Sitting of 7 August 1980

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

  BRITISH RAILWAYS BILL (By Order)
  Order for consideration read.
  To be considered upon Tuesday 28 October.

  LONDON TRANSPORT (No. 2) BILL
  Order read for resuming adjourned debate on Question proposed [6 August].
  Question put and agreed to.
  Ordered,
  That the Promoters of the London Transport (No. 2) Bill shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office not later than the day before the close of the present Session of their intention to suspend further proceedings and that all Fees due on the Bill up to that date be paid;
  Ordered,
  That on the fifth day on which the House sits in the next Session the Bill shall be presented to the House;
  Ordered,
  That there shall be deposited with the Bill a Declaration signed by the Agents for the Bill, stating that the Bill is the same, in every respect, as the Bill at the last stage of its proceedings in this House;
  Ordered,
  That the Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first and second time (and shall be recorded in the Journal of this House as having been so read) and shall be ordered to be read the third time;
  Ordered,
  That no further Fees shall be charged in respect of any proceedings on the Bill in respect
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  of which Fees have already been incurred during the present Session;
  Ordered,
  That these Orders be Standing Orders of the House.—[The Chairman of Ways and Means.]
  To be communicated to the Lords, and their concurrence desired thereto.

  BRITISH RAILWAYS BILL
  Ordered,
  That the Promoters of the British Railways Bill shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office not later than Five o'clock on the day before the close of the present Session of their intention to suspend further proceedings and that all Fees due on the Bill up to that date be paid;
  Ordered,
  That on the fifth day on which the House sits in the next Session the Bill shall be presented to the House;
  Ordered,
  That there shall be deposited with the Bill a Declaration signed by the Agents for the Bill stating that the Bill is the same, in every respect, as the Bill at the last stage of its proceedings in the House in the present Session:
  Ordered,
  That the Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first and second time (and shall be recorded in the Journal of this House as having been so read) and, having been amended by the Committee in the present Session, shall be ordered to lie upon the Table;
  Ordered,
  That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;
  Ordered,
  That these Orders be Standing Orders of the House.—[The Chairman of Ways and Means.]
  To be communicated to the Lords, and their concurrence desired thereto.

  DUNDEE PORT AUTHORITY CONFIRMATION BILL
  Lords amendment agreed to.
ORAL ANSWERS TO QUESTIONS
  ORAL ANSWERS TO QUESTIONS
  Mr. Speaker: I give a cautionary word to the House. Long supplementary questions cut out opportunities for other hon. Members.
  ORAL ANSWERS TO QUESTIONS
    NORTHERN IRELAND

      Enterprise Zone (Belfast)
      Mr. Molyneauxasked the Secretary of State for Northern Ireland if he will give a progress report on consultations on the proposal to establish an enterprise zone in Belfast.
      The Under Secretary of State for Northern Ireland (Mr. Philip Goodhart): The matter was debated in the Northern Ireland Committee on 16 July. Apart from seeking the views of hon. Members representing Northern Ireland constituencies, I have also contacted the main political parties in the Province, the Belfast city council and 25 industrial, professional and trade bodies. There is widespread support for the idea of an enterprise zone in Northern Ireland and I have received a number of representations on the boundaries of a zone and other matters. I am considering these comments.
      Mr. Molyneaux: Will the Minister examine the possibility of spreading the advantages a little more thinly over the Greater Belfast area? If that idea is rejected will he examine the possibility of enlarging the zone from the proposed 100 acre to 500 acres as suggested by his right hon. and learned Friend the Chancellor of the Exchequer, so as to include existing companies such as Mackies?
      Mr. Goodhart: During the debate a number of hon. Members suggested that the zone should be extended to 500 acres although I understand that the average size of an enterprise zone in Great Britain will be about 250 acres. I am considering those representations.
      Rev. Ian Paisley: Has the Minister received representations from Carrickfergus borough council about the possibility of a zone in the Carrickfergus area in view of the near close-down of Courtaulds there?
      Mr. Goodhart: I have been in contact with Carrickfergus district council on this matter and I expect to receive its views in the near future.
      Mr. Kilfedder: Is not the idea of a limited enterprise zone nonsense? Is the Minister aware that it has certainly not received much support in Northern Ireland, bearing in mind that the whole of Northern Ireland is a depressed area which needs massive support from a Government who are engaging in savage cuts? Does he realise that a major factor is the high overdraft rate in Northern Ireland, which is I per cent. to 1½ per cent. higher than in the rest of Great Britain?
      Mr. Bruce-Gardyne: Not to Mr. De Lorean.
      Mr. Goodhart: There was an announcement yesterday extending the amount of Government support to the Northern Ireland economy. We have calculated the cost of extending an enterprise zone to the whole of Northern Ireland and the cost of the rating concession alone would be about £56 million. That is almost precisely equal to the support recently announced for Harland and Wolff and De Lorean.
      Mr. Pendry: Has the Minister received any representation from the right hon. Member for Down, South (Mr. Powell) to the effect that Northern Ireland should forgo the proposed zone in view of its hyper-inflationary nature? If he has, will he reject that plea and instead concentrate his mind on the constructive suggestions which have been made today? Is not a single zone of 200 acres too small to affect the economic infrastructure of the city of Belfast? Will the hon. Gentleman reconsider that aspect?
      Mr. Goodhart: The proposal is not supposed to transform the entire position in Belfast. It is proposed to revitalise one area of Belfast in which there is considerable urban dilapidation. The right hon. Member for Down, South (Mr. Powell), who addressed the Northern Ireland Committee on this subject, can make his own views known.
      Mr. J. Enoch Powell: Is the Minister aware that those who criticised my speech in support of the Government in the censure debate are now dismayed to discover

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      that the Government intend to spend more and not less in Northern Ireland?
      Mr. Goodhart: I agree.

      Housing Executive
      Mr. Wm. Rossasked the Secretary of State for Northern Ireland if he has any plans to restructure the board of the Northern Ireland Housing Executive.
      Mr. Goodhart: No, Sir.
      Mr. Ross: Is not the Minister aware that since the Housing Executive was set up it has managed to provide fewer than 5,000 new dwellings a year? Is not that a far smaller number than was provided by the former housing authorities in Northern Ireland? Would it not be wise to restructure the board of the Housing Executive so that it might more fully reflect the opinions of the electors in Northern Ireland?
      Mr. Goodhart: A majority of the members of the board of the Northern Ireland Housing Executive are members of district councils. As the hon. Member knows, since the Northern Ireland Housing Executive came into existence the building programme in his constituency has been exceedingly large. Looking at the number of houses built in Londonderry and comparing it with the numbers in towns of approximately the same size in North-West England, one sees that Londonderry is about five times better off.
      Rev. Ian Paisley: Will the Minister confirm what he said just now, which was that the majority of the board of the Housing Executive were members of district councils? Will he give the House the breakdown of the board of the Housing Executive?
      Mr. Goodhart: Five of the eight members of the present board—because there is one vacancy—are members of district councils.

      Car Bombs
      Mr. Nicholas Wintertonasked the Secretary of State for Northern Ireland if his Department is satisfied with the security forces' liability to protect the community of Northern Ireland from bombs left in stationary vehicles; how many bombs have exploded while in
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      stationary, vehicles; and how many people have been injured or killed as a result so far in the current year.
      The Secretary of State for Northern Ireland (Mr. Humphrey Atkins): Neither I nor the security forces can be satisfied so long as anybody is killed or injured through terrorist violence, but the security forces make every effort to prevent the use of car bombs and to detect and disarm them when they are planted.
      So far this year, 19 such devices have exploded in stationary vehicles. Two people have died as a result and 24 have been injured. A further seven devices have been neutralised by the security forces; I would like to pay tribute to the Army's bomb disposal teams whose courage and skill continue to save lives.
      Mr. Winterton: I am grateful to my right hon. Friend for that very full and detailed reply. However, does he agree that the security position in the border areas of Northern Ireland is far from satisfactory and that little or no improvement has occurred during the past 12 months, despite the valiant efforts of our security forces? Does he also agree that there appears to be an assassination campaign against leading citizens in these areas, not least in Fermanagh? I remind right hon. and hon. Members of the dreadful and horrific car bomb explosion in Lisnaskea recently. What additional action can my right hon. Friend take to protect leading citizens from this campaign of assassination?
      Mr. Atkins: I said in my original reply that none of us could be satisfied so long as anyone was killed. I take issue with my hon. Friend about what has happened over the past year. I have a more detailed answer to give about the security situation later, and I will not anticipate that. I say at this stage merely that I do not agree with my hon. Friend. The disposition of forces is, first, a matter for the security force commanders. In any case, it would not be appropriate to give details in the House.
      Mr. Molyneaux: Can the Secretary of State say whether it has been possible to identify the source of the explosives used in these indiscriminate attacks?
      Mr. Atkins: Not always, although it is known that some of the explosive

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      definitely have been manufactured in the Republic.
      Rev. Ian Paisley: Will the Secretary of State take it from me that all right-thinking people in Northern Ireland are with him when he praises the work of the bomb disposal squads? They are doing signal service in protecting lives in Northern Ireland. However, will he tell the House, in view of 19 bombs which have done serious damage, how many people have been arrested and charged with these crimes?
      Mr. Atkins: I cannot link arrests for these crimes directly, although I have some figures to give the hon. Member for Antrim, North (Rev. Ian Paisley) in reply to his later question. I am grateful for his comments about the Army's bomb disposal squads. They deserve our utmost praise.

      Housing Executive
      Mr. Michael McNair-Wilsonasked the Secretary of State for Northern Ireland what is the total sum owed in non-paid rents and rates to the Housing Executive.
      Mr. Goodhart: At 30 June 1980 the amount due to the Housing Executive in respect of unpaid rent and rates was £10¼ million.
      Mr. McNair-Wilson: Does my hon. Friend agree that that is the highest figure of arrears in rents and rates ever stated by the Housing Executive in its short history? What steps are being taken by his Department to ensure that the 28,000-odd people who apparently are making no attempt voluntarily to pay their arrears are compelled to do just that?
      Mr. Goodhart: Although I agree that the figure is far too large, it is also true that, as a proportion of the weekly collectable rents, the figure has fallen in the last two years. We have set up a central body to chase those who are in arrears, and there will be further administrative improvements in the debt-collection process by the end of the year.
      Mr. Fitt: Has the hon. Gentleman read the recent report of the low pay unit about living standards in Northern Ireland, wherein it is stated clearly that in Northern Ireland, especially in certain
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      parts of Belfast where the majority of housing is under the control of the Housing Executive, it is because of high rents, high energy costs—including gas and electricity—and high levels of unemployment, that these people, not involved in any political protest, find themselves unable to pay the high rents demanded of them? That is why there is such a deficit.
      Mr. Goodhart: Although power costs, including the cost of electricity, are high in Northern Ireland—and they are in the rest of the United Kingdom—rents are lower, and there is a very effective rent rebate system. It must be remembered that those who do not pay their rents increase the burden on the vast majority of tenants of the Northern Ireland Housing Executive who do.
      Mr. Wm. Ross: Earlier the Minister referred to the house building programme in Londonderry. How many eviction orders have been sought in the courts by the Housing Executive for the non-payment of rent on the West Bank in Londonderry? Of those eviction orders granted, how many have been executed?
      Mr. Goodhart: I cannot give that information without notice, but I shall give it in a letter to the hon. Member.
      Mr. Kilfedder: Since average earnings in Northern Ireland are about £9 a week less than in the rest of the United Kingdom, will the Government, in view of their statement of cuts yesterday—assure the House that rents in public sector housing will not be increased, and abandon the policy of the previous Government of bringing rents in Northern Ireland into line with those in England and Scotland?
      Mr. Goodhart: Yesterday the Government announced an increase in the amount of money available for public spending in Northern Ireland. But plainly, there has to be a relationship between rents in Great Britain and those in Northern Ireland.
      Mr. Pendry: Is the hon. Gentleman really surprised at the level of rent and rate arrears that he has announced when last year there was a downward trend? Does he accept that the Government's policies and the cash squeeze imposed on the Northern Ireland Housing Executive will lead almost certainly to arrears

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      rising again? Will the hon. Gentleman give an assurance that every effort will be made to enable debtors to pay off their arrears without undue pressure or threats from the authorities concerned?
      Mr. Goodhart: We shall seek to reach voluntary agreement with those who are in arrears. I am not surprised by the figures because in real terms they reflect the improvement that took place in the last month of the previous Administration.
      Mr. Stephen Ross rose—
      Mr. Speaker: Order. I shall call the hon. Member for Isle of Wight (Mr. Ross), the Liberal Party's Northern Ireland spokesman. However, I cannot do the round of all the parties on every question and I shall not try to do so.
      Mr. Ross: Is the Minster able to give us the percentage of annual or weekly income that is expended on rates in Northern Ireland? The average for the rest of the United Kingdom is about 7½ per cent.
      Mr. Goodhart: The Northern Ireland differential for rents is a slightly larger figure.

      Ulster Countryside Committee
      Mr. J. Enoch Powellasked the Secretary of State for Northern Ireland why the annual report of the Ulster Countryside Committee to 30 June 1978 was not signed until 20 November 1979 and not published until last month; what action he proposed to take on its principal recommendations; and if he will make a statement.
      Mr. Goodhart: Staff changes in the secretariat, drafting consultations with the Countryside Committee and a printing dispute combined to produce a regrettable and unreasonable delay in publication. The Government have nevertheless made progress on a number of the recommendations such as the review of legislation. But we have not been able to meet the committee's request for a substantial increase in the number of staff engaged in countryside conservation.
      Mr. Powell: While noting the Minister's very proper censures and trusting that arrangements will be made for this lapse
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      not to recur, will he ensure that special attention is paid to the recommendations of the outgoing committee of two years ago on areas of outstanding natural beauty and on consultation over planning decisions in rural areas?
      Mr. Goodhart: Yes.

      De Lorean Car 4
      Mr. Cryerasked the Secretary of State for Northern Ireland if he will make a statement on the application for financial assistance to the De Lorean Car Co. Ltd.
      Mr. Humphrey Atkins: Yes, Sir. As I explained yesterday in my reply to my hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne), the extra funds available for industrial assistance and energy in 1980–81 will include up to £14 million by way of repayable loans towards the cost of bringing the De Lorean DMC 12 project to market launch. Detailed negotiations with De Lorean on this point are in progress.
      Mr. Cryer: Is not the private enterprise contribution to this project a somewhat nebulous £13 million? Is not the taxpayer already contributing about £53 million? Does not an additional £14 million, allied to savage cutbacks in social services and education, suggest that the taxpayer is getting an extremely bad deal when he will not even own the car at the end of the day? The car will be owned by the De Lorean research partnership. Does not the right hon. Gentleman begin to believe that this looks like the biggest rip-off since the South Sea Bubble?
      Mr. Atkins: We decided that we had to honour the commitment entered into by the previous Labour Government of whom the hon. Gentleman was a member—
      Mr. Cryer: No. I had just left.
      Mr. Atkins: No, the hon. Gentleman had not. I have checked that. I refer to the commitment to launch the DMC 12 car, which we must remember holds the prospect of 2,000 jobs in West Belfast
      Mr. Alan Clark: Of course, my right hon. Friend is, to some extent, the prisoner of the small print of an agreement that was negotiated by the previous Labour Government. That we accept.

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      But does he realise that he is really the laughing stock, not only of the international motor industry but, for all I know, the criminal fraternity as well, on account of the scale of this rip-off? Would he like to confirm the rumour—I hope that he will be able to confirm the rumour—that this £14 million is, in fact, the very last tranche to be handed out, and that it is being done in consideration of an undertaking in writing from Mr. De Lorean not to ask for any more money, which will get him off the hook on which he was placed by the previous Government?
      Mr. Atkins: The company has agreed in writing that the provision of extra funds removes the obligation contained in the original agreement to consider further applications.
      Mr. Pendry: We accept that De Lorean needed financial assistance, but will the right hon. Genttleman accept that we totally oppose the method that has brought it about—namely, to fund De Lorean at the expense of education, which was cut by £10 million last year, and social services, where there is already too little provision? Will he accept that nothing short of massive Government assistance will rectify the serious economic imbalance in the Province? No rejigging of the existing Estimates will overcome these grave problems.
      Mr. Atkins: The hon. Gentleman appears to have overlooked that part of my statement yesterday which indicated that the Government are providing an extra £48 million from the Contingency Reserve towards Northern Ireland.
      Mr. Bruce-Gardyne: Will my right hon. Friend confirm that the undertaking that he has now extracted from this American gentleman will not in any way be vitiated by the fact that we announced last year that we were not giving any more money to Harland and Wolff and we now are? Will he deal with the rather alarming proposition advanced yesterday that we had to put up £14 million for De Lorean because the company employs Catholics as we had given £42 million to Harland and Wolff because that company employs Protestants? Does he accept that that is not acceptable from the British taxpayer's point of view?
      Mr. Atkins: There is no truth in the last part of my hon. Friend's question. We found that we had a commitment, which we have now discharged, to provide funds to bring the DMC 12 to market launch. An agreement has been signed, not by Mr. De Lorean but by the company, that releases the Government from the obligation contained in the original agreement.
      Mr. Fitt: Does the right hon. Gentleman accept that even those, such as myself, who were enthusiastic in their support for the undertaking at its beginning are now beginning to have deep reservations about the project especially as so much employment was promised that has not materialised? Yesterday the right hon. Gentleman linked a mini-Budget statement on cuts in education, health, social services and the environment and savage housing cutbacks with the De Lorean issue. Will he accept the opportunity given to him today to make a full statement on the savage cuts that he announced yesterday in Northern Ireland expenditure?
      Mr. Atkins: I made a statement yesterday. If the hon. Gentleman wishes to ask me questions about it, let him do so.

      Sports Council
      Mr. Stephen Rossasked the Secretary of State for Northern Ireland how many representations have been made to him following the announcement of his intention to remove executive powers from the Northern Ireland Sports Council; and if he will now set up an independent inquiry before implementation.
      Mr. Goodhart: Northern Ireland Ministers have received 109 letters about the Government's decision to remove executive functions from the Northern Ireland Sports Council. A further inquiry into this matter is not likely to add to the information available to the Government.
      Mr. Ross: Will the Minister agree, having had all those representations, which have come from extremely able people in all walks of life, that it was a precipitate decision to wind up the executive powers of the Sports Council, a decision which does not relate to the rest of the United Kingdom? If there

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      is not to be an inquiry, will he at least reconsider that decision?
      Mr. Goodhart: We shall have further discussions with the Sports Council. As the Liberal Party has encouraged successive Governments to cut bureaucratic costs and to preserve capital programmes, it is rather unfair of the Liberal Party's Northern Ireland spokesman to attack my noble Friend.
      Rev. Ian Paisley: Is it not a fact that the majority of the representations that have been received are in support of the council retaining its executive powers?
      Mr. Goodhart: The majority of the representations are in favour of the Sports Council retaining its present powers. However, the council's administrative costs are very high in relation to the costs of sports councils elsewhere in the United Kingdom.
      Mr. Pendry: Will the Minister go further and spell out those people who have made the representations? Is it not true that all the sporting bodies, almost all the district councils, including the Belfast city council, and all the political parties have opposed the Government? Why do the Government not take on board this strong representative body of opinion and agree to an independent inquiry? If it backs the Government, the problem, I am sure, will go away. If not, it will not go away.
      Mr. Goodhart: All the information is available to the Government at this moment. All that is needed is further consultation on this point. There have been representations by many sporting bodies. These follow an energetic campaign on the part of the Sports Council to stimulate those complaints.

      Building Regulations
      Mr. Chapmanasked the Secretary of State for Northern Ireland if he will introduce proposals to bring Northern Ireland building regulations in line with those in England and Wales—outside Inner London.
      The Minister of State, Northern Ireland Office (Mr. Hugh Rossi): Building regulations in Northern Ireland are kept very closely in line with those in England and Wales.
      Mr. Chapman: Will my hon. Friend agree that the Northern Ireland building regulations could be considerably simplified without compromising safety, as could the other three sets relating to other parts of the United Kingdom? Is not the time now propitious to have consultations with the relevant Ministers in Wales, Scotland and England to try and unify and simplify the regulations so that one set is applicable throughout the whole of the United Kingdom?
      Mr. Rossi: With regard to language, these are statutory instruments that have to be expressed in a certain way. We are constantly looking at ways to simplify and streamline the contents of the regulations. I am closely in touch with the review that is taking place in England and Wales. It is my intention that those in Northern Ireland should comply with the others, making due allowance for local differences.
      Mr. J. Enoch Powell: While welcoming the support of the hon. Member for Chipping Barnet (Mr. Chapman) for the contention of my hon. Friends and I that there should be common legislation for the United Kingdom, will the Minister ensure, in any case in future, that when there is amendment in any part of the Kingdom, there is not the previous time lag that has occurred of a year to 18 months in adjusting the regulations in Northern Ireland?
      Mr. Rossi: We are looking at this problem and trying to ensure that the time gap is reduced as much as possible.
      Mr. Kilfedder: Is there any point in discussing building regulations when the Government, through their cuts announced yesterday, are to reduce the number of houses available in Northern Ireland for the homeless? Will the Minister apologise for his statement made to a news conference last night when he said that Northern Ireland's per capita figure for public expenditure is 35 per cent. higher than in Great Britain? This is a misleading statement—
      Mr. Speaker: Order. This question is about building regulations.
      Mr. Rossi: I am happy to reaffirm the statement I made last night to which the hon. Gentleman made reference. It is accurate. The current expenditure in

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      Northern Ireland on housing is one-and-a-half times more per capita than in Great Britain.

      Sports Council
      Mr. Strawasked the Secretary of State for Northern Ireland how many staff were in post in April in the Northern Ireland Sports Council; and how many will be in post in September.
      Mr. Goodhart: On I April, the Sports Council for Northern Ireland employed 38 people full-time and six people part-time. I cannot say at this point how many staff will be in post in September.
      Mr. Straw: In the light of the Minister's earlier statement that he will have further discussions on the matter, will he give an undertaking not to pre-empt the result of those discussions and ensure that the staff is not reduced until the discussions are completed?
      Mr. Goodhart: There is clearly a need for economy in this sphere, as elsewhere, in Northern Ireland. It is the hope of the Government that the staff of the Sports Council will be at a lower figure in September than it is now.

      Constitutional Reform
      Mr. van Straubenzeeasked the Secretary of State for Northern Ireland what progress he has made in his talks with the political parties in Northern Ireland on his latest constitutional proposals.
      Mr. Marlowasked the Secretary of State for Northern Ireland whether he will make a statement on the proposals for constitutional reform.
      Mr. Humphrey Atkins: Since Parliament debated the Government's proposals I have met each of the four main parties at least once. Further meetings are planned during the summer. Concurrently, I am seeking the views of the smaller parties, and of business, trade union, Church and other community and interest groups in Northern Ireland. In this way, we hope to move towards our goal of finding an acceptable means of transferring responsibility to locally elected representatives in Northern Ireland. In the light of my discussions, the Government will consider what recommendations should be put before Parliament.
      Mr. van Straubenzee: Does not my right hon. Friend understand that he has the warm support of many people for the round of discussions that he has initiated? Have any representatives of political parties refused to take part in discussions with him? If the answer is negative, is not that in itself an encouraging start at least?
      Mr. Atkins: My hon. Friend is right. No one has refused to come and speak to me. Everyone has accepted my invitation so to do. This is encouraging. It shows that political parties and others are anxious to make progress.
      Mr. John Fraser: In view of the fact that even the majority in Northern Ireland have probably more in common with Southern Ireland than with mainland Britain—
      Hon. Members: Rubbish.
      Mr. J. Enoch Powell: Come and see us.
      Mr. Fraser: I have been.
      Mr. Powell: Come again, then.
      Mr. Speaker: Order. Will the hon. Gentleman talk to all of us rather than to the right hon. Gentleman behind him?
      Mr. Fraser: Will the Secretary of State consider, as an alternative strategy, the possible unification of the whole of Ireland? I know that it is difficult. Will he consider it?
      Mr. Atkins: I think that the premise on which the hon. Gentleman's question was based was dealt with by the comments behind him.
      Mr. Biggs-Davison: While wishing my right hon. Friend well in his discussions, will he bear in mind, in considering the constitutional future of the Province that, contrary to what has been suggested by the hon. Member for Norwood (Mr. Fraser), opinion polls of repute show that about half the Roman Catholics in Northern Ireland support the union with Britain and are content for their laws to be made in the Parliament at Westminster?
      Mr. Atkins: The hon. Gentleman is right. All the indications that we have show that the majority of people, whatever their religion, wish to remain part

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      of the United Kingdom. As I, and successive Government spokesmen, have frequently said, so long as that is the wish of the majority of people in Northern Ireland, so it will be.

      Aid
      Mr. Kenneth Lewisasked the Secretary of State for Northern Ireland what is the total amount of Government aid provided for Northern Ireland; and if he can give the comparable figures for Scotland, the Northern and the North-West regions of England.
      Mr. Rossi: On a basis similar to that previously used for such calculations, the total subvention to the Northern Ireland Consolidated Fund in 1979–80 is estimated at £944 million. Comparable figures for other regions of the United Kingdom are a matter for my right hon. and learned Friend the Chancellor of the Exchequer. However, as I mentioned earlier, public expenditure in Northern Ireland per capita is 35 per cent. higher than in the remainder of the United Kingdom as a whole.
      Mr. Lewis: I do not think that the answer to the question gave me what I asked. I thought that my hon. Friend might have gone to the Chancellor and got the answer for me. Is my hon. Friend aware that I believe that it is a good thing to give responible Government aid to depressed areas? Would he care to ask the right hon. Member for Down, South (Mr. Powell) whether he would support the same amount of aid going to other areas of the United Kingdom as is given to Northern Ireland?
      Mr. Rossi: The right hon. Member for Down, South (Mr. Powell) has no doubt heard the second part of my hon. Friend's question and can answer it himself. On the first part of the question, I have asked the Chancellor of the Exchequer for the comparable figures, but they are not readily available.
      Mr. Molyneux: Following the review of expenditure in Northern Ireland, completed yesterday, will the Minister seek to allocate some of the available funds to the Belfast dock employers so that Belfast dockers can have the same degree of security of employment and be put on the same footing as their counterparts in Great Britain?
      Mr. Rossi: I am afraid that I am not able to do so this year. I have had long discussions both with the employers and the dock workers. They are aware of the position. I hope to make some funds available to them next year.

      Cross-border Security
      Mr. Hal Millerasked the Secretary of State for Northern Ireland what improvements have been made in the last two months to cross-border security, including action to block some roads.
      Mr. Humphrey Atkins: In the past two months eight more roads between County Fermanagh and County Monaghan have been closed. The security forces are continuing intensive efforts to prevent further terrorist attacks along the border and to apprehend those responsible for previous incidents. The extensive and increasing co-operation between the security forces on either side of the border is paying substantial dividends I shall consider additional closures or other measures if the Chief Constable advises me that they would be of real operational value and would not unduly interfere with legitimate traffic.
      Mr. Miller: I thank my right hon. Friend for the action that he has taken since my last question on this subject. Is he aware of the growing concern about the numbers of assassinations of people on the so-called "hit list"—not all being prominent citizens, but many being supporters of law and order and of the union with this country—and the feeling that those assassinations are greatly facilitated by the open cross-border routes?
      Mr. Atkins: Everyone in Northern Ireland is concerned at any assassination. There is considerable concern about the way in which terrorists can move to and fro across the border. Closing roads is one way of stopping them. I am sure that the increasing co-operation between the security forces in Northern Ireland and the Republic is the most effective way of putting an end to this traffic.

      Gas Supplies (Cessation)
      Mr. McQuadeasked the Secretary of State for Northern Ireland if he will now state the amount of compensation he is prepared to pay both in the public housing and private housing sectors for

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      the change over from gas when the gas undertakings in Northern Ireland cease their operations.
      The Under-Secretary of State for Northern Ireland (Mr. Giles Shaw): Grant-in-aid will be paid towards the reasonable cost of providing replacement appliances of an approved type. The rate of grant will be 100 per cent for households in receipt of supplementary benefit or family income supplement; 50 per cent. for private domestic consumers and 30 per cent. for industrial and commercial consumers.
      Arrangements for Housing Executive tenants are still being worked out but will be no less favourable than for other domestic consumers. I shall, in due course, make a detailed announcement setting out the conditions of eligibility for grant and the manner in which payments will be made.
      Mr. McQuade: In view of that statement, does the hon. Gentleman not think that it would be better to secure the natural gas pipeline for Northern Ireland?
      Mr. Shaw: No. Following examination of the costs involved in the pipeline, together with the substantial amount of deficit financing involved in maintaining the system in Northern Ireland, the Government's conclusion was that the preferable option was to close the industry.
      Mr. Fitt: Has the Minister taken into consideration that Northern Ireland is the lowest paid region in the United Kingdom, that many thousands of families are living just above the supplementary benefit and family income supplement levels and that they will be forced to pay a higher charge than the unemployed? Will he undertake to have another look at this matter to see whether something can be done to provide for such families?
      Mr. Shaw: I fully understand the hon. Gentleman's point. However, we must recognise that, with people living on supplementary benefit, there is a clear obligation for a definable group. It would not be easy to extend partial cover, in addition to the rates announced, to particular groups without affecting the whole.
      Rev. Ian Paisley: Does the Under-Secretary of State agree that his statement today is a statement of discrimina-
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      tion against those who are just above the poverty line? As many wage earners in Northern Ireland who are holding their jobs by accepting very low incomes will now be saddled with 50 per cent. replacements costs, will he reconsider this matter?
      Mr. Shaw: I have already answered that question in reply to the hon. Member for Belfast, West (Mr. Fitt). The hon. Member for Antrim North (Rev. Ian Paisley) will recognise that that answer must stand. As regards reconsidering the matter, the proposals that I have announced today are the first of a series of proposals. There will be a fuller announcement in due course. I cannot promise a review of the grant payments offered.

      Security
      Rev. Ian Paisleyasked the Secretary of State for Northern Ireland if he will make a statement on the security situation in Northern Ireland.
      Mr. Kilfedderasked the Secretary of State for Northern Ireland if he will make a statement about the security situation.
      Mr. Humphrey Atkins: During the month since I answered questions in the House on 10 July, the security forces have continued, often unobtrusively but with unrelenting determination and patience, to pre-empt terrorist attacks and to pursue and arrest those responsible for criminal acts. Progress continues to be made, gradually but inexorably.
      In support of this, I remind the House that so far this year 309 people have been brought before the courts and charged with terrorist-type crimes, including 41 with murder and 30 with attempted murder. In addition, 125 weapons and more than 13,000 rounds of ammunition have been recovered. The past four weeks alone saw 29 people charged with terrorist crimes: four for murder and two for attempted murder. A number of important arrests have been made in the Republic of Ireland.
      I regret, however, that since 10 July three people have been killed, two of them soldiers. One soldier was shot dead on 19 July in front of his wife and parents-in-law in a public house in Londonderry. He was on compassionate,

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      leave from the Army and had been visiting his wife who had given birth to a stillborn child. The second soldier was killed in an explosion at Aughnacloy on 27 July in which another soldier was seriously injured. The third person, a young civilian, was fatally wounded in South Belfast by a member of an RUC patrol. This case is under investigation and the RUC will be submitting a full report to the Director of Public Prosecutions.
      Rev. Ian Paisley: Will the right hon. Gentleman make a statement about the killing on Sunday of Private William John Clarke of the UDR?
      Mr. Atkins: This murder, if that is what it was—I assume that it was—took place in the Republic of Ireland. I am afraid that I cannot give the House any further information.
      Several Hon. Members rose—
      Mr. Speaker: Order. Although it is time for Prime Minister's questions, I shall call the other hon. Member whose question is being answered and allow extra time at the end of Prime Minister's questions.
      Mr. Kilfedder: In view of the grave concern felt by Ulster people, will the Secretary of State agree to the request that I have made repeatedly in the past, to the effect that the Northern Ireland Committee should meet at Stormont to discuss these matters as well as the grave economic, industrial and social problems?
      Mr. Atkins: The hon. Gentleman should address that request to my right hon. Friend the Leader of the House. I understand that that cannot take place under our Standing Orders.

    AREAS OF HIGH UNEMPLOYMENT
    Mr. Ron Brownasked the Prime Minister if she will visit the areas of high unemployment in order to explain her policies at a local level.
    The Prime Minister (Mrs. Margaret Thatcher): I have visited many areas of high unemployment and my plans for the immediate future include other such visits.
    Mr. Brown: I congratulate the Prime Minister on her smart outfit. Obviously I cannot say the same about her policies, which have created vast unemployment and inflation.
    Mr. Speaker: Order. The hon. Gentleman must ask a question.
    Mr. Brown: Does the Prime Minister appreciate that she is creating disaster for this country, particularly for working people? Does she also appreciate that the day of reckoning must come? While she may win votes in the House, the real fight will take place elsewhere. Indeed, during the winter the Labour Party will be organising opposition to the very policies in which she believes. Is that not one of our democratic rights?
    The Prime Minister: I recognise that the hon. Gentleman feels deeply about unemployment and the industrial recession. There is a world recession and unemployment is rising elsewhere. In fact, the recession has bitten more deeply in the United States. Industrial production there has gone down more rapidly and deeply than in this country. At this stage of the cycle, industrial production has not gone down by as much as it did at a similar stage under the previous Labour Government, in the six months to May 1975.
    Mr. David Steel: In the course of visits to areas of high unemployment during the recess, will the Prime Minister confirm that the control of the money supply is the beginning, the middle and the end of the Government's economic policy? If so, and if the money supply is not under control, what is left of her policy?
    The Prime Minister: I do not think that the right hon. Gentleman can have read the speech by my right hon. Friend the Secretary of State for Industry entitled "Monetarism is not enough'.
    Mr. Ian Lloyd: The Prime Minister will doubtless have seen the disturbingly self-confident assertion by the Japanese in The Times this morning to the effect that they intend to lead the West in the application of high technology by the end of the 1980s. Will she seize every opportunity to emphasise, not least where our unemployment is associated with a deliberate decision not to adapt to and adopt this technology, that this kind of

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    obstruction is self-defeating and that we must do everything in our power to follow the same course as the Japanese?
    The Prime Minister: I accept that the Japanese are making immense strides, not only in research and development in technology, but in the speed with which they get it translated into industry and with which those working in industry accept the new equipment and operate it to the peak of efficiency. If we wish to compete, we must do the same.
    Mr. Foot: As the steeply rising unemployment level is the worst problem facing the country and the Government, why has not the right hon. Lady and her Government brought before the House, before Parliament departs for the recess, fresh proposals to restore the £170 million cut that they made in the Manpower Services Commission budget? When will they carry out and bring before the House an expanded programme to deal with this problem?
    Will the right hon. Lady now tell us, when the Government have failed to bring forward a programme before the departure of Parliament for the recess, how soon those proposals will be announced to the nation?
    The Prime Minister: Already, about 324,000 people are affected by and benefit from special employment and training measures. My right hon. Friend the Secretary of State for Employment has given an undertaking that if the youth opportunities programme is not sufficient it will be enlarged, so that every school leaver has the offer of a place by Easter 1981.
    Mr. Foot: But what about the long-term unemployed? What about the cuts that the right hon. Lady's Government imposed on the programme of the Manpower Services Commission? What about the necessity of mounting a bigger programme to deal with the much heavier unemployment that we shall face? When will the Government bring forward those measures?
    The Prime Minister: Dealing with long-term unemployment depends on getting British industry competitive. The right hon. Gentleman conspicuously failed to do that during his term of office in the previous Labour Government.
    Mr. Myles: Will my right hon. Friend take steps to sweep away even more of those stupid rules and regulations that inhibit small firms, especially in rural areas, from taking on unemployed people?
    The Prime Minister: We shall certainly do our best to sweep away many of the remaining regulations. My right hon. and learned Friend the Chancellor of the Exchequer did a good deal for small businesses in the last Budget, and our policy on enterprise zones will be of particular advantage to small businesses starting up in them. However, I do accept that many of the other controls and regulations should go.
    Mr. Dewar: Does not the right hon. Lady accept that the Government have a duty to create jobs in high unemployment areas such as Scotland, or does her devotion to the principle of mobility of labour lead her to join those who advise the unemployed of Scotland that their best chance of getting a job is to move to areas such as the prosperous South-East?
    The Prime Minister: If the hon. Gentleman had either listened to my speech during the censure debate or if he had looked at the amount of regional assistance that has been given, he would know that the question is superfluous. During that debate I made an announcement about Inmos and other firms. We are trying to do two things. First, we are trying to move investment to areas where there is a reservoir of skilled labour. Secondly, we are continuing to operate the employment transfer scheme, which the hon. Gentleman's Government also operated.

    PRIME MINISTER (ENGAGEMENTS)
    Mr. Montgomeryasked the Prime Minister if she will list her official engagements for 7 August.
    The Prime Minister: This morning I presided at a meeting of the Cabinet. In addition to my duties in this House, I shall have further meetings with ministerial colleagues and others. Later this afternoon I shall attend the memorial service for Sir Seretse Khama at Westminster Abbey.
    Mr. Montgomery: Some time today, will my right hon. Friend urge her Ministers to take every possible opportunity to put across to the electorate the point that by its actions this week the Labour Party has shown that it is totally opposed to council house tenants being allowed to buy their own homes?
    The Prime Minister: What my hon. Friend says is very true. Millions of people in this country will have the opportunity to buy their own council houses when the Housing Bill becomes law—a chance that they would never have had if the Labour Party had been in power.
    Dr. Summerskill: Will the Prime Minister give thought to the fact that in Calderdale unemployment is rising more steeply than in the rest of Yorkshire and in the rest of the country? Will she assure my constituents that the textile, carpet, machine tool and confectionery industries will receive urgent help to stop them from further decline? Otherwise there will be litle manufacturing industry left in the area.
    The Prime Minister: Textiles are already protected under the multi-fibre agreement, and we have about 400 quota agreements with several other countries under that agreement. There is a world recession, added to a number of other problems, and it is not possible for any Government to guarantee everyone a job. We shall have to work our way up steadily, and try to create new businesses and new industries using the latest technology, but no Government can do that alone.
    Sir Nicholas Bonsor: While I congratulate my right hon. Friend on her decision to abolish the Clegg Commission, will she give her whole attention in the coming year to the terrible problem of the unacceptably high levels of wage settlements in the public sector?
    The Prime Minister: Yes, we certainly have to give our attention to that. It is obvious that comparability as a principle has not worked well. Obviously there are times when various comparability awards amount to more than is available from the taxpayer to pay them. Comparability is only one factor in determining public sector pay awards. The real determining factor is what the tax-
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    payer can afford to pay. We shall conduct matters in that way in the future.
    Mr. Urwin: Looking beyond 7 August, to the time when the right hon. Lady takes her standing ovation at the Conservative Party conference, will she then pause to reflect on the sheer misery that she has created in thousands of homes throughout the United Kingdom as a result of the additional unemployment caused by her Government's policies? Will she then give further thought to the requirement upon her Government to halt the flow of fugitives from depression from develepment areas such as the Northern region? If she cannot do that, will she then tender her resignation?
    The Prime Minister: If there were an answer to unemployment in a free society it would have been found long since, and the right hon. Gentleman would not have had to experience 1·6 million people unemployed under his Government. May I remind him that while his right hon. Friend the Shadow Leader of the House was Secretary of State for Employment, unemployment rose by 90 per cent. in Swansea, by 103 per cent. in Aberdare, by 128 per cent. in Neath, by 145 per cent. in Llanelli, by 98 per cent. in Cardiff, and so on.
    Mr. Michael Spicer: Will my right hon. Friend try to find time in her busy schedule to consider the question of the computerisation of the Inland Revenue? Bearing in mind that this is an extremely complex matter, will she, nevertheless, consider the fact that no other country with a viable computer company capable of doing the job would dream of giving it to a foreign company?
    The Prime Minister: I understand both the complexities of the matter and the sensitivities of the House. We are still considering it, and we shall make an announcement as soon as we have reached a decision.

    BECKTON
    Mr. Spearingasked the Prime Minister if she will make an official visit to Beckton.
    The Prime Minister: I have at present no plans to do so.
    Mr. Spearing: Is the right hon. Lady aware that in Beckton there are many families, with small children, living in tower blocks? Does she not agree that the sale of council houses by the GLC, or the forced sale of council houses by any borough council, must inevitably reduce the opportunity for such families to move out? Does the right hon. Lady think that this policy would have gained the approval of St. Francis of Assisi?
    The Prime Minister: No, Sir. I do not accept the assumptions upon which the hon. Gentleman's question is built. To give people the opportunity to buy either the house in which they live or, if they have held the tenancy of a council house, another house, will bring joy to many, and it will introduce them to the ownership of property which Labour Members have experienced for many years. It will give them a chance to buy their own homes in small estates. The hon. Gentleman should reflect on the many Labour Members who have large estates.

    PRIME MINISTER (ENGAGEMENTS)
    Mr. Heddleasked the Prime Minister if she will list her official engagements for Thursday 7 August.
    The Prime Minister: I refer my hon. Friend to the reply which I gave earlier.
    Mr. Heddle: Will my right hon. Friend consider extending the Government's practice of allowing private enterprise to compete for the provision of non-medical services in the National Health Service to local authorities? Does she agree that by so doing and by allowing local authorities to contract out such services as refuse disposal to private enterprise, she would be helping local authorities to reduce further the extravagance which still exists, particularly in Labour-controlled councils?
    The Prime Minister: I agree with my hon. Friend. I hope that a number of public authorities and local authorities will consider contracting out more services to the private sector. It gives them a much greater degree of flexibility than they would have if they did it all through the public sector, and it can often be done more economically in the private sector.
    Mr. Foot: As the right hon. Lady's policies have been so disastrous in the fields of local government, employment, inflation and industrial policy, may we end on a happier note by congratulating the right hon. Lady on her Cabinet's decision about teachers' pay? Does she agree that it would have been extremely dishonourable if the Government had sought to abandon and breach an agreement that had been made and had repudiated an arbitration agreement? Will the right hon. Lady tell the House now what adjustment she will make in the rate support grant in order to enable the Cabinet decision to be properly carried into effect?
    The Prime Minister: The answer to the last part of the right hon. Gentleman's question is "None." All these claims have to be met within existing cash limits. If some people take out more for themselves, that will cause, as I have frequently warned, greater unemployment elsewhere.
    With regard to that particular arbitration, as the right hon. Gentleman knows, it is about the only compulsory arbitration that there is in industrial relations. It can be set aside only—and the wording is very specific—if national economic circumstances "require" it—not "justify" it; not "advise" it; not "if there are clear and compelling reasons". It is only if national economic circumstances "require" it. We felt that national economic circumstances did not require it. Had we taken the view that they did, it would have meant setting aside quite a number of other claims which have already been settled.
    Mr. Foot: Why does the right hon. Lady not accept my congratulations with a more pleasant spirit? I was congratulating her Government on not taking dishonourable action. Will she repudiate the scandalous stories in the press that she wanted to take that dishonourable action but was turned down by the so-called "wets" in the Cabinet? Can she say when the next revolt is likely to take place and what is likely to be the subject matter?
    The Prime Minister: I thought that the right hon. Gentleman was wanting to congratulate me. When did he do such a quick U-turn? It was pretty nifty footwork.

BUSINESS OF THE HOUSE
Mr. Foot: May I ask the Leader of the House whether he has any statement to make about business?
The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): The business for the first week after the Summer Adjournment will be as follows:
MONDAY 27 OCTOBER—Debate on the structure and management of the National Health Service in England.
TUESDAY 28 OCTOBER—Debate on procedure.
WEDNESDAY 29 OCTOBER—Debate on a motion for the Adjournment of the House on a subject of the Opposition's choice.
THURSDAY 30 OCTOBER—Motion on Education (Assisted Places) Regulations, and on other orders to be announced later.
FRIDAY 31 OCTOBER—Resumed debate on the motion on references in court to Official Report of Debates and reports of Committees.
Mr. Speaker, the House will wish to know that preparations are proceeding on the basis of the new Session being opened on Thursday 13 November.
Mr. Foot: The right hon. Gentleman seems to have announced a mild week for the House when we return. First, I take note that he has not proposed that we should have the amendment Bill that will be required to carry out the Scottish housing arrangements that we discussed this week. We should be quite happy if that amendment Bill were brought forward in the second week rather than in the first. I hope that the right hon. Gentleman will include the announcement of that amendment Bill in his next Business Statement.
More important than that, we believe that it is highly probable that the House will have to be recalled long before that date in order to deal with the rising and dangerous unemployment situation in Britain—the most dangerous that we have had to face for 30 to 40 years.
Mr. St. John-Stevas: I shall certainly take into account the right hon. Gentleman's suggestion. Of course, it is always open for the Opposition—and indeed, for any hon. Member—to request the Government to recall the House of Commons, should national circumstances, in their opinion, require it.
Mr. Lawrence: We shall be getting a statement on civil defence before the House rises, shall we not?
Mr. St. John-Stevas: We shall be getting it as soon as business questions are concluded. It will be sandwiched between business questions and a statement on Members' pay.
Mr. David Steel: Have I missed something, or will the Government be announcing the result of the inter-party talks on the future government of Scotland? If the announcement has not yet been made, as it is likely to be the non-event of the year will it be made in the middle of August?
Mr. St. John-Stevas: It will not be the non-event of the year. [An HON. MEMBER: "That is the Liberal Party conference."] It is very annoying to have one's better lines taken from one. It will not be the non-event of the year, but it will be made as soon as the necessary arrangements have been completed.
Mr. Kenneth Baker: Will my right hon. Friend ensure that when the Procedure Committee is set up it will not be entirely restricted to examining changes in the Supply procedure, since, while fundamental changes in procedure are not necessary at present, there are, none the less, many relatively minor matters that the House may want the Committee to examine? For example, those of us who sat up during last night may well feel that there is some merit in the argument that the debate on the Third Reading of Private Bills should be restricted to one hour rather than three hours.
Mr. St. John-Stevas: The motion that the Government have tabled for consideration by the House would confine the Procedure Committee to the vital question of the consideration of Supply. I believe that that is the most urgent question facing us in the procedural field. I do not want to be delayed in any way. The motion will be before the House,

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and my hon. Friend will no doubt be able to discuss it then.
Mr. Whitehead: I congratulate the Leader of the House on rescheduling the debate on procedure at an early date. Can he confirm that amendments to the motion that the Government have tabled—provided that they are in order—will be accepted on the Monday on which we return? It would be extremely unfortunate if we had to table such amendments today, more than two months before the debate.
Mr. St. John-Stevas: The motions have been on the Order Paper for several weeks, but the question whether amendments are accepted is a matter for the Chair; it is not a matter for me.
Mr. Speaker: Perhaps I may give a little guidance. The House knows that I frown on starred amendments where-ever possible, as has every Speaker, except when they are Government starred amendments.
Mr. Bruce-Gardyne: I recognise that, owing to the zoological antics of the Labour Party, my right hon. Friend is left with no choice other than to postpone the debate on procedure, which was arranged for today. Will he nevertheless use his best offices to ensure that the Procedure Committee will be able to report in sufficient time to make sure that the House is not required again to pass on the nod the Spring Supplementary Estimates—including Estimates to reimburse for failure to observe cash limits?
Mr. St. John-Stevas: It was a personal disappointment to me that the procedure debate had to be postponed. However, I accept it in the interests of the House of Commons as a whole. It is only postponed. The House will have the opportunity to take decisions when the matter has been debated. I hope that the Procedure Committee will tackle this problem urgently, so that the propositions will be published and the House will have an opportunity to decide on them at the earliest possible opportunity.
Mr. Pavitt: Is the Leader of the House aware that the debate on the National Health Service on the first day of our return creates difficulties for hon. Members in all parts of the House, as we shall be discussing the structure of the NHS
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when 19 area health authorities will be disappearing and when between 160 and 180 districts will be created? In September the regional health authorities will be putting in proposals for the boundaries of these areas, which affect every constituency. The Secretary of State will have no opportunity to make an announcement in the House about such procedures. Will he discuss this issue with the Secretary of State for Social Services, so that before that day hon. Members may be given some information about their constituencies, and about the boundaries that are likely to be drawn?
Mr. St. John-Stevas: I shall certainly do that. I add the footnote that this is a prognostication about business that is to take place in three months' time. Many things may happen, some beneficial and some less so, during the interval. There is an element of provisionality in the issue.
Mr. Adley: I should like to reciprocate the spirit expressed by the right hon. Member for Ebbw Vale (Mr. Foot), who sought to end Prime Minister's Question Time with a congratulation. Will my right hon. Friend accept congratulations from, I believe, all hon. Members on the easy week that will face us on our return? The burden of being in this place is obviously too much both for the Leader of the Opposition and for the right hon. Member for Leeds, East (Mr. Healey), who have presumably retired to their estates. Is my right hon. Friend aware that we thank him on their behalf for an easy week on our return, in the knowledge that those right hon. Members will not be here when we return, just as they have not been here at the end?
Mr. St. John-Stevas: I am most grateful to my hon. Friend for those compliments. Such compliments are something of a rarity this week. I shall reflect on them when I retire to my semidetached.
Mr. Spriggs: Will the right hon. Gentleman take note of early-day motion 748, which stands in my name and those of my colleagues?
[That this House is deeply shocked at the reported increased number of unemployed men and women in the United Kingdom, which, with the decision of a major furniture and upholstery firm to

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lay off workers and to close a factory in the Manchester area, has reached the proportions of a major economic disaster in the North West Region; and calls upon the Government to take special measures to reduce the hardship caused by Conservative Government economic policy.]
Will the right hon. Gentleman invite the Prime Minister to undertake a special investigation into plans to use local initiative to take school leavers straight into training, under the indexed training programme? If the Prime Minister takes that initiative on behalf of the Government, will she also do something about bringing together those authorities that are prepared to do all in their power to absorb school leavers into permanent employment?
Mr. St. John-Stevas: Youth unemployment is the most severe problem facing us. I shall pass on that constructive suggestion to my right hon. Friend the Prime Minister and to my right hon. Friend the Secretary of State for Employment.
Several Hon. Members rose—
Mr. Speaker: Order. I hope to call those hon. Members who have been rising in their places, as long as they ask brief questions.
Mr. Dykes: Will my right hon. Friend undertake, as soon as possible in the autumn, to lay a long-awaited order that refers to the overwhelmingly popular and pressing demand to give our constitutional comrades from the European Parliament proper access to the House of Commons?
Mr. St. John-Stevas: A report of the House of Commons (Services) Committee recommends that members of the European Parliament should have limited access to facilities in the House. I have not rushed the report forward, in the interests of peace and good will. However, the House must have an opportunity to come to a decision on the report, and I hope that that will be possible later in the year.
Mr. Heffer: Given that I have often asked the Leader of the House for a full-scale debate on the high levels of unemployment on Merseyside and on its problems, and as the first week back is to be an easy week, may we have a debate on that subject? Is the right hon. Gentleman
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aware that the Prime Minister said that a free society could not solve the problem of unemployment. She did not make that point during the pre-election or election campaigns. Will the right hon. Gentleman give an assurance that we shall have an early debate on those problems?
Mr. St. John-Stevas: During the first week after the recess there will be a Supply day. This subject might be relevant to that. The Government are deeply concerned about the situation on Merseyside, and it will retain its special development area status. We are making particular efforts to aid the young unemployed on Merseyside.
Mr. Alan Clark: Does my right hon. Friend recall that the House divided 23 times last night, and that 20 of those Divisions occurred without any intervening debate? Is my right hon. Friend aware that hon. Members were shuffling through the Lobbies without any result? Although we all know that Opposition Members are scared stiff of their general management committees and have to demonstrate a little machismo at the end of the Session, would it not be appropriate to devote some of the recess to concentrating on how to avoid such practices?
Mr. St. John-Stevas: I have sympathy with the point raised by my hon. Friend. As I shuffled through all those Divisions, it occurred to me that there might be some means of avoiding such procedures. I shall certainly devote some of my time in my bungalow to considering that.
Mr. Fitt rose—
Mr. Speaker: Order. I do not usually intervene, but the Leader of the House has got mixed up. It is my bungalow.
Mr. Fitt: As the Leader of the House refused to find time for the Secretary of State for Northern Ireland to make a statement on the cuts that were announced yesterday by the devious means of a written answer, will he provide time for it in the first week of our return? Some of those who represent Northern Ireland constituencies are not concerned about easy weeks. We want the House to discuss the cuts that have been announced. Will the Leader of the House find time for the Secretary of State to make a statement

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during the first week of our return, and within this Session?
Mr. St. John-Stevas: I cannot give the specific assurance that the hon. Gentleman requested. We should have debates on the situation in Northern Ireland in the United Kingdom Parliament.
Mr. Kilfedder: Irrespective of the Secretary of State's failure to make a statement directly to the House on public expenditure cuts, one of his colleagues in the Northern Ireland Office made an unfair and misleading comparison, which was insulting to the people of Ulster. He compared public expenditure in the different regions of the United Kingdom without stating the special factors that apply to the Province.
May we have a debate in the Northern Ireland Committee, or, better still, in Northern Ireland, during the recess? We should then be able to debate those special features, namely, an unemployment rate that is twice the national average and the fact that, proportionately, there are 50 per cent. more supplementary benefit claimants and 500 per cent. more family income supplement claimants than in the rest of the United Kingdom.
Mr. St. John-Stevas: I shall pass on those remarks to my right hon. Friend the Secretary of State for Northern Ireland. He is doing an excellent job, in extremely difficult circumstances.
Mr. Edward Lyons: In view of the desperate state of the British carpet industry, which has been battered by American imports of cheap carpets as a result of America's cheap fuel policy, will the Leader of the House consider arranging for a debate to deal with the state of the British carpet industry?
Mr. St. John-Stevas: If there is an opportunity, I shall consider that. However, the first week clearly will not be an easy week.
Mr. Stanbrook: Will my right hon. Friend make arrangements to enable the Northern Ireland Committee to meet in Northern Ireland whenever that is appropriate?
Mr. St. John-Stevas: I shall certainly consider that matter.
Mr. Spearing: Is the Leader of the House aware that between now and when the House reconvenes there will be no fewer than eight meetings of the EEC Council of Ministers, about which we have had no oral statement of business? In view of the fact that there can be no oral statement or written answer about the outcome of those meetings will the Leader of the House undertake that there will be official statements on all those meetings, particularly those relating to fisheries and the budgetary contribution?
Mr. St. John-Stevas: We shall have a debate on the EEC documents concerned with fisheries later today. That, in part, will meet the hon. Member's point. I shall certainly draw the hon. Member's comments about the other matters to the attention of my right hon. Friend the Lord Privy Seal.
Mr. Christopher Price: On the business for Friday 31 October—the conclusion of the debate on references in court to proceeding in this House—is the Leader of the House aware that he would have a much better chance of getting that debate concluded if he were willing to table both of last year's recommendations of the Select Committee on Privileges, including the recommendation that came out of the Colonel B affair that fair reports of proceedings in this House should have absolute privilege, just as Hansard does? May I see the Leader of the House in his bungalow and discuss this matter?
Mr. St. John-Stevas: Certainly, I shall be delighted to discuss that matter with the hon. Member. I am prepared to meet him anywhere, even in Bolsover Castle.
Mr. Skinner: Is the Leader of the House aware that Bolsover Casle is falling down as a result of cuts in public expenditure by the Tory Government? The local press reported two or three weeks ago "Castle's cash aid runs out."
Will the Leader of the House tell us when the Government intend to raise the question of the reception for the British athletes who did so well in Moscow? How many representations has he received from those Conservative Members who spent nearly the whole fortnight rushing up to the Television Room in the House

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to watch British athletes performing so well?
Mr. St. John-Stevas: I shall pass the hon. Member's comments to my right hon. Friends who are responsible for those matters. I am sorry to hear that Bolsover Castle is falling down; perhaps we could meet on Creswell Crags.
Mr. Winnick: Have the Leader of the House and his colleagues, including the Chief Whip, learnt the most elementary lesson for all Governments—that this House cannot be treated with contempt? The events of the last few days were undoubtedly a victory not just for the Opposition but for the House of Commons itself. Does the Leader of the House agree that many people will find it strange that with a deepening economic crisis, and unemployment rising, the Government are closing down Parliament until the end of October?
Mr. St. John-Stevas: We can all draw our own lessons from the events of this week, and one lesson that I draw is that the Housing Bill will reach the statute book on time. That will be remembered long after the shenanigans of last night are forgotten. I have never made any complaints about the Opposition exercising their legitimate rights in this House. As Leader of the House, I recognise my duty to the Opposition as well as to the Government. If I had ever shown any contempt for this House I would not occupy the position that I hold today.
Several Hon. Members rose—
Mr. Speaker: Order. I shall call the hon. Member for Berwick and East Lothian (Mr. Home Robertson), the hon. Member for Rugby (Mr. Pawsey), and the Opposition Front Bench to finish.
Mr. John Home Robertson: Is the Leader of the House aware that since he began his Business Statement the report of the all-party talks on the government of Scotland has been made available in the Library? It is, in fact, the non-event of the year, as was suggested by the Leader of the Liberal Party. Will the right hon. Gentleman now take notice that there will be a major campaign in Scotland and in this House, throughout the summer and when Parliament resumes,
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to press the Government to produce a genuine initiative for devolution in Scotland?
Mr. St. John-Stevas: I shall take that matter on board. I know of the hon. Member's interest in these matters and I know that he has extensive properties in Scotland. I shall be happy to meet him there if necessary.
Mr. Pawsey: When will the House have an opportunity to discuss and perhaps finalise the outstanding matters in the Finniston report? This has been before the House previously. It is an important matter to the engineering industry, and the House should have an opportunity to discuss it as soon as possible.
Mr. St. John-Stevas: We have had a discussion on this report, but I shall draw my hone Friend's comments to the attention of my right hon. Friend the Secretary of State for Industry. I agree that the Finniston report is most important for the future of the country.
Mr. Wrigglesworth: In view of the deep anxiety that has been expressed on both sides of the House about the Government's intended procurement of computers for the Inland Revenue pay-as-you-earn system, will the Leader of the House have urgent consultations with his colleagues to see whether a statement can be made tomorrow about the Government's intentions? Is he aware that if no statement is made and the matter is allowed to drag on into the recess it will heighten the suspicion of both sides of the House that it is not the Government's intention to give the order to a British firm and follow their own policies of buying British?
Mr. St. John-Stevas: As the Prime Minister said, this is a complex and difficult question. It is most important to reach the right decision, rather than an immediate decision. I can assure the hon. Member that this matter is being considered carefully by the Government.
Mr. Urwin: On a point of order, Mr. Speaker. I was hoping to catch your eye in order to put a supplementary question to the Leader of the House, but largely because of the minor disturbance that took place in the Public Gallery—
Mr. Speaker: Order. The right hon. Gentleman can address a point of order

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only to me, and it must be a matter on which I can rule.
Mr. Urwin: I accept your ruling, Mr. Speaker. While the exchanges were taking place across the Floor of the House about discussions in bungalows and semi-detached houses, people who live in semi-detached houses were busy making their representations. There are 3,500 people who will lose their jobs before Parliament resumes in October because of the closure of the Consett steelworks, and—
Mr. Speaker: Order. The right hon. Gentleman knows that he is going beyond the scope of order.

CIVIL DEFENCE
The Secretary of State for the Home Department (Mr. William Whitelaw): With permission, Mr. Speaker, I should like to make a statement on civil defence.
On taking office last year, the Government decided to accord high priority to the defence of the nation; and a review of civil preparedness for home defence was set in train so that this important element of our defence strategy could be considered as part of the improvement of our general defence effort. The review has been wide-ranging, embracing the responsibilities of many of my right hon. Friends as well as my own. As a result, I am now able to announce certain immediate steps which the Government judge to be necessary. These will extend as appropriate to Scotland, and my right hon. Friend the Secretary of State for Scotland will be responsible for them there. I will also refer to parts of the review which are still continuing.
I begin by emphasising that, despite the difficulties of the present international situation, the Government do not regard armed conflict with the Warsaw Pact countries as probable, let alone inevitable or imminent, provided that we maintain, as we intend, a firm commitment to peace, while ensuring that our defence forces remain balanced and effective. We believe that to be seen to be prepared at home, as well as capable of military deterrence and defence, will make war less likely. Nevertheless, I remind the House of what my right hon. Friend the Secretary of State for Defence said in paragraph 110 of his statement on the defence Estimates 1980. He said that Soviet strategists hold that any war in Europe is likely to escalate into a nuclear exchange, though it might start with conventional warfare, and that the warning time we might receive could be very little. This period of warning might, we believe, be measured in days rather than weeks.
Against this background, the Government consider that an expanded civil defence programme is both prudent and necessary to achieve an appropriate balance in our defence capability. To this end, we propose to take the following immediate steps.
First, the United Kingdom warning and monitoring organisation, which exists to

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give the public warning of air attack and, in the event of a nuclear attack, to give warning of the approach of radioactive fallout and subsequently to monitor the intensity of fallout radiation, will now modernise its communications, replace certain obsolete equipment and improve the allowances paid to the volunteers of the Royal Observer Corps, who play a vital part in maintaining the warning and monitoring systems. There will also be additional expenditure on the completion of the organisation's administrative headquarters and the sub-regional headquarters for decentralised government. Extra expenditure will be incurred on the associated communications network and on improvements to the arrangements for the wartime broadcasting service, which, if the need ever arose, would be established to ensure the continuation of public broadcasting facilities even after large-scale attack.
A great deal of civil defence work must be done at local level, and the Government propose to double the money available for this purpose. We shall consult the local authority associations about the allocation of additional resources for local planning and training, and the adaptation of premises by district councils to complete the pattern of local authority war time administrative headquarters and communications. Effective civil defence arrangements depend upon co-operation between central Government and local government. I know that concern has been expressed about variations in civil defence arrangements in different parts of the country. I am satisfied that the Government have adequate powers to ensure that proper standards of protection are provided throughout the country, and it will naturally be our aim, with the local authorities, to see that that is done.
We recognise that many county and regional councils at present lack the resources to plan for community involvement in civil defence below district level. The Government are ready to make more money available to meet this need and will discuss with the associations the most effective ways of doing so. We are anxious in particular to enable local emergency planners to maximise the contribution
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made by the large number of citizens both individuals and members of organisations, who wish to add their efforts to civil defence planning on a voluntary basis. Many individual volunteers are already active in the civil defence field, and certain voluntary organisations are keen to play a fuller aprt. The harnessing of volunteer effort will be an important feature of our plans, and I intend to make a special appointment of a person of high standing for this purpose. There will be a separate appointment in Scotland.
At the same time, there will be greater involvement in civil defence planning and training on the part of central Government Departments, the emergency services, the Post Office and the National Health Service. There will be an increase in central training facilities for the senior staff at local and other authorities, including an expansion of the Home Defence college at Easingwold. There will also be improvements in the arrangements for the operation of emergency port facilities. The stock of emergency fire appliances is being refurbished this year.
Mr. Heffer: The right hon. Gentleman must be joking.
Mr. Whitelaw: The total additional cost of these immediate measures over the next three years will be about £45 million, and by 1983–84 expenditure on civil defence will have risen from £27 million a year before the review to £45 million a year, an increase of over 60 per cent. The additional costs will be covered by a reallocation of resources within existing programmes and without adding to the total of public expenditure.
I turn now to certain general policy matters and further studies that are still in progress.
In the face of an attack, dispersal is not a practicable policy, and in any event no part of the country could be regarded as safe from direct and indirect effects of nuclear weapons. A study is being made of domestic or family shelters, and advice will be available to the public later this year on a range of structures that would provide improved protection at relatively low cost. This guidance will

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consist of design outlines for five different types of shelter and the degree of protection provided by each. We propose that, additionally, a survey of existing structures suitable for communal shelter purposes should be conducted, and we shall discuss with the local authority associations how best to do this.
We have also decided that it is right for information about civil defence and the likely effects of a future war involving the United Kingdom to be made generally available in peace time. The public has a right to knowledge of these matters. We have already published "Protect and Survive", and we shall be examining ways of making more information available.
The Government will also be studying the role and closer involvement of industry in defence planning.
Finally, the review has emphasised the need to promote effective co-ordination at all levels and between all those with responsibility for civil defence. Ministers will be attending some of the conferences already planned in various parts of the country for this purpose.
The measures that I have announced today are an important contribution to improving our civil preparedness. They are positive and cost-effective. The Government are confident that they will be widely supported in this House and in the country.
Mr. Merlyn Rees: Is the Home Secretary aware that the general proposition at the beginning of the statement, that the Government do not regard armed conflict with the Warsaw Pact countries as probable, let alone inevitable or imminent, is important and puts the proposals in perspective? Does he recall the words of Lord Carver, in another place recently, when he said that:
"in the event of a thermo-nuclear attack … designed to knock this country out, no civil defence organisation … could really achieve much, if anything, worthwhile"?—[Official Report, House of Lords, 5 March 1980; Vol. 406, c. 308.]
We are concerned today with damage arising from a smaller nuclear or conventional attack, if that is possible, given the chain effect that would follow. It is only in that context that it is sensible to talk about civil defence.
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How are the public expenditure figures broken down? The right hon. Gentleman talks about the modernisation of the United Kingdom monitoring and warning organisation, and doubling money at local level. Doubling from what? He talks about refurbishing the "green goddesses", which is a procedure that goes on anyway. What part of the Government budget is losing expenditure if there is to be no overall increase in public expenditure? How does the new expenditure compare in real terms with that in 1968, when civil defence was essentially put on a care-and-maintenance basis? The expenditure then was three times more than it is now. It is all very well to talk of increases, but what do they add up to at the end of the day?
The right hon. Gentleman talks of voluntary effort, but is he not aware that the keys to voluntary effort are the police, the fire service and the home-based Army? What are the certain voluntary organisations to which the Home Secretary referred and what type of person is to be approached to co-ordinate voluntary activities?
We note that there is to be no policy of dispersal, because no part of the country is safe. It is my view that that would be true, whatever our defence role. Will the right hon. Gentleman concede that when he talks of various types of shelter—to use the words of the past, the Morrison type, the Anderson type, and so on—there is a danger that he could mislead people about their efficiency? Does the right hon. Gentleman accept that it is impossible to provide nuclear shelters for the entire population? To say that those who can afford small shelters can have them and that the rest will have no shelters is the wrong approach.
Finally, is the right hon. Gentleman aware that the only way through the frightful problem of nuclear war or updated conventional war, which would be far worse than the horrors that parts of Europe underwent in the last war, is for us to work for the disarmament of the great Powers? We have to convince the Russians, the Chinese and the Americans. To convince ourselves is not enough.
Mr. Whitelaw: I suspect that the right hon. Gentleman will agree that if we are to make war less likely it must be sensible to have military deterrents and to make

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preparations at home. I am surprised that the right hon. Gentleman should suggest otherwise. I believe that it is an essential feature of making war less likely.
The right hon. Gentleman said that all voluntary effort should be done through the police and the fire service. I cannot accept that. The following organisations have indicated that they are extremely anxious to take part in the voluntary effort: the WRVS, the Red Cross, the St. John Ambulance Brigade, the Royal Observer Corps and, in various parts of the country, including Devon and Wiltshire, voluntary organisations. I am surprised that the right hon. Gentleman, of all people, should decry voluntary effort in this country. That is exactly what he did. A great many people want to take part voluntarily, and it is a pity to decry their efforts.
Many people are asking what sort of nuclear shelters they should have. There are many shelters on the market. Some are undoubtedly good, but some are not. It is important that proper instruction should be given to those who wish to have shelters, as many do.
It is clear from what I have said that the Government, having taken over civil defence on a care-and-maintenance basis, are providing for a substantial increase in expenditure to improve our preparedness.
Several Hon. Members rose—
Mr. Speaker: Order. I am prepared to allow 20 minutes on questions on the Home Secretary's statement. The length of questions will decide the number of hon. Members called.
Mr. Buck: Is my right hon. Friend aware that responsible citizens throughout the land will welcome what he has had to say, because it enhances the credibility of our defence posture? Does he agree that it will bring our policies more in line with those of other "warlike" countries, such as Switzerland, Sweden and even Finland? It is wholly defensible and wholly responsible that my right hon. Friend should have made the statement that he has made.
Mr. Whitelaw: I am grateful to my hon. and learned Friend. We are seeking
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sensible precautions which will make war less likely in the long run but which will prepare our people at home for the dangers that could ensue.
Mr. Dobson: Does the Home Secretary agree that the best deterrent against nuclear war would be for the Government's contingency plans to allow for them and the joint chiefs of staff to walk out into Parliament Square after they have taken the decision to use our independent deterrent and to stand above ground? Will the Government try to arrange in any multinational talks that take place that the power elites in the rest of the world come to the surface in the event of nuclear war rather than hiding under it while letting the populations be destroyed?
Mr. Whitelaw: Snide and sarcastic comments are totally out of place on an important matter for the people of our country.
Mr. Banks: Is my right hon. Friend aware that his statement today has moved a mountain of neglect and indifference which has existed for more than 15 years on the subject of civil defence, and that he deserves to be warmly congratulated for the excellence of his statement?
Will my right hon. Friend say whether he will consider appointing a commissioner for civil defence whose task would be to co-ordinate the work of the various Departments and to administer an inspectorate to ensure that local authorities meet the standards that are asked of them? Secondly, will my right hon. Friend give advice in the booklet that he will offer for sale to the public to show that lives can be saved if the correct measures are taken?
Mr. Whitlaw: I am grateful to my hon. Friend, who has been foremost in advocating preparedness in civil defence and who introduced an important document on the subject, which I believe made many people think very carefully.
As to the question of how we should organise at the centre, I believe that it is right that the co-ordination should be done inside the Home Office. My Minister of State will be specifically responsible to me in that area. I have announced the appointment of a person of high standing for England and Wales and a separate appointment for Scotland for

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the harnessing of voluntary effort. The administrative work must be my responsibility.
Mr. Stephen Ross: Is the Home Secretary aware that we welcome his decision to improve monitoring, co-ordination and training in civil defence matters? Does he agree with the right hon. Member for Leeds, South (Mr. Rees) that in the event of a direct nuclear attack there is no protection that can be afforded? No shelter can give adequate protection. Will the person of high standing have funds directly available to him from the Home Secretary in order to deal with voluntary bodies, or will he have to work through the local authorities?
Mr. Whitelaw: The person of high standing will work directly through me. Therefore, I shall have to find the funds for his co-ordination work from the budget of the Home Office. I cannot believe that when other countries think it right to take measures to prepare their people and to ensure that as much life as possible should continue we should not do the same. That is what we are doing, and I should have thought that it would be regarded as sensible.
Mr. Archie Hamilton: Will my right hon. Friend accept that his statement will be welcomed by the people of this country, who have been concerned for some time about the dilapidated state of our home defence? As a first step, this is extremely progressive, particularly bearing in mind that we have certain constraints on public expenditure at the moment. Does my right hon. Friend also accept that in countries such as Switzerland and Sweden great advances have been made through planning regulations to equip many of the population with shelters? Has he given consideration to that?
Mr. Whitelaw: I am grateful to my hon. Friend. We have to accept that comparisons with other countries are difficult because conditions are different in various countries. If we can learn from what others have done through planning procedures, we shall certainly do so.
Mr. Frank Allaun:Quite apart from the transparent futility or civil defence against nuclear weapons and nuclear fallout, is there not a more questionable and dangerous aspect? Are not the Govern-
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ment extending civil defence deliberately to condition people mentally to accept a war as unavoidable and to involve them in preparing for it?
Mr. Whitelaw: I know the hon. Gentleman's view and I totally disagree with it. He is entitled to it, but I do not happen to agree with it. I made clear in my statement that the Government do not regard war as inevitable or imminent. We believe that by arranging more preparedness we are making it more likely that we shall preserve peace. The hon. Gentleman knows that I feel that his belief in just giving up makes war far more likely than anything else.
Mr. Neil Thorne: In view of the large number of reservists who are obliged to retire as early as 45, and since they have skills that would be useful in civil defence, does my right hon. Friend have any plans to make use of their abilities?
Mr. Whitelaw: I understand from my right hon. Friend the Secretary of State for Defence that for the time being home defence planning must continue on the basis that in a period of tension and of conventional war the Services, including the Territorial Army, will be fully engaged in the performance of purely military tasks. That is the basis on which I have had to plan.
Mr. Thomas Cox: Can the Home Secretary say what consideration he has given to the question of people who live in high-rise accommodation in many of our large cities? What protection will be offered to them in the event of an attack?
Mr. Whitelaw: I have announced that a survey is to take place, particularly in our big cities, of premises which could be used for communal shelters. We shall see what can be provided in that way.
Mr. Wilkinson: Is my right hon. Friend aware that I think that he is right to emphasise that nowhere in the United Kingdom will be safe in the event of a nuclear exchange, but does he agree that certain prime targets are readily identifiable? Would it not be prudent to initiate a programme of public shelter construction at least in such vicinities?
Mr. Whitelaw: I cannot go that far. The provision of public shelters through the Government would be enormously

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costly and something which we could not contemplate.
Mr. Heffer: Is the right hon. Gentleman aware that his friendly, bland, shaggy-dog manner will not convince anyone who really knows about these matters? Is it not clear that, because there is a genuine concern amongst our people about the possibility of nuclear war, he is trying to pretend that the Government really are doing something when they are not doing anything? Does he agree that there is nothing that one can do in relation to nuclear weapons except to do something about nuclear disarmament? May I advise the Government that it would be far better if they concentrated on working for a nuclear-free zone throughout Europe than on the nonsense that we have heard this afternoon?
Mr. Whitelaw: The hon. Gentleman's personal remarks about me do not add up to much in relation to the importance of seeking to prepare our people sensibly for civil defence. The hon. Gentleman says that we are not doing anything. An increase of over 60 per cent. in expenditure in the period that I have mentioned is something. What we are planning is a considerable change in the idea of a care-and-maintenance policy only. It is important that it should be so.
As I said to the hon. Member for Salford, East (Mr. Allaun), I do not accept the view that we should make no preparations for the dangers of nuclear war, either in defence generally or in home defence. Such a view is surprising because it does not seem to be that of many other countries.
Mr. Michael McNair-Wilson: Is my right hon. Friend aware that I support his statement? In his review and renewal of civil defence services, will he give thought to creating a national disaster service, which has long been needed in Britain, to meet local disaster problems? My right hon. Friend referred to approved designs of nuclear fallout shelters. He seemed to suggest that some on the market were not able to do the job for which they are intended. Does he intend to designate one of the five designs the "Whitelaw" shelter?
Mr. Whitelaw: I would not propose that. If I gave a misleading impression about the shelters I should like to correct it by saying that there is a wide variety of proposals. It is right that people with particular knowledge should study the different proposals, decide which are likely to be the most effective and tell our people accordingly. The question of a disaster corps is a different matter.
Mr. William Hamilton: As the right hon. Gentleman says that dispersal is not a practical policy, will the Government encourage the individual householder to buy his own shelter, class 1, 2, 3, 4 or 5? If so, what guidance will the Government give to the would-be purchaser as to the relative safety of the shelters? If people prefer not to buy a shelter but to stay indoors, will the Government give advice about the quality of whitewash put on windows to prevent radiation flash, which I understand to be one of the guidelines in the Government's White Paper?
Mr. Whitelaw: A scientific assessment of the various shelters will be made and people will have to make up their own minds about what they wish to do. That is the sensible way to proceed. Although the hon. Gentleman enjoys being somewhat cynical, many people want such guidance, ask for it and expect it. I think that they should have it.
Mr. John Browne: Will my right hon. Friend accept my congratulations? Does he accept that the broard measures that he is taking, including the development of voluntary services, will benefit the country not only in the event of a nuclear attack, which the Opposition dispute, but in the event of a conventional attack or of other mishaps or acts of God? Does he accept that an important fabric of society is being revived? Do the present plants take an adequate view of the provision of food and water, particularly in view of the acceptance of non-dispersal? Does my right hon. Friend believe that more should be done in that respect?
Mr. Whitelaw: I thank my hon. Friend. Of course there is always the possibility of a conventional war. That must be guarded against and it is one of the purposes of the proposals. Many of the voluntary organisations to which I have referred have a role in relation to other

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disasters and acts of God. Today I am referring specifically to civil defence. We shall examine further the plans for the provision of food and water to ensure that they are adequate.
Mr. Faulds: Will the right hon. Gentleman consider taking back the document, because it really is ludicrously inadequate? Does he not realise that full civil defence can be provided on the range and scale that it is provided in Sweden and Switzerland, but only at that cost, if citizens' lives are to be saved across the country? Will he and his colleagues understand that the only real civil defence is to work towards nuclear disarmament—which his Government are not doing?
Mr. Whitelaw: I do not accept that the Government's defence policies are doing anything other than working with our allies towards preserving the peace. I have made it clear, and I may as well say it again, that the people who advocate unilateral disarmament are the people who are most likely to provoke the war which they desperately and genuinely believe they seek to avoid. I just do not accept their view. Some preparedness is important. I do not believe that in our position we can contemplate preparations of the kind operating in Sweden and Switzerland. What I have proposed is a sensible basis on which to make some reasonable preparation for our people.
Mr. Jessel: Does my right hon. Friend accept that the need for fallout shelters is as great on the outskirts of London as anywhere because of the particular risk which could arise from a nuclear explosition 10 or 15 miles away? Will he say when, during the next few months, he expects to be able to give further information about the different types of fallout shelter?
Mr. Whitelaw: I hope to be able to give that information by the end of the year.
Mr. Soley: How long does the Home Secretary think that radioactive fallout will remain at danger levels in the event, first, of an air-burst nuclear strike on an area of mass population, and, secondly, a ground-burst nuclear strike on a military target? Does he agree that the food
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and water supplies will be contaminated for a longer period? Is not that information essential if the public are not to be lulled into a false sense of security?
Mr. Whitelaw: I do not believe that anyone could answer those questions. So much depends on many variables and many different problems, such as the size of the explosion, the weather, and other matters that no one can foretell. It would be misleading to try to answer.
Mr. Pollock: I thank the Government for their commitment to improve civil defence preparations. Will my right hon. Friend confirm that special attention will be paid to sensitive areas—such as my constituency of Moray and Nairn—which have major RAF bases? Will he say a little more about the nature of the Scottish overlord? Will he be charged with the key job of liaison between central Government, local authorities and the Royal Auxiliary Air Force?
Mr. Whitelaw: My hon. Friend's questions fall within the responsibility of my right hon. Friend the Secretary of State for Scotland. Discussions with local authorities must take account of local matters. My hon. Friend mentioned the co-ordinator for the voluntary effort in Scotland. He will work with the Secretary of State, who will be responsible in Scotland, as I will be in England, for liaison with local authorities.
Mr. Cryer: Does not the reopening of the regional seats of government mean that the Government are providing bolt-holes for a few appointed bureaucrats in the event of a nuclear war so that they can administer the radioactive cinder heat during the last dying days of civilisation? Is it not true that the only defence is to get rid of nuclear weapons? Is not the right hon. Gentleman ashamed to announce an increase of many millions of pounds expenditure on a cosmetic indoctrination of the population when people have demonstrated in the House today about the loss of jobs created by the Government through lack of proper expenditure?
Mr. Whitelaw: The hon. Gentleman should realise that the previous Labour Government sought to establish regional centres. We are seeking to make them

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effective and to improve their communications. That is a thoroughly sensible objective. The previous Labour Government thought that right, and we now need to ensure that they are effective and that their communications are improved. It appears to be a sensible idea.
The hon. Gentleman knows that I do not agree with him on his other point. He does not agree with me. I am never likely to agree with him, and I do not want to.
Mr. Lawrence: I thank my right hon. Friend for his reassuring initiative. Is he aware that many people in Britain want him to go further with civil defence as soon as the economic circumstances allow? Will he consider the possibility of giving tax concessions to those who build shelters in their homes? Will he reassure everybody that in the event of a nuclear attack the organisation of defence in the regions will not be in the hands of local government officers?
Mr. Whitelaw: On the question of extra expenditure, I have announced a sensible start, and a reasonable preparation, at this time. It would be wrong for me to give any projections. My hon. Friend will be the first to realise that matters concerning tax are predominantly not for me in any circumstances. However, I shall ensure that my right hon. and learned Friend the Chancellor of the Exchequer appreciates what my hon. Friend said. I hope that what we have sought to do will provide some reassurance, and that is its purpose.
Dr. Summerskill: The Home Secretary stated that the measures would cost an additional £45 million over the next three years. He then said that that would be covered by a reallocation of resources within existing programmes without adding to the total of public expenditure. Will he say which programmes will have money taken away in order to make the necessary provision? Is it not a cosmetic additional cost if he subtracts from one to add to another?
Mr. Heffer: There will be cuts in law and order.
Mr. Whitelaw: Naturally I am responsible for the allocation of expenditure in the Home Office. I believe that it is vitally important to make this preparedness. I have undertaken to ensure that I provide the money from my budget. I am working out exactly how I shall do that. Because I shall find it from the Home Office budget, other matters on which I am spending money will have to bear some part of the cost. I am entitled to work out exactly which provisions will be affected. That is sensible.
Mr. Kilfedder: On a point of order, Mr. Speaker. The statement made by the Home Secretary covered civil defence measures in Scotland as well as in England and Wales—
Mr. Speaker: Order. The hon. Gentleman is developing the habit, when he is not called, of raising a point of order that is not a point of order. I consider that to be an abuse of the rules of the House.

MEMBERS OF PARLIAMENT (PAY, PENSIONS AND ALLOWANCES)
The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): With permission, Mr. Speaker, I wish to make a statement about parliamentary pay, pensions and allowances.
On 21 July the Government proposed to the House a motion on these matters which would have reduced the cost of implementing the recommendations of the fifteenth report of the Top Salaries Review Body by about £1 million in the coming year. The House accepted the Government's recommendation about the pay of Members of Parliament but rejected that on the allowances to be paid for secretarial and other assistance to hon. Members. In addition, the House expressed the opinion that the notional rate of pay used for calculating the pension entitlements of hon. Members in the coming 12 months should be set at £13,750 a year rather than the £13,150 proposed by the Government; that the pay of hon. Members should correspond to the salary paid to a specific grade in the public service; and that the rate of accrual of hon. Members' entitlement to pension should be raised from one-sixtieth to one-fortieth of final salary for each year's service.
On allowances for secretarial assistance, the Government accept the resolution of the House and we are asking the Fees Office to give effect to it forthwith, backdated to 13 June. The maximum secretarial allowance will be at the rate of £8,000 a year and the maximum allowance for contributions to an approved pension scheme will be at the rate of £800 a year.
On the matters relating to pensions, the Government have noted the view of the House. There are, however, considerable complexities arising from the need to consider the repercussions for public service groups and the substantial implications for public expenditure. The Government have therefore decided that before making further proposals to the House they should prepare a factual paper and place it before hon. Members for their consideration. The House will then have
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an opportunity to vote on further proposals in the light of that paper after the recess. The Government propose to discuss linkage of salary in the same paper and also to undertake consultations on it in the autumn through the usual channels and with the parliamentary parties.
In the meantime, the Government are asking the Fees Office to put into payment the revised rates of parliamentary salary for which the House voted on 21 July, with effect from 13 June. These are £11,750 for Members of Parliament, except for ministerial office holders, for whom the rate is £6,930. For the time being the pensionable rate of pay will remain at its present figure of £12,000, but when the House in due course votes on a substantive motion on the revised pensionable rate this will operate with retrospective effect from 13 June 1980. Accordingly, Members of this House and their dependants will not suffer from the delay in reaching a conclusion on the pensionable rate. As, for the time being, the difference between pensionable pay and actual pay will be only £250, the supplement payable to hon. Members to cover the cost of the 6 per cent. employee's pension contribution will be £15.
Mr. George Cunningham: May I first thank the right hon. Member for making this statement and tidying up the many loose ends that exist in this field and for making the administrative arrangements—as it is his duty to do, of course —to put into effect the decisions of the House on secretarial assistance allowance and related allowances? As for the two more fundamental matters voted on by the House the other week—that is, the linkage point and the fiftieths and sixtieths pension point—we accept that those two matters cannot be implemented immediately, that one would require legislation, and that further discussion about them is appropriate after the recess.
However, we expect the Government to take seriously the fact that the House has now voted more than once for the principle of linkage and not to regard that as something that the Government can simply dismiss. We also expect the Government to take seriously the decision of the House in principle on the matter of fortieths and sixtieths as a basis for pension.

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That leaves the question of pensionable salary. Here, I must be less kind to the right hon. Gentleman. The considerations to which he referred as leading the Government to reject the decision of the House on this matter were rehearsed during the debate. Nevertheless, a motion supported by hon. Members on both sides was passed by a majority of the House, made up of hon. Members in all parts of the House. Despite that, the Government, instead of implementing that decision, say that they intend to do nothing about it except to bring it forward again for another decision in the autumn.
That is not an acceptable way for the Government, and particularly for the Leader of the House, to behave towards a decision of the House. If it has become the practice for Governments to take that line on decisions of the House of this nature, many hon. Members—I am sure on both sides—will decide that it is high time for the initiative in proposing expenditure of this sort to pass from Governments to the House of Commons Commission. I hope that even at this late stage the Leader of the House will recognise that the decision so wrongly taken by the Government in that case is quite unacceptable, and an insult to the House.
Mr. St. John-Stevas: The hon. Member has got the whole matter slightly out of proportion. First, I thank him for what he said about the measures that we propose. Clearly, we are taking linkage seriously. It is precisely because we take it seriously that we must have further discussions through the usual channels and with the representatives of the parties. Linkage is one of those ideas that sound fine when one first approaches them, but as one examines them more closely, the difficulties begin to emerge. We must therefore examine and discuss that matter further.
Similarly, on the matter of one-fortieth as opposed to one-sixtieth of salary, on which the House expressed its opinion, complex issues are involved. The Cabinet has considered the matter twice. We came to the conclusion that it would be unwise, at the tail end of the Session, to rush into decisions without considerable opportunity for reflection.
As for the question of the pensionable salary, we are not rejecting the view of
808
the House; the hon. Member is quite wrong. That, again, was an expression of opinion, and when an opinion has been expressed by the House the Government must reflect upon it. It is our view that one cannot implement that proposal in respect of one group of the TSRB people, who have all been treated equally, without implementing it for the others. Therefore, the House should have the opportunity to consider the facts. Then a substantive motion will be put before the House. The House will vote on the matter, and that will dispose of it.
Therefore, we are not rejecting the opinion expressed by the House. We are following it carefully and, I think, putting forward reasonable proposals. If he reflects on that the hon. Gentleman will see that the House is being treated with the respect and deference that is suitable.
Mr. Onslow: On the matter of linkage, is my right hon. Friend aware that many of us regard it as totally inconsistent that we should at one moment vote for hon. Members of this place to set an example to the country by exercising self-restraint and, not five minutes later, vote to make it impossible for ourselves ever to do the same again? In any consultations that he may have will he bear in mind the fact that that view is shared by hon. Members on the Government side, and that the executive of the 1922 Committee is not authorised to act as a shop steward on our behalf?
Mr. St. John-Stevas: Those are fighting words. I must take into account the views of all hon. Members. That is why it is essential to have consultations on this matter with representatives of the parties —that is, with Back Benchers as well as through the usual channels. This is a difficult problem. As my hon. Friend said, there is a strong view that it should be rejected. On the other hand, I must start from the premise that the House has voted for it and that we must examine the practicalities of it.
Mr. Dykes: Does my right hon. Friend nevertheless agree that an unhealthy and regrettable situation has now developed, in that the combined allowances are well in excess of the salary figure? That must be wrong, so one of the important imperatives for linkage will also be to bring that relationship back into more sensible line,

809
as well as to give an appropriate increase in salary.
Mr. St. John-Stevas: I am afraid that I cannot agree with my hon. Friend. The allowances in this House are reimbursable allowances for expenses actually incurred. The fact that there is a combined secretarial allowance and research allowance of £8,000 does not mean that every hon. Member is entitled to it. If an hon. Member spends that money he can claim it back; if he does not, of course he would not apply for it.
Mr. Alexander: May I seek further clarification on the problem of secretarial pensions? My right hon. Friend used the phrase "approved pension schemes". Will the mechanics of the system be that hon. Members should get their own quotations and present them either to the Fees Office or to himself for approval? If so, when that is done who gives the final approval? Has my right hon. Friend considered the possibility of the problems arising over secretarial pensions, presumably paid by their employers, when those employers lose their jobs, as some of us unfortunately do at election time, with the danger of insurance premiums lapsing?
Mr. St. John-Stevas: Those are technical questions. If I may, I will write to my hon. Friend on his second point. As for pension proposals being referred to myself, I feel rather as my right hon. Friend the Home Secretary felt about taxation proposals being submitted to him. I would feel sorry for any hon. Member who submitted a pension pro-
810
posal to me. He would have to be a person of great faith—and of hope and charity as well.
It is intended that any proposals should be submitted to the Fees Office. It will be possible for hon. Members to have a model scheme with an insurance company, which the Fees Office will make available, or, if arrangements are made by hon. Members themselves for secretaries, they can submit a receipted claim for money expended on the scheme, and that will be reimbursed. Those are alternatives that hon. Members may pursue.
Mr. George Cunningham: When the substantive motion conies before us after the recess, will it be in terms of the motion that the Government tabled before with regard to pensionable salary, or in the terms of the amendment carried by the House? Does the right hon. Gentleman appreciate the importance of this? If he tables a motion in accordance with the figure that the Government want, because it will be an effective motion it will not be open to any non-ministerial Member to move for an increase in the figure. Therefore, there will be no opportunity to take again the decision that was taken a week or two ago. How does the right hon. Gentleman propose to get around that difficulty?
Mr. St. John-Stevas: It is quite clear that what I am proposing is that quite a lot of information will be made available to the House about the implications of this change. The House will have an opportunity of voting for the motion in the terns in which hon. Members have already voted. It is similar to that.

NORTH-EAST LANCASHIRE
Mr. Straw: 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 impending closure of Messrs. Pickering Ltd., Blackburn, with the loss of over 500 jobs and the refusal of the Secretary of State for Industry to restore industrial assistance to Blackburn and North-East Lancashire."
Last night, Sears Holdings, the conglomerate founded by Charles Clore, announced that Pickerings of Blackburn was to close with the loss of the total work force of 520 people. The firm makes tufted carpet machinery. It is one of the few firms in the industry which export all over the world and it was a pioneer of tufted carpet technology. It was one of the first firms in the world to make this machinery.
The importance of the matter is that it is not just another run-of-the-mill closure. This was a profitable company until two years ago and, although it has made losses over the past two years, they are insignificant compared with the profit made by Sears Holdings as a whole of £40 million after tax in 1978 and £62 million after tax in 1979.
New management was put into the firm in January this year. At that time the chairman of Sears Holdings, Mr. Stainer, said in the annual report on 30 January that he was hopeful that with the change in management the division as a whole would start to show improved results. Everyone knows that it is impossible to turn round a company in six months, but Sears Holdings has decided to give this firm no time to turn the company round. It has decided to abandon the commitment it gave both to the shareholders and to the work force to try to turn the company round over a period, notwithstanding the fact that the firm has a £3·1 million order book and is not suffering from a major lack of demand.
It is my strong suspicion that this is an irresponsible decision by Sears Holdings. I think that it is premature and unjustified, and I am satisfied that there was no consultation with the trade unions before the decision was announced. Neither the chairman, Mr. Stainer, nor
812
Mr. Maitland Smith, the chief executive, is even in this country. They are absent abroad. They are not here to justify the decision to the work force. I believe that it is an outrageous and disgraceful decision. It is a cavalier and uncaring way of treating people who have lost their livelihood.
The urgency of the situation is that the decision is to take effect in September. There should be urgent Government action before that to intervene to prevent the closure and the loss of 520 jobs.
All this is taking place in the very week in which the Government start the withdrawal of assisted area status from Blackburn and North-East Lancashire—Accrington included. That is to happen on the ground that unemployment is not high enough in the area. In the past year unemployment in Blackburn has risen by 53 per cent. and will increase even further on the average of 44 per cent. for the coontry. Unemployment in Accrington has increased by 110 per cent. and it has increased by over 100 per cent. in Nelson and Colne. This is happening while in two other industrial areas receiving industrial assistance, namely, Lancaster and Blackpool, unemployment has not risen by half the national average. In areas such as mine which is now without assistance the unemployment figure is twice the national average.
I think that the Government should agree that we should debate the issue so that we can get them to overturn their decision to strip away industrial assistance for the area. Otherwise, unquestionably unemployment will go on rising before we meet again after the recess.
Mr. Speaker: The hon. Member for Blackburn (Mr. Straw) gave me notice before noon today that he might seek to make an application under Standing Order No. 9 for leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the impending closure of Messrs. Pickering Ltd., Blackburn, with the loss of over 500 jobs and the refusal of the Secretary of State for Industry to restore industrial assistance to Blackburn and North-East Lancashire."
I, and the House, have taken careful note of what the hon. Member said about

813
the serious circumstances in his constituency. He is aware that I am directed account of the several factors set out in Standing Order no. 9 but to give no reason for my decision. I am fully conscious of the importance of the matter that the hon. Member has raised, but 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.

ORDERS OF THE DAY

  TENANTS' RIGHTS, ETC. (SCOTLAND) BILL
  Lords amendments considered.
  4.55 pm
  Mr. Bruce Millan: On a point of order, Mr. Speaker. It might be for the convenience of the House if, before we start discussion of the detailed amendments, the Minister could give us some exact indication of what the Government intend to do to ensure that there is a provision in the Bill similar to that in the Housing Bill discussed yesterday. We have had a speech about it, but discussion of this matter is not announced for the week that we cone back from the Summer Recess. There will be difficulty unless the Government can give an assurance in the interim period that amending legislation will come forward. I think that it would be sensible if the Bill were not implemented until the amending legislation is enacted.
  I ask for three assurances: first that the amending legislation will come forward in the overspill period; secondly, that there will be no interregnum so that the amending legislation will be applied right from the start of the implementation of the Bill; thirdly, that we shall be consulted about the exact wording before the Bill is published. If that can be done, I am sure that the Bill can proceed with extreme rapidity through this House and another place since all are agreed that it should be so.
  Mr. Speaker: Order. Yesterday I allowed something that was not within order and I shall allow the same today because I believe it is in the interests of the House. However, this kind of question should normally come at a different stage in our proceedings.
  The Secretary of State for Scotland (Mr. George Younger): Perhaps I could reply to the right hon. Member for Glasgow, Craigton (Mr. Millan) after I have formerly moved the amendments, if that is acceptable.
  Mr. Millan indicated assent.

  TENANTS' RIGHTS, ETC. (SCOTLAND) BILL
    Clause 1

      SECURE TENANT'S RIGHT TO PURCHASE
      Lords Amendment No. 1, in page 4, line 10, at end insert "or any statutory predecessor"
      Mr. Younger: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker (Mr. Bryant God-man Irvine): With this we may take Lords amendments Nos. 2 to 9.
      Mr. Younger: I am grateful to the right hon. Gentleman. I am sure that the House would like to have an assurance, and I am glad to give him the assurances that he has sought. First, it is the Government's intention to produce the necessary Bill in the overspill period to give similar effect to the arrangements made yesterday in the English Housing Bill. Secondly, in the Bill we shall wish to provide that there is no possibility of an interregnum during which an old person's house might be inadvertently sold. That would be covered by the amendment. I am glad to assure the right hon. Gentleman that I shall ensure that the provisions are acceptable to him.
      Mr. Barry Henderson: Will my right hon. Friend consult his hon. Friends on the wording?
      Mr. Younger: I shall ensure that my hon. Friend is informed about the wording before it is published.
      The amendments that we are discussing are purely drafting in their nature. I hope that the House will agree to accept them.
      Question put and agreed to.
      Lords amendments Nos. 2 to 9 agreed to.
      Lords amendment: No. 10, in page 5, line 23, at end insert "and"
      The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this we may take Lords amendments Nos. 11 and 12.
      Mr. Rifkind: These are drafting amendments. They are designed to ensure that the wording of the clause coincides with that which the Committee and the House clearly intended.
      Question put and agreed to.
      Lords amendments Nos. 11 and 12 agreed to.

    Clause 2

      PROCEDURE
      Lords amendment: No. 13, in page 6, line 15, leave out from "months" to "after" in line 17 and insert—
      ",where the application is made during the first year after the commencement of this section, or, in any other case, within 2 months"
      Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 14 to 23.
      Mr. Rifkind: Amendments Nos. 13 to 19 are drafting amendments to various stages in the process dealt with in the clause. Amendments Nos. 20 and 21 are purely drafting amendments to correct the grammar of clause 2(9) consequent upon the insertion of a new subsection. Amendments Nos. 22 and 23 correct a printing error in the wording of a Government amendment that appeared on Report.
      Mr. Millan: The Bill as drafted without the amendments illustrates the extremely complex procedure for which provision is made. In the Government's enthusiasm to take care of every possible circumstance and to ensure that no local authority shall ever have any flexibility, we now have an extremely rigid and complicated procedure. I do not say that I hope that it will work. I hope that it does not work.
      Mr. Rifkind: It was considerations similar to those that the right hon. Gentleman has indicated that led the Government to believe that the present wording was necessary.
      Question put and agreed to.
      Lords amendments Nos. 14 to 23 agreed to.

    Clause 4

      CONDITIONS OF SALE
      Lords amendment: No. 24, in page 9, line 32, after "generality", insert "common".
      Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 25 and 26.
      Mr. Rifkind: These are technical amendments that correctly phrase the clause in the manner that was originally intended. They have no policy implications.
      Question put and agreed to.
      Lords amendments Nos. 25 and 26 agreed to.

    Clause 5

      LOANS
      Lords amendment: No. 27, in page 12, line 31, leave out "subsections (3) and (6) "and insert" subsection (3)".
      Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
      This is a drafting amendment that clarifies the status of a declarator for a loan granted by a sheriff to an applicant under clause 5.
      Question put and agreed to.
      Lords amendments Nos. 28 to 30 agreed to.

    Clause 13

      SUCCESSION TO SECURE TENANCY
      Lords amendment: No. 31, in page 19, line 25, leave out
      "created on the death of a tenant"
      Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
      This is a drafting amendment without any policy implications which I trust the House will accept.
      Question put and agreed to.

      Clause 17

        VARIATION OF TERMS OF SECURE TENANCIES
        Lords amendment: No. 32, in page 23, line 39, after "of" insert "section 10 of"
        Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
        This is a drafting amendment which clarifies the cross reference to the Bill to be included in the Housing (Scotland)
        Question put and agreed to.

      Clause 19

        RE-POSSESSION
        Lords amendment: No. 33, in page 24, line 21, leave out "the date" and insert Act 1969 by making it more specific. "service"
        Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
        Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 34 and 35.
        Mr. Rifkind: These are technical drafting amendments to change the terminology of the clause to attract the general provisions governing the service of notices that is contained in clause 80.
        Question put and agreed to.
        Lords amendments Nos. 34 and 35 agreed to.

      Clause 23

        LANDLORD'S CONSENT TO WORK
        Lords Amendment: No. 36, in page 27, line 16, leave out
        "(including wireless or television aerials)"
        Mr. Rifkind: I beg to move, That this House doth agreed with the Lords in the said amendment.
        The amendment removes the specific reference to the obligation of a tenant to obtain the landlord's consent to make the addition to his house of a television or wireless aerial. It is accepted that

        819
        these aerials come within the general definition of fixtures and fittings.
        Question put and agreed to.
        Lords Amendments Nos. 37 and 38 agreed to.

      Clause 27

        PUBLICATION OF RULES
        Lords Amendment: No. 39, in page 29, line 23, after "published" insert "by a body"
        Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
        This is purely a technical drafting amendment that has no policy implications.
        Question put and agreed to.

      Clause 30

        LOCAL AUTHORITY HOME LOAN INTEREST RATES
        Lords Amendment: No. 40, in page 32, line 11, leave out from "Notwithstanding" to "the" and insert
        "anything contained in subsections (1) to (8) above, but subject to subsections (11) and (12) below,"
        Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
        Mr. Deputy Speaker: With this it will be convenient to take Lords amendment No. 41.
        Mr. Rifkind: Amendment No. 40 provides for the Secretary of State to allow local authorities to charge low interest or waive interest for up to five years when they are granting a mortgage for the purchase of a house that is in need of repairs and improvements. The provision is aimed at encouraging what is known as homesteading. I understand that that concept was supported by the Opposition in another place when the issue was considered there. I think that the House will accept that it is highly desirable, especially in inner urban areas, that homesteading arrangements, which are often popular especially among young couples, should be encouraged. The amendment will achieve that purpose.
        Amendment No. 41 enables the Secretary of State to approve individual schemes submitted by local authorities. If it appears appropriate, the Secretary of State may issue an order with the consent of the Treasury on the basis of which local authorities could proceed without the need for individual approval.
        Question put and agreed to.
        Lords amendment No. 41 agreed to.

      LOCAL AUTHORITY INDEMNITIES FOR BULDING SOCIETIES ETC.
      Lords amendment: No. 42, in page 33, line 20, leave out "14"and insert "15".
      Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this it will be convenient to take Lords amendment No. 43.
      Mr. Rifkind: Amendment No. 43 is a technical amendment that is necessary to allow building societies registered in Northern Ireland but operating in Scotland to accept indemnities under clause 31 from Scottish local authorities. Amendment No. 42 is a drafting amendment.
      Question put and agreed to.
      Lords amendment No. 43 agreed to.

    Clause 34

      SHORT TENANCIES
      Lords amendment: No. 44, in page 34, line 39, after "and" insert:
      ", notwithstanding the provisions of section 44(1) and (4) of the 1971 Act.".
      Mr. Rifkind: I beg to move, That this House cloth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 45 to 48.
      Mr. Rifkind: Amendment No. 44 is a technical amendment that is designed to ensure that, although the effective date of a fair rent determination will in future be either the date of registration or the date fixed by a rent officer, the effective date of a short tenancy shall be the date of

      821
      the commencement of the short tenancy, which I know is agreeable to the Opposition.
      Amendment No. 45 fulfils a Government undertaking given in Committee to scrutinise the clause and eliminate any scope for evasion. It ensures that the right of possession conferred upon landlords of short tenancies shall take into account the particular circumstances of either a statutory successor or a lawful sub-tenant and either will be able to remain in possession until the end of the contractual letting even though the head short tenancy is terminated before that date. Lords amendments Nos. 46, 47 and 48 remove certain ambiguities in the clauses as drafted. I commend them to the House.
      Mr. Millan: I am not clear about Lords amendment No. 44. The Minister may care to remind the House why the rent in the case of a short tenancy takes effect from the commencement of the tenancy compared with the normal situation when it takes effect, particularly if there is some objection, from the date that the rent assessment committee makes its decision. I should like to know the implications from the point of view of the commencement date of the short tenancy. Short tenancies, by definition, will not last long. It can make a substantial difference to the date from which the tenancy operates. Is the date from which the rent is registered and operative of some significance or effect in terms of determining the date from which the tenancy itself starts and, therefore, the date on which the tenancy will eventually terminate?
      Mr. Rifkind: I am happy to clarify the point. The right hon. Gentleman will recollect that in the terms of the Bill a short tenancy is one that must have a fair rent registered. There is no option for an agreement between the parties. Concern was expressed in earlier stages that in the interim period between a short tenancy beginning and a fair rent being determined the tenant might be charged an excessive rent. Although the matter would ultimately be resolved, he would be paying during that period more rent than he ought to have been paying. The amendment was brought forward to meet that point.
      Mr. Millan: The Minister's explanation has brought back to my memory that this was the reason that the Opposition put forward this provision. I am therefore, content.
      Question put and agreed to.
      Lords amendments Nos. 45 to 48 agreed to.

    Clause 37

      LIMITS ON RENT INCREASES
      Lords amendment: No. 49, in page 37, line 26, leave out from "of" to "not" in line 27 and insert "subsection (2) above "rent" and "rental income" do"
      Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this we may take Lords amendment No. 55.
      Mr. Rifkind: Both amendments are minor technical amendments with no policy implications.
      Question put and agreed to.

    New clause A

      AMENDMENT OF RESERVE AND AUXILIARY FORCES (PROTECTION OF CIVIL INTERESTS) ACT 1951
      Lords amendment: No. 50, after clause 38, in page 38, line 8, at end insert—
      "A.—(1) The Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951 shall be amended in accordance with this section.
      (2)In section 15 (protection of tenure of certain premises), after subsection (1) insert the following subsection—
      "(1A) This section does not apply in relation to any tenancy entered into after the commencement of section 53 of the Tenants' Rights, Etc. (Scotland) Act 1980".
      (3)In section 16 (protection of tenure of premises not falling under section 15)—

      (i)in subsection (2Xc) the words from "and" to the end are repealed;

      (ii)for subsections (3) to (8) substitute the following subsections—

      "(3) The rent for any rental period (that is to say, a period in respect of which an instalment of rent falls to be paid) shall be the amount payable for the last rental period before thend of the tenancy, but subject to adjustment from time to time in accordance with section 22 or 23 of the Rent (Scotland) Act 1971 (adjustment,

      823
      with respect to rates, services and furniture, of recoverable rent for statutory periods before registration).
      (4) Subsection (3) above has effect subject to any agreement between the parties for the payment of a lower rent; and where a lower rent is agreed it shall not be increased in accordance with the said section 22 or 23 but may, notwithstanding anything in any other enactment, be increased by agreement in writing between the parties up to an amount not exceeding the amount of rent provided for in subsection (3) above.".
      (4)In section 17(2)(b) (provisions supplementary to section 16 where the accommodation is shared other than with the landlord) for "(5) to (8)" substitute "(3) and (4)".
      (5)In section 18(2) (protection of tenure in connection with employment, under a licence or a rent-free letting) for "(5) to (8)" substitute "(3) and (4)".
      (6)Section 19(5) (limitation on application of Rent Acts—heritable securities) is repealed."
      Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this, we may take Lords amendment No. 68.
      Mr. Rifkind: Lords amendment No. 50 amends the Reserves and Auxiliary Forces (Protection of Civil Interests) Act 1951 to take account of changes to the Rent Acts in the current Bill. That Act was concerned with the protection, in a variety of ways, of people called up in an emergency who might not have an opportunity to get their legal affairs in order before such call-up. It is right that the changes in the Rent Acts extending protection should also apply to such persons. These amendments cover the matter.
      Question put and agreed to.

    EXTENSION OF RENT (SCOTLAND) ACT 1971 TO CROWN TENANTS OF CROWN ESTATE COMMISSIONERS ETC.
    Lords amendment: No. 51, in page 38, line 8, after the words last inserted, insert
    "B.—(1) Section 4 of the 1971 Act shall be amended as follows—
    (a) in subsection (1)—

    (i)before "a tenancy" insert "Subject to subsection (3) below"; and

    (ii)the words "or of the Duchy of Lancaster; or to the Duchy of Cornwall" are repealed.

    824
    (b) after subsection (2) add a new sub-section—
    "(3) An interest belonging to Her Majesty in right of the Crown shall not prevent a tenancy from being a protected tenancy or a person from being a statutory tenant if the interest is under the management of the Crown Estate Commissioners."
    (2) Section 6(3) of the 1971 Act shall be amended by inserting after paragraph (a) a new paragraph—
    "(aa) in relation to any dwelling-house of which a tenancy granted before the commencement of section B of the Tenants' Rights, Etc. (Scotland) Act 1980 becomes, or would but for its low rent become, a protected tenancy by virtue of that section, means the date of commencement of that section.".
    (3) Section 85 of the 1971 Act shall be amended as follows—
    (a) in subsection (3)—

    (i) before "This Part" insert "Subject to subsection (3A) below";

    (ii)in paragraph (a) the words "or of the Duchy of Lancaster or to the Duchy of Cornwall" are repealed;

    (b) after subsection (3) insert a new sub-section—
    "(3A) An interest belonging to Her Majesty in right of the Crown shall not prevent this Part of this Act from applying to a contract if the interest is under the management of the Crown Estate Commissioners.".
    (4) Schedule 3 to the 1971 Act shall be amended as follows—
    (a) in Case 5 after "1965" insert "or, in the case of a tenancy which became a regulated tenancy by virtue of section B of the Tenants' Rights, Etc. (Scotland) Act 1980, after the commencement of that section"; and
    (b) in Part III, in paragraph 2 at the end add a new paragraph—
    "(aaa) in the case of a tenancy which becomes a regulated tenancy by virtue of section B of the Tenants' Rights, Etc. (Scotland) Act 1980, the relevant date means the date falling six months after the passing of that Act; and".
    (5) Section 134 of the 1971 Act shall be amended by adding the following new sub-sections—
    "(3) Where an interest belongs to Her Majesty in right of the Duchy of Lancaster, for the purposes of this Act the Chancellor of the Duchy of Lancaster shall be deemed to be the owner of the interest.
    (4) Where an interest belongs to the Duchy of Cornwall, for the purposes of this Act the Secretary of the Duchy of Cornwall shall be deemed to be the owner of the interest."."
    Mr. Deputy Speaker: This amendment requires the Queen's consent and the Prince of Wales's consent.
    Mr. Younger: I beg to move, That this House doth agree with the Lords in the said amendment.
    Mr. Deputy Speaker: With this we may take Lords amendments Nos. 72 and 76.
    5.15 pm
    Mr. Younger: The new clause has the effect of bringing within the Rent Act protection tenants of the Crown Estate Commissioners, the Duchy of Cornwall and the Duchy of Lancaster. Tenants who are brought within the Rent Acts by the clause will have full security of tenure and will be subject to the fair rents system. It has been the practice in the past to apply the Rent Acts administratively to such tenants. After this new clause is passed, the tenants will have for the first time statutory entitlement to this protection.
    Question put and agreed to.—[Queen's consent on behalf of the Crown, and Prince of Wales's consent on behalf of the Duchy of Cornwall, signified.]

    Clause 41

      AMENDMENT OF SECTIONS I AND 86 OF THE RENT (SCOTLAND) ACT 1971
      Lords amendment: No. 52, in page 39, line 9, after "roll" insert "on or".
      Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
      This amendment is of a minor and technical nature.
      Question put and agreed to.

    Clause 45

      DETERMINATION OF FAIR RENT
      Lords amendment: No. 53, in page 40, line 33, leave out from "section to first"to" in line 35.
      Mr. Rifkind: I beg to move, That this House dot hagree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this we may take Lords amendment No. 54.
      Mr. Rifkind: These amendments are concerned with the effects of the problem that arose in determining a fair rent. Instead of the words
      "knowledge and experience of current rents … in the area"
      826
      being used, it is felt more appropriate that the word "circumstances" should be used in order to avoid any suggestion that the primary emphasis is to be given to this knowledge and experience to the possible exclusion of other methods of assessment.
      Mr. Millan: This is matter on which I made a short speech on Report when the Government wished to make a certain change in the Bill that I thought, in one respect, was slightly mistaken, although I approved the general intention of the Government provisions. I am glad to say that the other place accepted my point. I have already acknowledged this fact to the Minister in a letter. I am glad to know that the Government have acknowledged the point. I am grateful.
      Question put and agreed to.
      Lords amendments Nos. 54 and 55 agreed to.

    Clause 48

      CANCELLATION OF REGISTRATION
      Lords amendment: No. 56, in page 42, line 28, at end insert:
      "(2) to (4), (7) and (8)".
      Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
      This is a minor and technical amendment.
      Question put and agreed to.

    Clause 51

      FURNISHED LETTINGS BY CERTAIN BODIES NOT TO BE PART VII CONTRACTS
      Lords amendment: No. 57, in page 43, line 36, at end insert:
      "(2) Section 16(3) of the 1972 Act shall be amended by adding, after "85(3)", "(aa)
      Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this we may take Lords amendments Nos. 58 to 60.
      Mr. Rifkind: These are technical or drafting amendments. Lords amendment No. 60 corrects a typographical error.
      Question put and agreed to.
      Lords amendments Nos. 58 to 60 agreed to.

      Clause 61

        RECOVERY OF POSSESSION OF DWELLING-HOUSE SUBJECT TO REGULATED TENANCY
        Lords amendment: No. 61, in page 46, line 39, at end insert:
        "(iA) the owner-occupier has died, and the dwelling-house is required as a residence for a member of his family who are residing with him at the time of his death; or".
        Mr. Rifkind: This appears to be a printing error. My reference indicates that it should be "who was residing". I hope that it is possible to incorporate and consider it as a printing error.
        Mr. Deputy Speaker: If I can be of any assistance, I am advised that it was sent from their Lordships' House correctly with the word "was". It is a printing error.
        Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
        Mr. Deputy Speaker: With this we may take Lords amendments Nos. 62 and 63.
        Mr. Rifkind: Lords amendment No. 61 is one of the circumstances already included in case 11A which enables the owner of a retirement home to recover possession. It is appropriate to extend this case in this way. The amendment will cover the situation where the owner-occupier who was single at the time of letting subsequently marries and dies. The new ground would enable a member of his family to recover possession.
        Amendments Nos. 62 and 63 make an important addition to part IV of the Bill and allow Service men to buy houses and let them meantime subject to the same rights of recovery as a temporarily absent owner-occupier.
        Mr. Millan: I do not disagree with the amendments I am not sure that the way in which amendment No. 61 is printed is correct. It does not read correctly. I do not know what can be done about that. It refers to
        "a member of his family who are residing with him."
        I think that it should read
        "who was residing with him."
        I am not clear how we can ensure that the Bill is correctly worded. No doubt, Mr. Deputy Speaker, you will guide hon. Members. It seems another major error in this chaotic week for the Government; they cannot get the wording right.
        Lords amendments Nos. 62 and 63 are difficult to follow as are all these matters in relation to the question of the recovery of the occupation of houses. It is right to make this provision for Service men. I welcome the amendments.
        Mr. Rifkind: This appears to be a printing error. My reference indicates that it should be "who was residing". I hope that it is possible to incorporate and consider it as a printing error.
        Mr. Deputy Speaker: If I can be of any assistance, I am advised that it was sent from their Lordships' House correctly with the word "was". It is a printing error.
        Question put and agreed to.
        Lords amendments Nos. 62 and 63 agreed to.

      Clause 63

        INCREASES IN PENALTIES FOR OFFENCES RELATING TO HOUSES IN MULTIPLE OCCUPATION
        Lords amendment: No. 64, in page 49, line 15, leave out paragraph (g) and insert
        "(g) in section 185(2) after "offence", insert "and shall be liable on summary conviction to a fine not exceeding £200"."
        Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
        This amendment corrects an error that inadvertently occurred in relation to the revision of the fines for which section 185(2) of the Housing (Scotland) Act 1966 provides. The amendment is brought forward on that basis and I commend it to the House.
        Question put and agreed to.

      New Clause C

        DISCRETION OF COURT IN CASES RELATING TO INSTALMENT PURCHASE AGREEMENTS
        Lords amendment: No. 65, after clause 71, in page 53, line 10, at end insert—
        "C.—(1) Where, under the terms of an instalment purchase agreement, a person has been let into possession of a dwelling-house and, on the termination of the agreement or of his right to possession under it, proceedings are brought for possession of the dwelling-house, the court may—

        (a) adjourn the proceedings; or

        (b) on making an order for possession of the dwelling-house, supersede extract or postpone the date of possession;

        for such period or periods as the court thinks fit.
        (2) On any such adjournment, superseding of extract, or postponement the court may impose such conditions with regard to the

        829
        payment by the person in possession of the spect of his continued occupation of the dwelling-house and such other conditions as the court thinks fit.
        (3)The court may revoke or from time to time vary any condition imposed by virtue of this section.
        (4)In this section "instalment purchase agreement" means an agreement for the purchase of a dwelling-house under which the whole or part of the purchase price is to be paid in 3 or more instalments and the completion of the purchase is deferred until the whole or a specified part of the purchase price his been paid."
        Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
        This is an important new clause, which gives people buying their homes by instalment purchase protection comparable with that available to people buying their homes with the aid of a morgage where default in making payments leads to possession proceedings. It gives the courts discretion to allow the purchaser time to remedy the financial situation. The law at present gives the courts discretion to allow mortgage defaulters time to remedy such a problem but it does not give them similar powers where an instalment purchaser defaults. This is clearly undesirable. For example, it might mean that an instalment purchaser who had paid most of the instalments towards the ownership of a house and defaulted at a late stage would find that he had virtually no rights left in the property in consequence of that one default. Therefore, it is thought appropriate that he should be put in the same position as a mortgage defaulter. The problem has not arisen often, but it seems reasonable that such a change should be made. I am sure that it will commend itself to the House.
        Mr. Millan: I welcome the new clause. I should like to get rid of instalment purchase agreements altogether. This is a difficult area, but I hope that, having made this useful provision, the Government will consider whether we need in-
        830
        stalment purchase agreements at all. Basically, they are extremely undesirable. It would be useful it we could find a way of making it impossible for a landlord to persuade—sometimes even to coerce—a tenant to enter into an instalment purchase agreement in circumstances where most of the cards are in the hands of the landlord, the seller, and very few are in the hands of the buyer. The new clause provides some protection.
        The Minister said that there were not many of these cases. Where difficulties arise the landlord—it is a landlord-tenant relationship basically—is usually able to get his way without going to court or going through any legal proceedings, because the weight not only of the law but of the relationship is on his side.
        I am not criticising the Government. They have introduced an improvement, which I welcome. It is a criticism of successive Governments that we have not tackled this problem in a wider way. There is much abuse in this area. It has been prevalent at times in certain parts of Glasgow, for example, but it applies elsewhere. I hope that in the continuing examination of the law on these matters the Government will keep this matter under review and will introduce even more radical proposals at an appropriate opportunity. However, that in no way detracts from my thanks to the Government for introducing this provision.
        Mr. Rifkind: The Government certainly share the right hon. Gentleman's distinct lack of enthusiasm for this form of property purchase. We are not certain that it would be appropriate to make it illegal, but it is appropriate that people purchasing properties in this way should have the same protection as mortgage holders. I am glad that the right hon. Gentleman felt able to welcome this provision. We shall certainly bear his comments in mind in considering whether further changes would be appropriate.
        Question put and agreed to.

      Schedule 2

        GROUNDS FOR RECOVERY OF POSSESSION OF DWELLING-HOUSES LET UNDER SECURE TENANCIES.
        Lords amendment: No. 66, in page 59, line 14, after "in" insert "or in"
        Mr Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
        Mr. Deputy Speaker: With this we may take Lords amendment No. 67.
        Mr. Rifkind: These are technical drafting amendments.
        Question put and agreed to.
        Lords amendments Nos. 67 and 68 agreed to.

      Schedule 5

        REPEALS
        Lords amendment: No. 69, in page 63, line 17, column 3, at end insert—
        'In section 17(3) the words", or fail to make such regulations under the said subsection (2)(b) as the Secretary of State approves,".'
        Mr. Rifkind: I beg to move, That this House doth agree with the Lords in the said amendment.
        Mr. Deputy Speaker: With this we may take Lords amendments Nos. 70, 71, 73 to 75 and 77 to 88.
        Mr. Rifkind: These amendments are consequential repeals. They have no policy implications. I am sure that they will be as uncontroversial as the other provisions of the Tenants' Rights, Etc. (Scotland) Bill.
        Question put and agreed to.
        Lords amendments Nos. 70 to 88 agreed to.

  HEALTH SERVICES BILL
  Lords amendments considered.
  HEALTH SERVICES BILL
    New Clause A

      SERVICES PROVIDED BY RELATIVES OF DOCTORS PROVIDING GENERAL MEDICAL SERVICES
      Lords amendment: No. 1, after clause 6, in page 18, line 3, at end insert—
      'The following subsection shall be added at the end of section 29 of the Act of 1977 (arrangements and regulations for general medical services) as subsection (5) of that section and at the end of section 19 of the Scottish Act of 1978 (which makes corresponding provision for Scotland) as subsection (4) of that section:—
      "( ) Regulations shall—

      (a)include provision for the making to a medical practitioner providing general medical services of payments in respect of qualifying services provided by a spouse or other relative of his; and

      (b)provide that the rates and conditions of payment and the qualifying services in respect of which the payments may be made shall be such as may be determined by the Secretary of State after consultation with such bodies as he may recognise as representing such medical practitioners.".'

      Motion made, and Question proposed. That this House doth agree with the Lords in the said amendment.—[Dr. Vaughan.]
      Mr. Deputy Speaker (Mr. Bryant Godman Irvine): I inform the House that the amendment involves privilege.
      5.27 pm
      Mr. Roland Moyle: I was half expecting the Minister for Health to advise general practitioners, if they find their wives uneconomic, to consider sub-contracting out their services to private contract, in the nature of recent circulars in the Health Service.
      This amendment was forced on the Government in another place. It pays lip service to the principle that was forced on them in another place, but it is effectively emasculated by postponing the payments to a time of the Secretary of State's choosing, which I suspect will be in the nature of the Greek calends.
      The problem is that general practitioners are entitled to claim 70 per cent. of the salaries of assistants as practice expenses. They are not entitled to do that at present if the helper is, in common parlance, a member of the family. A wife often gives great assistance to her

      833
      general practitioner husband in carrying out his practice, particularly where the practice is single-handed and is conducted in a rural area.
      Hon. Members will be aware of the problems that can arise when professional life involves family members. For example, a secretary employed by a general practitioner would be entitled to have 70 per cent. of her salary paid out of the practice expenses, so long as she remained unmarried to the general practitioner who employed her. But if the general practitioner succumbed to her charms and married her the employment could continue but the 70 per cent. reimbursement would cease.
      When I was a Minister I initiated an experiment to reimburse wives in single-handed rural practices. How has that experiment turned out? I understand that it has gone on, is regarded as going well and has been extended for another two years. If it is going well, why extend it? Why not take action on it? The great obstacle to a solution of this problem is the possibility of abuse.
      We do not accept the spirit of this amendment, first, because it seeks to arrange salaries by law, which is an undesirable principle. These matters are best left to collective bargaining. Secondly, industrial relations do not only concern justice; they concern tact and timing. In a year when doctors have been awarded a 31 per cent. pay increase, it would be inadvisable if some of their members received substantial increased sums of money, particularly when the Government, despite my best endeavours, have persuaded Members of Parliament to set an example to the country by restricting their salary increase to 9.6 per cent. However, the Government amendment emasculates the principle of the original amendment, and we shall not oppose it.
      The Minister for Health (Dr. Gerard Vaughan): I know of the great interest that the right hon. Member for Lewisham East (Mr. Moyle) has taken in this subject, and he rightly reminded us that he was instrumental in introducing the provision for single-handed GPs in rural areas.
      The introduction of this provision has been a success. About 190 GPs have taken advantage of it, and because of its initial success we thought it right to ex-
      834
      it for at least another two years. I should be glad to give the right hon. Gentleman extra information if it would be of interest to him.
      It was partly because of the success of the provision and following discussions with the profession that we thought it right to widen the provision a little further. So, from I October we propose that it should be extended to wives of GPs who have professional training—in other words, wives who are nurses. We were concerned about the cost implications, and we felt that it was only right to move in a gentle way and to find out how much money was involved. We accepted the principle behind the amendment and we welcomed it. It was widely welcomed in another place, and I hope that it will also be welcomed in this House. We should like to wait a little while before introducing the provision because we have a financial responsibility, but with that one proviso we welcome the principle, and I commend the amendment to the House.
      Question put and agreed to. [Special entry.]

    Schedule 1

      AMENDMENTS CONSEQUENTIAL ON CHANGES IN THE LOCAL ADMINISTRATION OF THE HEALTH SERVICE
      Lords amendment: No. 2, in page 41, line 5, after 'paragraph 5,' insert
      'in sub-paragraph (1)(a) after the words "metropolitan district" there shall be inserted the words "a non-metropolitan district," '
      The Under-Secretary of State for Health and Social Security (Sir George Young): I beg to move, That this House doth agree with the Lords in the said amendment.
      The purpose of the amendment to schedule 5 to the National Health Service Act is to include non-metropolitan district councils among the specified local authorities that may appoint several of the members of health authorities.
      Mr. Moyle: I agree with the purpose of the amendment. It was moved by the Labour Party in another place, with Conservative Back-Bench support. At present, there are administrative methods of including non-metropolitan district representatives on district health authorities, although they were omitted from the provisions of the 1977 Act.

      835
      "Patients First" suggested the reduction of local authority representation on district health authorities, with which we disagreed, and it implied that district council representatives could be included only if county councils cut back. In those circumstances non-metropolitan districts, because they were not specifically mentioned in schedule 5 to the 1977 Act, wanted specified legal guarantees. That is why this amendment was put forward. It gives them a bare minimum of representation. We accept that it is a minor improvement to the Bill. It is remarkable that the Government are so sensitive after causing such a massacre of local authority representatives on local health authorities. It reminds me of a famous French executioner who used to make sure that his victim's head was carefully and comfortably placed in the guillotine before bringing down the chopper. Nevertheless, we shall not oppose the amendment.
      Question put and agreed to.

  AGRICULTURE AND HORTICULTURE
  5.35 pm
  The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Jerry Wiggin): I beg to move,
  That the draft Agriculture and Horticulture Development Regulations 1980, which were laid before this House on 28 July, be approved.
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this it may be convenient to discuss the orders relating to:
  The Agriculture and Horticulture Grant Scheme 1980.
  The Horticulture Capital Grant (Variation) (No. 2) Scheme 1980.
  The Farm Capital Grant (Variation) (No. 2) Scheme 1980.
  Mr. Wiggin: After carefully considering a memorandum by the Joint Committee on Statutory Instruments, we felt obliged to replace one of the statutory instruments laid on 2 July with two of the statutory instruments that we are considering today—the agriculture and horticulture development regulations and the agriculture and horticulture grant scheme. We are grateful to the Joint Committee for its advice, to which we reacted promptly, but in doing so we unavoidably laid the replacement instruments rather late. I apologise to the House for any inconvenience that that may have caused. I wish to emphasise, however, that in all important respects the two new statutory instruments will have the same effect as the one that we withdrew.
  Hon. Members will recall that on 31 January this year my right hon. Friend laid statutory instruments before the House changing the rates of grant payable under the three current capital grant schemes. He explained that he was making those changes as a first step towards the introduction of new, simplified capital grant arrangements, replacing the existing ones. He promised to present the necessary legislation to Parliament before the Summer Recess. The agriculture and horticulture development regulations and the agriculture and horticulture grant scheme now before the House meet that promise.
  The new arrangements are based on recommendations resulting from a study of the administration of the current

  837
  schemes made in consultation with Sir Derek Rayner. They are designed to reduce bureaucracy, cut the number of forms that farmers have to fill up, generally speed up the whole process and leave farmers with more responsibility for their own investment decisions.
  The keynote of the new arrangements is: "Treat the farmer as a responsible person." He usually finds most of the money, so we want to leave him as free as possible to get on with the job. To help him we intend to have as simple an application form as we can devise, and we are trying to produce an explanatory leaflet which is readable, helpful and, above all, comprehensible.
  The changes that we are making will save about 400 posts in my Ministry alone. Of those, 250 will be administration jobs and 150 ADAS posts. The savings will come mainly from cutting out prior approval and by considering claims for grant after the work has been done. That is what happens with regional development grants.
  Following last January's announcement, we consulted a large number of organisations and individuals about our proposals for a new scheme. As one would expect, reactions differed widely. Everyone wanted some changes, but the changes spanned a very wide spectrum. We have tried to meet as many as possible of those interests while still meeting our objectives. We have been flexible in our approach; otherwise, there would have been no point in consulting. But we have always had in mind our main objective of simplification.
  Mr. Peter Hardy: The Minister said that he had consulted widely and that people had different views about the proposals. Can he say whether any organisation approves of the proposals?
  Mr. Wiggin: Yes, my Department. We are surrounded by many differing views, with which I shall deal during the course of my speech, justifying, I hope the action that the Government propose to take.
  The statutory backing for the proposals is included in the orders with which we are dealing today. The agriculture and horticulture development regulations and the agriculture and horticulture grant scheme, in effect, consolidate the farm capital grant scheme,
  838
  the horticulture capital grant scheme and the farm and horticulture development regulations, on which the existing capital grant schemes are based. If the House approves these statutory instruments, the new arrangements will come into operation on 1 October next. From that date the existing provisions will no longer be needed, so they will be ended by the other statutory instruments which are before the House.
  Two of those statutory instruments also clarify the provision, introduced in February, which limits to 160,000 ECU—about £100,000—the amount of investment on which grant will be paid. The Joint Committee expressed doubt about the wording of the provision when the original statutory instrument was laid in January, so we have taken this opportunity to clarify it.
  The biggest departure from present practice will be the dropping of prior approval. I think that most hon. Members will be familiar with that procedure. The rule was introduced many years ago and has been retained mainly to ensure that farmers got proper advice about their investment proposals. I think that it has been very valuable, but it has also been very expensive on manpower. It has produced its own problems, giving rise to complaints from farmers on a number of occasions. It delays them when they want to get on. It subjects all their investment decisions to "the Man from the Ministry, who knows best." It leads to arguments over whether it has been breached. After all, a fairly minor or technical infringement of the rule resulted in a farmer losing grant. So, although the scheme had many defenders, it also had many critics.
  But farming has now grown up. Farmers and growers long ago learnt the value of seeking professional advice from Departments. They are quite capable of making their own investment decisions. With few exceptions, they are finding much the greater part of the costs, so surely it is right that they should be trusted. Dropping prior approval will give them the freedom to make their decisions and to decide for themselves how and when they wish to invest.
  This will not impede the continuation of the close and fruitful collaboration between farmers and advisers. This is good for the farmer and good for the nation,

  839
  and we are anxious for it to continue. But it is time for farmers to take on their responsibilities in full, backed, as in the past, by the solid assistance that our ADAS provides.
  Our decision to drop prior approval and not to require any form of advance notice has been criticised. It has been said that farmers will be less certain of their grant than at present and that we are disregarding our responsibilities for the countryside and wildlife.
  The whole point of the new arrangements is to make them as simple and as automatic as possible. We do not intend to be pernickety. We shall be mainly concerned to ensure that the investment is of a capital nature, because this is a prime requirement of the legislation. The explanatory leaflet will give guidance on the specifications or British standards that will be acceptable. If farmers want to be sure that work will qualify for grant, all they have to do is to meet these standards. Where there is no appropriate standard we shall be looking for a good, sound job.
  Although the risk of a farmer losing grant is negligible, I recognise the anxiety that exists. We shall be doing everything we can to set farmers' minds at rest. For example, we shall include in the claim form a check list to remind farmers of the most important conditions that they have to observe. I shall be looking for other ways to allay any fears on that account.
  Mr. Geraint Howells: Will there be an opportunity for the farmer who will not, for one reason or another, get the full grant, to appeal against the Ministry's decision?
  Mr. Wiggin: As I understand the situation, the administration of these grants is absolutely at the Ministry's discretion. Of course, as the hon. Gentleman will well know, there is always, if not through internal channels, through Members of Parliament, an appeal to the Minister. In this respect I do not think that we shall seek to administer this scheme any differently from the administration of the former scheme. I hope that there will not be too many cases for appeal, but of course, we shall look
  840
  favourably where there are borderlines. However, I see there being fewer opportunities for borderlines under this scheme than there were under the previous scheme.
  The assertion that we shall be disregarding our obligations in terms of conservation and the countryside is quite unfounded. We acknowledge that our obligation under the Countryside Acts will be exactly the same in the future as it has been in the past. Indeed, we have had extensive consultations with the interested bodies to work out a satisfactory approach.
  In the leaflet about the new grant arrangements we shall make it clear that, in accordance with the requirements of section 11 of the Countryside Act 1968, the Minister, when considering claims for grant, will continue, as in the past, to have regard to the desirability of conserving the natural beauty and amenity of the countryside, including its wildlife. If farmers wish to avoid putting their grant at risk for this reason, it is important that they should consider whether the work they have in mind would be likely to create problems in relation to conservation and, if they are in any doubt, to seek advice from ADAS, which is in touch with the responsible authorities in the course of its work. In national parks and sites of special scientific interest special considerations apply, and if a farmer wishes to claim grant he will have to consult the national park authority or the Nature Conservancy Council, as appropriate, before starting work.
  If the authority had no objection or if agreement was reached on modifications the work could go ahead. If there is disagreement that cannot be resolved ADAS must be brought in. Grant would be payable on condition that it had. Here, too, ADAS would, as now, offer advice and try to achieve a mutually acceptable compromise. If agreement was not possible, the Minister would have to reach a decision in principle on whether, if the work were done and grant was claimed, he would have to reject the claim. The farmer would be advised of this decision. If he decided to go ahead without waiting for the Minister's decision, he would be told that grant would be at risk and the Minister's decision would be based on the situation prior to work commencing.

  841
  In this context, it must be remembered that the only sanction that my Department has in this matter is whether to pay grant. What the farmer does without grant on his own land is a quite separate matter over which I have no control.
  We have considered how we could best assist the authorities which would be notified under this procedure to assess the environmental implications of proposals put to them. For England and Wales we have decided to make available to them on a regular weekly basis suitably qualified and experienced ADAS officers. They will help an authority to decide whether any proposal is likely to give rise to difficulties on conservation grounds and, if neccessary, will be ready to visit the farmer concerned to give him guidance on how to overcome them. Arrangements will be made in Scotland for similar contacts to be made.
  These procedures have been worked out in co-operation with the bodies concerned. I should like to record my appreciation of their co-operation and the help they have given us and, I hope will give us in the future.
  We originally proposed to apply the special procedures to areas of outstanding natural beauty as well as to sites of special scientific interest and to national parks, but the idea ran into difficulties. The Association of Disctrict Councils was worried about the extra work that might fall on its members, and some organisations representing farmers and growers were concerned about the problems it would create. On further consideration with my right hon. Friend the Minister of State, Department of the Environment, we concluded that it would not be necessary to impose these very rigorous requirements in areas of outstanding natural beauty.
  It has been suggested that these proposals represent a change in our attitude to the Strutt report. This is not true. Our commitment to it is the same as before. As we—and our predecessors—have always made clear, ADAS can develop its work on conservation matters only to the extent that resources can be made available. But one beneficial effect of the new arrangements in England and Wales is that by reducing the administrative burden on advisory staff and not taking the savings in full, we are deliberately increasing the capacity of ADAS
  842
  to give advice and assistance, on both argicultural and conservation aspects.
  With one exception, the rates of grant introduced on I February remain unchanged. The exception is the standard rate of grant for improvements to banks and channels of watercourses in Scotland. The rate was reduced from 50 per cent. to 37½, per cent. in February; but, in order to provide assistance in line with that available for similar work to drainage authorities in England and Wales, a standard grant rate of 50 per cent. for this item is proposed. Because of its special nature, prior approval is being retained for this item, and this item alone.
  The coverage of the new scheme is essentially the same as for the existing ones. But we have made some small changes. We are including hedge layering and classifying peas for vining as a horticultural crop. We have also made it clear that deer and goat farming are eligible.
  I do not think that it would be sensible to persist to the last with all the requirements of the present schemes, though there are legal constraints on the extent to which they can be waived. Consequently, if the House approves the new provisions, we propose to make transitional arrangements which will give farmers certain options during the period between the date of approval and I October. I shall not detain the House by explaining them in full. We shall be publishing them shortly.
  In presenting these new arrangements to the House, I firmly believe that we are heralding an era no less important and significant than the one which began in 1957 with the farm improvement Scheme. That was designed to bring the industry and the Ministry, particularly its advisers, closer together in working out the best way to develop a farm business. This one continues to give farmers and growers financial help with their capital investments but leaves them with greater freedom to decide their own destinies, secure in the knowledge that ADAS is there to help them.
  I commend these statutory instruments to the House.
  5.50 pm
  Mr. Gavin Strang: The Parliamentary Secretary has sought to justify and explain these proposals,

  843
  but he has done so inadequately. The origin of the proposals is the Rayner project. I have no objection in principle if the Government wish to bring in someone such as Sir Derek Rayner to look at the efficiency of the Civil Service, but when Sir Derek Rayner comes up with cuts which—when subjected to scrutiny—are found to be unjustifiable, Ministers should have the courage and responsibility to reject them.
  The proposal put forward by Sir Derek Rayner is impracticable. It is damaging to the agriculture industry and to conservation interests. The advice given and representations made to the Government demonstrate that. Nevertheless, Ministers have sought to ram measures such as these through the Houses of Parliament. When the Department of Health and Social Security proposed to abolish a pensioner's entitlement to draw his pension weekly, there was opposition to the proposal and it was withdrawn. The Ministry of Agriculture, Fisheries and Food is not prepared to listen to reasoned advice. The best illustration of that occurred when my hon. Friend the Member for Rother Valley (Mr. Hardy) asked the Parliamentary Secretary to name one organisation—among the many consulted—that had supported the proposals. The hon. Gentleman replied that the Ministry supported them.
  We oppose the new regulations because there is a lack of public accountability. It is all very well for the Parliamentary Secretary to say that on the whole farmers' money is being spent. It usually is. Some rates of grant, particularly in the less favoured areas, are very high. Indeed, half the money comes from the State. Millions of pounds of public money is spent annually, and we are entitled to seek an assurance that there will be genuine public accountability. I do not single out farmers as being more likely to abuse the procedures, but they are human like the rest of us. If, in a few years' time, it is proved that abuses have taken place, and if grants are claimed that are wholly unjustified, I hope that civil servants will not be dragged before the Public Accounts Committee to justify them. I am convinced that this is a political decision. Ministers have insisted on pressing ahead with arbitrary cuts.
  844
  The agricultural interest can best be summed up by quoting from the National Farmers Union. The article is dated 1 August, and it was therefore made after all the consultations, representations and changes had been made. The article said that
  "the NFU considers that the arrangements currently proposed for administering the new scheme will result in unnecessary difficulties for farmers and growers; are unlikely, in overall public expenditure terms, to lead to the level of saving claimed; and will act as a deterrent to a continuation of the positive maintenance and enhancement of the countryside."
  The position of the agricultural interest is clear and unequivocal: it is opposed to the proposals.
  I understand why ordinary farmers are unhappy about the situation. A farmer has no guarantee that he will get a grant for his proposed investment. It is in the industry's interest that an investment proposal should be given consideration and approval by the Ministry. I am all for cutting red tape. There might be scope for simplifying such procedures, particularly at the stage of prior approval, but the Government have removed the principle of prior approval. That is against the interests of farmers, who are the recipients of such grants.
  The criticism made by conservation interests is more crucial. There has been widespread criticism from all the organisations and from the responsible people who are concerned about preserving and protecting our countryside for the benefit of this and future generations.
  I should like to give another quotation, which is representative of the attitude of all the conservation organisations. I quote from what was said by the Society for the Promotion of Nature Conservation. The document, which was issued to Members of Parliament, is dated 29 July. I note that one of the organisation's patrons is His Royal Highness the Prince of Wales. It said:
  "Farming and conservation organisations are united in their belief that the proposals should be withdrawn and substantially modified to ensure that the Ministry of Agriculture, Fisheries and Food is aware of all proposals for capital works which conflict with conservation and is therefore able to undertake the necessary consultations and offer appropriate advice to farmers throughout the countryside, not just in designated areas. Meantime, the Orders terminating the present arrangements should be negatived."

  845
  That is the position of the conservation interests. Their case was acknowledged in the Parliamentary Secretary's statement. The hon. Gentleman has told us that special arrangements will apply to sites of special scientific interest and to national parks. I do not have time to go into this issue in depth. I am not happy even with the proposals for the designated areas. The central thrust of any criticism on the ground of conservation is that the conservation interest is not confined solely to those areas. We are concerned about conservation throughout the countryside. We are not concerned only about areas of outstanding natural beauty, which the Government have dropped from special consideration.
  Farmers do not always have the same view about conservation as do conservationists or the general public. We need some protection. There is a growing desire to enjoy the countryside. We have a responsibility to future generations. That responsibility is being discarded.
  Mr. David Myles: Is the hon. Gentleman suggesting that farmers are so irresponsible that they do not pay attention to conservation requirements?
  Mr. Strang: I am suggesting nothing of the kind. I recognise that there is often a genuine conflict. A hard-pressed farmer may be anxious to maximise his productivity and increase his output. Understandably, he would like to plough up an old meadow, but perhaps it has a hedge that is of great benefit to the countryside. It is not that farmers are not concerned about conservation. Usually, they are. Their leaders are certainly concerned about it.
  It is a fact of life that a conflict exists, and we are entitled to do something about that at the decision-making level. The system has worked well. The advice of the Strutt committee and of everyone else was that ADAS should be encouraged to increase its responsibility for conservation. I support that approach. I am in favour of using the Agricultural Development and Advisory Service in that area, and not officials in local councils or the national parks.
  Mrs. Elaine Kellett-Bowman rose—
  Mr. Strang: No, I shall not give way. I have done so once already. This is an important debate and the sad thing is that we have only one and a half hours in which to discuss these matters. There is great resentment about the regulations.
  I conclude with a question about conservation. What is the position on designated areas in Scotland? The designated areas in England and Wales are inadequate. Indeed, we do not want designated areas; we want application right across the board. Will the Minister tell us what areas of Scotland will be subject to this special procedure, and will he confirm that the provisions for the undertaking that a farmer must sign a statement saying that he has consulted conservation interests, and for the arrangement that if agreement is not reached a grant will be refused if ADAS is not brought in, will apply only to the restricted areas? Will he also confirm that there will be no requirement on the farmer to consult conservation interests or to seek a solution to this problem outside these areas? If the farmer goes ahead and does damage, even in the selected areas, and there is an objection or complaint from the conservation interests, will the Minister automatically deny that farmer the capital grant?
  In the long term, the outcome of these changes will be damaging for the agriculture industry. If my fears and those of the conservation organisations are justified, and if instances of significant damage result from investments made by obtaining these grants without proper prior approval and consideration of the conservation issue, the clamour to subject agriculture to the normal planning procedures will grow. At present, farmers can erect buildings without making planning applications to the local planning authority. The failure of these regulations—and I regret to say that as proposed they are destined to fail—will lead to a growing resentment. It will be unfortunate if farmers are subjected to the whole bureaucracy of the local government planning system when they seek to erect relatively minor buildings.
  I believe that this is an example of the immense damage that Ministers are doing to one of the strengths of this country—that is, the research capability in agriculture, the advice capability and the whole administrative structure of the Ministry of Agriculture, Fisheries and Food. We

  847
  have seen arbitrary cuts. We have seen offices throughout the land closed and changes made in the structure of the Ministry. We have seen cuts in ADAS. The Minister made it clear that at least 150 advisory jobs will go as part of this ill-thought-out measure.
  It is regrettable that Ministers have not yet learnt from the mistakes of the present Secretary of State for Employment in a previous incarnation. He will be remembered for the damage that he did to what was then called the NAS. Although our Minister of Agriculture is allegedly one of the leading "wets", I am afraid that he is not getting away with the modest cuts in his Department. On the contrary, it almost seems as if the fact that he is a moderate means that he must be more arbitrary and swingeing and more insensitive to the agriculture industry and conservation interests.
  Because of our resentment of the Govment's whole approach to this great national asset, because we believe that these instruments are a mistake and that Ministers should have rejected the advice that they received from Sir Derek Rayner and because the proposals are opposed throughout the country, we on these Benches will vote against this measure tonight.
  6.5 pm
  Mr. Kenneth Carlisle: I am grateful for the chance to speak in this important debate. I wish to concentrate on the conservation aspects of the proposal. We must be in no doubt at all that there can be few more important subjects than the maintenance of the richness and diversity of the wildlife in our countryside, not only for our own enjoyment but for the benefit of future generations. Because the fabric of conservation is so delicate in Britain, any Government have a particular responsibility to examine with the utmost care any proposal which might adversly affect that fabric.
  I accept the proposals for designated areas—the national parks and the sites of special scientific interest. Here the arrangements are satisfactory. I welcome the Minister's aim to save on administrative costs. We all recognise that this Government must scrutinise every aspect of expenditure I also welcome the move to make the farmer accept a greater
  848
  responsibility for conservation on his own farm. Self-reliance is a goal that we must welcome. Clearly, these are all steps in the right direction. Nevertheless, the proposals as they stand will, without doubt, have a bad effect on conservation. All groups which are responsible for conservation appear to agree on this. If the Government genuinely take seriously their responsibilities for conservation, they must take more account of those views, especially as I believe that it is possible to satisfy the legitimate worries that exist and to meet the twin goals of saving costs and making the farmer more responsible.
  Let me say first why the proposals are not satisfactory for conservation purposes in non-designated areas. There are two main reasons for this. First, we must recognise—I speak as a working farmer—that most damage is done by farmers out of ignorance. Certainly, damage is not done as a result of a wilful disregard for nature.
  Moreover, we all recognise that the economic pressures on farmers make it more likely than ever that they will clear away a bit of old scrub or plough up an old pasture without being fully aware of what they are doing. Certainly, they can consult the Ministry beforehand, and some will do so, as is their right. However, the majority will not. Farmers are independent, and they live in remote areas, far from the rest of the population. I can say confidently that they will want to get on with the job. Therefore, irretrievable damage will be done through ignorance, and it is not good enough to pretend that this will not happen. We must also recognise that it is not just the SSSIs that are important—they cover about 4 per cent. of the country; it is the fabric of woodland, hedgerow and pasture throughout the rest of the country, which knit together these valuable sites.
  This brings me to my second objection. In theory, the Minister will be able to refuse grants to the farmer if damage to wildlife is serious, but I do not believe that that will work effectively in reality. For example, if a wood has been scrubbed out a water maedow drained or an ancient pasture reseeded, how can anyone judge the damage that has been done? There is no record of the richness of that site or any way of ascertaining what wildlife existed there before the wood

  849
  was cleared or the work was done. Although the threat of refusal of grant in some cases be invoked, it is not sufficient protection in the majority of cases.
  If we recognise that the proposals are not satisfactory for non-designated areas, we must ask what can be done. The most practical solution would make use of the prior notification, which was suggested for audit purposes in the consultation document, one month before starting work on field drainage, land clearance and grassland regeneration, especially as action in those three areas has the major effect on wildlife. I propose that ADAS should sift through the prior notifications and pull out those that could have an important impact for wildlife. On the weekly visit to the Nature Conservancy Council, those cases could be discussed and action taken on the significant ones. I suggest that the number of investigations would be a small proportion of the total number of notifications, yet they could have an influence on conservation out of all proportion to their number.
  I believe that such a scheme could involve the employment of only an extra 25 people. Even if a few more were needed, the number would not be excessive in view of the impact on preserving the fragile fabric of the countryside for the benefit of future generations. Once a habitat is destroyed, it can never be replaced. The best habitats take decades, and often hundreds of years, to evolve. I recognise that the extra 25 places will have to come from elsewhere. However, as a farmer, I recognise the ability of ADAS. I have been pleased to make use of its advisory facilities. However, in fulfilling his responsibilities the Minister must have regard to the proper development of the countryside. We should get the balance right and devote a little more effort to conservation. I should be happy to receive a little less advice if we could achieve a better balance, which would be for the long-term benefit of the countryside and the country.
  I hope that my right hon. Friend the Minister can indicate that he can move towards what I am suggesting or bring forward other ideas at least to hold the situation while we see how his major proposals—which I an not criticising—work out. I regard conservation of the countryside as so important that, unless he puts
  850
  forward more satisfactory suggestions, regretfully I shall not be able to support him in the Lobby tonight.
  6.12 pm
  Mr. Wm. Ross: I recently had occasion to look at the number of people employed in agriculture in Northern Ireland. In 1940 the number was 157,000. In 1950 it had risen to 161,500. Today it is only 60,500. Hon. Members may wonder what that has to do with the orders before us. A statistical survey of Northern Ireland agriculture published recently shows that 1979 was a had year for agriculture. It shows a 53 per cent. decline in the net income of farmers, calculated in current money terms, which is equivalent to a fall in real terms of about 60 per cent. We should consider the schemes against that background. If workers in any other industry experienced a fall in real income of 60 per cent., they would almost be tearing down this building in protest.
  We must view with grave concern changes in capital grants that place an extra burden on our food producers and question closely what the Minister has said, in a press notice on 2 July, the hon. Gentleman indicated that the Ministry had consulted a wide range of interested parties. I may have missed all of what he said today. Perhaps he could list who those people were and what they said. If I understand him correctly, none of them agreed with the Ministry. Whenever a regiment of soldiers marches down the street and only wee Johnny is in step, his mother alone is proud of him. The Minister has put himself in the position of Johnny's mother.
  Mr. Wiggin: As the hon. Member for Edinburgh, East (Mr. Strang) said, there is inherent disagreement on such matters. Those in favour of conservation see all agricultural development as against their interests. Those involved in agriculture see the interests of conservation as inhibiting their industry. There was a broad spectrum of disagreement either side of the issue, and I believe that I can reasonably say that we have it just about right.
  Mr. Ross: The hon. Gentleman is still out of step as far as I and other hon. Members on the Opposition Benches are concerned.

  851
  As a practical farmer, I am most concerned about the removal of the requirement to get prior approval from the Ministry. Previously the farmer sought approval against known standards, and he was on safe ground. It is all very well for the Minister to say that farming has grown up. Many small farmers do not have the expertise or financial resources to seek the advice that they may need before embarking on what would for them be a major scheme. In the past, that information was available to large and small farmers. It will now be denied them. Being able to go along and ask for such information is not the same. The change is a big step in the wrong direction. To avoid quarrels and fights, we should retain the procedure.
  To illustrate the problems that will arise, I draw the Minister's attention to the arguments over BSI standard 5502 and its application to buildings such as round-roofed Dutch barns. From 1 January 1980, the Department of Agriculture, Fisheries and Food in Northern Ireland will not accept such a building over 30ft. or 35ft. wide. The previous limit was 45ft. No qualified engineer in the Department is prepared to say that a 45ft. building is absolutely safe. It is said that it does not meet engineers' structural requirements.
  What will happen if a farmer in Northern Ireland—I am pleased to see that the Minister responsible for agriculture in Northern Ireland is in the Chamber—builds a 45ft. wide building of a type that already exists down the road? Such buildings have not read the engineers' reports. They stand up against all the weather. None has yet fallen down or been blown away. What will happen if a farmer erects a building in the belief that he has met the criteria and the engineers decide that it is not up to standard? Will he lose the grant? That is the tip of a large iceberg, and I fear that such problems will multiply in Northern Ireland and Great Britain.
  There will be confusion, because the EEC rates still need prior approval in the form of a development plan. We shall have like structures not being treated in a like manner. That cannot be good for farming or any other industry.
  A number of serious and interesting problems arise from regulation 3 of the
  852
  agriculture and horticulture development regulations. I cannot wholly understand the regulation, but I suspect that it means things that will not be welcome to many landowners. Regulation 3(1)(a) provides that
  "an individual carrying on an eligible agricultural business if the appropriate Minister is satisfied that that individual or, as the case may be, the farm manager or other person through whom the business is being carried on—
  (i) practises farming as his main occupation
  will qualify for a grant. Does that mean that in future the landowner—and this has much wider application in Great Britain than in Northern Ireland—cannot personally apply for a grant and that only the tenant may do so? May we have the exact position spelt out?
  The regulation also includes a requirement that the applicant must earn not less than half of his annual income from farming. Does that shut out those who were formally encompassed within the grant regulations? Am I correct in believing that it is a change for the worse?
  The regulation also sets out other necessary qualifications:
  "sufficient agricultural skill and competence, in that he holds an appropriate certificate issued by a teaching establishment recognised for this purpose by that Minister or has been engaged in agricultural activities for not less than five years".
  Let us consider the case of a youth leaving school at 18 and coming home to farm, without having the necessary certificate. If his father dies suddenly, will that young man be outside the qualifications, or will there be some way in which proper sympathy can be shown to him? The provision could have serious consequences for young people starting out in farming. The Minister knows the sort of problem that I have in mind.
  We have a peculiar problem in Northern Ireland because of our conacre scheme. Children are often young when their father dies and the farm is "let for a long time on the annual conacre scheme. What will be the position of a family in those circumstances? Could it get a grant, or will it be outside the scheme because it is not carrying on farming as a business but is merely preserving the lands in question until the children have grown old enough to take over the running of the farm? Will the children be caught by the five-year requirement when they are grown up? There could

  853
  be serious effects for a number of family farms in Northern Ireland, and I should like to be told exactly how such individuals will be affected.
  Farmers generally trust the Department and accept what its officials tell them. I am concerned about the involvement of conservation bodies. I believe that they will be a source of great friction, because the instruments appear to be giving power into the hands of persons who will have no financial liabilities as a result of their decisions and no responsibility for their actions but who will be able to put pressure on the farming community. I believe that we should stick to the present system. It has been well tried and has been proved to work. We should not lightly cast it aside.
  6.26 pm
  Mr. David Myles: As a practising, practical, less-favoured tenant farmer, who has availed himself of grants on numerous occasions, I heartily welcome the Government's move. The simplication is something that we farmers who use the schemes will greatly welcome, because the less bureaucracy that we have to go through, the better.
  We have considerable experience of applying for grants and we have a good relationship, in Scotland at least, with the Ministry in Scotland—with the help of the colleges—and I see no reason why that good relationship should be spoilt. In fact, I am sure that the proposals will enhance it.
  A number of erroneous comments have been made about the simplification of prior approval. It is prior approval—not approval—that is being clone away with. There will still have to be final approval before grants are paid.
  In those circumstances, any sensible farmer—and most of us are quite sensible—will get in touch with the Ministry official, whom he will know well, and tell him what alterations or developments are proposed. They will have a chat about it and the official will give his advice. That is how the system works, and it works well.
  I once had a great friend in Northern Ireland who held a high position in the NFU. He was on such good terms with officials in Northern Ireland—I admit that the Irish are slightly different—that he always got grants without going through
  854
  the prior approval system. I always envied him.
  Mr. John Home Robertson: The hon. Gentleman said that in future he would intend to have informal discussions with an official of the Ministry in Scotland in order to check whether proposed work would be eligible for grant. Does he not realise that the whole idea is to ensure that the officials will no longer be available? The Government are seeking to sack them.
  Mr. Myles: Not all the Ministry officials will be sacked. It will be only those who have to traipse all over the countryside checking on developments being carried out by commonsense farmers. Department officials know the people on the end of the telephone. Instead of running around the countryside they will chat with people they know. This can work well, and I welcome it.
  The hon. Member for Edinburgh, East (Mr. Strang) mentioned the National Farmers Union press release and selected his little bit from it. I shall select mine. The release states:
  "As indicated in an earlier brief the NFU welcomes the proposed replacement of the present minimum income test of elegibility for national grants by a test ban on 'sufficient employment', and the extension of grant aid to cover hedge-laying and general purpose building for fish-farms (though the growing numbers of fish farmers consider that this latter should be extended to equipment and specialist buildings). We also welcome the proposed simplifications of the standards of construction and materials which will give farmers more freedom in making investment decisions."
  Unless the whole of the NFU's submission is quoted, it should not be quoted.
  I turn to the use of standard costs to carry out a development. Standard costs are the most efficient and valuable way of operating for farmers. However, inflation causes a problem. Inflation has been running at a tremendously high rate and standard costs are always out of date before they are updated. I am confident that the Government will bring inflation under control and that the problem will not exist. However, while the problem is there I urge that standard costs be put on an index-linked basis so that that simpler procedure can be used to a greater extent.
  The rule is that half a farmer's income must come from agriculture for him to benefit. The income of some farmers from farming is negligible, especially in

  855
  hill areas. Instead of half the income being the test, it should be half the turnover. That would be more acceptable to the small operators in the countryside.
  Capital grants are the best way to aid agriculture. They are better than low-interest loans and other schemes used on the Continent. Capital grants are a sensible and more efficient way of encouraging agriculture. Moreover, they are more selective and can be used to encourage the branches of agriculture that should be encouraged.
  I welcome the fact that areas of outstanding natural beauty have been removed from the schemes. I live in such an area, and there are conflicts. Where there are conflicts there must be sensible arbitrations and ideas. If only one of the conflicting parties decides, a sensible judgment will not result, especially if that side does not have a financial interest. The side with the financial interest—the agriculture side—should be given priority. I welcome my hon. Friend's remarks.
  6.35 pm
  Mr. Peter Hardy: I shall try to be brief, but we are discussing a serious matter and I have much that I should like to say. I have never heard a more outrageously selective comment than that made by the hon. Member for Banff (Mr. Myles) when he read from the National Farmers Union brief. That brief concludes by suggesting that the House should throw out the schemes if the Minister is not prepared to change them. The NFU, most wise farmers and all conservation organisations are united not merely in opposing but in critically and angrily condemning the proposals. The Government have placed themselves in a ridiculous position.
  Under section 11 of the Countryside Act, which has been endorsed by the Conservative Party, the Government are required to have regard for conservation. The regulations fundamentally change that position. They threaten, by their lack of regard, the maintenance of conservation patterns and practices in Britain. They pass responsibility away from the Government on to the shoulders of the farmers. That is dangerous and could be extremely divisive.
  Conservationists are not opposed to the farmer. One of the problems about the
  856
  regulations is that division and conflict will develop. In the last few years a remarkable advance has been made in securing harmony between conservationists and agriculturists. The conflict will develop as a result of the proposals. That is perhaps one of the most dangerous aspects.
  The role of the Agriculture Development and Advisory Service is to be imperilled or withdrawn. Whatever the Minister says, the result will be that each chancer in agriculture will seize the new opportunity. The chancer will try to take advantage of the new opportunity. If he gets away with it, the responsible farmer next door might feel required to go along the same road because of competitive pressure. As the hon. Member for Lincoln (Mr. Carlisle) said, that is one reason why Government Members should be worried about the future of the countryside. They should ensure that the Minister provides sensible schemes instead.
  I am in regular contact with the conservation organisations. They are all extremely angry and concerned. It was all very well for the Minister to say that the Department backs the proposals, but that was a frivolous response. I am speaking of responsible organisations, not the eccentric "nut cases", of which there are a few in this area. I am speaking of responsible people, who care about the country. They have been treated with contempt. The Government appear to be contemptuous in their response to the Strutt report. The Conservative Party endorsed and commended the Strutt recommendations. One of the report's principal recommendations was that ADAS should have an enhanced role. Now, it is seriously imperilled.
  The Minister might say that irresponsible action will not qualify for grant but the damage will be done before the farmer is disappointed. In the short space of time available, I cannot say much more except that this—
  Mr. Frank Dobson: There is plenty of time.
  Mr. Hardy: I understand that we have more time. I shall cease to rush at the rate that I was progressing. I do not intend being brief now. I was becoming rather tense, but there was much that I wished to say—
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. The hon. Gentleman is right to say that there is time, but I hope that he will not be over-tempted. There is a great deal of business before us.
  Mr. Hardy: I accept that, Mr. Deputy Speaker, but it would be regrettable if we were to complete the debate in 20 minutes when the future of our countryside and our national heritage was at stake.
  Sir Albert Costain: On a point of order, Mr. Deputy Speaker. How long is the debate timed to last?
  Mr. Deputy Speaker: It may continue for one and a half hours after 10 o'clock.
  Mr. Hardy: I promise that I shall have sat down by 11.30 pm—perhaps even a little earlier. Indeed, I hope to be sitting down in Yorkshire by 11.30 pm. I do not propose making my remarks at great length.
  The Minister must remember that the Conservative Party previously accepted, endorsed and applauded the Strutt recommendations, which foresaw an enhanced role for the advisory service. This measure is a remarkable retreat from that endorsement and one which has not been properly explained. There have been inadequate explanations. There seems to have been an element of slickness in the Government's approach. When their Lordships were considering this matter in another place, they were pursuaded to allow the regulations to go through on the ground that it would be wrong to throw them out before they had been considered here. The Minister knew that there were more independent people in another place, who might have been tempted to throw out the regulations, than there would be on the Government Back Benches today. I hope that Conservative Members will be concerned about the future shape and character of our countryside and will express resentment of the measure by their actions this evening.
  The Minister believes that he has made a concession about part of our countryside, namely, the SSSIs and the national parks, but there is no concession for 80 per cent. of the British countryside. There are hon. Members in the Chamber whose constituencies have little of their surfaces
  858
  devoted to SSSIs and which may be some way from a national park. But in those constituencies, as in mine, there are areas of considerable attraction that should be protected. Many Conservative Members may think that my constituency is industrial. It is an important steel and coal area, but it is also a county constituency, with 256 farms.
  An important part of the agricultural area of Rother valley was created in the great agricultural reforms of the eighteenth century, when there was a longer and wiser view than that exhibited by the Government Front Bench today. The area around Roche Abbey was designed by Capability Brown. He was instructed to apply the eye of an artist and the heart of a poet. It took a long time to create, and it has been treasured and esteemed for centuries. It has given enormous pleasure to my constiuents, their grandparents and their grandparents before them. We want our grandchildren and their grandchildren to have the opportunity of solace and refreshment provided by the British countryside.
  In order to fly the flag of St. Michael rather than St. George—that is a reasonable metaphor, given the influence of Sir Derek Rayner on these proceedings—the Minister is prepared to put an enormous risk upon the rural heritage of Britain. It is not simply a question of protecting the SSSIs, the national parks or the areas of outstanding natural beauty. We must remember that one of our great legacies—something that we must pass on to those who follow us—is the diversity and abundance of British wildlife, the treasure that lies within our habitats in our rural areas. That legacy can be found in the vast majority of the constituencies represented in the House. It is wrong and regrettable and will be described in future as criminal for the Government to pursue the course that they are presently pursuing.
  Strong words were said in another place. There may be few strong words said in the debate tonight, but the Minister knows full well that there is already great anger in the conservation organisations. There will be even more irritation as conflict and division emerge. Considerable disturbance, dissatisfaction and regret will be felt in the rural areas of Britain. The Minister may not wish me to make the point—but I shall do so—that the Conservative Party has, over the

  859
  years, claimed to be the natural representative of the rural areas. In the past 12 months the rural areas have suffered more disadvantages from this Government than they have suffered in the previous century. Public transport has been removed, uncertainties and anxieties have developed, and those areas now see a real threat to the natural treasury which makes life worth living in their localities. I do not think that the rural areas of Britain will readily forgive Conservative Members if they lightly allow the measure to pass today.
  I am glad to see the Under-Secretary of State for the Environment on the Government Front Bench. He is well aware that last year the Conservative Administration promised Britain and the world legislation to preserve wildlife in our natural habitats. We were disappointed. We are to have that legislation next year. We were promised it last year, we may get it next year, but what is happening this year is most contradictory and anomalous in relation to the Government's international commitments.
  If the Minister listened to what is said in the country and paid regard to the countryside, he would not press the regulations. He would do what every conservation organisation in Britain has demanded and what the National Farmers Union has requested, and withdraw the proposals and consider them again.
  6.47 pm
  Mr. John Major: At the conclusion of a long parliamentary Session I propose to curry your favour, Mr. Deputy Speaker, by being excessively brief and not reiterating many of the points that have been made. To put my remarks in context, I wish to say how much I welcome a great deal of what is contained in these instruments.
  I turn to the area where I have some reservations, and which was touched upon in a thoughtful and knowledgeable speech by my hon. Friend the Member for Lincoln (Mr. Carlisle). My concern relates to the restriction in the role of prior approval and the reduction in the role of ADAS. I take the point and the necessity for staff savings, but there is a broader implication that we must consider. It seems at least arguable that the reduced role of ADAS will be compensated for largely at the expense of shifting that
  860
  burden on to other agencies, local authorities and other organisations. I agree that the manpower saving will be welcome, but I question whether the other agencies will have quite the same competence to deal with this important and delicate matter in the fashion in which ADAS has dealt with it over recent years.
  I appreciate and welcome the fact that where advice is sought it will still be available from ADAS. I seek my hon. Friend's assurance that he is satisfied that the rump of ADAS that will remain will be sufficient to discharge his obligations under the Countryside Act 1968. The hon. Member for Rother Valley (Mr. Hardy) began to touch upon that matter. I do not think that he specifically quoted section 11 of the Act, which calls upon the Ministry to have
  "regard to the desirability of conserving the natural beauty and amenity of the countryside."
  My point is simple and straightforward. There will be a welcome for and agreement throughout the House on the proposal to seek to preserve and maintain the countryside that remains. Is my hon. Friend satisfied that the reduced role of ADAS will leave sufficient capacity to ensure that the Ministry can discharge its obligations under section 11 of the Act? If he is so satisfied, will he comment on the apparent danger that a farmer who has not studied the available advice may, with the best will in the world, start a development which, in retrospect, can be seen to have damaged irreplaceable countryside? I hope that he can assure me that the Ministry has studied this matter carefully.
  6.50 pm
  Mr. Geraint Howells: I declare an interest as a hill farmer who has taken full advantage of all the grants and has received great co-operation from officials and others in Wales.
  We are discussing the future of the most efficient industry in Britain. I wonder how many people know that we spend less on research for this industry than for any other in Britain. I have read what was said in the other place yesterday—that about 400 people will be made redundant for a saving of about £2 million a year. If that money were to be spent on research I should support these statutory instruments, but that is not to be.

  861
  To take advantage of any grant scheme, the farmer has to be able to match it pound for pound, and in the current state of agriculture fewer farmers can do so. We were told last week that the industry's income this year will be lower again—by about 15 per cent. This happens year after year. I am afraid that fewer farmers will take advantage of the capital grants scheme.
  Like other small business men, many farmers have to bear the brunt of high interest rates. Until the MLR is lowered by at least 2 or 3 per cent., there is little chance that that financial outlook will improve. That is yet another reason for setting up a land bank from which farmers can borrow at advantageous rates to keep their heads above water.
  Another difficulty for those who will apply for the grants is that the farmer always has to find ready money to pay the contractor before the grant is forthcoming. That applies even under the current system.
  When the contractor has completed his job, he rightly expects his money. Many of us, when we started on our own, could not take full advantage of the scheme because we did not have the capital to pay the full amount. I hope that the Minister will look at this matter and that in years to come a percentage of the grant can be paid to farmers when the contractors are working on the land.
  There are good arguments for and against getting prior provision for grant-aided schemes, but the new proposals could be fraught with danger. There is also great danger in the arrangements for farmers in the national parks, which include a large percentage of the agricultural area of Wales. I am afraid that there will be two groups of farmers. Those outside the national parks will be able to carry on with their schemes, but the others will have to get the blessing of the park authority and other organisations before carrying out a scheme. That is unfair.
  I am one of those who believe that we should conserve the best parts of the country. There are beautiful areas in Scotland, England, Ireland and Wales. I have always believed, as, I hope, have most hon. Members, whatever our other views, that, whatever schemes are de-
  862
  vised, farmers must remain the guardians of the countryside. They will do the job much better than any other organisation.
  For the sake of producers and consumers, I urge the Minister to persuade his colleagues to look again at the present proposals. They are not acceptable to the majority of hon. Members on both sides, if we are honest, or to the National Farmers Union, the Farmers Union of Wales or any other organisation.
  Like many other hon. Members, I have received many letters on this subject. It is a shame that we should force through legislation against the will of farmers and every relevant organisation, all of which have come out against these proposals. Therefore, I shall have to vote against the instruments. I hope that the Ministry will bring forward other proposals in the next Session.
  6.56 pm
  Mr. Paul Hawkins: I greatly welcomed the practical, down-to-earth speech of my hon. Friend the Minister. I would compare it with that of the hon. Member for Edinburgh, East (Mr. Strang), which, as usual, was full of bitterness. He said that the Government had harmed argriculture, yet as a Minister he did more harm to British agriculture than any other man, with the introduction of succession into farming. That has put farmer and farm landowner against each other. The hon. Member knows that it was introduced in the face of hitter opposition from many of his right hon. and hon. Friends, including the previous Minister of Agriculture.
  As a land agent who has sat at meetings between landowner and tenant, I know that the prior approval system was an absolute curse. The time that it took meant that plans became out of date and that contractors who had given an estimate would not stand by it. One had to get another estimate. Then the cost rose and many farmers and landowners said "We shall have a much simpler scheme, although probably not as good. We shall do without the grant and get on with it rather than wait for approval." I can assure my hon. Friend the Minister that many practical farmers will welcome the ending of prior approval as a sensible step.

  863
  I am sorry that the hon. Member for Londonderry (Mr. Ross) is no longer present. Small farmers in my district are highly intelligent and can cope with this sort of legislation. They probably know quite as well as the large farmer, the advisers of the NFU and the secretaries who have a great deal of information. With prior approval so many forms had to be filled in that one needed a secretary, but I believe that simplification will do a great deal of good. I do not believe that these farmers will be unable to cope with that.
  I was glad to hear the Minister's assurances about conservation and the countryside. I accept them. I think that the hon. Member for Rother Valley (Mr. Hardy)—I call him my friend because we serve on a committee together in the Council of Europe—will admit that, though I am not so outspoken as he, I try to do my best to preserve the countryside. I am extremely keen on that. I believe that a protest lobby has been worked up without the conservation societies really knowing what they are doing.
  I am a member of the Norfolk Naturalist Trust and of the Wildlife Trust, which has a wonderful preserve in my constituency, and I find that their members, who are in close contact with the farming, landowning and tenant community, have far more influence than officials from outside. My hon. Friend the Member for Lincoln (Mr. Carlisle) made a good speech, but I disagree with him.
  We must realise that the only matter with which the Minister can deal is the grant. Everybody else has spoken about ploughing up old pastures. One does not need to ask for grant in order to cut down a hedgerow, but I fear that far too many hedgerows are cut down. However, that has nothing to do with the regulations.
  Therefore, I welcome these instruments. I believe that they will speed matters up and help farmers large and small. I hope that we pass them without delay.
  7.1 pm
  Mr. John Home Robertson: I declare an interest at the outset, since I have been known
  864
  to claim these grants. The regulations before us have been dressed up as a rationalisation scheme, but if they are the result of rationalisation carried out by Sir Derek Rayner, and if that gentleman is to undertake a rationalisation exercise in other Government Departments, I despair because of the red tape and confusion that will be created throughout the Civil Service.
  This is a phenomenally complicated set of regulations. The Minister said that he intended to produce a straightforward explanatory leaflet, and I shall be fascinated to see how he manages to do that. There are one or two unforgettable passages in the regulations. I shall quote item 8(1), on page 7.
  "Subject to the provisions of this regulation and regulations 12 and 14 the amount of any grant payable under regulation 7(1) towards expenditure in respect of any work, facility or transaction of a kind specified in any of paragraphs 1 to 20 and 22, in column 1 of the Schedule shall be the percentage of that expenditure specified in relation to that work, facility or transaction, in column 2 of the Schedule, except that in the case of any work, facility or transaction which, in the opinion of the appropriate Minister …"
  It goes on in that way. There are three lots—
  Mr. Myles: Does the hon. Member for Berwick and East Lothian (Mr. Home Robertson) know the difference between the passage that he has quoted and the one contained in the original regulation that was in force under the Labour Government?
  Mr. Home Robertson: The hon. Member for Banff (Mr. Myles) has anticipated what I intended to say. I was about to criticise the farm and horticultural development scheme on which the regulation is based. That is a complicated scheme. If I cast my mind back to the beginning of my farming career 10 years ago, I remember that if I wanted to carry out work on the farm I did it under the old farm improvement scheme. Under that scheme, I simply had to look at a schedule of eligible works to see whether what I wanted to do was eligible, fill in a simple one-sided form and send it to the Department of Agriculture and Fisheries for Scotland.
  Someone would come along from the Department, have a look at what I proposed to do to ascertain whether the work was necessary or desirable, and give me

  865
  written approval to get on with the job. In due course the job would be done and the grant would be paid. There was no problem. Since then, this typical European-inspired monstrosity, the agriculture and horticulture development scheme, has emerged. Its complications lead to considerable difficulties for farmers most of whom are unable to prepare their own schemes. They must find a specialist consultant, a member of the college advisory service or ADAS to draft their schemes for submission. It is then decided whether the schemes are eligible under the regulations.
  All that must be done so that capital grant may be paid out. I do not believe that this is a clever way of conducting our affairs. Is that what the Government want? Do they want such a proliferation of non-productive, pseudo-administrators on the back of what should be a productive and efficient agriculture?
  It is fair to say, in this instance, that Sir Derek Rayner is chasing his own tail, because these psuedo-administrators are in many instances employed by the Government. They are employed either by the Scottish agricultural colleges or by ADAS. To what end are they engaged on all this paperwork?
  Our advisers, whether in the Scottish or the English services, should be put to much more useful work in helping the industry to become more efficient by giving constructive advice to producers and growers rather than by preparing all this bumf. The Government should put before the House a much simpler scheme, based on the farm capital grant scheme, with prior approval, as happened in the past. It is about time that we tore up this scheme. I recognise that it was set up in order to tap European funds, but surely there must be better ways of tapping such funds.
  I agree with my hon. Friend the Member for Edinburgh, East (Mr. Strang), who spoke of the need to maintain prior consent. I also agree with my hon. Friend the Member for Rother Valley (Mr. Hardy), who spoke of the need to give proper weight to conservation interests throughout our rural areas. I am delighted that on this happy occasion I agree not only with my hon. Friends but with both my trade unions, namely, the National Farmers Union and the National Union
  866
  of Agricultural Workers, in opposing these regulations.
  7.8 pm
  Mrs. Elaine Kellett-Bowman: I am glad that on this occasion we are, for once, debating these impor-thank my hon. Friend the Minister for having met many of the objections that were raised against the February proposals. There are many aspects of these regulations which I welcome.
  I was interested to hear the hon. Member for Edinburgh, East (Mr. Strang) say that we must keep our hedges and that the old proposals had worked out well. If his idea of things working out well is that people should be paid for grubbing up hedges, I have to say that it is not mine.
  In the part of the country which I have the honour to represent, there are some superb examples of hedge-laying. Competitions are held and great pride is taken in the craft. It is extremely good for conservation, and it is an excellent way of keeping in one's stock. It is a first-class job. However, it is quite hideously expensive. In the past, though not the immediate past, not only were farmers not encouraged to lay hedges: they were actually paid to grub them up or, as my late husband used to say, to cut them off at the knees. That was equally hideous.
  In the area in which I farmed for many years—I must declare an interest as a farmer—almost all the hedges were grubbed up. We continued to lay our hedges, and there was a half-page article in the local paper when we laid a roadside one last year, because the practice was so unusual. It had not been seen in the district for many years. I am glad that the interpretation of the regulations is being widened so that hedge-laying is included. There is no finer form of conservation than the hedgerow. It is good stock protection and a wonderful protection for wildlife.
  I am glad about the simplification of the standard of construction. My hon. Friend the Member for Norfolk, South-West (Mr. Hawkins) is right. Many farmers despaired at the complications and the escalation in price that ensued in the delays involved in getting prior approval. In despair they probably built, as I did myself, a simpler form of construction and forwent the grant.

  867
  I agree with my hon. Friend the Member for Banff (Mr. Myles) when he says that the standard should be half the turnover and not half the income. In many country areas, especially the fells in Lancashire and Cumbria, it will be essential in years to come for farmers to have ancillary forms of income such as tourism, which is rapidly increasing in those areas, and part-time work in forestry. It would be much better if the criterion was half the turnover of a farm instead of half the income.
  I do not like the uncertainty that the draft regulations will involve for a farmer who can just about find the money to do the job if he receives a grant but who will not be able to do so if he does not receive it. If the farmer is not certain that he can get a grant, it would be helpful if a residual capacity to apply for a grant were to remain—a residual option so that if a farmer is in doubt he can obtain prior approval. That will apply probably to only one application in 10. If that is so, it will not cost very much and it will be a valuable addition. I know that my hon. Friend cannot change a draft statutory instument, but he can possibly delay this one.
  In general, I welcome the much greater flexibility that has been introduced and the considerable thought that has been paid to the objections that were made to the original proposals.
  7.13 pm
  Mr. Frank Dobson: The last way to commend the draft regulations to me is to say that they have been introduced at the behest of Sir Derek Rayner and that they will result in a reduction in agriculture costs. If my memory serves me right, it was Marks and Spencer that in March of this year first started selling the individually priced potato. That does not commend its cost-saving abilities very much.
  I make no apology for contributing to the debate when my constituency is Holborn and St. Pancras, South. My constituents and others who live in urban areas have as great an interest in the future of the countryside as anyone else. That is partly because it produces food for them and partly because it represents a form of recreation and relaxation, in the same way as the cities provide
  868
  recreation and relaxation for those who live in country areas.
  Probably Exmoor best epitomises the conflict within the national parks between the interests of farmers and those of visitors and conservationists. The Government and previous Governments have not resolved the conflict. That is partly because it is a conflict between the Ministry of Agriculture, Fisheries and Food and the Department of the Environment, which have different objectives.
  As I understand it, the requirement for prior approval for the reclamation of moorland in the national parks will stilt be required. I also understand that a thorough consultation procedure will be required. That is not going far enough. The procedure is not as conservation-oriented as it should be. Secondly, the present method stimulates bureacracy.
  In the national parks, and on Exmoor especially, there should be a presumption against the further reclamation of moorland for farming purposes. At present there is no presumption towards either allowing the ploughing of moorland or the retention of moorland. That unclear area of discretion is an area in which bureaucracy flourishes.
  Many people will be consulting many others—this will apply to official bodies, unofficial bodies, voluntary bodies, conservation bodies and agriculture bodies—and at the end of the day there must be an individual decision on each issue, based on its merits and without a presumption one way or the other. That must be calculated to be the most fertile breeding ground for bureaucracy, which loves consulting itself and others on matters where it has a discretion and where there are no clear and binding rules.
  It would be better for Exmoor—better from the point of view of conserving it, better from the point of view of farmers who would not need to make applications that would not succeed, and better from the point of view of reducing bureaucracy—if the Government set out and maintained a clear presumption in favour of retaining moorland when dealing with its reclamation in national parks.
  7.18 pm
  Mr. Matthew Parris: About three-quarters of my constituency is in the Peak District national park.

  869
  When I first read the Government's proposals I had grave reservations. I welcome the changes that the Government have made. I welcome the proposal that an ADAS representative should hold a weekly surgery and should appear once a week at the offices of the national park. That goes a long way towards allaying my anxieties.
  There is a rumour in my constituency —I shall be grateful if my hon. Friend dispels it when he replies—that in the national park area the effect of these measures will be to oblige farmers to consult conservation interests when previously they were not obliged to do so. In fact, conservation interests have always had to be consulted. The ADAS representatives used to talk direct to the national parks and there was not so much interface between farmers and those responsible for the parks. I understand that the result of these measures will be to make a direct interface between national parks and farmers.
  Relations between the farming community and the national parks used to be rather had. I have the impression that those relations have been improving slightly, in no small, part due to the intense efforts that have been made by the national parks to improve their public image. Those efforts have begun to pay off and relations have been getting better.
  The new interface between farmers and the national parks may make it more difficult for the parks to improve their relationship with the farming community. Decisions that might have seemed acceptable if they had come from the ADAS representatives may seem less acceptable to farmers when they come from the national parks. Farmers may be more inclined to challenge decisions from the national parks than from ADAS representatives. That is a problem, but it should not prove to be insurmountable. To what extent is the effect of the regulations in the national parks simply to transfer manpower requirements from the Ministry of Agriculture, Fisheries and Food to the national parks bureaucracy? Can my hon. Friend give the House an assurance that there will be no requirement to increase manpower in the Peak District national park as a result of the new obligations that the regulations place upon the national parks?
  7.20 pm
  Mr. Wiggin: By leave of the House, Mr. Deputy Speaker, I should like to seek to deal with some of the points raised during the debate.
  The speech of the hon. Member for Holborn and St. Pancras, South (Mr. Dobson) epitomises the difficulty for my Department and the equivalents in Scotland and Northern Ireland in seeking to marry the conflict between the wish of his constituents to use the countryside as an area of recreation with the fact that those who earn their living from farming have to do so in the same countryside. The question of moorland conservation is not relevant to the debate but will be relevant to the countryside legislation that I believe my right hon. Friend may be seeking to bring forward.
  The hon. Gentleman reminds me that under the voluntary arrangements that have been in existence not a square inch of Exmoor has been ploughed up except by agreement with the national park authorities. My hon. Friend the Member for Derbyshire, West (Mr. Parris) dealt with the question of the national parks. I understand the substantial feeling that exists in that part of the world about such matters. My hon. Friend used the word "oblige" in the context of the necessity of the farmer having to consult. That is right. This is a change from what, in effect, was a voluntary arrangement to one that requires him to consult in the interests of the countryside before proceeding. I remind my hon. Friend that we do not look upon this development as necessarily leading to a vast bureaucratic load.
  Each week the ADAS officer will visit the office of the national park, go through the applications, remove, I believe, the vast percentage that will not be of a sensitive nature and proceed to deal with the handful that remain by visiting the farmers and talking to them about the issues, proceeding in the same way as in the past by consultation, persuasion and, if necessary, management agreements and such procedures.
  Mr. Geraint Howells: Does the Minister agree that previously it was a voluntary action for the farmer to approach the officials of the national park? Now it is compulsory.
  Mr. Wiggin: I agree. That is what is happening. The point is whether this will be a disadvantage.
  I suspect that Opposition Members consider that national park authorities will not be sufficiently consulted even now. I believe that I can allay the farmers' fears. I understand their fears that unknowledgeable members of national parks' committees will start dictating, without the intervention of ADAS, what should or should not go on. This will not be a question of holding matters up for months. Each week, under our administrative arrangements, there will be a visit, which I believe will deal with the problem.
  My hon. Friend the Member for Banff (Mr. Myles) gave a welcome to the scheme for which I am grateful. He asked about the review of standard costs. They are reviewed annually—a major exercise. We should like to do so more often at a period of high inflation. We shall look at my hon. Friend's suggestion, but I cannot make any promises.
  My hon. Friend and also my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) and others raised the matter of eligibility. Eligibility for the scheme is the same as before. Eligibility is laid down by the Community so that these schemes should qualify for Community contribution. There is nothing that I can do about the matter at this stage.
  The hon. Member for Rother Valley (Mr. Hardy), in a passionate speech, claimed, like many of his fellows, to speak on behalf of a wide range of conservation societies. The hon. Gentleman confirms my conclusion, which I have mentioned previously, that in such matters these societies are opposed to capital grants.
  Mr. Hardy: No, they are not.
  Mr. Wiggin: They are indeed. They are saying, in effect, that development in the countryside is harmful to conservation. We have to ensure that farmers are able to continue to develop their businesses. We must produce food. At the same time, we do our best to ensure that our duties under the Countryside Act are kept.
  Mr. Hardy: The Minister does many people in the conservation movement a
  872
  great disservice. There has been a great deal of effort to try to ensure that conservationists and agriculturists work together. A great deal of progress has been achieved. The Minister may care to clarify the position, because the conservationists agree with the view of the Nature Conservancy that the Ministry's proposal will lead to a marked and accelerated decline in wildlife habitat. That point concerns conservationists and also a great many farmers.
  Mr. Wiggin: I do not accept that argument. The history of the previous arrangements, with the prior approval scheme, has not been very successful in the context of what the hon. Gentleman suggests. We shall require the farmer—not the ADAS man who gave the prior approval—to say that he has considered these aspects.
  I do not accept the criticism that we have not considered the conservation aspect. I believe that, at the end of the day, there will be the opportunity for a greater relationship between the conservation interests and the farmer. If that is not the case, there are farmers—signs exist that some are starting to do so—who will say that they are not prepared to have this argument, not prepared to delay their investment, and who will forgo the grant and get on with doing what they want to do despite the interests of conservation or the countryside. I am against that approach. It would be a great pity if that stage was reached.
  Mr. John Home Robertson: The hon. Gentleman knows the industry pretty well. How many farmers can afford not to take advantage of the type of grants about which we are talking?
  Mr. Wiggin: By the very fact that they have not applied for a grant, I do not know how many, but two substantial cases were drawn to my attention last week. I have sought information on this point.
  My hon. Friend the Member for Huntingdonshire (Mr. Major) raised the question of shifting responsibility. I do not think that this is the case. ADAS will still be available to give advice. To suggest that we are making some dramatic reductions in the total numbers of ADAS and that ADAS involvement will be less is contrary to the facts of the situation.

  873
  We are cutting down on ADAS administration. ADAS is currently over 5,000 strong, 3,000 of whom are advisers. The cut in ADAS, which is 150 man-years, will come from less administration. We hope not only to maintain our level of advice but to improve it. I gain the impression that this will be the wish of almost every hon. Member who has spoken.
  My hon. Friend the Member for Lincoln (Mr. Carlisle), who has spoken to me on the matter in recent days, has referred to the pressures on the farmer. The pressures on the farmer by the conservation interests are such that there is a detectable and regrettable antipathy. Ministers on occasions have to seek to resolve these difficulties. We are adopting a procedure whereby advice content in these disputes will be as high as or higher than in the past.
  The hon. Member for Londonderry (Mr. Ross) raised a number of detailed questions about eligibility in Northern Ireland. I hope that my hon. Friend the Under-Secretary of State for Northern Ireland, who was listening to his speech, will write to him and deal with what are Northern Ireland points. Among other matters raised by the hon. Gentleman was the question of building standards. British Standard 5502 is a highly complex document, but all professional firms, and presumably contractors, will understand its implications. There will be no worry about buildings built to that standard. We are not saying that because a building is not up to standard we shall reject the grant. We shall give advice and suggest how the standard might be maintained. We shall use good, common sense. I hope that there will be no difficulty there.
  The hon. Gentleman suggested that there was a change in the operation of the FHDS. The change is not that the plan will not need prior approval, because it will. The farm plan will get approval as in the past, but the buildings and capital investment which are part of the plan will not require prior approval.
  The hon. Member for Cardigan (Mr. Howells) mentioned research. I hope that he will look at this separate subject and recognise that, where it is possible to make savings in one part of a Department, there is a balancing element. We
  874
  have made some cuts in research, but I believe them to have been as modest as possible. I suggest that the hon. Gentleman's criticisms of the amount of agricultural research which is going on are not well founded.
  My hon. Friend the Member for Norfolk, South-West (Mr. Hawkins), with his customary deep knowledge of the countryside, has welcomed the practicalities of the scheme.
  The hon. Member for Berwick and East Lothian (Mr. Home Robertson) referred to Sir Derek Rayner chasing his tail and then argued extensively that the Government should seek to reduce bureaucracy and to increase advice. That is precisely what we are doing. If anyone is chasing his tail, I suggest that it is the hon. Gentleman.
  My hon. Friend the Member for Lancaster shares my enjoyment of a well cut and layered hedge. Making the layering of hedges available for grant is a step forward.
  My hon. Friend referred to contingency approval. I understand her concern about this matter. Where there is doubt, the farmer concerned will be well advised to seek guidance from ADAS. Provided that advice is complied with, I cannot see that the other hand of the Department is likely to turn down the resulting application. I suggest that in practice that point has been met. We do not foresee the turning down of too many grants for the reasons put forward by my hon. Friend.
  The hon. Member for Edinburgh, East (Mr. Strang) raised the important matter of public accountability. It has exercised my mind considerably. However, he will know from his previous experience that we must satisfy the Treasury, and it is in agreement with the scheme as it has been announced. We shall certainly watch this matter with our customary audit procedures. There will be sampling, inspections and checks in the normal way. The Public Accounts Committee will breathe heavily on us in the ordinary way. However, I believe that we have taken all possible precautions in the same way as they were taken before.
  The hon. Gentleman asked specifically about Scotland. The prior notification procedures will apply in SSSIs and, when

  875
  they come into being, national scenic areas. In general, the same procedures and thoughts will be applied to the scheme in Scotland as apply here, bearing in mind that there are some differences in the advisory services there. My noble friend the Minister of State will be altering the scheme largely to deal with those slight differences.
  The hon. Gentleman talked about the necessity for conservation. I hope that I have dealt with that aspect sufficiently both in my opening remarks and in replying to the debate. In view of the conflicting interests, we have emphasised the need for and provided the manpower to give advice. I do not think that every ADAS officer has a magical ability to deal with all conservation problems, but he has the trust of the farmer and to a large extent of the conservation bodies, though I suspect that that trust has been elevated substantially during the debate.
  Finally, the hon. Gentleman referred to the cuts. My Department can, will and intends to bear its share of the full economies which must take place across Whitehall. In making these cuts, we have sought to impinge upon the farming community as little as possible. This is a fundamental change in bureaucracy, organisation and form-filling. We believe that the farming community can and should be trusted to make its own decisions.
  I remind the House that the only sanction that we have is whether we pay the grant. Some will choose to ignore that sanction and go the other way. However, this is a good scheme. It is an improvement on the old one.
  Mr. Kenneth Carlisle: My hon. Friend said that one sanction was to refuse to pay the grant. Will he elaborate on that point? I do not see how it will work. What criteria will be applied? For example, a woodland or small copse may have been destroyed and there may be no evidence of what existed before. How can one say what damage there has been when, so to speak, the horse has bolted?
  Mr. Wiggin: My hon. Friend knows that if a wood is an SSSI and has been allocated as such, prior notification will be involved. As I have said, the applicant will have to say that he sought to consider countryside effects. If, as a result of his doubts, he has not sought the advice of ADAS and has deliberately flouted common sense, we shall reserve the right to withhold the grant. That is made clear in the explanatory leaflet, and it will be carried out.
  I emphasise again that the purpose of the scheme is advice, not bureaucracy. I commend it to the House.
  Question put:—
  The House divided: Ayes 96, Noes 45.

  Division No. 469]

  AYES

  [7.35 pm

  Benyon, Thomas (Abingdon)

  Fenner, Mrs Peggy

  Neale, Gerrard

  Berry, Hon Anthony

  Goodhew, Victor

  Neubert, Michael

  Biggs-Davison, John

  Gow, Ian

  Newton, Tony

  Blackburn, John

  Griffiths, Peter (Portsmouth N)

  Normanton, Tom

  Boscawen, Hon Robert

  Hawkins, Paul

  Onslow, Cranley

  Bright, Graham

  Hawksley, Warren

  Page, Rt Hon Sir Graham (Crosby)

  Brinton, Tim

  Henderson, Barry

  Page, Richard (SW Hertfordshire)

  Brocklebank-Fowler, Christopher

  Hogg, Hon Douglas (Grantham)

  Parris, Matthew

  Brooke, Hon Peter

  Hurd, Hon Douglas

  Patten, Christopher (Bath)

  Brotherton, Michael

  Jopling, Rt Hon Michael

  Patten, John (Oxford)

  Brown, Michael (Brigg & Sc'thorpe)

  Kellett-Bowman, Mrs Elaine

  Prentice, Rt Hon Reg

  Bruce-Gardyne, John

  Kershaw, Anthony

  Price, David (Eastleigh)

  Buchanan-Smith, Hon Alick

  Lawrence, Ivan

  Proctor, K. Harvey

  Buck, Antony

  Le Marchant, Spencer

  Cadbury, Jocelyn

  Lennox-Boyd, Hon Mark

  Rhodes James, Robert

  Carlisle, John (Luton West)

  Lester, Jim (Beeston)

  Rhys Williams, Sir Brandon

  Chapman, Sydney

  Lloyd, Peter (Fareham)

  Ridley, Hon Nicholas

  Clegg, Sir Walter

  MacGregor, John

  Rossi, Hugh

  Colvin, Michael

  McNair-Wilson, Michael (Newbury)

  Sainsbury, Hon Timothy

  Cope, John

  Major, John

  St. John-Stevas, Rt Hon Norman

  Costain, Sir Albert

  Mellor, David

  Shaw, Giles (Pudsey)

  Cranborne, Viscount

  Meyer, Sir Anthony

  Silvester, Fred

  Dorroll, Stephen

  Miller, Hal (Bromsgrove & Redditch)

  Speed, Keith

  Dover, Denshore

  Moate, Roger

  Speller, Tony

  Dunn, Robert (Dartford)

  Monro, Hector

  Spicer, Jim (West Dorset)

  Elliott, Sir William

  Morrison, Hon Peter (City of Chester)

  Spicer, Michael (S Worcesetershir)

  Eyre, Reginald

  Murphy, Christopher

  Sproat, Iain

  Faith, Mrs Shella

  Myles, David

  Squire, Robin

  Stanbrook, Ivor

  Waddington, David

  Winterton, Nicholas

  Stevens, Martin

  Waller, Gary

  Wolfson, Mark

  Strading Thomas J.

  Ward, John

  TELLERS FOR THE AYES:

  Thatcher, Rt Hon Mrs Margaret

  Wickenden, Keith

  Lord James Douglas-Hamilton and

  Thorne, Neil (Ilford South)

  Wiggin, Jerry

  John Wakeham.

  NOES

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

  Hughes, Robert (Aberdeen North)

  Ross, Stephen (Isle of Wight)

  Bidwell, Sydney

  Johnson, James (Hull West)

  Ross, Wm. (Londonderry)

  Cocks, Rt Hon Michael (Bristol S)

  Kilfedder, James A.

  Snape, Peter

  Cunliffe, Lawrence

  Lyons, Edward (Bradford west)

  Soley, Clive

  Dean, Joseph (Leeds West)

  McDonald, Dr Oonagh

  Spearing, Nigel

  Dobson, Frank

  McKay, Allen (Penlstone)

  Spriggs, Leslie

  Dormand, Jack

  McNamara, Kevin

  Strang, Gavin

  Dubs, Alfred

  McQuade, John

  Tinn, James

  Dunwoody, Mrs. Gwyneth

  Millan, Rt Hon Bruce

  Urwin, Rt Hon Tom

  Foot, Rt Hon Michael

  Molyneaux, James

  Winnick, David

  Grimond, Rt Hon J.

  Paisley, Rev Ian

  Wrigglesworth, Ian

  Hamilton. W. W. (Central Fife)

  Palmer, Arthur

  Hardy, Peter

  Parker, John

  Harrison, Rt Hon Walter

  Penhaligon, David

  Holland, Stuart (L'beth, Vauxhall)

  Powell, Rt Hon J. Enoch (S Down)

  TELLERS FOR THE NOES:

  Home Robertson, John

  Powell, Raymond (Ogmore)

  Mr. George Morton and

  Howells, Geraint

  Roberts, Ernest (Hackney North)

  Mr. Terry Davis.

  Question accordingly agreed to.
  Resolved,
  That the draft Agriculture and Horticulture Development Regulations 1980, which were laid before this House on 28 July, be approved.
  Resolved,
  That the Agriculture and Horticulture Grant Scheme 1980 (S.I., 1980, No. 1072), a copy of
  878
  which was laid before this House on 28 July, be approved.
  That the Horticulture Capital Grant (Variation) (No. 2) Scheme 1980 (S.I., 1980, No. 929), a copy of which was laid before this House on 8 July, be approved.
  That the Farm Capital Grant (Variation) (No. 2) Scheme 1980 (S.I., 1980, No. 930), a copy of which was laid before this House on 8 July, be approved.—[Mr. Wiggin.]

  COMMON FISHERIES POLICY
  7.47 pm
  The Minister of State, Ministry of Agriculture, Fisheries and Food, (Mr. Alick Buchanan-Smith): I beg to move.
  That this House takes note of European Community Documents Nos. R/2988/75, R/2519/77, R/2520/77, R/1514/78 and 8959/80 on structural policy, No. 8583/80 on catch reporting, No. 8957/80 on conservation, No. 8958/80 on 1980 quota allocations, No. 9047/80 on quota allocation criteria and the Ministry of Agriculture, Fisheries and Food's unnumbered memorandum of 21 July 1980 on access: and supports the Government's objective of a satisfactory overall settlement of the revised Common Fisheries Policy in its own right at the earliest possible opportunity which takes adequate account of the need to conserve and safeguard fish stocks and of the overall requirements of the United Kingdom fishing industry.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): I have to inform the House that Mr. Speaker has selected the amendment in the name of the Leader of the Opposition.
  Mr. Buchanan-Smith: I should like to draw the attention of the House to the Ministry of Agriculture, Fisheries and Food's unnumbered explanatory memorandum of 22 July 1980 and corrigendum of 1 August 1980, which relate to document No. 9047/80 and which are also relevant.
  The official text of document No. 9129/80 on access has now been received, and it was made available in the Vote Office on Wednesday. In essence, it is identical to the unnumbered illustrative text that was originally supplied in relation to the unnumbered explanatory memorandum on access that is referred to in the motion.
  I welcome the opportunity for this debate because it comes at an important time. In the autumn there will be a series of important meetings of Fisheries Councils in Europe, when decisions may be taken. I very much welcome this opportunity for the House to express its views on these vital negotiations.
  The Government's objectives in the renegotiation of the common fisheries policy remain as we have stated them on many previous occasions, from this Box and elsewhere. I should like to summarise the four essential principles as I see them. First, we believe that we must have an
  880
  adequate exclusive zone. Secondly, we must have further preferential access beyond that exclusive zone. Thirdly, we must have a proper control system. Fourthly, we must have a substantial share of the total allowable catch which takes account of the fact that we are contributing most of the water and most of the fish to the total waters of the EEC.
  Through recent Councils, particularly through bilateral contacts which my right hon. Friend the Minister and my right hon. Friend the Secretary of State for Scotland have had, I believe that at present, and certainly compared with the position 15 months ago, there is a very much better understanding in Europe of the United Kingdom's position and of its aspirations in relation to the renegotiation of the CFP. Indeed, on many areas —this was particularly apparent at the last Fisheries Council in July—there is an identity of interest between some of our objectives and those of other countries. They have similar interests to our own. I believe that on that basis we have an opportunity for progress which has not been there previously.
  I should also like to refer to the Foreign Affairs Council on 30 May, when an agreed text on fisheries was issued following that meeting. I draw the attention of the House to three aspects of it. First, that agreement urged a settlement of the CFP by the end of this year. This is something that we support, because in a period of uncertainty it is very difficult for any industry to continue on the present basis. Provided that we get a satisfactory settlement—I emphasised that in what I said earlier—it is right that we should try to seek a settlement by the end of this year.
  Secondly, the document contains a number of criteria that are to be used in the negotiations towards that settlement. All those criteria are acceptable in relation to our objectives in the renegotiations.
  Thirdly, that agreement from the Foreign Affairs Council makes it clear that there is no linkage with the budget and that the fisheries policy has to be settled on its merits.
  We now have new proposals from the Commission on quotas, on conservation and on structures. We also have a paper —I make that distinction on purpose—on access.

  881
  Looking ahead to the future meetings of Fisheries Councils, to which I referred a few moments ago, there is a Fisheries Council at the end of September. We would hope at that Council to see conservation measures discussed and to see some progress made on that matter then. There is likely to be a further Fisheries Council in October. At that Council we would expect to see more substantive discussions, and we would hope to see progress on the crucial matters of quotas and access.
  It is for that reason that I particularly welcome the opportunity for this debate this evening, because these Councils are to take place during September and October.
  Mr. J. Grimond: I agree with the Minister that it is necessary to get an agreement on the CFP. If a policy were to be agreed in October or November, when does the Minister think that it would come into force concerning quotas and conservation?
  Mr. Buchanan-Smith: That would depend upon a number of factors. For example, if the right hon. Gentleman looks at the document on conservation he will see that different items of conservation come into force on different dates. Therefore, there would be different dates for different parts of the agreement. What I should like to make clear—this is probably the point that underlies what the right hon. Gentleman is saying—is that we shall not agree to individual items. We want to see a package as a whole that is acceptable. We may make progress on individual items of the package, but we want to be able to reserve our judgment on the package as a whole.
  Mr. J. Enoch Powell: I wonder whether the Minister would answer the counterpart to the question put by the right hon. Member for Orkney and Shetland (Mr. Grimond). What will happen if a CFP is not agreed this year?
  Mr. Buchanan-Smith: The purpose is to try to negotiate a satisfactory CFP. In the event of not getting a satisfactory CFP, we shall be in a different situation. The United Kingdom will then have to reassess the situation, but at present we are in the process of negotiating a CFP.
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  I believe that that is what we should have our attention on now.
  Mr. James Johnson: I do not wish to anticipate the Minister's argument, but is it not a fact that if we do not get a genuine settlement, with the Nine signing together, by old year's night of this year and we come to new year's morning, we shall have to take what is there? Is that not so?
  Mr. Buchanan-Smith: That is not true. The document to which I referred earlier refers to the date by which it is hoped that the new policy can be negotiated.
  Mr. Kevin McNamara: Will the hon. Gentleman give way?
  Mr. Buchanan-Smith: There will be opportunity later for speeches. I have very helpfully given way for three interventions. I would rather get on. We have time for the debate. I shall be very happy to deal with any detailed points at the end of the debate, with the permission of the House.
  I have mentioned the new proposals before us, and I should like now to deal with them. In some respects these proposals are an improvement on what has been on offer previously. There are some aspects—I shall develop this as I go along—on which we have considerable reservations. I should like, therefore, to deal fairly quickly with the different proposals before us—with the proviso that I hope to be able to speak again at the end of the debate.
  First, I should like to deal with the document on conservation—No. 8957/80. I deal with it first because that is the document on which we expect substantive discussion in the Fisheries Council in September. This document is an improvement on what has been available up to now. This is particularly important in relation to white fish mesh sizes, which is an important aspect of our fisheries. What I find most encouraging of all about this document is that we have in it a recommendation on conservation that is much more firmly based on scientific advice than previous proposals have been. This has always been one of the firm bases on which successive Governments have

  883
  argued the case for a CFP. In this respect, this document is an improvement
  We believe that progress is possible on this matter. This answers the point made by the right hon. Member for Orkney and Shetland (Mr. Grimond). This is the one indication that, as long as the broad objective is achieved of increasing particular mesh sizes for more effective conservation, there might be some room for movement on the phasing in of different mesh sizes, perhaps even variations for different areas, to take account of current practice.
  A particularly unsatisfactory aspect concerns the important pout box in the North Sea. Evidence over the years shows that it is an important conservation measure. However, we have recently received a court decision which does not help the United Kingdom. We are considering that decision and how to negotiate on it.
  Secondly, I should like to deal with catch reporting, which is referred to in document No. 8583/80. A considerable amount of detailed work remains to be done. It is a crucial aspect of the common fisheries policy. As I am sure the House will agree, and as anyone who knows about fishing will agree, if a common fisheries policy is to be effective there must be common standards. Those standards must be properly applied by all countries, Governments and industries within the EEC. Our objective in relation to catch reporting is to obtain an effective system. If a system is not effective, it is not worth anything. Negotiations are taking place because we want a system that does not add any unnecessary administration and bureaucracy. In addition, the effectiveness of the system must not be sacrificed.
  Thirdly, quotas are a crucial and "crunch" area in the renegotiation of the common fisheries policy. Documents Nos. 9047/80 and 8958/80 are involved. I shall deal first with document No. 9047/80, which deals with the principles that should be used when calculating quota allocations. Most of the criteria laid down in the document are sensible, and we agree with them. However, we are concerned about some of them and about the way in which they might be
  884
  applied. I shall mention only four of those criteria.
  First, we do not believe that sufficient allowance has been made for losses sustained in third country waters. The United Kingdom is in a different position, in terms of magnitude, from any other European nation. The German fishing industry is the nearest in size to ours, and it is far behind us. We are worried that sufficient weight will not be given to that factor.
  Secondly, there must be more emphasis on the discounting of industrial catches, particularly excessive by-catches of edible species in industrial fishing. Over the past year I have discovered that European industries with a greater tradition of industrial fishing than Britain are becoming more aware that the emphasis should be placed on catching for edible purposes. We are dealing with a scarce resource. We must husband it and look after it properly. Although that is mentioned in the document, insufficient weight has been given to it.
  Thirdly, we are concerned about the preferences applied to the Hague areas. Those areas resulted from an agreement in 1976, and they involve the waters around Northern Ireland and the North Coast of Britain and as far down the North-East coast as Bridlington. Reference is made to Hague preferences in the calculation of quotas. We are concerned about the way in which the Hague preferences are applied, particularly when two countries with such preferences lie opposite each other, such as Britain and the Irish Republic. We are not happy about the way in which the preferences are applied, and we have reservations about them.
  Fourthly, as the common fisheries policy has not been negotiated, the fishing industry is suffering from uncertainty. If an agreement on quotas is to be reached, we must ensure that the quotas have a certain degree of staying power and are not agreed for just one year. In that way our industry and the industries of other countries will have some certainty about future opportunities. Sufficient emphasis has not been given to that in the Commission's criteria.
  The second document on quotas, about which there has been much comment in the fishing press and elsewhere, is No.

  885
  8958/80. It puts forward figures and percentages for the possible quota allocations to the different countries within the Community. When my right hon. Friend made a statement after the last Fisheries Council meeting, he stressed that the figures were merely illustrative of the criteria. They are not formal proposals from the Commission. [Interruption.] Opposition Members may laugh, but that is precisely what was said in the Council, and outside it, in July. The position is clear and the figures can be negotiated.
  Mr. Robert Hughes: After four or five years of negotiations under successive Governments on the so-called renegotiation of the common fishery policy, why are we still dealing only with illustrative proposals?
  Mr. Buchanan-Smith: The Labour Government made it impossible for renegotiation to take place. The fault lies with the Opposition. At least we have proposals which illustrate how the calculations will work. Now, and in the autumn, we shall seek more definite quota proposals. The figures are useful. In some areas there has been an improvement in the allocation of some important stocks, such as mackerel, haddock and whiting, but we have considerable reservations about the proposals. Indeed, we have some simple arithmetical reservations. We have made strong representations to the Commission. In addition, we have made plain to the Council and to the Commission that more discussion is required before further progress can be made.
  I should like to turn to structures and to document No. 8959/80, which replaces all the other documents listed under the "structures" heading. The proposals are interesting. They allow financial contributions for the restructuring of the fishing industries of member countries. I shall not pass any comment on the proposals at this stage. We shall judge them by their suitability for the United Kingdom industry. Whether they are suitable for our industry will depend on the outcome of other aspects of the negotiations, such as those on access and quotas. Until we know the position, it will be difficult to judge how effective and useful the proposals are.
  While we welcome the commitment of Community funds, we must ensure that
  886
  those funds are used in the most effective way.
  Mr. David Penhaligon: Did the conversations about access include the Soviet Union's access to the mackerel fishery off Cornwall? Have the Government made up their minds about whether the Russians will be allowed in this year?
  Mr. Buchanan-Smith: Neither the Soviet Union nor any other Eastern European country fishes within the 12-mile limit off the South-West coast. Nor do they fish in the remainder of the limits. That is worth putting on record, because if one listened to hon. Members one would think that the Russians were fishing for mackerel in that area. I know that there is concern. Considerable efforts have been made, both locally and by the Government, to do something about the way in which those activities are conducted. However, if we did not have markets for the products of that fishery it would have a considerable effect on the constituents of the hon. Member for Truro (Mr. Penhaligon) and on other areas. The hon. Gentleman should reflect on that.
  I have spoken on the issues covered by the documents before us tonight. These issues are crucial to negotiations on the common fisheries policy. While these negotiations are continuing, there is great uncertainty in our fishing industry. In these circumstances, the industry cannot plan for the future and there is an obligation on the Government to help it through this period of renegotiation. Government aid to the fishing industry in the current year amounts to £23½ million. Because of the uncertainty during the period of negotiation on the CFP, we now propose further aid of just over £14 million up to the end of the financial year. This brings to over £37 million the total assistance that the Government are making available to the fishing industry. We believe that it is imperative that the United Kingdom fishing industry is kept viable, in order to meet the opportunities that will be open to it when the negotiations on the CFP are completed. To fail in this would undermine what we have been working for in the Community. This new aid will sustain the industry during the period of the negotiations.
  The aid will take the form of payments to vessel owners. We have responded

  887
  swiftly to the industry's case—it is less than one month since we received its final figures. We shall now move equally quickly to complete our consideration of the details of the new scheme. Our officials will meet representatives of the industry very shortly to outline the proposed scheme. My right hon. Friend has discussed the urgent need for this measure with the European Commission and will notify it formally of the details, which will be worked out in consultation with the industry.
  We also propose to make a further £900,000 available this year for replacement fishery protection vessels. This will enable contracts to be placed for the two vessels currently being built by Hall Russell of Aberdeen. I know that that news will be welcome in Aberdeen. I already hear approving noises from my hon. Friend the Member for Aberdeen, South (Mr. Sproat), who is sitting behind me.
  Parliamentary approval for the new scheme and for the consequential increase of £15 million in cash limits to cover both the aid and the additional fishery protection costs will be sought in Supplementary Estimates. Pending that approval, the new expenditure on fisheries aid will be met by repayable advances from the Contingencies Fund.
  Mr. Bruce Millan: The Minister of State has given a precise figure of just over £14 million. He must have some idea of the form that that aid will take. He must be able to give some more information. May we have some idea of the broad lines of the scheme of assistance, even though the details have yet to be worked out?
  Mr. Buchanan-Smith: I am happy to respond to that request. Our purpose is to use the money by paying it in aid to vessel owners on the basis of individual vessels. We believe that that takes account of the varying types of vessel in the fishing industry and the different costs that are involved in different sections of the industry. There are a number of different ways in which this can be applied, and it is thought that the ways that will be used will no the all that different from those used in the past. For example, aid could be paid in relation to the size of the vessel and its type of operation.
  888
  We envisage the type of scheme of which we already have experience in this country.
  The right hon. Gentleman must understand that I do not wish to go into more details of the scheme tonight. The needs of different sections of the industry vary, and we want to consult the industry about the best way that the aid can be applied most effectively to sustain the fishing industry during the course of the renegotiations on the CFP.
  Several Hon. Members rose—
  Mr. Buchanan-Smith: I shall give way to the hon. Member for Aberdeen, North (Mr. Hughes).
  Mr. McNamara: The Minister has given way twice to my hon. Friend but not once to me.
  Mr. Robert Hughes: Does that mean that the aid that the Minister has just announced will be expended in a different way from the £2 million that was given a few months ago?
  Mr. Buchanan-Smith: The money that was given a few months ago was in two forms: first, £1 million for exploratory voyages; and, secondly, £2 million which was applied through fish producer organisations. We intend to apply this money differently.
  Mr. McNamara: Will the Minister of State give a broad indication of the division of this money between the different fleets? For example, how will it be divided between the deep water, middle water and inshore fleets? In that way, we could get some indication of what was intended for our own areas.
  Mr. Buchanan-Smith: I am afraid that I cannot do that. That is precisely the area in which we must consult the industry. One thing that has marked the fishing industry under successive Governments has been the high degree of consultation between the Government and the industry. That is particularly important where there is such great variety within the industry, not only in the kind of fishing but in the areas in which it operates. I am not trying to hide anything from the House, but we believe that the details of the scheme are best worked out in consultation with the industry, as has happened in the past on the question of aid.

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  In conclusion, I believe in what I have said, particularly for the longer term. We have before us crucial negotiations in which we hope to achieve a satisfactory settlement of the common fisheries policy. While the aid question is important, I hope that both the House and the industry will not lose sight of the important long-term objectives which last not just for the next six or nine months but long into the future and which are crucial to the success and well-being of the industry.
  In the shorter term, both in relation to what the Government did in response to the industry in April this year and by a real response again in terms of hard cash to meet the needs of the industry in the renegotiation period, we have shown not only to the House but to the fishing industry and to the country that the Government are fully committed to the support of the United Kingdom fishing industry.
  8.17 pm
  Mr. Gavin Strang: I beg to move, at the end of the Question, to add,
  and in particular, maintains the need to secure exclusive access within 12 miles, preferential access within 12 to 50 miles, and an overall share of fish for United Kingdom fishermen which reflects United Kingdom losses incurred in third country waters and the contribution made by United Kingdom waters to total European Community fish resources.'.
  The Minister of State referred to the importance of this debate. We would all agree that ideally we would have liked a statement on the aid package followed by a full day's debate on these very important documents. I make no complaint about the arrangements, however, because we realise that near the end of the Session it is necessary to encapsulate the debate in this way. We are discussing issues of immense importance to the fishing industry. In fact, we are talking about its very survival, in both the short and the long term.
  The Minister of State announced that the Government intend to give £14 million of aid to the industry. I address my remarks to that matter. The fishing industry is in a desperate state. There is no doubt that it is on the verge of collapse and there is no doubt that our fishermen would not take action unless the position was serious. They are not
  890
  militant by nature, but what they have done shows their fears about their livelihoods being in jeopardy.
  The Government's announcement must be judged against the state of crisis in the industry. It must also be judged against the demands of the industry. I think that the request for £35 million of aid to sustain the industry to the end of the year was probably a reasonable and objective assessment of the industry's needs.
  The industry was anxious to outline realistically the financial basis that it needs purely to survive. I am glad to see that the Minister is nodding assent. We have to compare the aid offered with the industry's £35 million estimate and the extent of the crisis.
  The £14 million should be accepted by the industry. The Government are acting in good faith. I hope that when the fishermen's organisations meet tomorrow and on Saturday they will accept the £14 million and continue fishing. However, that sum should not be the end of the story this year. It should be viewed as an urgent and necessary lifeline to sustain the industry until Parliament resumes at the end of October. A great deal can happen in that short time. The Government's response is a fair one, and I hope that the fishermen will not institute unofficial action similar to that last month.
  We must also consider the very cheap imports that are doing immense damage to the market. I hope that the Government have not decided against temporary action. We accept that there cannot be a ban on fish imports. Many sections of the industry are dependent on imports for processing. However, fish is coming to this country from inside and outside the Community at unrealistic prices, which is enormously damaging to our industry. The action within the Community to increase protection was inadequate. I hope that the Government will not accept the increase in the reference prices as adequate for the future.
  The documents are immensely important to the industry. First, let us consider the proposals on the allocation of fish to member States. We should be under no illusion that the bargain that may be struck over quotas is vital to the future of the United Kingdom fishing industry. Although the quotas relate only to 1980, they will form the basis for

  891
  quotas in subsequent years. It is crucial to get them right and to ensure that we get a fair share of the fish. As they stand, the proposals are wholly inadequate. Over 60 per cent. of the Community catch is in British waters. Our fishing industry is asking for approximately 45 per cent. That is a realistic demand, which takes account of the pressures on Britain within the Community. Our industry wants a resolution of the matter. With such a large proportion of the fish in British waters, 45 per cent. is reasonable. It is argued that the Community proposals amount to about 30 per cent. I shall not go into details. What counts are the allocations for the species. I use overall figures only to indicate how far short of our needs the proposal falls. The quotas for many species must be improved.
  There is need for exclusive access in the 12 miles adjacent to our coast. That is vital—and we mean exclusive. Although sections of the industry argue for exclusive access for 50 miles or more, we consider that 12 miles is realistic. We must phase out historic rights within that limit. That will not be achieved overnight. However, we must limit those rights, so that that 12 miles becomes genuinely exclusive to British fishermen.
  Equally important is our stance over the 12-to-50 miles argument. The previous Government argued for a dominant preference for British fishermen in the 12-to-50 mile limit. We stand by that. It is vital to have that dominant preference. Our position is on record. We want to secure a disproportionate share of the benefit of conservation measures in that limit. In addition, if we are successful, as we believe we shall be, in conserving the fish within the 50-mile limit, in future quotas we want to ensure that our industry gets the lion's share of the benefit.
  We all accept what the Minister said about the importance of conservation. The hon. Gentleman referred to recent court decisions. I hope that there is no question of the conservation measures being lifted. The whole House regards them as justified on scientific grounds and in the interest of preserving stocks.
  There is no doubt that the stand that we took on the Norway pout box has already helped stocks. The proposal in
  892
  that area is still inadequate, and I hope that the Government will insist on the right of member States to introduce nondiscriminatory conservation measures in advance of Community decisions. It is important that we should hold on to our right to introduce such conservation measures in British waters.
  Of course, it is a question not only of conservation measures but of enforcement. The previous Labour Government were as responsible as are the present Government, but I worry whether we have the capability to enforce the sort of conservation measures that will be needed.
  The bulk of the waters involved are British waters, and whatever conservation measures are agreed, whether they are British initiatives or Commission initiatives, Britain will be responsible for enforcing them. It has been suggested that there will be a committee of nationals from the member States to supervise the monitoring and implementation of conservation measures. I hope that the Minister of State will give us an indication of the Government's attitude to that suggestion. He will accept that there is no substitute for our having the capability to implement such measures in our waters.
  Mr. Penhaligon: Does the hon. Gentleman think that Britain has achieved such conservation in the past? Many of those involved in mackerel fishing in the West Country believe that last year's regulations and catch limits were an abject and miserable farce. Over-catching totalled at least 50 per cent. Will the hon. Gentleman comment on that?
  Mr. Strang: We have to accept that the measures were not successful in some areas, though that is not true of herring fishing. The industry, to its credit, accepted a ban and, while there may be a little restlessness, the overall judgment is that we must sustain the measures in order to allow stocks to increase. I accept that the application and enforcement of some of the measures relating to mackerel were not stringent. Part of the reason was the reaction to what had happened elsewhere. We know that measures are not being enforced by other member States in the way that we enforce them. An easier attitude was taken towards mackerel.

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  If we are to have effective conservation measures, enforced throughout the waters of the EEC, they must be operated fairly. Many sections of our industry have no respect for the way in which the measures are enforced by other Governments. The "World in Action" film demonstrated beyond reasonable doubt that there was a substantial flouting of the conservation measures and that officials who might have been able to contain it were turning a blind eye.
  If we do not achieve acceptability of the way in which conservation measures are being enforced throughout the Community, the whole idea of a common fisheries policy will be doomed to failure.
  The other area in which there are many important proposals concerns the plan for structural measures. The Minister of State was reluctant to say much about those measures, but I believe that we can obtain a substantial amount of new money for our industry through the application of some of those proposals, albeit after modification. By "new money" I do not mean that people should be paid to get out of the industry. I do not mean that money should be paid for laying up vessels. By "new money" I mean money to modernise and replace old vessels, so that they are more fitted to our modern industry.
  The £14 million for temporary aid is simply to sustain the current catching capacity. None of that money should be paid to vessel owners who do not intend to put their vessels to sea. That money is a temporary package to sustain our present catching capacity, so that we have an industry to take advantage of what we hope will be a satisfactory settlement.
  The money to be used for negative purposes or for helping people out of the industry is important. It is important in relation to Denmark and industrial fishing. Some parts of the industry are dependent upon that type of fishing, and there is a case for Community money being used to help it through the transitional period. If we are to succeed in the negotiations, the structural money must be used in Britain to modernise our fleet and to give us the capacity to catch fish efficiently in the future.
  Important discussions are to take place in September and probably in October. They are vital to our industry. The £14
  894
  million is a demonstration of good faith by the Government. However, there is a long, hard way to go yet. The industry wants a settlement, because the future is so uncertain. It must not be a sell-out: it is too vital for that.
  Of course, the budget issue is important. The Prime Minister, who was present for part of the debate, is right to attach the highest priority to the budget, but let us not forget that the fishing industry will be with us long after the budget issue has been forgotten. The fishing industry will be contributing to our national well-being long after the oil has run dry.
  Potentially, fishing is a growth industry. It could make a great contribution to our economy. A satisfactory common fisheries policy is in its interests because much of the fish that we catch is outside British waters at some stage. If we can achieve effective conservation and management of the stocks in the North Sea and a fair deal for ourselves, we shall secure something which is worth while for the country. It will not be easy, but the Government will have the united support of the House of Commons if they insist on securing the type of deal that we have described many times in the House.
  8.38 pm
  Sir Walter Clegg: I congratulate my hon. Friend the Minister on his announcement. The £14 million aid is to go to the most important part of the industry—the catch—because that is where the help is needed. I hope from what he has said, although he cannot give much detail, that it will be more effective aid than the last £3 million. Most of the aid must be directed to that part of the industry.
  The Minister of State and my right hon. Friend the Minister of Agriculture, Fisheries and Food must have had a hell of a fight with the Treasury to achieve the £14 million in the present circumstances. I thank the hon. Member for Edinburgh, East (Mr. Strang) for being fair and saying that the Government's offer of £14 million is a fair response to the request from the industry.
  The Minister knows well the position in Fleetwood, where all our middle-water vessels are tied up. I hope that this aid will enable them to put back to sea and

  895
  to make the port viable again. We cannot judge that until we see how the allocation will be made. We shall then be able better to judge the matter.
  I also thank my hon. Friend for steering us through this glutinous mass of EEC matter. It was a terrible prospect to collect it from the Vote Office. We were weighed down carrying it away. It made equally heavy reading. At times it was like reading "Hamlet" without the Prince of Denmark because the common fisheries policy was not there. All the structural parts of the documents are based on the fact that there is a common fisheries policy—but there is not. Structuring will play a part, and I hope that the restructuring will preserve the industry and not simply come in the form of payments to the industry to lay up vessels.
  The one factor that I do not see mentioned in the documents is compensation for fishermen made redundant through no fault of their own. No matter what we say, some will be made redundant because of the loss of fishing opportunities and catch potential in Third world waters. In other industries such as steel and coal there have been considerable redundancy payments. Because of the way that British fishermen are paid, it appears that no provision will be made for them either by the Government or by the EEC. I hope that my hon. Friend, when he negotiates the structure, will bear that point in mind to ascertain whether anything can be done to help them. It is exceedingly difficult for those men to apply skills learnt at sea to jobs ashore.
  I turn to the other factor raised by the Minister, namely, his intention to negotiate the common fisheries policy on the basis of the agreement reached between the House and the industry. We thank him for his assurance. I am sure that he will do his best to stick to that agreement in the negotiations. When he comes to deal with the question of a fair distribution of catches, I hope that he will place great emphasis on the loss of catch potential in Third world waters which has hit our fishing industry. We suffer from an inability to catch the right fish at the right time and at the right price. I am glad to see that that point is covered in the documents. I hope that
  896
  my hon. Friend will bear it well in the forefront of his mind during the negotiations.
  Everybody in the House connected with the fishing industry is concerned about conservation and quotas. We are of one mind that policing must be effective. We saw many examples on the Granada programme of the way in which quotas can be broken down. We are right to press the Minister—as we and the Labour Party have done—to ensure that any schemes for quotas and conservation are policed. That will be the key to the effectiveness of the common fisheries policy once it is settled.
  Many hon. Members wish to speak. I conclude by thanking my hon. Friend once again for what he has said today. I hope that it means that Fleetwood will now receive some substantial help by which it can survive and grow again.
  8.44 pm
  Mr. Kevin McNamara: I do not intend to delay the House, so perhaps I may behave like a grasshopper, jumping from point to point, rather than spend 20 minutes agreeing with my hon. Friend the Member for Edinburgh, East (Mr. Strang) or picking holes sin the Minister's speech.
  I welcome the decision to give money to the fishing industry. Although I should have liked more to be given, I thought that the hon. Member for North Fylde (Sir W. Clegg) underplayed the point when he stressed the amount of money that had been obtained from the Treasury. I agree, and I congratulate the Minister on getting so much money for the industry. However, it would have been better to have more detail for our constituencies about the distribution of the money to the different sections of the fleet. I understand that the Ministry wants to discuss general matters with the industry, but giving details of percentages and of differences between England and Scotland—
  Mr. J. Enoch Powell: And some for Northern Ireland.
  Mr. McNamara: Indeed—and Northern Ireland, while its fleet is still there. Then we might have had some idea of what would happen in our areas.
  Any schemes will emerge in August, September and October, when the House

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  is in recess, and there will be no opportunity to bring parliamentary pressure to bear to have matters examined more fully. I therefore regret that we are having this debate on the penultimate day before the recess, but even having it yesterday or the day before would not have allowed us much time.
  My hon. Friend the Member for Edinburgh, East was right to sound a note of caution about taking a truly drastic attitude towards the problems presented by imports. I understand that there are difficulties, but cheap imports are important for the consumer and as a source of employment for those working in processing in the factories. We must try to strike a balance between the two. We should not rush into an absolute ban but should be selective among countries, prices and species of fish. That would be better than blanket proposals in some areas.
  Such places as Humberside and Fleetwood, which depended a great deal on third country fishing areas, will need considerably more compensation from any common fisheries policy than is being given to the inshore and middle water fleets. That compensation should take the form not only of restructuring and providing immediate employment for fishermen but of a more direct and positive regional policy, encouraging industries and giving benefits and inducements to industry to refurbish and invest in those areas.
  In towns such as Hull there have been enormous cuts in the fishing fleets and job opportunities have been slashed, not only on vessels but in shipbuilding and processing, because of a lack of opportunities in third country waters. Such areas need not only restructuring of the fleet but a great injection of captal to rebuild the basis of their economy.
  Whenever one asks representatives of the owners what they are doing, they say "We do not know. Until we see the shape of the policy and know what is happening, we cannot make investment or restructuring decisions." That is what makes a coherent package and a coherent plan of urgent importance.
  Here I differ with the Minister. I do not share his joyful anticipation that at the end of the year, or early next year, we shall have a common policy. I do
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  not think that we shall be able to agree with the French, who will be engaged in presidential elections, with the Germans, during their elections, or with the Irish, during their possible elections. I do not believe that we shall achieve a coherent policy on our share and on the attitude and reaction of the countries involved. In those circumstances, every country will be fighting for its own corner.
  What happens at the end of the year if we do not reach agreement? If we do not have a package, are we prepared, as I believe we should be, to take strong and positive unilateral action to achieve the objectives which are contained in the Opposition amendment?
  I congratulate the Government—though I appear to be constantly carping—and thank them and Lord Bellwin for the encouragement they gave to the initiative of the trawler owners, the TGWU and the fish merchants of Hull in the establishment of a fish landing company in Hull. Hull city council was the catalyst in the efforts to establish and to maintain a viable fish landing facility there. It would be churlish of me not to have recognised Lord Bellwin's work. We would have liked far more. We would have liked a proper policy. But at least we have maintained that facility. We hope for the establishment of proper dock charges so that we may maintain them not only until the end of the year but into the foreseeable future.
  However, I do not believe that the Government will succeed in obtaining a common fisheries policy. I do not believe that our colleaguese—if that is what they are—in the Community will allow us to achieve what we believe we are entitled to. For the important crumb of comfort that we have received fom the Government, however, I express my satisfaction.
  8.52 pm
  Mr. Alex Pollock: I wish to add my warmest congratulations to the Government on bringing forward this much-needed package of aid for the industry. As was pointed out by my hon. Friend the Member for North Fylde (Sir W. Clegg), we are all too keenly aware how difficult it is to extract cash from the Treasury just now. It is a signal triumph for my hon. Friend the

  899
  Minister and his colleagues and, I am sure he would agree, for the Secretary of State for Scotland. It is, perhaps, in no small measure due to the continuing personal interest of the Prime Minister. It was a pleasure to see her present at the opening of this debate. Her attendance was in total contrast to the complete absence of the self-styled defenders of the Scottish fishing industry, the Scottish National Party. I trust that their absence has not gone unnoticed in Scotland.
  I also emphasise the background of consultation preceding the Government's decision. It is vitally important that the industry should realise the great need at all times for an open-door policy between the leaders of the industry and the Government. At this critical time Europe would like nothing better than to see a divide between the Government and the industry. I am pleased at the way in which the Government have consistently taken the leaders of the industry with them in discussion and negotiation. I trust that they will long continue to do so.
  The longer-term goals are more important. However, I do not intend to discuss the documents in any detail. I merely wish to highlight the three key objectives. The first is a realistic total allowable catch. The second is restricted access to United Kingdom waters. The third is a fair and just quota share for United Kingdom boats. Those, coupled with enforcement, must remain the key objectives for a successful policy.
  The Government must show their good faith with their assistance to the industry on the terms requested earlier this year. They are continuing to show their determination to maintain a viable industry with tonight's announcement. With that record of good faith behind them since taking office, it behoves us all to wish the Government well in their future endeavours.
  8.55 pm
  Mr. J. Enoch Powell: A strange spirit of brevity has descended upon the House—not, in the context of this subject, to be confused with levity.
  Why is it that our trawlers and our fishing fleets are being tied up and are rotting and rusting at the quayside when that is not happening to the trawlers and
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  the fishing fleets of the other member States of the European Community, or of Iceland or Norway? Every hon. Member, whether present in the Chamber for this debate or not, knows perfectly well what the reason is. It is that our membership of the European Economic Community has cost us the control of our own sovereign waters.
  It is for that reason that we need compensation, as the hon. Member who represents the Fleetwood fishermen, the hon. Member for North Fylde (Sir W. Clegg), was saying, for the third country waters in which we can no longer fish. We do not possess a bargaining counter. We have no power to make an understanding with third countries, as have those who are not shackled as we are.
  Within the European Community we have no bargaining capacity. Under the Treaty by which we joined, the other countries could fish up to our beaches by waiting until 1982. But now they no longer have to wait until 1982; the crucial date is now the end of this year.
  Mr. Buchanan-Smith: No.
  Mr. Powell: The hon. Gentleman denies that. I understand that the Government—no doubt in good faith—say that the date of the end of December is not linked with the other matters, that there is no package linking that date with the budget agreement of the spring. The question is not what we think. It is not whether we think that there is a package. The question is whether the other countries think that there is a package. They openly refer to one. The French do. All the reports that come from Brussels talk about a budget package, of which the fishery understanding about 31 December 1980 was a part.
  If one is to sell a house, it is not specially advantageous to be told that it has to be sold by 31 December. That is not conducive to getting the terms that one wants. We shall be placed in the position of being told, if we fail to comply by the end of the year, that we are defaulting upon the spirit of the agreement of which this issue forms a part.
  It is little wonder that our fishing industry is under pressure inside the Community. We have handed away our entire position. We have handed away the control of our waters. On top of that,

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  we have imposed upon ourselves undertakings that place the bargaining power in the hands of others. Those others have been referred to as our colleagues or partners. But they are not in this instance our colleagues or partners; they are our enemies. It is their intention to strip the United Kingdom. That is what it is all about, and that is what people should understand. That is why the terms were made for us when we joined the Community. That is why those terms were re-enforced in the context of the budget agreement. The object of the other countries is to put Britain out of fishing altogether, to take our place, to use our waters and our fisheries and to have our fleets off the seas. That is their object, and there is no point in being mealy-mouthed about it.
  The Minister talked about the preparation of our fleets and our fishermen for new opportunities as a result of a common fisheries policy that is to be negotiated. If we have not those opportunities now, at whose expense are we going to gain them? Who is benefiting at the moment from our restrictions? Who is gaining by our losses? Does the Minister imagine that those advantages, enjoyed by the other countries today, will be given up in order to arrive at a common fisheries policy? It is the most absurd innocence.
  It is all very well for the Government to put down a motion of platitudinous aspirations. The word "aspiration" was used by the Minister in his speech. It is all very well for the Opposition to spell out more precisely the conditions that they would like to see. Both Front Benches and both sides in the argument know perfectly well that we have no power to obtain these conditions. We are at the receiving end. We have taken down our trousers and given the rod to others.
  How did we come to be where we are? How did we come to wreck our own fishing industry? How did we come to betray our own national interests? It was part of a larger betrayal. It was part of the supreme betrayal of handing away this country's sovereignty and the sovereignty of this House to an external body. If that is not betrayal, there is no meaning to the word "betrayal".
  On both sides of the House, those whose names are attached to the motion
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  and to the amendment have put party before country. The Conservative Party put party before country in the 1970 Parliament. The Labour Party, by its pretence that this could be an open question, put party before country in the 1974 Parliament. Party before country has resulted in the betrayal of Britain. The fishermen of Britain are among the first, but they will not be among the last, to feel the consequences of having surrendered our own independence and our right to control that which is ours.
  This is the biggest of all questions. It is not a question of 12 to 50 miles of preferential access, or whether it is to be 35 per cent. or 45 per cent. The rest of the nations of the Common Market care nothing for these things. Whatever agreements they enter into, they have no need, no necessity and no requirement to keep them. We can hear them saying that they do not intend to keep them. Have we not yet learnt, from our experiences in other fields, what reliance is to be placed upon arrangements and agreements made with the Common Market? We have no opportunity to protest or to get our own back, for we have surrendered the power to do so.
  We are beginning to taste on the seas, the very home of Britain, the bitter fruit of subordination, the bitter fruit of the betrayal of which both parties in the House have been guilty. The fishermen and those who will suffer, their families, and the fishing ports and fishing areas should understand the cause. It is not the fault of any external authority. It is not the difficulty of arriving at a common fisheries policy. It is the fact that the fishermen have been betrayed, and are now contemplating the consequences. That is what this debate is about.
  9.4 pm
  Mr. Iain Sproat: I hope to continue the practice of brevity that has been adopted so far in the debate.
  My hon. Friend the Member for Moray and Nairn (Mr. Pollock) began by saying how glad hon. Members were to see the Prime Minister on the Front Bench at the beginning of the debate. My hon. Friend is right in saying that the success of my hon. Friend the Minister of State and his right hon. Friends in securing aid for the industry owes much to the knowledge of the industry that my right hon.

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  Friend the Prime Minister learnt in the North-East of Scotland shortly before the last general election.
  My hon. Friend the Member for Moray and Nairn, with characteristic courtesy, played down the other side of the coin, which, contrary to the presence of my right hon. Friend the Prime Minister, was the absence of the Scottish National Party. This may seem a small matter and perhaps hardly worthy of notice, but on the Benches beside me are hon. Members who defeated members of the Scottish National Party at the general election—members who had previously based almost their entire campaign in Scotland on the vicissitudes of the fishing industry. Yet, when the subject comes to be debated in the House of Commons where something really has been done, thanks to my hon. Friend, where are they? The} are not here. I hope that the voters in Moray and Nairn, Banff and Fife, East will notice the SNP's absence and draw the correct conclusions from it.
  I said that I wanted to follow the practice of brevity, so I shall. I thank my hon. Friend the Minister of State for two announcements which will bring great pleasure to Aberdeen. The first, to which I shall return, was the announcement of £14 million of aid. The other issue, which perhaps will not have been so widely noticed in the House, was what he said about the Hall Russell shipyard and the confirmation of the order for two off shore patrol vessels worth £13 million. I congratulate him on managing to get that order confirmed.
  If I enter a note of criticism, it is not criticism of my hon. Friend. But there is a note of criticism that it has taken so many weeks after an order was promised to Hall Russell to get it confirmed. During these past many weeks, there has been deep concern in Aberdeen that, the building of the vessels having been begun, they would not be paid for. Hall Russell has been losing £15,000 a week in interest, because somewhere within the mechanics of Whitehall confirmation of the order could not come through. I know that my hon. Friend was foremost in getting the order through. He was one of the heroes of the piece. But I hope that he will look at the machinery which could have allowed this matter to
  904
  go on for so long and ensure that such a delay with substantial financial consequences does not happen again.
  The second matter for which I give my hon. Friend thanks and congratulations is the £14 million aid. I am glad that the hon. Member for Edinburgh, East (Mr. Strang) welcomed it in such a generous manner. I thought that was exactly the note that he should have struck. It demonstrates how in this House, perhaps somewhat precariously and contrary to the speech by the right hon. Member for Down, South (Mr. Powell), we still manage to keep substantial areas of agreement on the fishing industry.
  Mr. J. Enoch Powell: That is the trouble.
  Mr. Sproat: The right hon. Gentleman says "That is the trouble." How wrong he is. If we are to succeed in these renegotiations, it will be precisely because we have the support of a 90 per cent. united House of Commons.
  I congratulate my right hon. and hon. Friends on easing the Common Market down the road of realism. We have not got there yet, as we have seen from the documents before us, but they have certainly gone much further down the road towards realism and justice than they have been before. For that, we should pay some tribute to the negotiating skills of my right hon. and hon. Friends.
  Recently there have been reports in the press that the Government were not properly in touch with the fishing industry. My hon. Friend the Member for Banff (Mr. Myles) wrote a splendid letter to The Scotsman pointing out what rubbish that was. He said it then. Now he has the proof. The fishing industry may want more. It wanted £35 million and it got almost £15 million. None the less, whatever else can be said, it cannot be said that the Government were not in close touch with all sections of the fishing industry. I can think of many other industries which would be grateful for half the contact with Ministers which the fishing industry enjoys.
  I suspect that the hon. Member for Aberdeen, North (Mr. Hughes) will ask why the hon. Member for Aberdeen, South welcomes this aid when he does not believe in giving aid to industries that

  905
  are down on their luck. Perhaps I can pre-empt that by saying that a substantial difference must be drawn between industries which have problems of their own making, such as British Leyland, and those which have problems that are not of their own making, such as the fishing industry. We have already heard that the problems of the fishing industry arose because of the loss of the Icelandic fishing grounds and because of the complexities of the common fisheries policy. Those problems are not the fault of the industry. They were created by Governments, and rightly, it behoves Governments to try to solve them. That is why I pressed for aid for the industry and why I welcome, without restraint, the aid that is to be given.
  However, this aid is only a stopgap measure to keep the industry ticking over until the common fisheries policy can be renegotiated. Most hon. Members who are present have made many speeches in the House during the last year on the subject. There is no point in going over all the old ground again—the need for access, the need for proper quotas, the fact that 65 per cent. of the fish in the collective waters of the EEC is caught in British waters and the fact that we shall not be content with 25 per cent. of the catch.
  My hon. Friend the Minister of State rightly said that the quota suggestions from our Common Market partners were illustrative. Indeed they were. But I hope that they were not illustrative of the genuine thinking of our partners. I hope that they will be under no illusion after this debate or after meetings with my hon. Friend. There is no way that the British fishing industry could accept the pathetic quotas, whether in global or species terms, that it has so far been offered. The hon. Member for Edinburgh, East was right in saying that 45 per cent. was a realistic but rather low estimate by the fishing industry and a generous negotiating percentage.
  I am grateful, as the industry will be, for what my hon. Friend has announced today, but the fishing industry does not want to live on subsidies. It wants my right hon. and hon. Friends to renegotiate a common fisheries policy with a framework within which the industry can thrive and prosper without subsidies.
  9.13 pm
  Mr. James Johnson: Perhaps I might intervene in this Aberdeen imbroglio and say that I found the Minister of State as courteous as ever and that he gave us an informative, comprehensive survey, but what did he actually say? He told us that the Government were giving the industry a cash boost of £14 million to £15 million. I must not be churlish, because this is the second injection to the industry this year. The Minister emphasised that and added that another £23 million had been injected into other sections of the industry. Some people think that that aid is miraculous, but I do not.
  In a way, this money is a boost in a rapidly deteriorating situation. It is a stopgap measure that will give hope—I hope, more than faint hope—to many thousands of fishermen. How the moneys are shared out between vessel owners is a technical point about which, no doubt, we shall hear later. I do not know what the fishing leaders will say. For months we have had a pilgrimage on their part to Westminster Hall. They have not come to a Klondike. More often than not, it has been a pilgrimage to Canossa for some of them. It was shocking for people such as myself and many of my colleagues to see really hard men who had fought in the war and gone to sea against Hitler and others becoming so demoralised by their situation, financial and otherwise. I am glad that these men have got something that they deserve. They deserved a jolly sight better than what they were getting previously— £2 million here and £1 million there.
  The hon. Member for North Fylde (Sir W. Clegg) has left the Chamber. Let us look at what he called this glutinous mass of documents. I have studied them carefully. I am antagonised by the verbal humbug. They are full of wonderful intentions and aspirations. Let us look at article 2, on page 13, of document 8958/80, which has been mentioned by the Minister, which talks about joint ventures between firms or people in these sister States.
  I listened carefully to the right hon. Member for Down, South (Mr. Powell). I shall not go as far as he went, but I ask, as he does: where is the political will to have these joint ventures and to

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  have what he might term a share-out and a fair deal? What do these pious phrases and saccharine sentences mean for a place such as Hull?
  I saw the film on BBC television which was mentioned by the hon. Member for North Fylde. One of our best Hull skippers went over to Boulogne. It was quite scandalous. He asked questions such as "Where was this herring caught?" and "How much is being unloaded?"—or loaded, as the case may be. He questioned what we would term a local harbour commissioner, and he got nothing whatever out of him. The people there smiled or nodded. This sort of behaviour almost makes me think that detente, just as between the East and the West blocs, is almost impossible inside the Council of Ministers. The malaise is exemplified by articles in Fishing News about this.
  However, I come back to the draft legislation—document No. 8958/80. In his explanatory memorandum, the Minister says "No account is taken" and so forth.
  When no account is taken of these conditions in doing business with third nations, of course this is vital to Hull. We have lost all our distant fishing banks—Iceland, Norway, the White Sea, the Barents Sea, Greenland, Labrador and God knows where else. We want what the paper says—a fair distribution of catches. We want attention paid—again, as the paper says in these saccharine sentences—to the special needs of local populations, particularly those
  "dependent upon fishing and allied occupations."
  I come to the matter of the loss of catch potential in third country waters. The Minister used the most illuminating phrase when he said that these were "illustrative figures". Dear me! It goes down to 42,000 tonnes and 105 points of a ton. How on eath these tables are supposed to illustrate the case, I do not know. I would much sooner go on to a percentage of quotas.
  There were leaks during the talks in June. When we returned to this Chamber there was talk of 31 or 32 per cent. of pelagic catches coming to us and about 38 per cent. of demersal fish—vital to Hull—cod, haddock, hake, halibut and so on. Later estimates put our share at
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  40 or 45 per cent. I do not understand that. All hon. Members know that, according to our scientific experts, 65 per cent. of the stocks are in what most of us would accept to be our territorial waters.
  The philosophy of sharing out the stocks is not in the minds of our Gallic cousins. They have a wonderful word, communautaire. A classic example can be vouched for by Hull skippers fishing in Arctic waters. The French have never fished north of 62 degrees latitude. If discussions take place in Luxembourg, Strasbourg or Brussels, the French say that they want a share of the catch of demersal fish. Those fish are caught in the Arctic, well north of 62 degrees latitude.
  The table on the size of deep-water fleets is fascinating. I am amazed that the United Kingdom is still listed on paper as having the largest deep-water fleet. The statistics seem to be a bit behind the times. The position is fast changing. With national subsidies, the Cuxhaven fleet is making additions to its deep-water distant fleet. So are the Danes and the Dutch. Where are we making such additions?
  I understand that £14 million or £15 million of aid is involved. It is better late than never. Is it too late? Austen Laing is the most informed fishing diplomat in Western Europe. He advises the British Fishing Federation. He wonders whether the policy is too late. The Minister listens to such men, and so do I.
  I wonder whether Mr. Laing's remarks to the Committee in the other place hold water with the Minister and his advisers. He said that the major ports—I should include Fleetwood as well as Hull—could go out of business if things continued as they were. He pointed out that if he had said that 10 years ago in the bar of the Star and Garter pub in Hessle Road, Hull he would have been looked upon by skippers as a madman,
  In less than a decade, we have gone from the bad position of 137 vessels down to our present position of 28. Most of them are rusting in the docks of Hull. Our partners are building fleets in anticipation of the 1980s, but our fleets are withering away. Why does the Minister, who is courteous and who has the interests of the industry at heart, tolerate

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  that? Why does the Cabinet committee, or the sub-committee, allow that to continue? With the exception of constituencies in the Hull area, and perhaps one in Aberdeen, all the fishing constituencies elect Conservative Members. The Government should do more. I do not understand why they have continued to allow such fantastically low import prices on fish from third countries.
  The result of those imports is that although vessels go to sea, they lose money. They are not inefficient, but the fish that they catch earns a low price in the home harbour. I listen—as I hope we all do—to experienced political observers in this House, on television, in the unions and in newspapers. They go to Brussels with the Minister and his team. I am told by these men that the chances of agreement in the CFP negotiations depend basically on the accord between two nations—ourselves and the French. I am told that when our Minister is negotiating there he talks about "all my farmers". Let us fervently hope that in the future—and not before long—he will talk about "all my fishermen".
  The Prime Minister deserves a compliment for coming to the Chamber and listening to the debate. I hope that what she hears will have some effect on the way in which she influences her Ministers. I think that it does. The Minister of State knows, and the industry knows, that the Government have the complete and unfaltering support of all sections of the House. It is up to them to bring home the bacon for our fishermen in October.
  9.26 pm
  Mr. David Myles: I very much welcome the chance to speak in this debate and I shall attempt to be brief, although there are a few points that I wish to make.
  I welcome the bipartisan approach that the Labour Party has made to this issue. I wonder whether there is a tripartisan or quintupartisan approach as well. There is certainly not a quintupartisan approach. As my hon. Friend the Member for Aberdeen, South (Mr. Sproat) said, the Scottish National Party is not represented in the debate tonight. That shocks me, because in the North-East of Scotland the SNP claims to speak for the fishing industry. In the Banff-Buchan district council the
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  SNP representatives have demanded that they should take over from the Grampian regional council fisheries committee, which consists of people such as Gilbert Buchan and Willy Hay. The five SNP councillors on the Banff-Buchan district council say that they know far more about the fishing industry than the real leaders of that industry. Therefore, I am rather sad that there are no SNP Members present in the House tonight.
  Mr. Barry Henderson: Is it not true that the Scottish nationalists have been users and abusers of the industry rather than spokesman for it?
  Mr. Myles: My hon. Friend has said it. I need do no more than agree with him.
  I wish to repeat something that I have said before in the House, and I make no apology for doing so. What our fishermen need are the "seven Cs". I may change some of those Cs slightly in view of the Minister's statement tonight, but I still think that we in the industry need those seven Cs. I use the word "we" advisedly, because I feel that I am part of the fishing industry, representing Banff as I do.
  First, we need cash. We had a demonstration from the Government tonight that cash was forthcoming and I welcome that generous gesture. I also pay tribute to the Labour Opposition for being so generous in their welcome of that cash injection.
  However, the aid must be used wisely. Here I slightly disagree with my hon. Friend the Member for Aberdeen, South (Mr. Sproat), who said that the fishing industry was not responsible for the position in which it finds itself. I am not sycophantic to the fishing industry all the time. When my hon. Friend the Minister allocates the cash, I urge him not to spread it around or give it to the industry to use as it considers fit. No one is perfect all the time.
  The fishermen in Buckie and the surrounding area are independent men. They are desperately trying to set up a new PO to organise themselves. Will the Government recognise urgently that that is a useful addition to fishing representation? It would greatly help in the distribution and use of the cash.

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  The second "C" is catch. My hon. Friend explained the Community's suggestions on quotas. I do not disagree with the Opposition amendment. However, I have done a lot of horse trading. The party that jumps in with figures too soon nearly always loses the argument. It would be a slight mistake to be as specific as the Opposition suggest.
  The third "C" is conservation. Draft instrument R/8957/80 states that the modified proposals are an improvement on previous drafts, but problems still exist as far as the pout box is concerned. The fishermen to whom I have talked are concerned that the pout box will have to be cut because of a European Court decision. I urge my hon. Friend to consider the intricacies of the law to see how it can be bent in our favour on this occasion.
  A further point on conservation concerns by-catches. By allowing them we are opening the door to abuse. Great care should be taken in allowing by-catches.
  Mrs. Elaine Kellett-Bowman: Was that not revealed in the staggering film by Granada, which has been taken to Brussels to try to convince the Commission what is happening?
  Mr. Myles: My hon. Friend is right.
  I come now to the catchers of nephrops, or prawns. That section needs to be considered. I am grateful to my noble Friend, who was wise enough to interpret the rules to allow prawn catchers to use a lifter, a chafer or a topside chafer. I appreciate that many hon. Members will not know what I am talking about, but I hope that fishermen do.
  The fourth "C" is co-operation. Fish do not see the meridian line or a 12, 50 or 200-mile limit. They swim across it and are liable to be caught by whoever is on the other side. We need co-operation from our EEC partners. I say "partners" advisedly. We cannot wish them away. If they are our enemies, we should try to persuade them to be our friends. It would be a lot easier for us to live with them as friends than to brand them as enemies and keep them at arm's length.
  We must also consider co-operation with third countries. The strength of the EEC in that regard is to be commended.
  912
  We were able to get the Iron Curtain catching power out of the North Sea because of the strength of the EEC. I welcome that.
  We also need to co-operate with ourselves. There is here a slight suspicion of criticism of the fishing industry. It must stick together and must not divide and allow itself to be conquered. That could be another "C".
  The next "C" is control. I welcome the agreement on catch reporting. As the World in Action "film pointed out, it is important to have a proper catch reporting system. The only way to control fishing its by coastal State control of the waters. That can and ought to be done. I do not believe that control by committee is much good.
  Another "C" is construction, or what is often called restructuring. We must continue to try to restructure and to use agreements within the EEC to get sensible restructuring and we must also keep our boatyards constructing—building fishing boats, whether by scrap and build or otherwise. We must keep our fleet modernised.
  We welcome the FEOGA grants. I make a plea for the simplification of the grants and for their allocation in a way that can be seen to be fair, instead of the dog-in-the-manger way in which they appear to be allocated, when no one quite understands how the grants are allocated.
  The final "C" is the most important. The debate has done some good in terms of confidence. We shall not have a fishing industry unless we have confidence. I hope that the industry will realise that there are vicious forces somewhere—I do not know who pulls the strings—trying to split the industry and to destroy it from within.
  The erroneous statements that have appeared in The Scotsman in the last couple of weeks have done nothing to help the fishing industry. I am all for freedom of the press, but I ask that the freedom be exercised responsibly. Let the press realise what it is doing in its short-term sensationalism. I plead with the press to be responsible and to understand that all Governments will support the fishing industry. The industry will not be sold down the river.
  9.41 pm
  Mr. David Penhaligon: I have learnt two things in the debate: first, that the Government have found a useful sum for the fishing industry for which there seems to be a general welcome—I concur with that general welcome—and, secondly, that it is clear that the Scottish National Party is far from dead. There is a possibility that I shall have some Celtic friends on this side of the House before long.
  The Minister will not be desperately surprised to hear my views.
  Mr. John Home Robertson: I am sorry to learn that the Liberal Party is on such cordial terms with members of the Scottish National Party. Will the hon. Gentleman say more about that?
  Mr. Penhaligon: The one thing to be said for the SNP is that its members have the good sense to sit on this side of the House. The hon. Members who replace them do not, and we might have been marginally better off if they did.
  We must recognise the real progress that has been made in the negotiations. At long last, a system has been started in Europe under which catches are reported and monitored. I am not desperately enthusiastic about how far that system has gone. The relevant document is full of what should be done, but it is weak on how the system will be enforced. I am cynical because of what has happened in my part of the country in relation to catch reports in the last four or five years.
  The simplest form of fishing to report must be the transhipment of fish from a large number of trawlers to a small number of klondikers or factory ships. However, we cannot succeed even in monitoring that accurately. There could be nothing simpler. The transhipment happens in one harbour. If one goes to Falmouth or Flushing in the autumn, or later at Christmas, one can see 25 or 30 large factory boats from many countries anchored there. They take supplies from British fishing fleets. Our record of monitoring that process is appalling, if the reports that I hear are accurate.
  The White Fish Authority's last report indicated that Britain succeeded in ex-
  914
  porting twice as much mackerel as it caught. That is a productivity record held by few industries. That document is six months old, but I have yet to see a detailed explanation of an honest mistake which would contradict that ludicrous situation. Enforcing any agreement will be an enormous problem, since it cannot be managed even in Falmouth harbour.
  Why has the Minister rejected the idea of a single boat to which all the trawlers have to report before they are allowed to tranship their fish to the klondikers? That is the easiest way to monitor the position. Fish cannot be transhipped to the klondikers—the factory boats—until skilled people with an eye for estimating the weight of the fish—it is all done by estimation—can apply that skill and produce a genuine and reasoned estimate. That is the minimum that is required to ensure satisfactory monitoring in that single, isolated harbour. I do not know how the Minister hopes to monitor the position throughout Europe. I am pleased that he has that job rather than I.
  I am against the whole transhipment business. Britain's fishing industry is in trouble because of overfishing by super sophisticated boats for many years. It is a ludicrous farce that the one fish that breeds in large quantities in our waters is being sold to boats from the Soviet Union and East Germany. It is especially ludicrous in the light of the present political position. We are selling the fish for 4p a pound. That is the going price for what we, in my area, call Cornish mackerel but which, for the benefit of the House. I shall call British mackerel. The Government allow the Soviet bloc invasion—indeed, they encourage it—each year in our territorial waters. I see no logic in that, even in normal circumstances.
  The Government begged athletes who had spent a lifetime training for the Olympics not to fulfil that brief climax of their careers, yet that self-same Government allow the invasion of our terriorial waters by enormous Soviet factory boats which have to be beholden to be believed. Looking out from Falmouth or Flushing, one sees an endless array of boats from one harbour to the other. I do not understand it, because it is not logical.

  915
  The Government should face the reality of what they are doing and run tremendous campaigns to make mackerel more popular. It is a standard Cornish joke that the English will not eat mackerel, and it is true. Other than the smoking industry which has been developed in Scotland, the consumption of mackerel in Britain compares not one iota with the total amount caught.
  I repeat my protest once again. I cannot understand why the Government are allowing the one industry that we have to be stripped by the Soviet invasion that will take place again this year. The going price is only 4p a pound. Many people in my area will see the £14 million that the Government are providing as a subsidy to British trawlers to catch mackerel to give to the Russians at 4p a pound. That is an incredible position. I hope that the Government realise their folly before it is too late and we are left without any mackerel.
  9.48 pm
  Mr. Barry Henderson: I shall be brief. If the hon. Member for Truro (Mr. Penhaligon) will forgive me, in the interests of maintaining the maximum possible degree of agreement within the House I shall refrain from following precisely his remarks.
  It is fair to say that a broad measure of agreement has been reached in the House, with the exception of one right honourable fly in the ointment. I refer to the right hon. Member for Down, South (Mr. Powell). While I fully acknowledge his far greater eloquence and learning, I prefer to take the sensible and practical advice of the fishermen in my constituency to that which he gave the House this evening.
  Mr. J. Enoch Powell: They are against the Common Market, too, are they not?
  Mr. Henderson: They are not, I am happy to assure the right hon. Gentleman. Some are, but it is a free country.
  I welcome the Minister's brief reaffirmation of the Government's policy objectives for fishing. He has amply demonstrated his understanding of the facts of life in fishing and the Government's commitment, supported this afternoon by my right hon. Friend the Prime Minister, to get a settlement acceptable to the industry as a whole.
  916
  I was encouraged by the Government's intention, which my hon. Friend the Minister reaffirmed, to maintain the closest relations with the leaders of the industry. I have in mind the Scottish Fishermen's Federation and comparable organisations south of the border.
  The Government should retain that close contact. The leaders of those organisations have shown themselves responsible, well informed and, not least important, closely in contact with those they represent, so that when they come to an understanding with the Government they can deliver. It is of cardinal importance that the industry's leaders have the respect of the Government, since they are seen truly to represent the industry.
  Can the Minister give a little more information about the additional sums that he is making available? I believe that there will be a 60 per cent. increase in the amount available during this fiscal year. How much of that will be on his own Ministry's budget and how much on the budget of the Department of Agriculture and Fisheries in Scotland, for example?
  I appreciate that the Minister is now discussing with the industry the way in which that aid will be used, although it is seen principally as help for the owners of vessels. Does he have in mind the further use of the producers' organisations in assisting in the use of the resources to the greatest possible benefit? Does he see those organisations having a continuing function in the support and management of the market place itself?
  I know that there have been some difficulties in the way in which the producers' organisations have used the money provided by the Government, but in my area the system with the limited amount of money which the Government had made available through the producers' organisations had a worthwhile effect in the local market place.
  Talking of the market place, I was a little disturbed when an hon. Member said something like "It will keep us ticking over until we get the CFP."
  Sir William Clark: That is not good enough.
  Mr. Henderson: My hon. Friend is quite right: it is not good enough, partly

  917
  because I want the industry to do better than tick over and partly because I do not believe that the CFP will be the answer to all our problems. We shall have problems to solve for fishing in this country itself, quite apart from the CFP.
  In the long term, the most serious development for the fishing industry in the last decade or so has been the fact that we eat less fish. That is to the disadvantage of the people, but we do eat less and as long as we do there will be a problem for the industry.
  Marketing and persuading people of the benefits of fish in their diet, both as a delicacy and for their health, are very important. I hope that my hon. Friend the Minister will do what he can to encourage the industry to have greater regard to the importance of marketing
  9.55 pm
  Mr. Robert Hughes: I had not intended to refer to the longstanding disagreement between the hon. Member for Aberdeen, South (Mr. Sproat) and myself on the principle of State industry. Though he has temporarily left the Chamber, it is necessary—since he trailed his coat, as he put it—to make one or two remarks on the subject.
  I understand that constituency circumstances alter cases and that the general principle of being opposed to State aid is very much watered down in relation to one's own constituency. That is certainly true of Conservative Members. They have made much play this evening of the Prime Minister's interest in and presence at this debate. That may be because, three days before the last election, six Conservative candidates sent a panic telegram because they thought that they were about to lose their seats. The telegram called for the Conservative Party to propose a proper fisheries policy.
  I do not object to the hon. Member for Aberdeen, South trimming his coat—I see that he has now returned to the Chamber—to suit the circumstances. However, I object to the fact that, when we are speaking of aid to other industries, the industries seeking State aid are referred to in a grossly offensive manner. The hon. Member for Aberdeen, South did not use this particular phrase, but yesterday a Conservative Member at Question Time referred to people rattling
  918
  begging bowls in front of the Government.
  If we wish to be consistent, we must recognise that the fishing industry could be said to be rattling a begging bowl in front of the Government. But the industry that rattles its begging bowl most often, and with the greatest success, is the agriculture industry.
  In that context, I now turn to the matter of aid to the fishing industry. That aid must be judged not just on its own terms but in terms of what the Government do for other industries. It must be judged particularly in relation to agriculture, where £15 million would be regarded as a small sum indeed.
  Conservative Members have been almost overcome by euphoria at the granting of £15 million to the fishing industry. I do not blame them, given the record of their Government in cutting public expenditure. They are grateful to be able to go back to their constituencies this weekend and speak of £15 million in aid.
  I say that £15 million is inadequate. It is inadequate in relation to what the industry sought. My hon. Friend the Member for Edinburgh, East (Mr. Strang) spoke of the £15 million in relation to the £35 million asked for by the industry. He and I, perhaps, have slightly misinterpreted what the industry asked for. We should make it clear that—as I understand the position from papers I have received from the industry—the industry was asking for £35 million for Scotland over the year. The industry was saying that the shortfall—what the industry needed in terms of costs and interest—was £70 million. Therefore, we are talking about £15 million as part of a total of £70 million, not as part of a total of £35 million.
  The announcement of £15 million worth of aid is not news. The aid was widely forecast in the press. In The Press and Journal yesterday some of the fishermen's leaders commented on the sum of £15 million.
  Mr. Henderson indicated dissent.
  Mr. Hughes: It is no use the hon. Member for Fife, East (Mr. Henderson) shaking his head.
  Mr. Henderson: I must correct the hon. Gentleman. I was somewhat disturbed that he had spent a fair amount of time casting aspersions at some of my

  919
  right hon. and hon. Friends. I was hoping that, with his knowledge of the industry, he would address himself to the documents that we are discussing.
  Mr. Hughes: That is more than the hon. Gentleman did when he spoke, but I shall come to the documents in due time. Mr. Roddy McColl, assistant secretary of the Scottish Fishermen's Federation, said yesterday that the sum of £15 million was significant. I accept that. He said that it was significant if it was meant as a help until the year's end. Mr. Ian McSween, deputy chief executive of the Scottish Fishermen's Organisation, said that the cash infusion would be the minimum needed to see the industry through to about the end of the year. I give this quotation:
  "Chairman of the Aberdeen Fishing Vessel Owners' Association, Mr. David Craig, said: 'We do welcome financial assistance. Whether it is sufficient to keep the fleet going until the end of the year I am not sure. It is a question of how it is going to be allocated'."
  It can be fairly said that that is a muted response from the fishing industry.
  We are entitled to ask the Government how long the money is intended to last. As I understand it, the Minister said that the money is to last until the end of the financial year. Whose financial year is the hon. Gentleman—
  It being Ten o'clock, the debate stood adjourned.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the Motion relating to Financial Assistance to Opposition Parties may be proceeded with, though opposed, until half-past Eleven o'clock or for one and a half hours after it has been entered upon, whichever is the later.—[Mr. Boscawen.]

  COMMON FISHERIES POLICY
  Question again proposed, That the amendment be made.
  Mr. Hughes: Is it to be the industry's financial year? It is plain from all the documents that the industry is referring to the end of the calendar year. All the assessments of vessel figures are based on the calendar year. Is it the industry's financial year or is it the Government's financial year? There is a difference of almost three months. That is significant
  920
  in terms of what the industry has to face in future. I hope that that issue will be resolved.
  There has been some concern about the way in which the previous few million pounds of aid was distributed. I know that the Minister has said that he is changing the allocation scheme. I hope that he will do something to ensure that the aid that goes into the industry is reflected in prices in the shops. The hon. Member for Fife, East says that the consumption of fish is decreasing. That is hardly surprising when we consider how the price of fish on the fishmonger's slab is increasing.
  In our fishing debates, we often concentrate on the industry and leave out of the equation the most important factor, namely, the consumer. If the consumer's rating is £15 million, £18 million, £30 million or whatever figure the Government claim and the price of fish is increasing in the shops, the public are bound to ask why.
  Those who are acquainted with the industry know that market prices have to be considered carefully. However, the public read in the press of boxes of haddock being sold at £2 a box in the fish market. That has been the catalyst for a great furore in the fishing ports. At the same time, the price of haddock at the fishmonger's is over £1 a pound and cod is £1·75 a pound. The public are bound to ask "What is happening?" I hope that the Government will do something to ensure that the money that they put into the industry is used in part to keep prices down.
  Mr. Myles: Am I right in thinking that the hon. Gentleman is suggesting that the money that goes into the industry should go to the housewife and not to the industry?
  Mr. Hughes: Not in whole. I am suggesting that the money that is going into the industry should be reflected in keeping prices down in the shops, if not reducing them. I am not suggesting that all the money should be used for that purpose. Unless we increase the consumption of fish, there is no point in keeping the industry alive.
  I welcome the Minister's confirmation of the order to Hall Russell and Co. for two offshore patrol vessels. It is not a

  921
  new order. It is not an order for two additional vessels. These are the vessels for which the Ministry of Defence issued a letter of intent to Hall Russell and Co. in February. As I understand it, the order is now signed, sealed and delivered. It has been signed on the dotted line. The Minister will know, because I have been telephoning his office almost every day since the beginning of July, that there has been unhappiness about the delay in confirming the order.
  I was alarmed to hear the hon. Member for Aberdeen, South refer to the Minister as the hero of the hour who had battled to get that order. I had always understood, throughout the last four or five weeks, that there was no doubt about the order being placed and that the issue was one of accounting difficulty among the four Departments about who would pay for the two vessels. I hope that the hon. Gentleman was slightly overdrawing events and was not suggesting that the signing of the order was in doubt. If there were doubt, the situation would be much more serious.
  The placing of the order, while important for Hall Russell and for our fisheries protection fleet, is not enough to ensure a proper fishery protection fleet for conservation, protection and the policing of quotas. I hope that the Minister will give an assurance that the Government are considering placing further orders. I make the constituency point that I should like such orders to go to Hall Russell. Wherever they are placed, in the interests of our fishing industry we should have a much bigger fishery protection fleet.
  It is not simply yards such as Hall Russell that depend on the fishing industry. Hon. Members from fishing ports around Scotland and England will know that many small boat builders face serious trouble. Some face redundancies and there is fear that a number may have to close because orders have all but dried up. This has happened, I understand, to the extent that £2 million of White Fish Authority money will not be spent this year. I hope that such rumours are untrue.
  I hope that the extent to which boat builders depend on the confidence of those who go to sea is recognised. If reconstruction funds are channelled into boat
  922
  building from the EEC or elsewhere, I hope that owners, who have been arguing, rightly, that there should be import controls against cheap fish, will take the point that when they receive British aid to build vessels they should not simply duck across the Channel and elsewhere to place orders in foreign yards. This has happened far too much. I hope that owners will realise their responsibility to the boat-building industry in this country.
  The aid given to owners by Continental Governments to purchase vessels is conditional on those orders being placed in domestic yards. We have always had the answer that we are bound by the Treaty of Rome and previously by EFTA rules that free competition had to arise and that people should be allowed to place orders anywhere. It happens nowhere else except in this country that people are allowed to take Government money and spend it outside the country. Apart from any action the Government take, the fishing industry should feel a sense of responsibility.
  I wish to refer to the EEC generally. I disagree with the Minister, who gave a fairly rosy picture of how matters had developed since he became Minister. The hon. Gentleman suggested that in the period in which the Government had been taking part in negotiations there had been significant moves towards the British point of view. That idea is entirely misplaced. It seems that the Government have learnt nothing since the days when they were first elected—the heady days of optimism when they started negotiations. At that time, their message was that it would be "full speed ahead" towards agreement on a common fisheries policy. Apparently, the days of obstruction by my right hon. Friend the Member for Deptford (Mr. Silkin), the days of disagreement in the Community because some Labour Members were antagonistic to the EEC and had no enthusiasm for it, had passed. The reason, we were told, why there had not been progress towards a new common fisheries policy was the lack of flexibility and the intransigence of those carrying out the negotiations.
  We have had 15 or 16 months of the new flexible approach of the commitment to the European Community. That was supposed to remove the difficulties in our way. The reality is very different from

  923
  what we were promised. It is also different from what the Minister said tonight. Far from its being full speed ahead towards a fisheries agreement, the anchors are still firmly embedded in the sea bed. We have made no progress at all.
  Whether the Government like it or not, they are boxed in in their negotiations. The negotiations are linked with the budget issue, which they claim to have settled. The right hon. Member for Down, South (Mr. Powell), in a rare moment when we happened to agree, was right when he said that it is not so much what is said in the House at the Dispatch Box that counts as what is said by and emanates from other EEC Governments. They have made it clear that if we do not reach a fisheries agreement satisfactory to their fishermen—not to our fishermen—we shall not get the budget rebate which we are due to get on 1 January next year. We are hemmed in. I do not know why the Government allowed themselves to be conned into the 1 January 1981 date.
  The indicative or illustrative quotas, or whatever is the current euphemism to be applied to them, are an insult to this country. As I interjected earlier, we have for four to five years been trying to negotiate a new common fisheries policy. Yet the result of the great progress that we have made is indicative or illustrative quotas. It is a sad position in which to find ourselves.
  I hope that the Government will stand firm in their resolve. I doubt whether they will be able to do so. The issue has gone so far and they have got so boxed in that they will not be able to reach an agreement. I hope that they will, but I doubt it. As an earnest of the Government's intention to reach an agreement, I hope that the Minister will announce that he accepts our amendment. Some hon. Members think that the amendment is inadequate. Nevertheless, it encapsulates our negotiating position. Failure to accept our amendment will mean that the divide in the so-called bipartisan policy is widening.
  When we have asked the Government to stand firm, they have said that they will stand firm. When we have asked them to say what will happen if we drift on as we have done—on the question of negotiations, one could almost open Hansard
  924
  at 13 April, col. so and so, repeat it and sit down, because we have been over it so many times—we have been told that we must wait and see when that happens because we cannot declare our negotiating hand. That excuse is wearing thin, because the issue facing the fishing industry is very serious.
  The Government must now say that if there is no agreement in October satisfactory to our fishing industry it will be a question not of discussing the rebate, which we might or might not get in January, but of saying that we shall not pay one penny of our money into EEC funds until we get an agreement satisfactory to our fishing industry.
  10.14 pm
  Mr. John Home Robertson: My hon. Friend the Member for Aberdeen, North (Mr. Hughes) has been a powerful advocate for the fishing industry for many years. The one thing shown by the debate is that the east coast of Scotland's fishing communities are not short of powerful advocates. Eight Members on both sides of the House representing Scottish east coast constituencies have taken part in the debate. I think that it is right that hon. Members on both sides of the House should be united in their concern about the future of this important industry.
  Like other hon. Members, I welcome the strong stand that has been taken by the Minister of State on quotas, conservation, protection, and so on. The nation and the House are united on those issues. I also welcome the fact that the Government are to give financial assistance to the industry. The sum of £14 million is a convenient compromise—judging from press reports—and we must recognise that it must have been difficult for the Minister to extract that sort of sum from the Treasury under present stances. It is a joy to share the pleasure of the hon. Member for Aberdeen, South (Mr Sproat) on one of these happy occasions when he can revel in public expenditure for his constituency, which he would be only too willing to deny to people in other parts of the country.
  The Minister of State could have been more forthcoming about how the money will be distributed. In terms of the need, there is not very much money. I hope that he will say how much will be spent in

  925
  Scotland as compared with other parts of the country and how much will go to the inshore fleet as compared with other parts of the fishing fleet. He could have said more, and he will have to say more.
  I should like to make one minor constituency point. I wonder how much is left of that part of the previous sum of £3 millon that was set aside for experimental projects for the industry. Is there anything left in that kitty which might be used to help fishermen in my constituency who operate small boats and who are hoping to develop ways and means of supplementing the loss that they are making in fishing for crabs and lobsters by developing a new method of fishing for clams? Perhaps the Minister could write to me about that in due course.
  I have looked again at the submission that the Scottish Fishermen's Federation made to the Government last month. Not long ago I spoke to Mr. David Aitcheson, chief executive of the SFF. The Scottish Fisherman's Federation says that three things are needed if the Scottish fishing industry is to be put on an equal footing with its foreign competitors.
  First, £5½ million is needed for an interest support scheme in order to cope with the massive and expensive accumulating debt burden that the industry carries at present. Secondly, £4½ million is needed as a fuel subsidy. It should be noted that while fishermen in my constituency have to pay 70p a gallon for their diesel, fishermen in other parts of the world, notably Canada, are paying only 20p. That must be particularly galling for some of our fishermen on the east coast of Scotland who are having to cope with the problems of the oil industry and the disruption that it is causing in their fishing grounds and their fishing ports. Thirdly, the industry needs £2 million for a minimum price scheme to firm up the protective prices that the fishermen receive for the fish that they land.
  Those three items total £20 million for Scotland alone. I appreciate that the SFF. may have put its bill a little high, but, in fairness, the last time it asked for money it asked for too little. But when the calculations are of this nature it must be said that the £14 million figure is perhaps a little inadequate and a little too late.
  926
  The industry is in a perilous condition, and the Government cannot escape a measure of responsibility for the problem because they are responsible for the high level of interest rates and the high value of the pound, which has led to the cheap import blitz that has created such problems for fishermen in Scotland and the rest of the United Kingdom.
  That the industry is in a critical condition is demonstrated by the fact that many fishing boat skippers have found it necessary literally to go on strike. They tied up their vessels a week or two back. These are not the sort of people who do that kind of thing lightheartedly. The situation has been critical, and it remains critical.
  I know that the House has some extremely important business to deal with later. I should be the last person to want to delay that. Therefore, in conclusion, I take this opportunity to wish the fleet better luck and better fishing in the future and to wish the Minister of State good luck and continued good fishing in the Treasury's pout box.
  10.20 pm
  Mr. Buchanan-Smith: I thank the hon. Member for Berwick and East Lothian (Mr. Home Robertson) for his good wishes. I hope that my right hon. Friends and I will be successful in that fishing operation. I also thank him for correcting one thing that I think was wrong in relation to some of the allegations made by the hon. Member for Aberdeen, North (Mr. Hughes). The hon. Member for Berwick and East Lothian made it quite clear that the amount of money for which the Scottish Fishing Federation was asking—which I certainly understood to be for the Scottish industry as a whole—was just over £20 million, and not £35 million for six months. I accept that. It was not a question of £35 million for six months or for the industry as a whole. Therefore, I start by correcting some of the misapprehensions which the hon. Member for Aberdeen, North might have been spreading around the House.
  Mr. Robert Hughes: I think that the Minister has to be corrected in his correction. I was speaking about £35 million in a full year, whereas the submissions here are speaking about £20

  927
  million over six months, so I am not that far out.
  Mr. Buchanan-Smith: The hon. Member's arithmetic was rather interesting to follow. It seemed to get very quickly up to £70 million. I am simply going by the facts of the case put to the Government, which were confirmed by the hon. Member for Berwick and East Lothian. That is on the record. The hon. Member for Berwick and East Lothian is correct about the case put to the Government.
  I should like to deal with one or two other matters which I regard as misapprehensions. I believe that the right hon. Member for Down, South (Mr. Powell) is totally wrong and is misleading the House in suggesting that it is only the fishing industry of the United Kingdom that is in trouble among the fishing industries of Europe. I trust that the right hon. Gentleman will have read, even in the past 24 hours, press reports in British newspapers of, for example, French fishermen who prevented the landing in France of British visitors and tourists and others who are using car ferries, because the French fishermen are concerned about their industry. I trust that the right hon. Gentleman has met, as I have met, members of the Danish fishing industry—the hon. Member for Edinburgh, East (Mr. Strang) referred to this matter—who, in the area of Jutland, for example, where they have a tradition of industrial fishing, have been unable to fish in the way to which they are accustomed and have had to tie up vessels, probably more than any other section of any fishing industry in Europe.
  If the right hon. Member for Down, South cares to consider the fishing industry of one country that is outside the EEC yet is within Europe, that of Norway, he will find that that country has to pay in aid to its fishing industry more than any other country in Europe. That does not indicate that merely by being outside the EEC one country's fishing industry is necessarily in better health than those of EEC countries. There is a more rigorous programme of scrapping vessels in Norway than in any EEC country. The Norwegians are talking not only in terms of scrapping in scrapyards. They have been sinking purse seiners at sea.
  928
  I must ask the right hon. Gentleman to get these matters right and to realise the problems of the United Kingdom fishing industry. By the aid that we are giving, the Government acknowledge that problems exist. However, such problems must not be seen in isolation from the problems of the fishing industries of other European countries, both within and without the EEC.
  Mr. J. Enoch Powell: Will the hon. Genteman explain at whose expense we shall gain through the common fisheries policy?
  Mr. Buchanan-Smith: I shall deal with that question shortly. It is not as simple as that. The right hon. Gentleman is good at asking questions in a simple and rather appealing way, but he does not see the subject in the round, nor does he see the different aspects involved. He oversimplifies problems and, in doing so, often reaches the wrong conclusion.
  The right hon. Gentleman was wrong on two other points. I admit that our deep-sea fleet has suffered the most and that boats are tied up in ports and are rusting. However, that is not a product of the common fisheries policy. As Germany's deep-sea industry will acknowledge, it is the result of 200-mile fishing zones not within Europe but round other countries which are further away. That would have happened whether or not we were members of the EEC. The right hon. Gentleman should not ignore that.
  I should like to turn to the more positive side of this issue. I hope that the right hon. Gentleman will point out to the fishermen in his constituency that effective conservation measures cannot be obtained without international agreement. The EEC gives us an opportunity to achieve such measures. I know that the right hon. Gentleman is against the concept of the EEC. I shall not attempt to argue about the philosophy and wider arguments involved. Whatever the right hon. Gentleman may think about the drawbacks of EEC membership, he should recognise that before we were members of the EEC we tried to achieve effective conservation through international co-operation. The only result was that the stock around Europe and in the North Atlantic decreased inexorably year by year. Voluntary efforts did not produce effective conservation. One of the

  929
  United Kingdom's most valuable stocks,—the herring stock—was depleted to such an extent that fishing for that stock has had to be prohibited for a number of years.
  International co-operation is necessary. Fish do not know about boundaries. The European countries do not enjoy 200-mile limits because of the median lines in the North Sea and in the Channel. We could not conserve our fish without an agreement with other countries. An extreme example might be salmon. Such a fish requires even wider conservation agreements with countries such as Greenland. By good fortune, that country, through its association with Denmark, is still a member of the Community. We therefore have an opportunity to obtain effective conservation measures for a fish that swims even further than most of the other species around our coasts.
  We have tried voluntary agreements, but they have failed. Membership of the EEC gives us an opportunity to reach an agreement that will have the force of Community law behind it. If, as I hope, effective conservation is achieved, and if there is effective enforcement of that conservation, we shall have, for the first time, fishing agreements on the main stocks round the coast of the United Kingdom. Such agreements will have the force of Community law behind them. They are more likely to be enforced than any of our previous agreements. Whatever the right hon. Member for Down, South may feel about the EEC, he should recognise that in the narrow issue of fishing we have an opportunity for more effective conservation. That conservation is useful, and it will be to the benefit of our fishing industry.
  The remarks of the hon. Member for Truro (Mr. Penhaligon) contained a number of misapprehensions. I share his concern about the organisation of the mackerel fishery, but I ask him to get his facts straighter. Already there is provision for reporting to the port inspectorate before our own vessels land their fish on the factory ship. I put to the hon. Gentleman again, but in more precise terms, the question I put to him when he intervened in my opening speech: would he rather see the Cornish mackerel going for 4p a pound for human consumption than for 2p per pound for fish meal? That is what
  930
  we are faced with at present. If we could spread that fishery over the whole year, how wonderful it would be. But, again, we are dealing with a living resource and we cannot choose just when we have that fishery. Nature has ordained the times of the peaks and the times when there can be no fishing.
  In such circumstances, it is inevitable that at present the only major outlet—and it is about twice the value it would be for fish meal—is the one that the hon. Gentleman finds abhorent. I ask him to recognise what the alternative is if we do not have that outlet. It means that the fish will not go primarily for human consumption and there will be about half the return to the fishermen.
  I share the hon. Gentleman's concern about the organisation of the fishery, as he knows. I have seen some of the aspects of it at first hand. He also knows that I tried through a restrictive licensing scheme to get better organisation because in doing so we should get better longterm outlets for processing. The way the current licensing system has worked has not been conducive to the better longterm outlets for processing.
  The hon. Gentleman also knows that some of my proposals have been rejected by the industry. We are producing a scheme this year not all that different from that of last year but containing certain elements which I hope will be incorporated in the long term to attain a more effective management of the fishery. I agree with the hon. Gentleman that there is scope for more effective management. It requires a different attitude not only from the Government but also from those who take part in the fishery. I hope to see developments in that direction. I assure the hon. Gentleman that I take to heart some of his criticisms about policing, and we shall do our best to organise that as best we can.
  Mr. Penhaligon: Is not the alternative to selling or practically giving it away to the Russians for 4p a pound to leave a larger portion of the fish in the sea? There is worrying evidence that the total quantity of mackerel, at least around my part of the country, is diminishing rather rapidly.
  Mr. Buchanan-Smith: I tried in our last debate on fishing to lay low the hon. Gentleman's misapprehension. Of course

  931
  I am concerned about over-fishing. The total allowable catch for that fishery had to be reduced by 10 per cent. again this year, and we have introduced a large conservation box in the South-West which is proving effective.
  I ask the hon. Gentleman not to exaggerate the position. As I explained to him in our last debate, there were mistakes over the figures; there were simple arithmetical mistakes on the part of Customs and Excise in the way the figures were converted after the fish had been processed. It meant that the figures he had been using were not accurate in reflecting the total number of fish caught.
  I turn to some of the points about structure which relate to the EEC documents. I reassure my hon. Friend the Member for North Fylde (Sir W. Clegg) that there are, in this document, proposals which could cover the question that he raised on compensation for redundancy. In the discussions on this document, I shall bear in mind the points that he has made. I shall also bear in mind the remarks of other hon. Members on the question of structure. It is right that we should reserve judgment on the structure document until we know the outcome of negotiations on more important matters such as quotas and access.
  On conservation, I have already mentioned the question of the pout box. We shall consider this very carefully in the light of the court judgment. This is a particularly important matter in that the extension of the box takes effect from 1 October, and some urgency is needed.
  I was encouraged by the remarks of the hon. Member for Edinburgh, East about conservation. He is right: we must maintain our right, even after a common fisheries policy is agreed, to apply our own measures in an emergency on a non-discriminatory basis if we believe that a particular stock or fishery is put at risk and if there are no common fishery measures. I assure the hon. Member that in the negotiations we shall try to incorporate that under the conservation measures.
  On the question of quotas, my hon. Friend the Member for Aberdeen, South (Mr. Sproat) was right. These quotas are fundamental to the whole CFP. We have
  932
  made clear that we believe that the illustrative figures are very unsatisfactory in a number of respects. But the hon. Member for Edinburgh, East is correct: we must be very careful not to jump too quickly to conclusions on the basis of the figures alone. One must look at the figures—the percentage of the tonnage—and then at the stocks that are important to our fishermen, such as haddock, whiting, cod, mackerel and herring. Our other stocks have nothing like the same value. The value of the quota proposals must be seen in the light of the stocks concerned.
  Secondly, we must look not simply at the quantity figures but at the value. Cod is one of the most valuable resources. We shall certainly reserve our judgment on the figures until we know exactly where we are.
  The hon. Member for Edinburgh, East moved an amendment, and I am quite prepared to accept it. I share the view of my hon. Friend the Member for Banff (Mr. Myles) that it does not make sense to tie oneself to particular figures when one is negotiating, but I believe that the words of the amendment have been carefully chosen and I hope that the objectives that the Opposition have put in their amendment will be achieved during the course of the negotiations. We must wait and see how the negotiations progress.
  Finally, I turn to the question of aid. I thank hon. Members for the way in which they have welcomed the announcement tonight. I thank my hon. Friend the Member for Aberdeen, South and the hon. Member for Aberdeen, North for the concern that they have expressed recently about the uncertainty at Hall Russell. I hope that my announcement tonight will enable the yard to continue in certainty as a result of the two very good, well-designed and well-built vessels which, I believe, are well up to time.
  The hon. Member for Berwick and East Lothian (Mr. Home Robertson) and my hon. Friend the Member for Fife, East (Mr Henderson) asked about the distribution of the aid. The House rises tomorrow, and we considered that we should announce now the aid available to the industry rather than wait for the details. Had we delayed until the details had been worked out, the House would

  933
  have risen, and it would have been discourteous of us. I am, therefore, afraid that I cannot give the information requested.
  Another factor is equally important, and it was referred to by my hon. Friend the Member for Moray and Nairn (Mr. Pollock) in his brief but effective speech. He mentioned the important consultations and partnership between the industry and the Government. If they are to mean anything, in this aid package as much as in relation to the common fisheries policy, the industry has a right to be consulted on the way in which the aid is applied. Officials of the Fisheries Departments will be approaching representatives of the fishing industry tomorrow to try to arrange a meeting next week in order that the details of the aid package can be worked out. Once that is done, we shall make sure that the information is made available.
  The debate has been useful and wide-ranging. We have covered the long-term problems of the industry in relation to the renegotiation of the common fisheries policy. I am grateful to the House for suporting the line that the Government are taking, which gives us much greater strength in the negotiations. I am also grateful to the House for welcoming the aid package.
  The leaders of the fishing industry have as had a task as the Government in trying to steer the fortunes of the industry and keeping those at the grass roots informed. I pay tribute to their response-
  934
  bility. In relation to the aid package and the common fisheries policy, I hope that their counsel, wisdom and responsibility will be understood and respected by those at the working end of the industry.
  The interim aid scheme is important. We must keep the industry viable while negotiations on the common fisheries policy continue. In the House and in the industry I hope that we shall keep our eyes on the longer-term negotiation of the common fisheries policy. Only by doing so can we ensure that we have an effective industry for the future.
  Amendment agreed to.
  Main Question, as amended, agreed to.
  Resolved.
  That this House takes note of European Community Documents Nos. R/2988/75, R/2519/77, R/2520/77, R/1514/78 and 8959/80 on structural policy, No. 8583/80 on catch reporting, No. 8957/80 on conservation, No. 8958/80 on 1980 quota allocations, No. 9047/80 on quota allocation criteria and the Ministry of Agriculture, Fisheries and Food's unnumbered explanatory memorandum of 21 July 1980 on access; and supports the Government's objective of a satisfactory overall settlement of the revised Common Fisheries Policy in its own right at the earliest possible opportunity which takes adequate account of the need to conserve and safeguard fish stocks and of the overall requirements of the United Kingdom fishing industry, and in particular, maintains the need to secure exclusive access within 12 miles, preferential access within 12 to 50 miles, and an overall share of fish for United Kingdom fishermen which reflects United Kingdom losses incurred in third country waters and the contribution made by United Kingdom waters to total European Community fish resources.

  OPPOSITION PARTIES (FINANCIAL ASSISTANCE)
  Mr. Deputy Speaker (Mr. Bernard Weatherill): I inform the House that there is an error in the motion on financial assistance to Opposition parties and in the amendment in the name of the hon. Member for Sudbury and Woodbridge (Mr. Stainton). The figure reading "£1,925" should read "£1·925".
  The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): There appears also to be a misprint in the Government motion.
  Mr. Deputy Speaker: I am sorry if I did not make that clear. The error is in the Government motion, and it is repeated in the amendment.
  10.45 pm
  Mr. St. John-Stevas: I did not wish to be party to a resolution giving £1,925 for every 200 votes. I am well disposed to the Opposition, but not that well disposed.
  I beg to move,
  That the Resolution of the House of 20 March 1975 shall have effect from 1 July 1980 with the substitution of the following paragraph for paragraph 2 of that Resolution:—
  'That for the purpose of determining the annual maxima of such assistance the following formula shall apply:
  £962·50 for each seat won by the party concerned plus £1·925 for every 200 votes cast for it at the preceding General Election, provided that the maximum payable to any party shall not exceed £290,000.
  The effect of the motion is to increase the amounts of financial assistance payable to Opposition parties to assist them in carrying out their parliamentary business. At present the amounts payable are £550 for each seat won by the party at the last general election, plus £1·10 for every 200 votes that it received. In order to qualify, a party must have at least two Members elected to the House as members of that party at the preceding general election, or have one such Member and have received at least 150,000 votes at that election. There is at present a maximum party entitlement of £165,000.
  If the House approves the motion, the amounts payable under the formula will be increased by 75 per cent. to £962·50
  936
  for each seat and £1·925 for every 200 votes. The maximum amount payable to any party will also be increased to £290,000.
  The scheme was first introduced in 1975, when the formula was fixed on the basis of £500 for each seat won by the party plus £1 for every 200 votes. These amounts have previously been increased from their original level only once—by 10 per cent. in February 1978.
  I must stress that the purpose of the scheme is to assist Opposition parties in carrying out their work at Westminster. The use of this financial assistance is therefore confined by the original resolution to paying for expenses incurred in relation to a party's parliamentary business. Subject to this limitation, its allocation is at the party's discretion. I understand, however, that the bulk of the money goes towards research and secretarial assistance and in staffing the Whips' offices.
  In practical terms, the leader of the Opposition party, or a person deputed by him, makes his quarterly claim to the Accountant of the House, who makes out a cheque in accordance with his instructions. If the party concerned wished the amount payable to be made over in some other way, that could be done, provided that the way in which the money was to be spent could be properly certified as being within the terms of the 1975 resolution—that the expenses had been
  "incurred exclusively in relation to that party's Parliamentary business".—[Official Report, 20 March 1975; Vol. 888, c. 1934.]
  I must stress that this has nothing in common with propositions for helping parties with their activities outside Westminster.
  Obviously, like all other administrative and office expenses, the costs of the support services that this assistance is designed to meet have risen sharply in recent years. The proposed increase will help to meet these increased costs, which are inevitable if the Opposition parties are to carry out their parliamentary duties. Our constitution has long recognised the position of the Leader of the Opposition as part of the parliamentary constitution, to the extent that he is paid an official salary.
  I need add only that the scheme and the proposed addition to the amounts

  937
  payable in no way represent any change in the Government's position with regard to the provision of public finance for the general activities of political parties or towards the recommendations made in the Houghton committee's report in 1976. The Government have made it clear, and we make it clear again tonight, that we have no proposals to extend financial assistance to political parties in that way. The proposal is accordingly no more than an updating of existing provisions in the light of increased costs since the amounts payable under the scheme were last fixed.
  10.50 pm
  Mr. George Cunningham: As the Leader of the House said in moving the motion, the Government are extending the facility first presented to the House in 1975 by the then Labour Government to take account of some degree of inflation since then.
  When it was put forward in 1975, this proposal, while not commanding 100 per cent. support in the House, commanded the support of all parties in the House. That went, too, for the increase in the scales that was adopted in 1978 and put forward by the Labour Government at that time.
  It is now well over two years since the increase was effective in 1978, and it is therefore time for an increase to be made once again. Coming to the figures, it should be noted that the revised figures in the motion do not take account of the degree of inflation that has taken place since I January 1975, when the facility first began.
  If we took account of inflation since I January 1975 and then took as one of the main figures the maximum figure that any party might receive, it would have to be about £330,000, whereas the motion provides for a maximum figure of only £290,000. That ratio is reflected in the other figures in the motion.
  We are saying that the real value of this assistance, compared with what was decided by the House in 1975 and effective from the beginning of that year, will not be similar to what we decided at that time but will be between 95 per cent. and 87 per cent. of the real value of what was decided then.
  938
  Therefore, there is a real fall of about 12 per cent. or 13 per cent. in the value of this assistance. Since, as the Leader of the House said, most of that money, irrespective of which party is using it, is expended upon salaries, the real value of it is even less than the figure that I have just stated, because the rise in salaries has been greater than the rise in general inflation.
  I make two points to the Leader of the House on an obscurity in the motion. I am sure that we are all clear about what is intended, but there is an obscurity that in the future we should do something to clear up. It is not absolutely clear from the terms of the motion that the maximum for the present year. 1980, is to be made up of one half-year at the rate—if I may put it like this—of £165,000 maximum and one half-year at the rate of £290,000 maximum. I take it that it is the intention that the maximum this year will be composed of the two halves—half of the old rate and half of the new rate.
  Secondly—and this problem has occurred in the past—there is the situation that can occur, and did occur in the last Parliament, where a party breaks up after an election. In the terms of the motion that we passed in 1975, we did not address ourselves to that difficulty. It occurred in the last Parliament. I mention it because it is a problem that has cropped up. No solution to it was available in terms of the motion that we passed, and, since the terms we adopt in the case of a resolution of the House are usually less carefully drafted than in the case of legislation, it is something to which we should address ourselves. That is not to say that the Labour Party would have any interest in that point. I raise it only in relation to the party that had that problem several years ago.
  As the Leader of the House said, this money is available only in connection with an Opposition party's parliamentary duties and not for its work outside the House. It should be noted that in the use of these funds the party is answerable, like the users of all public funds, to the Public Accounts Committee, which could, if it wished, investigate the use of these funds to satisfy itself that they were being used for the purposes covered by the resolution.

  939
  When the predecessor motion was going through the House in 1975, the right hon. Member for Yeovil (Mr. Peyton), the then Conservative Opposition spokesman, pointed out very firmly that one of his colleagues, who was concerned about the proposal, was
  "wrong in discerning a new principle".
  He pointed out that what was being done was to extend a principle that had already been adopted of extending assistance from public funds to the Opposition and making that accord more with the needs of modern times. He referred to it in 1975, when it was a newer idea, as
  "this modest little proposal".
  The right hon. Gentleman argued that
  "the means of support available to the Opposition have dwindled steadily as against the steady and, to my mind, loathsome growth in the power of the Government",
  and that
  "We must have some means of redressing the balance."—[Official Report, 20 March 1975; Vol. 888, c. 1920–22.]
  That thought was repeated by the right hon. Member for Cambridgeshire (Mr, Pym), who is now Secretary of State for Defence, when, supporting the increase in the funds in 1978, he said:
  "After nearly three years, it is reasonable in all the circumstances to propose this very modest increase. Plainly it will leave the Opposition parties much worse off in real terms than they were then."—[Official Report, 13 February 1980; Vol. 944, c. 199.]
  He was referring to the time when the facility was first introduced, at the beginning of 1975.
  That once again is the situation. We are in exactly the situation that was approved by the Conservative Party in 1975 and approved by the Conservative Party in 1978. It is time to make this modest increase, which does not take full account of inflation, and I hope that, in the interests of the proper working of the House, the House will give support to the motion that the Government have introduced.
  10.57 pm
  Mr. Ivan Lawrence: I am unhappy at this proposal, for a number of reasons. I cannot imagine that the proposal that Opposition parties should receive money from the taxpayer and that they should have removed from them the responsibility of raising their own money
  940
  through the persuasiveness of their representatives in the country would ever have been introduced had it not come about that in 1975, when the Labour Party was in power and it realised that the Labour majority was likely to totter, one of the agreements that was struck with minority parties for their support at a time of voting difficulty was to give financial support to the minority parties for the assistance that had been forthcoming.
  Until 1975, the House had gone along for hundreds of years without providing taxpayers' money for the parties. One of the ways in which the Labour Party was allowed to maintain its strength, although it was clearly in difficulties when raising finance, was to allow the substitution of contracting out for the contracting in of trade union levies.
  I can recall many Conservative Party conferences at which Conservative Party supporters expressed their puzzlement at the way in which we continued to allow the trade unions to raise money for the support of the Labour Party although trade unions are in essence not meant to be political parties. The only reasonable answer was that if the contracting-in proposal was substituted for contracting out, so little money would be raised for the Labour Party that it would have great difficulty in maintaining a viable Opposition.
  That was the concession that Parliament and Conservative Governments made for Opposition parties that were in substantial difficulties. As long as that concession remains, it seems wrong that the taxpayer should continue increasing the contribution to minority parties.
  There is no reason why any concession should be made to minority parties for the purpose of keeping the present Government in power. One has to concede the logic and the sense of the taxpayer providing support for the Leader of the Opposition because his is a constitutional position in our political life. To go beyond that support is an excess that is not necessary for Parliament to provide. My right hon. Friend, in moving the motion, said that the contribution was restricted to the use of parliamentary facilities and did not go towards sponsoring political parties outside this place. The reality is that the less money a political party needs to spend on the running of its offices in this

  941
  place the more money it has available to spend on the running of its activities outside this place. It is not a sufficient answer to the criticisms that some of us feel to say that this matter is restricted to the activities of the House.
  The matter does not stop there. In 1975, the facilities provided for research and secretarial assistance were nothing like the generous facilities that we have now decided to provide for our secretaries and research assistants. In that regard, the State contributes more money to all parties than ever before. The matter that gives me greatest cause for concern is the fact that we propose to increase the contribution to minority parties at a time when we are asking the nation to undergo a period of considerable economic restraint.
  I notice that Opposition Members below the Gangway have thought it consistent with their party's approach, when in Opposition, to attack the Government at every stage for every cutback in public expenditure. Yet the Government have reached the end of their first year successfully, I believe most people in the country would say, in terms of their manifesto. The Government have made a substantial contribution towards the fulfilment of the manifesto. About 60 per cent. of our promises—
  Mr. Edward du Cann: Seventy-five per cent.
  Mr. Lawrence: It rises higher. That has been achieved in the face of substantial opposition—from among our own ranks apart from others—to the cutbacks in public expenditure. People in the country will be puzzled, so strong has been the Government's attitude towards restricting the rise of inflation, to read that we should be voting at this late hour and at this late day in this Parliament—when many hon. Members have still not recovered from two nights, or certainly one night, of irresponsible opposition—an increase of pay to Opposition parties in this fashion. It is inconsistent with the spirit in which the Government have conducted their approach to the manifesto.
  It is all very well to say that this power was given in 1975. We have an entirely new Parliament. I regret that an opportunity has not been given to the full House, at a time when all hon. Members are present and not laid low by the acti-
  942
  vities of the past week, to consider whether it still supports the substantial change in the constitutional position of Opposition parties in the House.
  For all those reasons—I do not seek to detain the House with a long argument—this is contrary to the traditional principle. It is unnecessary as a means of encouraging minority parties to raise their own funds, it is unnecessary in the light of the contracting-out provisions of the trade union legislation, and it will not look well when people read tomorrow that we have approved an increase in the expenditure of minority parties.
  11.5 pm
  Sir William Clark: We should get this matter into context. It is interesting to consider why this money was voted in the first place. It was originally known as Short money. The then Leader of the House—now Lord Glenamara—introduced the idea that Opposition parties should get some subvention from the taxpayer.
  Why should there be a subvention from the taxpayer? When a party is in Government, it has the resources of the Civil Service behind it free, but the party in Opposition has to do its own briefing and devilling and produce its own researches. It was right that in 1975 a certain amount of money should be allocated to the Opposition parties. I do not propose to deal with the minority parties. I shall talk about the two major parties, with no disrespect to other parties in the House,.
  It is obvious that the concept of giving the Opposition the opportunity and the wherewithal to carry out certain functions is right. With respect to my hon. Friend the Member for Burton (Mr. Lawrence), this has nothing to do with the running of voluntary parties. At one time, voluntary parties paid not only the whole of the Whips' office but the whole of the postage. Indeed, Members of Parliament paid the whole of their postage. Since then it has been felt that Members of Parliament cannot do their job properly unless they get certain facilities. Over the years, apart from the increase in salary that we might have had, we have been given free postage, a secretarial allowance, a research group allowance and a living-in-London allowance.
  Let us ally that to the Leader of the Opposition. I point out that the Leader

  943
  of the Opposition is a Crown appointment. If it is thought right that the Leader of the Opposition should be a Crown appointment, of course he should have the back-up staff to enable him to carry out his responsibilities. It is nothing to do with running the political party.
  In the past I had something to do with Central Office. I assure hon. Members that the running of the Leader of the Opposition's office was quite a task. I do not know how many letters the Leader of the Opposition gets today—I am not talking about whether the party has done well—but on a topical issue he can receive 400. 500 or 600 letters a day. How can the Leader of the Opposition, with one salary and without back-up staff, answer all those letters?
  In addition to the Leader of the Opposition, Shadow spokesmen need to be briefed. That means having a tremendous number of research staff. I assure the House that when this scheme started and the Conservative Party was receiving £150,000 a year, in no way did that cover the whole cost of the Leader of the Opposition's office. I agree that it was a contribution to it.
  My hon. Friend the Member for Burton raised the red herring of the Houghton committee. I do not agree with the Houghton report. I remind my hon. Friend and other hon. Members that the Conservative Party gave evidence to the Houghton committee against taxpayers' money being spent on political parties in the country. I emphasise the words "in the country" because there is a difference between running a party in this House and running a party in the country. If a party in the country does not have the support of the voters in the country, it will not receive the subscriptions. If the party in the country could not raise sufficient funds to run that party, it might mean that its policy was not in tune with what the public wanted. But that is an entirely different matter from running a party in the House.
  I am told that it is essential for me, as a Member of Parliament to have a secretary and a research assistant. The allowances for such assistance have been updated over the years. If it is essential for me to have a back-up staff, surely it is essential for the Leader of the Opposition to have a back-up staff. If we say
  944
  that the Leader of the Opposition should not receive this money, we should take away the allowances for secretarial and research assistance for Back Bench Members of Parliament.
  I hope that we do not fall into the trap of thinking that the sum of £290,000 —all parties have accepted the principle of a subvention payment for running the office of the Leader of the Opposition—is right. The hon. Member for Islington, South and Finsbury (Mr. Cunningham) suggested that it should be £330,000. I think it should be slightly more. The principle has not changed—
  Mrs. Peggy Fenner: Does not my hon. Friend accept that some of the allowances and some of the recent awards made to Members of Parliament were contested by some hon. Members as being too high? Is he not making an argument for the inflationary increases that we have said cannot be sustained at our present production rates?
  Sir W. Clark: I think my hon. Friend will agree that my record shows that I am not in favour of increasing public expenditure. I accept the fact that some hon. Members resisted the increases for secretarial and research allowances. But we must remember that in the two-party system that we operate in this country the leader of any Opposition party is always in a more difficult position than the Prime Minister and Ministers simply because they have the whole weight of the Civil Service behind them. With respect to my hon. Friend, this matter is not in the same context as that of whether some hon. Members thought that we should not increase secretarial and research allowances. I do not think that many hon. Members would say that those allowances should be abolished.
  One accepts the premise that it is essential for the Leader of the Opposition's office to be serviced. However, the £290,000 on offer at present will in no way pay the whole of the expenses of that office. I note that the Shadow Leader of the House nods in agreement. Any sensible person must know that this is so, bearing in mind the number of secretaries, researchers and so on that the Leader of the Opposition needs.
  I hope that none of my hon. Friends will resist the motion, for the simple

  945
  reason that it is fair. If the allowance were rising to £500,000, I would be on the same side as some of my hon. Friends. If it is being increased by only about 82 per cent. of the inflation rate, that is right.
  Mr. Tim Brinton: Two things occur to me. First, I believe that my hon. Friend has obscured his argument by referring to the secretarial and other allowances that Members of Parliament get in the same breath as referring to an allowance that we are now discussing in terms of political parties and their activities here. They are totally different things. We as Members receive an allowance—we can argue whether it is too much or too little—to service our constituents on a non-party political basis.
  The terms of this proposal are that a political party or two political parties—however it may turn out—receive money from the State in order to oppose the Government. If that is so, it will only perpetuate in the minds of the electorate who elect us the feeling that there is an alliance between the establishments of both main parties so that, whoever's turn it is, it is Buggins's turn. I do not believe that the electorate believe that this is real.
  Sir W. Clark: I take my hon. Friend's point, but I think that he is barking up the wrong tree, because there will be a loss on the £290,000. It will go towards paying for the secretaries and the research that the Leader of the Opposition must carry out, and it will not in any case be used for the propagation of party philosophy. Party philosophy is not necessarily a question of cash. Opposition Members propagate the philosophy of whatever they believe in. Conservative Members do exactly the same.
  There are many people who write to the present Leader of the Opposition but who probably vote for me or for my hon. Friend. There is no party point in it, but those letters must be answered by someone.
  Let us not get this matter out of context. I am delighted that the Conservative Party is in Government. I hope that it will be in Government for many years, although I know that that will not go down well in all parts of the House. But we must ensure that no party that is in
  946
  Government, with the whole weight of the Civil Service behind it, should be in a position to squash an Opposition. We must see that the Opposition have some resources in order to fight whichever Government are in office.
  I have tried to give the history of this matter and to put it into context and take it out of the business of parties. It has nothing to do with parties. This concerns running an office which, I repeat, is a Crown appointment. As a Member of Parliament, I am paid by the taxpayer. The Leader of the Opposition is also paid by the taxpayer. As a Member of Parliament, I get certain allowances for secretarial services and so on. Those allowances are updated now and again. The Leader of the Opposition has far more responsibility than I or any other Back Bench Member. His office should be serviced sufficiently without the need for subsidies. The £290,000 will not pay all the Leader of the Oppositions expenses, no matter which party he comes from.
  I hope that my hon. Friends will not resist this measure. The Conservative Party has accepted the principle and precedent. The Government are only updating the provision. The full effect of inflation has not been taken into account. I should have thought that this was a very reasonable proposition.
  11.20 pm
  Mr. Stephen Dorrell: I do not wish to detain the House for more than a few minutes. I hope that my hon. Friend the Member for Croydon, South (Sir W. Clark) will not misunderstand me when I say that for the first time I have listened to a speech from him that might almost have been made from my notes. It was a new experience for me, and I very much enjoyed it.
  My hon. Friend was right to concentrate on the key issue, namely, the type of democracy that we want. When the Government present measures and arguments, they are supported by the massive resources of the Civil Service. Whether one is a Back Bencher or an Opposition Front Bench Member, one does not have access to the same amount of support.
  I should like to put my right hon. Friend's proposal and the principle of giving State funds to the Opposition

  947
  Front Benches—which the House accepted in 1975—into the context of the series of measures that have been proposed during the past 15 years. Such measures have tried to right the balance between a Government Front Bench that is generously supported by the Civil Service and other hon. Members who are less generously supported.
  Select Committees were set up to provide new ways of eliciting information from the Civil Service. They gave Back Bench Members a new basis from which to strengthen control over the Executive. In a way, that is part of the same process—in which my right hon. Friend played a notable part—of improving our control and influence over the Executive. Like the measures before us tonight, the Select Committees helped to strengthen Parliament.
  My hon. Friend the Member for Croydon, South was right to point out that giving funds to the official Opposition party would emphasise the importance of the role of that institution in our two-party system. Its role is vital if we are to continue to produce the parliamentary compromises that are the stuff of the British constitution. We are often told that the great strength of our system is that an alternative Government are ready to take office after a general election without having to form a coalition or go through a formative phase. That would not be a strength if the party was unable to do the research necessary to build up its programme and to formulate policies.
  If we provide Opposition parties with funds during the Session we shall be buying a public good. That public good is that Opposition parties will be well informed and will have the means necessary to establish their case. They will then be able to base their cases on fact rather than on mythology. That will be a public good, and it will be rightly paid for from the public purse.
  11.24 pm
  Mr. Ivor Stanbrook: Nothing that has been said by my hon. Friend the Member for Loughborough (Mr. Dorrell) distinguishes between the justification for paying money to the office of the Leader of the Opposition and that for paying money to political parties in general.
  948
  He seems to think that democracy can be assisted and strengthened by the provision of public money for the activities of political parties. I suggest that if he thinks a lot more about this he will realise that he is treading on very dangerous ground.
  I now refer to what my hon. Friend the Member for Croydon, South (Sir W. Clark) said. We are not talking about money being provided for the office of the Leader of the Opposition. If we were, and if it were expressed as such, perhaps an argument could be made for saying that this was a special fund which applied only to this purpose. That was the brunt of my hon. Friend's argument. I understand that there may be something to be said about that. There is a precedent that a stipend is now paid to the Leader of the Opposition. However, the resources of the office of the Leader of the Opposition are drawn from the party that he represents in the House. Indeed, it is said that what is paid is not enough, and so he has to be subsidised in his activities by his party.
  The argument of my hon. Friend the Member for Burton (Mr. Lawrence), as I understand it, is that in principle this cannot be justified and that in a healthy democracy a political party should be able to provide all the funds that are necessary to carry on those activities. The problem here is one of attitude.
  I believe that the hon. Member for Tottenham (Mr. Atkinson) is the treasurer of the Labour Party. Did he not recently publicly ask the leader of the Labour Party to arrange that the money paid from this fund should go to him and that he should be responsible for its disbursement to the Labour Party as a whole? The hon. Gentleman will correct me if I am wrong, but I understand that to be his view. If that is his view, quite clearly he, as the national treasurer of the British Labour Party, believes that that money should be paid for the purposes of the Labour Party. That, no doubt, is the argument. If so, it completely contradicts the argument of my hon. Friend the Member for Burton.
  Mr. Joseph Dean: My hon. Friend the Member for Tottenham (Mr. Atkinson) is entitled to express that opinion, but he does not speak for the rest of the Parliamentary Labour Party.
  Mr. Stanbrook: I fully appreciate that. I have some sympathy with that point of view. The fact is that the hon. Member for Tottenham is the national treasurer of the Labour Party. As I understand it, he has been elected to that post by the Labour Party, by whichever form of democracy in which it indulges. It seems to follow, as at present advised, that it is the view of the national authority of the Labour Party that the money should be paid to that source.
  If we had an undertaking from the Opposition or the Labour Party that in future all the money would be paid to the Leader of the Opposition personally or in some form that ensured that it stayed within the office of the Leader of the Opposition, I concede that there would be an argument. Even so, I do not agree with it, as in principle we should not use taxpayers' money to benefit political parties.
  My hon. Friend the Member for Burton was wrong continually to emphasise that money was being paid to minority Opposition parties. That is not the point. The money is being paid to political parties. Should political parties in a democracy—whatever kinds of parties they are—be subsidised with public money? We are not talking only about the Labour Party. The members of the Liberal Party find it difficult to raise money, as, no doubt, do the others. However, the real argument concerns the Labour Party. From the time of its origins, it has never persuaded itself to go to the doorsteps to raise money from small subscriptions, jumble sales, coffee mornings, and all the 1,001 activities by which money is raised for political parties in a democracy.
  That is the healthy way in a political democracy such as ours. That is the way in which the Labour Party should raise its funds, instead of attempting to resolve its difficulties by going to the taxpayer cap in hand and saying "We cannot carry on our party organisation without a subsidy from public funds—without help from you. It does not matter that you do not happen to support our party. You have to pay because we have arranged it that the law says that money should be paid by Parliament itself."
  That attitude is completely wrong. The Labour Party's attitude should be that of bringing itself up to date and
  950
  running and financing its organisation in the modern, practical, healthy, democratic way, which is the way followed by the Conservative Party.
  Sir William Clark: If the logic of that argument is followed to its conclusion, is it not wrong consequently to give a Back Bench Member of Parliament a secretarial allowance? Why not take that away?
  Mr. Stanbrook: I take that point from my hon. Friend. I am rather surprised that he should go on emphasising this. There is all the difference in the world between assisting an individual Member of Parliament, no matter what his party, to represent all his constituents and do a more effective job, enabling him to spend more time on the interests of his constituents, and providing money to a political party.
  This has nothing to do with assistance that may be given to individual Members of Parliament to enable them to do their jobs more effectively. It is not done in the context of political organisation. It is not given to them because they happen to be Conservative, Labour, Liberal or supporters of any other political party. It is given because they as individuals want to do their best for all their constituents.
  I do not believe in the theory that a Conservative Member represents only the Conservatives in his constituency. If he does, he is a rotten Member of Parliament. But that is said constantly, especially by the Liberals, because, of course, every Liberal Member does his best for all his constituents. Let us get away from that silly nonsense. Every hon. Member tries to represent all his constituents, and it is perfectly proper that he should be assisted financially in this way, not only by his salary but by the provision of services.
  That is a completely different argument in principle from what my hon. Friend the Member for Croydon, South has been saying, which is that the political organisation to which an hon. Member belongs should be enabled to become more efficient by being paid money not through individual Members of Parliament but direct to party funds.
  I suggest that if my hon. Friend really believes that the equivalent of this money

  951
  should be paid as allowances to individual Members we should say that within each party every individual Member of Parliament should pay a percentage of what he is paid by way of salary to his party.
  Sir William Clark: That is all right.
  Mr. Stanbrook: Let the parties be financed from the pockets of Members of Parliament.
  Mr. Joseph Dean: And a percentage of their outside earnings.
  Mr. Stanbrook: That is not my point. My argument is that if money is provided to an hon. Member to do his parliamentary job, it is from that fund that it would be quite appropriate for the money to go to that parliamentary job being done by his political organisation. What an individual Member may earn outside this place has nothing to do with this argument. The argument is how to use public money in this respect.
  When we talk about public money in this context, we must define the objective that we have in mind. I suggest that the only objective must be that of improving the efficiency and quality of the service given by each Member of Parliament. That argument is wholly unrelated to the argument behind speeches made in favour of this propostion, namely, that taxpayers should be brought in when a party is so inefficient that it cannot even raise enough money to run its own leader's office and that the taxpayers should make up the difference.
  There are many respects in which money is needed in party organisations. The Labour Party, for example, does not have nearly enough full-time salaried agents. The question is how the money for them is to be raised. One thing to be said for the national organisation of the Conservative Party is that, by and large, we manage to raise enough money to pay for our own organisation.
  Mr. Alexander W. Lyon: An Opposition party does not have to take the money if it does not want to. Why did the Conservative Party take it in 1975?
  Mr. Stanbrook: I was unfortunate in being a Back Bencher and, therefore, was not at all responsible for the decision
  952
  that was taken. It was a mistake in 1975, and I said so at the time, so I cannot be accused of inconsistency.
  Mr. Nigel Spearing: Did you vote against it?
  Mr. Stanbrook: I do not remember.
  Mr. John Ward: Will my hon. Friend consider the suggestion that perhaps with the new research assistant allowances, or the increase in the secretarial allowance that is supposed to cover the research allowance as well, Members who so wished could contribute to a communal fund in their party so that research could be undertaken on a party basis and, no doubt, cover all the wonderful things of which my hon. Friend the Member for Croydon, South (Sir W. Clark) spoke?
  Mr. Stanbrook: I am obliged to my hon. Friend, because that was the point that I was trying to make. If individual Members of Parliament want to improve their efficiency in this place as a whole, it is for them to provide for that better organisation out of the remuneration they are paid from public funds—in other words, by some sort of levy.
  My main point is that we could provide a far better service to the people of this country if only we as political parties concentrated on improving our efficiency. That means that the Labour Party must get over its problems. It has relied for so long on trade union funds that it has never got into the habit of getting on to the doorsteps and raising money in small amounts.
  Mr. Spearing: Nonsense.
  Mr. Stanbrook: No doubt individual constituencies and individual Members of this place do that to some extent, but there is no doubt that the overwhelming majority of Labour Party funds comes from huge corporate subscriptions from the trade unions. It used to be alleged by the Labour Party that the Conservative Party raised its funds for the most part by donations from big business. That was an interesting thought, until gradually one got information about these matters. Nowadays it has been discovered that the opposite is true and that the majority comes from individual subscriptions.

  953
  My own constituency is a good example of how things should be done. My Conservative association raises £14,000 per annum, through individual annual subscriptions and through many hundreds of small fund-raising events, such as coffee mornings, jumble sales and garden parties. From that sum my association is able to pay £2,000 to Central Office for its needs, and yet at the same time it pays a full-time agent a salary of £4,000 or £5,000 and carries on all its other activities. That is done only by harnessing the energies of about 7,000 or 8,000 members of the association. I wonder how many Labour Members have that sort of membership in their party organisations. That is the democratic and effective way of raising funds.
  Mr. Leslie Spriggs: It is quite unwise to allow any hon. Member, on either side, to make such mistakes as the hon. Gentleman is making. I have been close to a county constituency party for many years, as its secretary, and I assure him that not one penny of the assistance that we are discussing goes to constituency or local parties. That is a fact.
  Mr. Stanbrook: I am obliged to the hon. Gentleman, but I never suggested that. What is being suggested is that the money that we are discussing goes to a particular need within the Labour Party—namely, if we accept what my hon. Friend the Member for Croydon, South said, to the office of the Leader of the Opposition. If that is so, none of that money goes to the purpose of the party as a whole.
  Sir William Clark: I do not think my hon. Friend realises that a certificate has to be signed each quarter stating that a certain amount of money has been expended for the direct expenditure of the Leader of the Opposition. It is a red herring to say that some of this money could be used for national party politics. We must get our facts right before we try to distort them.
  Mr. Stanbrook: That is fine, because my hon. Friend is giving a perfect example of the sort of tactic that accuses someone of saying something he never said and then says how wrong he must
  954
  have been. I have never suggested anything to the effect that my hon. Friend has criticised me for.
  In principle, the services of the Leaders of the Opposition should be met by revenue raised by the party as a whole. I was not suggesting that money raised for the Leader of the Opposition goes to the constituency parties. My argument was that the Labour Party relies too much on institutional financing from the trade unions—a sort of block financing. It would be far healthier and far more democratic if the Labour Party as a whole drew its funds from sources like the many that the Conservative Party fortunately is able to use.
  Mr. Michael Brown: Would my hon. Friend care to consider the system that we have in the Conservative Party? For the most part, the constituency associations have a quota, which they are expected to pay to Central Office to assist with its management. When my right hon. Friend the Prime Minister was Leader of the Opposition, presumably as many letters were sent to her in her capacity as leader of the Conservative Party as in her capacity as Leader of the Opposition, and those letters went to Central Office. Would it not be reasonable to expect party headquarters to provide a sum of money from voluntary funds to assist the Leader of the Opposition—Conservative or Labour—deriving those funds from the individual subscriptions and contributions, which I know my hon. Friends are expected to pay to their associations?
  Mr. Stanbrook: I accept that point, which is of great assistance to me in my simple argument that political parties should be responsible for raising their own funds and for applying those funds to all their purposes, not merely in the country as a whole but also in the House. If it were suggested that we need more money to do our jobs as individuals, I would say "Fine, we are paid to do that job." Each hon. Member is paid to do his job, just as the Leader of the Opposition is paid to do his job. Surely, if the Leader of the Opposition needs more money it should come from the same source—from the individuals in the party organisation.

  955
  If the Labour Party wants to provide more funds to the Leader of the Opposition, let it do so. I simply do not understand the argument in principle, and I am surprised that so many Conservatives should find that there is any merit in it.
  Mr. John Townend: Could my hon. Friend give us the benefit of his legal training and help a simple man like me to understand the argument that in some way sums that are made available to the parliamentary party—the official Opposition—are not being used for party political purposes? Surely, if that money were not made available the funds would have to come from the political party in the country. If it is relieved of that liability, surely it must be the case that the funds are, at least indirectly, being used for party political purposes.
  Mr. Stanbrook: I accept that point, too. It is sad for me, believing as I do in parliamentary democracy, to realise that the Labour Party is so wrong about this matter and is depriving itself of the strength and moral justification that could be derived from obtaining its revenue from individual members. The Labour Party gets so much in funds from great institutions, such as the trade unions, yet now, when extra support is needed for the party in this place, it does not go back to the party organisation and tell its supporters to get out on to the doorsteps and ask for more money. It says that the taxpayer must pay up.
  This was the argument put forward in 1975, and I am very sorry that the leaders of my party at that time saw fit to accept it. One of the strong arguments put by Conservatives at that time was that we had to go along with this because it was in the interests of the other parties. There was the suggestion that it would not be fair for the Conservative Party to object to this system because, after all, the poor Labour Party, which is not as efficient as the Conservative Party at raising money, would suffer.
  The fact is that the Labour Party must go back to square one and begin raising its money in a democratic way through the individual subscriptions of the many thousand members that it could have. There is a fiction that every local party that has 1,000 members affiliates with the
  956
  Labour Party, but many affiliate anyway, even though they do not have the requisite number of members. I am pretty sure that the local party in my constituency does not have 1,000 members, and yet it is affiliated. Surely, the Labour Party should decide to raise this money properly and honestly instead of calling on the taxpayer. It should decide to be independent and rely on its members. In that way not only would it get more members; it would be happier, healthier and bigger, and it might even win a few more elections.
  11.49 pm
  Mr. K. Harvey Proctor: I am pleased to be called in this debate in order to discuss the question of financial assistance to Opposition parties. I come to this debate fresh as I am a new Member of this Parliament. I did not have the opportunity to participate in the debate on 20 March 1975. However, I read the reports of it with great interest. I have listened closely tonight to my hon. Friends the Members for Burton (Mr. Lawrence) and Orpington (Mr. Stanbrook). I believe that they have the better of the argument. Having listened to the entire debate, I believe that those who oppose the motion have the better of the argument.
  The main reason why I believe that the House should reject the motion was touched on by the hon. Member for Islington, South and Finsbury (Mr. Cunnngham) in supporting it. The motion is not dealing so much with principles, which were debated in March 1975. We are debating uprating the figures to take account of increased costs.
  At the beginning of the debate, Mr. Deputy Speaker, you drew our attention to the error. We are talking about £1.925 for every 200 votes. I have not used a slide rule, calculator or abacus to do the calculation, although before the end of the debate we may need an abacus. However, I do not believe that that error would have affected the sums payable to the main Opposition party—namely, £290,000—although it would have affected the sums payable to minority parties, of which there are a number.
  It is strange that we should be considering uprating the figures to take account of inflation. I am driven to consider why we have had such high inflation under the previous Government and

  957
  this one. The sooner the rate of inflation comes down, the better for all of us. Why is inflation so high? Some hon. Gentlemen suggest that it is all the fault of the wicked capitalists and entrepreneurs, who set the price of their goods and services higher than the market can bear. Some would believe—although, I hope, none in my own party now—that in some way trade unionists are responsible for inflation. It seems to me that neither of those groups is responsible for the inflation that is causing the pressure on the figures in the formula. We must look elsewhere for the motive force responsible for the increase in the figures.
  There are those in all parties who say that the motive force is the price of oil and that by increasing it the oil sheikhs are pushing up other prices, including the prices of the goods and services on which the Leader of the Opposition and his colleagues are spending their money, to expand their opposition in the House. I shall later dwell on whether the money is well spent. We must examine public expenditure thoroughly, looking not only at the quantity—and I do not believe that to date we have had the figure for the quantity of public money that is to be spent—but at the quality.
  I take the silence of the House to be consent—
  Sir William Clark: We are listening with avid interest.
  Mr. Proctor: I am sure that my hon. Friend will support my central point about inflation and will agree with my right hon. Friend the Member for Taunton (Mr. du Cann) that inflation is not caused by wicked capitalists and entrepreneurs or by wicked trade unionists. Neither of those categories is providing the upward force, and nor are oil prices. We cannot look either to the scapegoat of the Government of my right hon. Friend the Member for Sidcup (Mr. Heath) in the early 1970s—that it was something peculiar to do with world food prices.
  The cause of inflation, the real motive force responsible for the upping of the figures in the motion, is the very politicians who at one time or another will benefit from the motion. I view that fact with a great deal of concern and suspicion.
  958
  If as politicians we can index-link our own error and our own inability to control inflation—the major economic issue of our time, as the Conservative Government rightly see it—and if we can isolate ourselves from the pressures upon us, we shall have less incentive, less of a motive force ourselves, to control the very inflation of which these figures are the outward sign.
  Mr. Michael Brown: My hon. Friend has made a valid point about indexation. The argument has been put forward by both Front Benches that this is almost a technical motion to index according to inflation. Will my hon. Friend consider the position that faces both parties outside the House? From my knowledge of the Conservative Party's finances, I am conscious, at a time of inflation, that the party is subject to inflationary pressures. We have not been able to obtain income by taking advantage of indexing, because we are dependent upon voluntary contributions. I suspect that the Labour Party treasurer will report to the Labour Party conference that inflation has eaten away that party's funds. It is a valid point.
  Is my hon. Friend aware that both political parties outside the House, at a time of inflation, have to cut their coat according to their cloth and cannot resort to the magic formula, as the Leader of the House is doing tonight, of indexation in order to solve our problems?
  Mr. Proctor: I am thankful for that intervention, particularly because this is the first time that I have followed my hon. Friend in such a debate and because we are the first graduates of the university of York to serve in this House. I have been listening—
  Mr. Deputy Speaker: Order. The hon. Member for Basildon (Mr. Proctor) must relate his arguments to the motion on the Order Paper. The university he attended has nothing to do with it.
  Mr. Proctor: I am sorry if I have tried your patience, Mr. Deputy Speaker, but this was a first opportunity and I thought that it was a polite and courteous reference to the intervention of my hon. Friend. I fully accept the points he made.
  However, I turn to the second major reason why it is dangerous—
  Mr. George Cunningham rose—
  Mr. Proctor: I shall give way in a moment. I wish to proceed to the second part of my speech.
  Are political parties and politicians popular? Political parties, it seems to me, are not the most popular bodies in our society. Therefore, I think that it would be wrong for the State to continue to give even more money to these unpopular creations. On grounds of unpopularity—
  Mr. Cunningham: Will the hon. Gentleman give way?
  Mr. Proctor: In a moment. On those grounds, I would argue that no money should be given to these unpopular and extraordinary beasts in our society.
  Mr. Den Dover: Before my hon. Friend leaves the issue of inflation, I should like to ask a question. Was it not in February 1978—three years after the original allowances were set—that they were increased, and then by only 10 per cent.? We heard that from the Leader of the House. Twelve months later, under the Labour Government the rate of inflation came down. Would it not be better and more sensible to throw out this measure and rethink this matter in the next Session rather than approve increases of between 75 and 80 per cent.? There is a direct correlation.
  It is entirely wrong if we increase the allowances to Opposition parties and gaily increase other allowances and public sector pay. We cannot hope to bring down inflation if we embark on that course. Does my hon. Friend agree that it would be far better not to agree to these vast increases and to think again? Surely, it would be better to let the House have time to consider the issue during the Summer Recess. We can hope to bring down inflation by reducing increases of this sort.
  Mr. Proctor: I agree with my hon. Friend. I am interested in his suggestion that any increase of the allowances should preferably be linked with a future general election. I said at the outset that in principle I am against any payment to Opposition parties, whichever parties they may be and however many they may be.
  When the debate on this issue took place on 20 March 1975, a distinguished
  960
  Labour Back Bencher, the hon. Member for Newham, North-West (Mr. Lewis), moved an amendment that was accepted by the Chair. One might say with hindsight that it is unfortunate that I or one of my right hon. or hon. Friends did not consider tabling a similar amendment. The effect of the amendment was that the resolution should take effect after the general election, namely, after October 1974—
  Mr. Deputy Speaker: Order, It would be quite wrong to go back to a debate that took place some years ago. We are dealing with the motion on the Order Paper.
  Mr. Proctor: I am dealing with the motion before us, Mr. Deputy Speaker. I am suggesting that it might be a good idea if the Government, even at this late hour, were to think again about whether they should bring forward the motion. They might consider introducing it after the Summer Recess with a view to its taking effect after the next general election. That would provide our constituents with an opportunity to consider the view of our stance on the propositions that are set out in the motion.
  Mr. Nicholas Baker: Does my hon. Friend recognise that some of us have voted down the indexation of increases in the allowances of Members of Parliament in various forms? That is what I find obnoxious about the motion. Will he address his remarks to the idea that politicians, whether they happen to be in Opposition now or on the Government Benches and thus potential Opposition Members, should be prepared to be judged by results? If they succeed in reducing inflation, they can be prepared to accept some of the benefit.
  Mr. Proctor: I thank my hon. Friend for his useful, helpful and precise interruption. I have joined him in voting down measures of indexation of the sort that he mentioned. If our constituents could pack the Strangers Gallery tonight, they would take rather a dim view of the motion when inflation is still high. The date of I July is a rather odd one for the motion to take effect. It might have been more appropriate to have selected the beginning of next year, when inflation will be far lower than it is now.
  Mr. Keith Wickenden: There are many of us who accept the basic dislike of a taxpayers' subsidy to political parties no matter how it is dressed up. Nevertheless, we feel some diffidence about the fact that when the Conservative Party was in Opposition it took the money offered to it by the Labour Government. Can my hon. Friend help people like me who were not Members of the House at the time to know how we can salve our consciences?
  Mr. Proctor: My hon. Friend, like myself, was not a Member of Parliament at the time of the March 1975 debate. We were not able to participate. Opposition Members shouted during the speech of my hon. Friend the Member for Orpington, asking whether he had voted in that debate against the principle of financial assistance to Opposition parties. My hon. Friend had a momentary lapse of remembrance. I have the Division list here. I can assure my hon. Friend that he registered two votes on that occasion against the principle in two separate Divisions.
  I see the difficulty, raised by my hon. Friend the Member for Dorking (Mr. Wickenden, for hon. Members who served in the last Parliament. It is not a difficulty that affects 80 or so of the newer hon. Members who are sitting in this Parliament for the first time. Nor should it be a difficulty for certain members of the present Administration. It should not be a difficulty for my hon. Friend the Member for Blaby (Mr. Lawson), the Financial Secretary to the Treasury, who, correctly on that occasion, voted against the principle of the measure. I am sure that he will join us tonight. Six other present Government Ministers went into the Division Lobby against the matter on principle.
  My central argument is whether the increase of financial assistance to Opposition parties will be well spent. If public money is being spent, it is necessary to look at the record of the Labour Party in Opposition during the last 17 months. There may have been a few hiccups this week when Labour Members knew that the recess was creeping up and were able to stomach one or two late nights. For the rest of the time, it has been rather milk-and-water stuff. Labour Members have spent most of their time in Opposition
  962
  opposing not the Government but each other. That seems extraordinary.
  My hon. Friend the Member for Orpington raised the important point of public money being spent on parliamentary duties as opposed to party duties. He was eager to gain a distinction—
  It being one and a half hours after the commencement of proceedings on the motion, the debate stood adjourned.
  Debate to be resumed this day.

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

    COMPETITION
    That the Anti-Competitive Practices (Exclusions) Order 1980 (S.I., 1980, No. 979), a copy of which was laid before this House on 21 July, be approved.—[Mr. Waddington.]
    Question agreed to.

  PAUL LEHAIR (DEATH IN CUSTODY)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Waddington.]
  12.13 am
  Mr. Fred Silvester: I wish to raise the question of the death of Paul Lehair, the son of a constituent of mine. On 19 June 1979, Paul Lehair, a young man aged about 20, was convicted of taking away a motor vehicle, theft and breach of a suspended sentence connected with theft. He was sentenced to six months' imprisonment and taken to Wormwood Scrubs. Five days later he was dead.
  Paul Lehair was placed in a cell with Vincent Smith. Smith had been sentenced to life imprisonment at the Northampton Crown court for the murder of Nicolais Feodorus, who had been attacked by Smith on a park bench in Oxford and stabbed and beaten to death. Although Smith pleaded not guilty, the court found otherwise, and by the time Paul Lehair joined him in his cell he had served 18 months of his sentence.
  At Smith's trial for the murder of Paul Lehair, the prison doctor, Dr. Elmo Jacobs, said that Smith had a history

  963
  of psychiatric problems since he was eight. He was an adopted child of a couple who claimed that he had been in trouble since he was a child. He was in and out of institutions most of his teenage life because he was unmanageable in ordinary schools. Dr. Jacobs, according to the press at the time, said:
  "Smith has a severe and persistent disturbance of personality with abnormally violent conduct which diminishes responsibility. This is called a psychopathic disorder."
  Almost immediately upon his first committal to prison, Paul Lehair was placed in the cell of a young man aged 20 who had a long and known history of psychopathic disorder and was in prison for a brutal murder.
  The character of the man was known to the prison authorities apart from his original offence. At the trial it was stated that a senior prison officer had expressed the fear that Smith would
  "perpetuate acts of violence which could result in the death of either a prison officer or an inmate."
  Smith apparently complained of homicidal tendencies in 1978 and again in 1979. Defence counsel at Smith's second trial, apparently without challenge, stated that
  "there was a series of acts of violence on the part of Smith, both concerning prison officers and other prisoners at Wormwood Scrubs. In one he started smashing things up and attacked a prison officer with a fork."
  Three days after Lehair joined him, Smith told the prison authorities that he disliked Lehair
  "because he did not wash"
  and asked for him to be moved. Although it was said at Smith's trial that plans were made to move Lehair, in fact nothing was done in time and on the night of 23 June 1979 Smith strangled Paul Lehair with the sleeve of his pyjamas.
  Paul Lehair's mother—Mrs. Irene Travis—is a constituent of mine. She came to see me after Smith's trial.
  Before continuing with the story, I want to make a general point. Nobody connected with this debate wants to harass the prison staff. I understand the difficulties that they have in making a judgment, particularly in overcrowded conditions. We have therefore throughout this matter tried to conduct our inquiries
  964
  quietly. We made no attempt to raise the matter while it was sub judice.
  Smith was convicted on 28 January and his solicitor, Mr. Geoffrey Miller, got in touch with me on 31 January. Since that time we have both been pressing the Home Office on a number of occasions for answers to our questions. We have accepted the need not to be unfair to those making the inquiries and we have kept our representations private, but we have got very inadequate results. Neither the solicitor nor I got any answers, and Paul's mother has heard nothing since immediately following his death.
  On 5 June I was getting nowhere. I remind my hon. Friend the Minister what this means. Following the murder last year there were extensive enquiries. At Smith's trial the inquiries were still not complete after six months. The recorder at Smith's trial then asked the Home Office
  "to look very carefully into this matter."
  The Home Office said that it would take note of the recorder's remarks.
  I had been promised a reply, which had still not materialised 12 months after the murder and five months after the trial. After the Under-Secretary's latest stonewalling letter, which I received on 9 June, I rang his office and made clear that if I did not receive a reply the following week I would raise the matter in the House. The reply came the following week, on 17 June. I may be forgiven for believing that that was a strange coincidence.
  The delay that accompanied this inquiry inevitably raises suspicions that there was something to hide. When it arrived, the answer said that the investigation was complete and—I quote from the letter:
  "We have come to the conclusion that it could not reasonably have been foreseen that Vincent Smith would behave as he did and we are satisfied that the prison authorities acted reasonably in deciding they should share a cell."
  My question to the Home Secretary in the House on 24 July received the same reply.
  I am here tonight to say that that reply was quite unsatisfactory. According to my hon. Friend's reply of 21 July, the governor, in deciding who should share a cell, takes account of all relevant information, including the inmates' history and character. I understand that a

  965
  newcomer would normally be placed in a position—possibly in the prison hospital—for his character to be assessed. It would be most unusual to allocate a young man on first sentence for a minor offence to the cell of a man with a record since the age of eight, and even more unusual to put him in a cell with a man with pronounced and well-known violent tendencies. Even if it were not expected that he would murder again, it is inevitable that we should question whether it was a normal and reasonable coupling. In this case, apparently almost immediately, the decision was taken to mix Smith with Lehair—in other words, to mix murder with a minor offence.
  I realise that my right hon. Friend the Home Secretary may be receiving advice to protect his legal position, as Mr. Travis's solicitors have claimed general damages and some minor damages in connection with the funeral. It is inevitable, however, that the stone-faced attitude of the Home Office in this matter should make Mrs. Travis think in terms of compensation, especially in view of the distress that she suffered immediately after the death. At that time, although it was subsequently explained, she was distressed by the non-attendance at the funeral of a prison representative and by the way in which Paul's belongings were treated. But compensation is not the main issue. The central issue is that Mrs. Travis has had no reasonable explanation. Indeed, apart from the original letter from the deputy governor, she has had no word at all.
  I hope that my hon. Friend the Minister will use this opportunity to answer some questions. How can he claim that it is reasonable to place a new and minor offender in the same cell as a person with a record such as that of Smith? Does he still maintain that view? If so, is he saying that it would be allowed to happen again? Will he publish the report, or at least describe its findings tonight, instead of hiding behind the straight bat that we have had from the Home Secretary so far? What was the nature of the inquiry, and what changes have happened since, both to the procedures and to the prison staff? Will my hon. Friend reconsider his attitude towards the claims for compensation to Mrs. Travis?
  The case of Paul Lehair is a deep personal tragedy. It is also a matter of public concern.
  966
  No one wants to engage in a witch hunt, but if we as a party and personally are to give strong support to the police and the prison service, the other side of the coin is also important. We must make certain that remedial action is taken when things go wrong. I hope to hear from the Minister tonight that that has happened.
  12.24 am
  The Minister of State, Home Office (Mr. Leon Brittan): I share the deep concern expressed by my hon. Friend the Member for Manchester, Withington (Mr. Silvester) about what occurred in this case. It is always extremely difficult to understand and to accept the view which may be expressed that when a tradgedy of this kind occurs it does not necessarily follow that individuals or even necessarily the system are at fault. Therefore, I do not criticise my hon. Friend for the strong terms in which he has spoken.
  However, I am afraid that I am not able to accept that the attitude of my noble Friend and others who have been dealing with this matter can fairly be described as stone-faced. That is not so at all. There has been a thorough investigation into what has occurred, and I welcome the opportunity of setting it out as I see it, although I accept that it represents a viewpoint to which my hon. Friend, at least at first blush, will not readily adhere.
  The basic facts of the case are that on 19 June 1979 Paul Lehair was sentenced to six months' imprisonment for taking and driving away, theft, breach of a suspended sentence and having articles in connection with theft. He was taken to Wormwood Scrubs young prisoner wing and placed in a cell with Vincent Richard Smith, another 20-year-old young prisoner who was serving a life sentence for murder. On the morning of 24 June, Vincent Smith rang his bell to use the toilet. He was let out of his cell, went to the toilet and then told an officer that there was a body in his cell. Paul Lehair was found to be dead, with bruising around his neck and blood on his face, ear and pillow. Vincent Smith was subsequently charged with murder. On Monday 28 January 1980 he was found guilty of manslaughter, on the ground of diminished responsibility, by strangling Paul Lehair and was committed to Broadmoor.

  967
  Vincent Smith's previous history and behaviour are clearly quite central to this case. He received his sentence of life imprisonment for robbery and murder in 1977. He was sent to Wormwood Scrubs young prisoner wing for medical treatment and allocation as a life sentence prisoner. While there, in April 1978, he attempted suicide; he had also attempted suicide while on remand in custody in 1973. He did not settle easily at Wormwood Scrubs, and he was placed on report for disciplinary offences, including attempted assault on an officer and attempting to disrupt an exercise period.
  In November 1978 he was sent to Aylesbury young prisoner centre, but was returned to Wormwood Scrubs on 5 December to undergo an operation for a self-inflicted injury to his hand and remained there because of continued concern that he would attempt suicide and a consequent need for location in an establishment such as Wormwood Scrubs that had full-time medical cover. Shortly after his return he was segregated from other prisoners in the interests of good order and discipline, on suspicion of bullying another inmate. With the transfer of that inmate, he was returned to normal location and settled reasonably well. Instructions were given that he should share a cell only with an inmate unlikely to be bullied by him or to join him in bullying others. He had a succession of cell partners, none of whom complained of bullying. Paul Lehair was the last of these.
  I turn now to the various questions to which this case has, absolutely understandably, given rise: first of all, relating to the general principles of mixing prisoners together; and, secondly, concerning the particular circumstances of this case.
  First, should Vincent Smith as a life sentence prisoner have been located with a 20-year-old serving a short sentence for non-violent offences? I must point out that Vincent Smith was also aged 20, and it is the practice so far as possible to keep separate from adults all prisoners who are under 21 when sentenced. There are in fact about 100 young prisoners serving life sentences.
  Then there is the question whether life sentence prisoners should be kept separate from non-lifers, short-termers, non-
  968
  violent offenders or conceivably any other category of prisoner. In fact, it is normal practice to mix them only with other long or medium-termers, but where there are particular reasons—such as the need for full-time medical cover in Vincent Smith's case—they may have to be held in accommodation which caters primarily for short and medium-termers. The Government's view in any case is that it would be a mistake to impose any general prohibition on cell sharing.
  The prison system has at any one time to cope with quite a high concentration of people with serious criminal records serving a variety of sentences, and, whilst it is clearly necessary that the weak should be protected, we think that this should continue to be done on an individual basis: through segregation from others in the interests of good order and discipline or for their own protection; by transferring in order to separate inmates who have come into conflict; or by using discretion when placing inmates in cells together.
  A general prohibition based on a simple criterion such as the receipt of a life sentence would not be the most appropriate way of dealing with the problem. There are, after all, life sentence prisoners who do not pose a threat in prison conditions whilst there are other inmates who do, and to establish a rule based on length of sentence or any other indiscriminate criterion would not necessarily prevent another tragedy and, indeed, might obscure the importance of other factors. Therefore, one must consider the propriety or otherwise of the judgment in a particular case rather than work on the basis of a general rule.
  Turning now to the particular circumstances of this case, we have considered with great care, in the light of the governor's report and what was said at the trial, whether the danger presented by Vincent Smith should have been recognised, and appropriate action taken, by prison staff before Paul Lehair died. In so doing, it is obviously right to look solely at what was known about Vincent Smith before the date of the death of Paul Lehair.
  First of all, Vincent Smith was a convicted murderer, having robbed and killed a drunken man in a park in 1977. That he was capable of killing is not, therefore, in doubt. But there are over 1,500

  969
  life sentence prisoners in the prison system, and not all can or should be treated throughout their sentences as likely to repeat within prison offences which may have been committed in a wide range of circumstances and for a wide range of reasons. They are not treated entirely like other prisoners. Each is kept separate from others during the early stages of his sentence while he undergoes assessment. But the decision on the subsequent location and treatment of each of them is based on his general character rather than his offence alone. I believe that that is the right approach to adopt in such a difficult matter.
  I turn, therefore, to what was known about Vincent Smith's mental state and dangerousness. When he was tried in 1977, a consultant psychiatrist reported to the court that he was suffering from a psychopathic disorder within the meaning of the Mental Health Act 1959—that is to say, he was suffering from a persistent disorder or disability of mind which results in abnormally aggressive or seriously irresponsible conduct. However, the consultant also stated that Vincent Smith was unlikely to benefit from placement in a special hospital. In fact, the question of making an order under section 60 of the Mental Health Act 1959, committing Vincent Smith to hospital, was not raised at the trial. When he was in custody, the medical staff at Wormwood Scrubs considered that he was a psychopath. However, they did not consider that his mental disorder was of such a nature or degree to warrant his detention in hospital.
  Furthermore, the fact that Vincent Smith was a psychopath does not necessarily imply that his condition required his separation from all or some other prisoners. A psychopath is essentially a person who persistently displays antisocial behaviour but which is not necessarily manifested in physical aggression to others. The management of a psychopath varies according to the characteristics of the individual. Although Vincent Smith had certainly shown aggressive tendencies in the early part of his sentence and had committed various disciplinary offences, his last such offence, prior to the killing of Paul Lehair, was in mid-1978. He had been segregated in January 1979 after being suspected of bullying but had given no trouble since then. In
  970
  the light of all the reports made on Vincent Smith in the court and since his conviction, as well as of his behaviour in prison, it was the clinical judgment of medical staff at Wormwood Scrubs, based on their knowledge and experience of this type of inmate, that he was not homicidal in a prison setting.
  In prison, therefore, Vincent Smith was undoubtedly aggressive and troublesome, a nuisance and with a tendency to lead astray or to bully other inmates. But I am afraid that such behaviour is not uncommon amongst his age group in custody, and his conduct was not such as to suggest to the prison authorities that he would go beyond this fairly well-established pattern seriously to injure or kill somebody. That that judgment proved wrong with hindsight does not mean that it was not well founded, made in good faith and reasonable to make at the time.
  I turn now to what consideration was given to Paul Lehair's safety, in the light of what was known about Vincent Smith, before they were placed in a cell together and to what was known of relations between them after this was done. As I have said, Vincent Smith shared his cell with a succession of prisoners, and none complained. Paul Lehair was chosen to share his cell because of his size—he was 6 ft 3 in tall—because he was mature and because he was not institutionalised. It is not the case that no thought was given to his safety.
  In the few days that these two prisoners shared a cell, there were two incidents which assumed some significance subsequently. The first was that on the day before Paul Lehair's death. Vincent Smith requested a change of cell mate, making offensive remarks about Paul, although not threatening violence. The officer to whom this request was made said that this would be arranged on the Monday morning, and Vincent Smith seemed at the time quite content with this. I think that in the circumstances the officer's response was sensible and reasonable. The second incident, on the same day, was that Vincent Smith made remarks to other prisoners indicating that he did not like Paul Lehair and had hostile intentions. Those remarks assumed significance to those other inmates, and were reported to staff only after Paul Lehair's death.

  971
  Therefore, obviously, it could not be taken into account in forming any decision whether they should immediately cease sharing a cell.
  There were, therefore, a whole series of points in this case at which a different decision might have been taken. In view of the tragedy that occurred, it hardly needs underlining that we all wish a different decision had been taken. But the decisions taken by the staff were reached in good faith and after proper consideration of Vincent Smith's history and character as well as the characteristics of Paul Lehair. There was not oversight or failure to think about the consequences, still less any hard-heartedness or lack of concern.
  By the time of Paul Lehair's death, the prison system had had over 18 months' experience of Vincent Smith in custody. There is no doubt that during that time he was a troublesome prisoner, but I am afraid that the trouble he caused was not unusual in a prison setting and, even in retrospect, if one analyses his behaviour over that period of time, troublesome though it was, one sees that it did not betray evidence of homicidal intentions.
  In saying this, the last thing in the world that I want to do is to give the slightest impression of callousness or lack
  972
  of concern about Paul Lehair's death. That would be a totally false impression and does not represent the attitude or position of anybody concerned with this case in the Home Office or elsewhere.
  The whole matter has caused us great concern, but at the same time, great as that concern is, we have a duty to look clearly and dispassionately at what went wrong, however terrible the consequences were. We cannot assume blame where blame does not properly arise merely because of the tragic consequences or decisions which, with hindsight, and only with hindsight, ought to have been taken on a different basis.
  I should therefore like to repeat the regrets that my right hon. Friend the Home Secretary has already expressed about Paul's tragic death. If I may say so, I welcome the opportunity of adding my own condolences to his family. However, I must repeat that, in the light of an assessment of the situation that I have tried to give to the House with candour, I cannot accept that the Home Office is at fault or legally liable for his death.
  Question put and agreed to.
  Adjourned accordingly at twenty minutes to One o'clock.

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Preamble
(Sitting in the Royal Gallery)
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chester.

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 thank you most sincerely for your loyal and dutiful Address on the occasion of the 80th Birthday of Her Majesty Queen Elizabeth the Queen Mother.
"I am deeply moved by your wish to be associated with the congratulations offered to Her Majesty Queen Elizabeth the Queen Mother on this happy occasion and by the warmth of your tributes to her".

MESSAGE FROM THE QUEEN MOTHER
The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, I have to inform your Lordships that, together with the most reverend Primate the Archbishop of Canterbury, the Lord President, the Lord Aberdare, the Lord Byers, the Baroness Hylton-Foster, and the Lord Peart, I, pursuant to the Order of the House, waited upon Her Majesty Queen Elizabeth the Queen Mother on Tuesday last with the Message of this House of 4th August, and that Her Majesty made the following reply:
"My Lords and Members of the House of Commons:
"I thank you for your messages of congratulations on my 80th birthday and I am deeply touched by the very kind sentiments that you have expressed.
"Eight decades is certainly a considerable span. During this time a
1586
great deal of history has unfolded and in many ways our lives have been transformed. New discoveries, new inventions, new outlooks continually challenge the established order. But I am happy to feel that there is one constant factor: the good sense, loyalty and patriotism of the people of our land.
"During the war The King and I, on our visits round the country, were sustained and inspired by the steadfastness, courage and compassion shown by our people. It is encouraging to find today that in our schools and universities and among the younger generation these same qualities live on.
"I feel deeply grateful to have been given the opportunity to serve our beloved country in some small way and through the years, in peace and in war, I have been always helped and uplifted by the love of my family, the loyalty and understanding of our people, and by my faith in Almighty God.
"Once again, may I thank you all from my heart for your very kind messages on my birthday."
Signed, Elizabeth Regina.

A.33: HOCKLEY CROSSROADS IMPROVEMENT
3.11 p.m.
Lord MONTAGU of BEAULIEU: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will give top priority consideration to the construction of a flyover at the traffic light controlled crossroads on the A.33 Winchester by-pass to avoid even greater and continuing congestion following the completion of the M.3 extension, the much welcomed benefits of which will be nullified unless this bottleneck is eliminated en route to the major port of Southampton.
Lord MOWBRAY and STOURTON: My Lords, my right honourable friend the Minister of Transport recognises the urgent need for relief at the signal-

1587
controlled crossroads on the Winchester by-pass at Hockley. He will shortly be promoting an improvement scheme within the existing highway boundaries. This will provide extra capacity to alleviate the present problem and the traffic conditions that will arise when the planned M.3 motorway extension from Popham southwards to Bar End is in use. This interim improvement will not take the form of a flyover. The possibility of providing a flyover in a new permanent junction will be very carefully considered in the fresh study that is to be made of possible schemes for further improving the trunk route south of Bar End.
Lord MONTAGU of BEAULIEU: My Lords, I thank my noble friend for that reply. Is he aware that this bottleneck has been a problem for many years, and is quite separate from the extension of the motorway? In the meantime, could my noble friend also look into the possibility of a better phasing of the lights while this work is being done?
Lord MOWBRAY and STOURTON: My Lords, better phasing of the lights is, of course, a matter for the appropriate authorities, in this case the Department of Transport and the police, and it will certainly be considered as and when appropriate. At the moment, there are two "Ahead" and one "Right turn" lanes in each direction. In the next two years there may be four "Ahead" lanes in each direction and one "Right turn". When that happens, the phasing of the lights will become much more appropriate, and will be done.
Lord MAYBRAY-KING: My Lords, when the noble. Lord is considering this matter, will he remember that open, free-and-easy access to the important port of Southampton from all over England, leading to Europe, is a vital matter, both for England and for Southampton?
Lord MOWBRAY and STOURTON: My Lords, I can assure the noble Lord, Lord Maybray-King, that not only the M.25 but the London-Southampton Road is of the utmost importance to this country, and that they both have the highest priority that this Government give to road building.

THE RENTON REPORT: RECOMMENDATIONS 13 AND 15
3.14 p.m.
Lord RENTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will now request Parliamentary Counsel to act upon Recommendations (13) and (15), dealing with statements of principle and of purpose respectively, of the report of the Committee on The Preparation of Legislation (Cmnd. 6053), with a view to better expressing the intentions of Parliament and the better understanding of statutes.
The LORD CHANCELLOR: My Lords, Parliamentary Counsel are well aware of these recommendations, and, subject to drafting instructions by responsible Ministers, will act on them.
Lord RENTON: My Lords, may I thank my noble and learned friend for that very encouraging and satisfactory reply.
Lord HARMAR-NICHOLLS: My Lords, does not this Question and the Answer confirm the impression that some have, that we are either having too much legislation or there are too few draftsmen to deal with it? Will that be kept in mind and perhaps something done about it?
The LORD CHANCELLOR: My Lords, I cannot resist reminding my noble friend of the words of Edward Gibbon, who was faced perhaps in his time with problems not dissimilar to these. He said:
"The experience of an abuse from which our own age and country are not perfectly exempt may sometimes provoke a generous indignation, and extort the hasty wish of exchanging our elaborate jurisprudence for the simple and summary decrees of a Turkish cadhi. Our calmer reflection will suggest that such forms and delays are necessary to guard the person and the property of the citizen; that the discretion of the judge is the first engine of tyranny; and that the laws of a free people should foresee and determine every question that may probably arise in the exercise of power and the transactions of industry. But the government of Justinian united the evils of liberty and servitude, and the Romans were oppressed at the same time by the multiplicity of their laws and the arbitrary will of their master".
Lord ELWYN-JONES: My Lords, while thanking the noble and learned Lord for that admirable dissertation, may I ask him whether it was before or after Edward Gibbon wrote Decline and Fall? My Lords, in spite of the noble and learned Lord's acceptance of the purport of the Question, may I ask whether, if reliance is placed in Acts of Parliament on statements of purpose, there may not be a temptation, as indeed was said by First Parliamentary Counsel in his evidence to the Renton Committee, to call for something which is no more than a manifesto and which may obscure what is otherwise precise and exact?
The LORD CHANCELLOR: My Lords, the same view was expressed even more succinctly by our joint predecessor, Lord Bacon, who said:
"Quantum fieri potest tamen, prologi evitentur, et lex incipiat a jussione".
Lord BYERS: My Lords, may I ask the noble and learned Lord how he obtained the intelligence that these two supplementary questions were going to be asked?
The LORD CHANCELLOR: My Lords, I just guessed.
Lord ELWYN-JONES: My Lords, may I respond to the noble and learned Lord the Lord Chancellor in this vernacular, "Diolch", and refer him to the laws of Howell DDA.
Lord RENTON: My Lords, is my noble and learned friend aware that the more the detail that has to be written into a Bill the more desirable it is to define the purpose underlying that detail so that it may be better understood?
The LORD CHANCELLOR: Yes, my Lords; but this would give rise, of course, to the same dispute as we had the other day. The thing will ultimately depend upon our laws of interpretation. The literalists have won what is virtually a complete triumph, and the purposivists have been in retreat for 300 years.

COMPANY LAW: EEC DIRECTIVE
3.19 p.m.
Lord BOYD-CARPENTER: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action they propose to take in respect of the EEC Fifth Directive on company law.
Lord TREFGARNE: My Lords, the draft European Community Fifth Directive on company law is at present before the European Parliament. The next step is for the European Parliament to give its opinion on the draft directive. Only then will the Commission make a formal proposal to the Council of Ministers. This is not expected for some considerable time, and I cannot predict what action may be needed until the terms of the proposed directive are known.
Lord BOYD-CARPENTER: My Lords, while thanking my noble friend for that reply, may I ask whether the Government appreciate that the introduction of anything on these lines through Community legislation into the company law of this country would have drastic and difficult consequences including, inter alia, the revival of the discredited Bullock recommendation?
Lord TREFGARNE: My Lords, we shall ensure that our preference for the voluntarist approach in this matter is conveyed to those preparing the directive.
Lord BRUCE of DONINGTON: My Lords, is the noble Lord aware that, notwithstanding the fact that this draft has still to be considered by the European Parliament, it has been found in practice that after emerging from that examination it very rarely differs substantially from the original draft? Will the noble Lord give the House the assurance that detailed discussions will be held with all those affected in the United Kingdom, including not only the legal and accounting professions, but industry itself?
Lord TREFGARNE: My Lords, the Government will take steps to ensure that

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they are acquainted with the views of those who may be affected by the directive and will take into account those views when forming their own views to present to the Council of Ministers.

COUNTER-INFLATIONARY POLICY: BORROWING LEVEL
3.21 p.m.
Lord MORRIS: 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 criteria are used to determine a level of borrowing in the private sector compatible with their counter-inflationary policy.
The MINISTER of STATE, TREASURY (Lord Cockfield): My Lords, the achievement of the Government's target for money supply growth is central to their policies for bringing down the rate of inflation. While no target is set for bank lending as such, growth in bank lending to the private sector is one of the factors influencing money supply growth. Accordingly, the Government's interest rate and other policies are directed at ensuring that such growth is compatible with the money supply target.
Lord MORRIS: My Lords, I thank my noble friend for that Answer. While I assume that my noble friend agrees with his right honourable friend when she stated the other day that we will be able to reduce the interest rate when fewer people, including the Government, are living on credit, may I ask the Minister whether he can reconcile that view with the unfortunate practice of the clearing banks of continually, energetically and expensively exhorting people, and particularly the young, to pledge their credit as hard as they can go, bearing in mind the unfortunate economic and social ills that must flow from that practice?
Lord COCKFIELD: My Lords, I appreciate the important point that has been raised by my noble friend. The directional guidance issued by the Bank of England to the clearing banks enjoins
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strict control over advances to individuals to ensure that the needs of priority customers are met. The need for caution was also underlined by my right honourable and learned friend in his Budget Statement on 26th March.
Lord BRUCE of DONINGTON: My Lords, is the noble Lord aware that the events of the last few days, including the publication of the figures, show clearly that Her Majesty's Government have no control over the money supply and, in the words of the Financial Times of yesterday,
"… the Government's complete monetary policy is in a mess"?
Does he also realise that this is further underlined by the fact that only yesterday the Bank of England had to inject a further £500 million into the banking system? When will the Government admit that the whole of their policy in respect to monetary affairs lies in complete shambles?
Lord COCKFIELD: My Lords, not even the noble Lord is entitled to draw such a conclusion. The corset control was imposed by Mr. Healey in June 1978. It greatly obfuscated the position. This now has been swept away and we can see what the true position is. If the noble Lord is interested in pursuing the question of the faults in the Financial Times from which he quoted, I might draw his attention to what appeared in their leader of the same day. It read:
"What has been revealed is not a new horror but a past error. The real economy shows clearly that whatever happened last year restraint is now a fact".
I commend that thought to the noble Lord.
Lord BRUCE of DONINGTON: My Lords, arising out of that reply in which the noble Lord admits that the Government have been labouring under some illusions for, at any rate, the last six months, will he give an undertaking that during the very welcome Recess he and his colleagues will do a bit of homework and get their figures right?
Lord COCKFIELD: My Lords, unlike the previous Government, this Government do not labour under illusions, or for that matter, delusions. It is well-

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known that the money supply growth figures published in the lifetime of the Labour Government were, in fact, substantially understated because of the leakage as the result of the corset control. We were aware of the existence of that leakage and it was one of the factors taken into account in setting the money targets.
Lord ORR-EWING: My Lords, will my noble friend arrange with Hansard to have an asterisk put to the first supplementary which came from the noble Lord, Lord Bruce, because he appears to have kicked the ball through his own goal?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, is the noble Lord aware that, whereas the House expects from him in answer to every question put to him an analysis of the work of the last 18 months of the previous Government, it would greatly appreciate a more constructive and very much lighter approach from him in answer to questions?
Lord COCKFIELD: My Lords, the Government have a constructive policy which I have endeavoured to explain to noble Lords opposite on a large number of occasions and I would recommend the noble Baroness to read what I have said because it sets out the position with great clarity. The Government have a clear policy and they propose to pursue it to success.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, is the noble Lord aware that it is bad enough to have to listen to it?
Lord AVEBURY: My Lords, would the Minister admit that extortionate interest rates are one of the main causes of the large numbers of liquidations in private industry and that in the long run it will be inflationary if domestic companies are supplanted in the home markets by foreign competitors whose prices are not under the control of the Government?
Lord COCKFIELD: My Lords, I do not accept the noble Lord's analysis of the situation. We have made it clear repeatedly that if, for example, there are excessive wage settlements, these result in
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both liquidations and insolvencies on the part of companies and unemployment on the part of the workers who demand these excessive increases. We have no desire whatsoever to see these effects. They are the regrettable consequence of the paramount need to bring down the rate of inflation.
Lord MISHCON: My Lords, is the noble Lord aware that political irony is not acceptable to this House as a substitute for proper, informed replies to questions? Is he further aware—and, if not, would he consult the Equal Opportunities Commission—that controls are not exercised formidably by corsets in these days; and if he is in any doubt about the effectiveness of corsets as a method of control, would he kindly consult his right honourable friend the Prime Minister?
Lord COCKFIELD: My Lords, I have not the slightest doubt that the noble Lord is a greater authority on corsets than I am.
Lord WHADDON: My Lords, is the noble Lord aware that the Government's smugness and self-satisfaction are not shared by Britain's export industries—in which I must declare an interest—since these industries constantly have to fight against an artificially high exchange rate caused by the Government's savagely high interest rates at home?
Lord COCKFIELD: My Lords, the Government are very fully aware of the problems that are faced by export industries. The performance of such industries reflects very great credit on them and they have succeeded in holding their own to a remarkable degree. But I think that it is valid and important to point out to the noble Lord that the greater part of the rise in costs from which the export industries suffer is due to the rise in labour costs.
Lord BESWICK: My Lords, would the noble Lord now be good enough to say in the present situation by what means the issue of credit is to be controlled? If he tells the House that it is by the high interest rates, will he bear in mind that the useful export earning industries cannot afford that high interest rate and it is tending to be the non-useful, the speculative interests, that afford that high interest rate?
Lord COCKFIELD: My Lords, I do not accept this analysis. The important aspect so far as British industry as a whole is concerned, and export industry in particular, is that it should restrain the rise in its costs, and particularly the rise in its labour costs. If this is done it will greatly improve its competitive position.
Lord BESWICK: My Lords, would the noble Lord now be good enough to answer the first part of my question? Will he say, now the corset has gone, what powers the Government have to restrain the issue of credit by the banking system?
Lord COCKFIELD: My Lords, there are various ways that credit is restrained and the most important is the rate of interest which in effect rations the available money to the demand for it. The most important point of all is to bring down the rate of inflation. If we were to bring down the rate of interest prematurely, it would merely result in a further upsurge in inflation. As soon as it is clear that the monetary aggregates are under proper control, reductions in the rates of interest will follow.
Lord LEATHERLAND: My Lords, is the noble Lord aware that I agree with everything he has said in the last answer? But may I also ask him to tell us by what percentage inflation has risen since the present Government came into office? Is it not about 20 per cent.?
Lord COCKFIELD: No, my Lords, it is not. The rate of inflation was on a steeply rising path at the time that this Government took office in May of last year. This is amply demonstrated by the fact that if one compares an annualised six-month figure it is substantially higher than the 12-month figure. The rate of inflation has already begun to fall and we anticipate that it will fall further.
The LORD PRESIDENT of the COUNCIL (Lord Soames): My Lords, we have had a good run on this Question and perhaps it is important, in the interests of the House, that Questions do not turn into a matter of debate.

CIVIL DEFENCE
Lord DENHAM: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m. this afternoon, my noble friend Lord Belstead will repeat a Statement that is to be made in another place on civil defence.

BUSINESS OF THE HOUSE
Lord DENHAM: My Lords, on behalf of my noble friend the Leader of the House, I beg to move the Motion standing in his name on the Order Paper. The purpose of this Motion is to enable the House to consider the Commons reasons and amendments to the Housing Bill in the order in which amendments were taken in this House at the earlier stages. I am sure that the House will wish to proceed in this way. I beg to move.
Moved, That if the Housing Bill is returned from the Commons with amendments and reasons any amendment to Schedule 1 or any amendment proposed in lieu thereof be taken first on the consideration of those amendments and reasons. —(Lord Denham.)
On Question, Motion agreed to.

LOCAL GOVERNMENT, PLANNING AND LAND (No. 2) BILL
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin): My Lords, I beg to move the Motion which stands in my name on the Order Paper.
Moved, That it be an Instruction to the Committee of the Whole House to whom the Local Government, Planning and Land (No. 2) Bill has been committed that they consider the Bill in the following Order, vizt.:

Clause 1

Schedules 1 to 6

Clauses 2 to 46

Schedule 7

Clauses 47 and 48

Schedule 8

Clauses 49 to 62

Schedule 9

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Clauses 63 to 72

Schedule 10

Clauses 73 to 78

Schedule 11

Clause 79

Schedule 12

Clauses 80 to 82

Schedule 13

Clauses 83 to 90

Schedule 14

Clause 91

Schedule 15

Clause 92

Schedule 16

Clause 93

Schedule 17

Clause 94

Schedule 18

Clauses 95 to 98

Schedule 19

Clauses 99 to 106

Schedule 20

Clauses 107 to 109

Schedule 21

Clauses 110 to 121

Schedule 22

Clauses 122 and 123

Schedule 23

Clauses 124 to 131

Schedule 24

Clauses 132 to 134

Schedules 25 and 26

Clauses 135 to 144

Schedule 27

Clauses 145 to 153

Schedule 28

Clauses 154 to 162

Schedule 29

Clause 163

Schedule 30

Clauses 164 to 166.

—(Lord Bellwin.)
On Question, Motion agreed to.

PIER AND HARBOUR ORDER (GREAT YARMOUTH WELLINGTON PIER) CONFIRMATION BILL
Read 3ª.
Lord MOWBRAY and STOURTON: My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Lord Mowbray and Stourton.)
Lord ELWYN-JONES: My Lords, may I ask whether the noble Lord will take advantage of the Recess to visit personally some of the threatened seaside piers that he has recently been praising in the House but failing to provide any finance to safeguard?
Lord MOWBRAY and STOURTON: My Lords, during the summer months it is a custom among us that we take ourselves to seaside resorts; and I, like others of your Lordships, will be doing precisely that. Piers are a prime attraction at such seaside resorts. I can assure the noble and learned Lord that I shall be doing my bit as a private individual, putting my hand in my pocket, buying ice-creams and all the rest. If private individuals will help to keep the piers going, all will be well.
On Question, Bill passed.

HOUSING BILL
Returned from the Commons earlier this day with certain Lords Amendments agreed to; with one other Lords Amendment agreed to with an amendment; with certain other Lords Amendments disagreed to but amendments proposed in lieu thereof and with a consequential amendment to the Bill and with the remaining Lords Amendments disagreed to with reasons for such disagreement; the said amendments and Reasons printed pursuant to Standing Order No. 47.
3.36 p.m.
Lord BELLWIN: My Lords, I beg to move that the Commons reasons and amendments be considered forthwith.
Moved, that the Commons reasons and amendments be considered forthwith.—(Lord Bellwin.)
On Question, Motion agreed to.

COMMONS REASONS FOR DISAGREEING TO CERTAIN LORDS AMENDMENTS, COMMONS AMENDMENTS IN LIEU OF CERTAIN OTHER LORDS AMENDMENTS, COMMONS AMENDMENT TO ONE OF THE LORDS AMENDMENTS AND A COMMONS CONSEQUENTIAL AMENDMENT TO THE BILL
[References are to Bill (280) as first printed for the Lords: the Commons Reasons and Amendments are printed in italics.]

LORDS AMENDMENT
1 Schedule 1, page 95, line 19, leave out from ("dwelling-house") to end of line 23 and insert ("it is designed or specially adapted to make it suitable for occupation by persons of pensionable age, and which it is the practice of the landlord to let for occupation by persons of pensionable age")
The Commons disagreed to the above amendment but proposed the following amendment in lieu thereof:
Schedule 1
2 Page 95, line 23, at end insert—
("5. The landlord has, within six weeks of the service on it of a notice claiming to exercise the right to buy the dwelling-house, applied to the Secretary of State for a determination under this paragraph, and the Secretary of State has determined that the right to buy is not to be capable of being exercised with respect to the dwelling-house; and he shall so determine if satisfied—

(a) that the dwelling-house is designed or specially adapted for occupation by persons of pensionable age; and

(b) that it is the practice of the landlord to let it only for occupation by such persons.")

Lord BELLWIN: My Lords, I beg to move that this House do not insist on their Amendment No. 1 and agree with the Commons in their Amendment No. 2 proposed in lieu thereof.
This brings us back to the question of the right to buy and its application to elderly persons' dwellings. This issue has been thoroughly debated in your Lordships' House at every stage of the Bill. Peers from all parts of the House have been concerned to preserve an adequate stock of housing for elderly people. The Commons Amendment No. 2 on the list of amendments shows that the Government share that concern, and that they have now been prepared to go almost all the way to meet the views expressed in your Lordships' House.
The amendment which my right honourable friend tabled in manuscript yesterday, in lieu of the amendment which was made in this House, has the same effect as that amendment with one important change, and one fairly minor change of wording. The major change which is introduced by the amendment which was passed last night in another place is that, in respect of the new category of old persons' dwellings covered by the amendment, the exclusion from the right to buy will follow the service of a notice claiming to
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exercise the right, and a determination to that effect by the Secretary of State.
I emphasise the words "the new category of old persons' dwellings", because I want to make it quite clear that the effect of disagreeing with Amendment No. I and accepting Amendment No. 2 in lieu would be to reinstate the form of exclusion in paragraph 4 of Schedule 1 to the Bill, as it was before we passed our amendment, as well as to add a new paragraph to the Schedule. In other words, put simply, sheltered housing would be excluded automatically, and other old people's housing would be excluded only following a determination by my right honourable friend.
There is no mystery about the reason for introducing the requirement for a determination before a dwelling is to be treated as exempt. It is intended to remove the scope for reluctant local authorities to exploit the exclusion, by seeking to deny the right to buy, to a large number of elderly persons on specious grounds, when dwellings do not actually fall within the terms of the definition given.
It is also to prevent a reluctant authority from dragging its feet that a time limit is contained within the new paragraph. A local authority will have to make up its mind and apply to the Secretary of State within six weeks of service of the right to buy notice if it wants an exemption under this provision. That is, I suggest, a reasonable time. It gives the local authority sufficient time to establish the facts and apply; and it defines a period which, even though it may be unwelcome to the tenant who wishes to buy, is perhaps not unreasonable.
However, just as conditions are placed on the way in which the local authority must operate, so there is a clear obligation placed upon the Secretary of State. It will not be possible for the Secretary of State to withhold giving a determination if he is satisfied that the application relates to a dwelling which falls within the terms of the paragraph. The amendment provides that in those circumstances he shall so determine; the provision is mandatory upon him. The Government place this obligation upon themselves in order to demonstrate their clear intention as to the manner in which the exclusion shall operate.

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Your Lordships will wish to know what sort of dwelling is likely to be covered by this provision. The paragraph will apply to any dwelling-house which is designed or specially adapted for occupation by persons of pensionable age and which it is the practice of the landlord to let only for occupation by such persons. That definition is taken from the amendment made in this House, with the addition of the word "only" in the second leg of the test which has to be applied.
That addition is the minor change of wording to which I have already referred. It is based on an amendment to our amendment, proposed in another place by Mr. Robin Maxwell-Hyslop and others. A considerable amount of discussion late late night was devoted to this change in wording. It was suggested that the addition of this word meant that it would be significantly more difficult to exclude dwellings intended for old people from the right to buy, and that it would provide my right honourable friend with a ready pretext for declining to make a determination in a significant number of cases. My right honourable friend expressed the view that such an interpretation did not place enough emphasis on the word "practice". He also made it quite clear that it would not be his intention to operate these arrangements in such a way, and I am sure that in the light of the assurances which he gave your Lordships will not wish to pursue this point this afternoon.
For those with some expert knowledge of these matters, it may help if I say that the kind of accommodation which will be covered by Amendment No. 2 will be what is known as Category 1 accommodation. It is the sort of specially designed accommodation which has been the cause of the concern expressed so eloquently in this House and elsewhere. It has been clear for some time that this concern would lead my right honourable and honourable friends in another place to go a considerable way towards meeting the amendment which was made at Report stage in this House. In the course of yesterday they decided to go even further. I do not think I can usefully add much more. I think your Lordships will have the tenor, the feeling of all that has taken place, some of it quite traumatically, in he last day or so. I beg to move.
Moved, That this House doth not insist on their Amendment No. 1 and agree to the Commons Amendment No. 2 proposed in lieu thereof.—(Lord Bellwin.)
3.45 p.m.
Baroness BIRK: My Lords, this is a very happy day for the Lords, and, between ourselves, I am feeling very happy, too. I think we are celebrating the collective good sense of this House, because all the way through the debate on this very long and complicated Bill, from Second Reading until today, the concern about the elderly cut right across party lines. It really is a great pity that the Government were so obdurate for so long, and it was really their own fault that their conversion came so late; but at least it came, and we welcome it. In saying this, I certainly do not blame the noble Lord, Lord Bellwin, who, I should like to think, as today I am feeling rather starry-eyed, was secretly on the side of the angels. If he was not, do not tell me; let me live with my illusions.
The reason so many of us in this House and outside will be so delighted about this amendment is that there is today a terrible danger for old people if anything is done, as would have happened with the Bill as it was before, to erode the housing provision made for them. Under the Bill as it was originally drafted, 199,000 sheltered houses were exempted; now, under this new exclusion, 221,000 more will also be excluded. As the Minister so rightly pointed out, the sheltered housing will be taken within the other housing. Since another place's Select Committee on the sale of council houses has estimated that between five and 10 houses would have to be sold in order to be able to build one replacement, one can see the very great importance of preserving elderly people's dwellings. Within the last week or so we saw an article in The Times—it was followed by a letter—which pointed out the great importance of trying to keep elderly people in their own homes and using day centres and other means in order to keep them out of residential care. I feel that this is going to go a long way towards stopping the reversal of what we are trying to do now.
The Minister referred to the change following the amendment—the change between the Government's amendment

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and the amendment which I moved on Report. Quite frankly, I would have preferred the decision to be left with the local authorities and housing associations. I do not believe that in this instance either local authorities or housing associations would use housing for the elderly in order to push a coach and horses, as the Government evidently felt they would do, through the right-to-buy provisions. I believe that both Conservative and Labour councils feel strongly about the need for housing for old people, are concerned that they have not sufficient housing and are trying to find ways of producing more, and I do not believe that they will behave in this way in this instance. But, since the Secretary of State, in his original Statement yesterday, confirmed that the Government were endorsing the will of this House, and since when I heard him speaking much later, on the occasion when the amendment was debated, he spelt out, in what I felt were extremely generous and sympathetic terms, his intention to honour the letter and spirit of the amendment, I shall certainly accept his assurances. I shall keep an eye on him, of course, to see how it works.
It is now up to local authorities to apply to the Secretary of State when they want the determination for exclusion to be exercised, and I do believe that, with the concern of all authorities, the concession will be widely welcomed. I know that the local authority organisations welcome this, as indeed do the voluntary bodies. I have received, as I suppose have many noble Lords, many letters about the proposed pre-emption clause which the Government had intended to move instead. It was a Conservative Back-Bencher who pointed out during the debate in another place last night that, if the exemption clause had been passed, he believed there would have been no further building of houses for the elderly for a considerable time.
Many amendments were moved in this House, and certain ones which we shall be discussing later were won on Report. If I may speak personally for a moment, this one seemed to me to be the most important. I am particularly pleased that the Government have included in the body of the amendment the criteria that I, my friends and other Members of the House supported on Report. I think this is an area which, as I said then, is not
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within party political territory. It is something that is a social as well as an economic necessity. What happened last night and what we are, I hope, confirming today, demonstrates the importance and the necessity of a second Chamber which takes its function of revising very seriously indeed.
Several noble Lords: Hear, hear!
Baroness BIRK: What has happened is the result of the dedication to this of so many Members of this House, my noble friends behind me, the Liberals, the Cross-Benchers and indeed many Members sitting opposite, who, while they may have believed, as I am sure they do believe, in the Government's Bill and in their manifesto promises on the right to buy, felt strongly enough about this particular exclusion to support us. Therefore it is with great pleasure that I accept the amendment as moved in the Commons.
3.51 p.m.
Lord WIGODER: My Lords, I have been asked specifically by the National Executive Committee of the Liberal Party to say how very greatly they appreciate the vital role played by your Lordships' House in the introduction of this amendment. They particularly asked me to say how impressed they were with the high standard of debate both on this amendment and on the later one moved by my noble friend Lord Banks in relation to option mortgages. They are full of admiration for the fact that on those amendments many of your Lordships found it possible to vote according to the merits of the argument, quite irrespective of narrow party political considerations. They entirely accept that as a result of this amendment and a later one there are going to be substantial safeguards for the elderly in our society.
They recognise too, of course, that had there been in existence the sort of one-chamber government which they have been advocating for the last few years, the assistance that is now going to be given to the elderly and the disadvantages would simply not have been possible. In those circumstances they join with my noble friends on the Liberal Benches who have jointly sponsored this amendment from the beginning in commending it to your Lordships.
Lord HYLTON: My Lords, as I moved an amendment in Committee and also wrote to The Times on this point, I am very happy indeed that the Government have had second thoughts. I think we all have to be grateful to some ingenious and vociferous friends of the noble Baroness in another place for giving the Government that extra nudge. I was sorry my noble friend the Minister felt obliged to talk about local authorities exploiting spurious grounds in relation to the amendment carried in this House.
When we come to Amendment No. 2, I feel that this complicated procedure involving the Secretary of State is perhaps something of a fig leaf to cover his retreat. It seems to me very bureaucratic that the tenant has to serve a notice and that then the local authority has to apply to the Secretary of State. Could it be just jobs for the boys in Marsham Street, I wonder? I also notice that there is no time limit for the Secretary of State to give his reply, whereas there is a time limit on the local authority. I think that is most unsatisfactory.
3.55 p.m.
Baroness DENINGTON: My Lords, as one who was also concerned with an amendment on this particular matter, I want to say how very happy I am at the outcome and that Lady Birk's amendment was infinitely superior to mine. Your Lordships may remember that when I spoke in the Second Reading debate I did support Lady Birk. I am still sad that the Secretary of State seems to be unduly suspicious of local authorities. I think it would be for the good of local government if he could get over that very heavy dose of suspicion. Of course, local authorities that do not share his political philosophy find some of his policies very difficult. I suppose that, basically, they find them so not because of deep party antagonisms, which I think is what the Secretary of State believes, but because those local authority members who disagree with the Secretary of State's policies feel that they are inimical to the interests of the citizens they represent. That is a perfectly proper and understandable point of view for them to take. I hope that the Secretary of State will, as time goes on, be able to realise that his partners in Government—for the local authorities are his partners—
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are not nearly so bad as he still seems to think they are.
I am delighted, as many of your Lordships here this afternoon are delighted, that the Government have revised their views on this matter. I would say that I have been quite astounded myself at the number of telephone calls I had late last night and this morning from outside, from individuals, from housing associations, from organisations and from all kinds of people saying, "What a relief, what a joy!" So I am certain that the decision finally arrived at is giving very widespread satisfaction to people concerned with housing. To me the decision represents the triumph of right and the recognition of national needs over party political considerations. I think that is something of which we all ought to be very proud indeed.
It has been absolutely necessary to safeguard this accommodation at a time when we have an ageing population and when local authorities and housing associations have been worried over the last months, and especially over the last weeks, that they would not be able to fulfil their duties to those who look to them for housing. The outcome finally, as I say, is one of rejoicing for many people and many organisations up and down this country.
Viscount HANWORTH: My Lords, I do not want to spoil the euphoria on this amendment but I think there are some things which we might consider in the future as a result of this. I am afraid I am going to refer to three; it will take me only about two minutes to do it. The first is that I deplore, as I said before, the somewhat doctrinal legislation that the Government have put forward not only in this Bill but again in the agricultural orders and elsewhere. What I think they ought to realise is that unless they are quite certain of making a substantial improvement by the legislation it will take a very long time before any improvement arrives and therefore they should not do it. I also think they have lost a sense of pragmatism. Finally, I would ask them to consider whether, in the present state of the nation, some of their legislation—we are all agreed that there is too much legislation—is too detailed to be acceptable. Is it not simply fiddling while Rome burns?
4 p.m.
The Lord Bishop of GUILDFORD: My Lords, I speak not only on my own behalf but on behalf of my right reverend friend the Lord Bishop of London, who asked me to present his apologies to the House; his name was associated with the amendment when it was debated at the Report stage. Both he and I would like to express our thanks to the noble Lord, Lord Bellwin, for his courtesy in speaking with the bishop about this matter, and also to the Government for having accepted the principle of the Lords' amendment and bringing it to this House today.
I am sure that this decision will be much welcomed by those who have the concern of the aged in their minds, particularly in those areas of the country where the public housing stock is below average. May I say simply that I welcome this change within the Bill because I believe that it sets over against the right to buy the other consideration, that a just society can only be built not just on absolute freedom but when the rights and responsibilities of the whole society are seen in context together as matching each other. I welcome this recognition that society has a responsibility to provide housing for those who are vulnerable in our society and who cannot themselves find the personal resources to achieve the heights of home ownership.
Lord ROSS of MARNOCK: My Lords, it would be churlish of me not to express my delight, as a Scot, that this change has been accepted by the Government. I cannot thank your Lordships very much. You will remember that exactly the same amendment for the people who need the same protection was turned down when we came to the Scottish Bill. To my mind, it was an exceedingly foolish thing to do. The same protection is needed in Scotland as was recognised and accepted for England in this House. I am grateful that as a result of what has happened in another place and indeed, starting with the acceptance of the principle of the amendment we are now discussing for England and Wales, that the Government have thought again and have made a promise that the same protection will be incorporated, not into the Scottish Bill—alas! we cannot do that—but into the new legislation.
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I do not know whether the Government are going to make any statement on what they propose to do about this, but I understand that in the overspill period we are to have a special one-clause Bill to deal with it. I am gratified for my colleagues and all those who took up the cause of the elderly in the Housing Bill. They have every justification for being delighted, as indeed have those who are interested in the future of this House. For myself, my pleasure is deferred but I will support this proposal.
The Earl of MANSFIELD: My Lords, I wonder whether I might just respond to the noble Lord, Lord Ross of Marnock. It would not, of course, be proper for me to comment in any way on the Tenants' Rights, Etc. (Scotland) Bill, which is still before another place. But what I can do is to direct the noble Lord's attention to the Official Report for another place in which my right honourable friend the Leader of the House and my right honourable friend the Secretary of State for the Environment both said their piece. I would also commend to the noble Lord, Lord Ross, tomorrow's Official Report in which I anticipate he may see what my right honourable friend the Secretary of State for Scotland has said.
Lord SANDFORD: My Lords, may I, on behalf of the 330 housing associations that make up the Association of District Councils, say how grateful they are that more than they had hoped for in respect of housing for the elderly has been achieved without their president having to take any active part in the defeat of his right honourable friend on the Front Bench?
Lord HATCH of LUSBY: My Lords, as one of those who participated in drawing the attention of the House to the danger to old people in the context of this Bill, I only want to ask the Minister about one point which disturbs me in the amendment which he has proposed. I join in the general congratulations—well-merited congratulations—to my noble friend Lady Birk and her assistants in representing not just this side of the House but the whole of the House in pushing through this amendment against the will of the Government. I would still have preferred the text of her amendment: in particular paragraph(b),

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to which the noble Lord referred, seems to me to contain some dangers.
I shall be grateful to him if in his reply he will repeat the assurance given by his right honourable friend in another place concerning the inclusion of the word "only", so that the clause which now reads:
"… it is the practice of the landlord to let it only for occupation by such persons.",
will not restrict the operation of the power of the Secretary of State in disallowing what I still consider to be the compulsion to sell rather than the right to buy. As we could not hear very well exactly what assurance he gave, I shall be grateful if he will repeat it to make sure that the inclusion of the word "only" is not going to restrict the exemptions contained in the clause.
Lord SHINWELL: My Lords, is there nobody present who will say a kind word on behalf of the Minister? After all, he has been the most eloquent speaker addressing your Lordships' House on this subject. He has made a most eloquent speech today, advising your Lordships' House to accept a decision which your Lordships made the other day; but the other day he made a quite different speech, just as eloquent, but to the contrary of the speech he has made this afternoon. A Minister who can achieve such a feat is a Minister worthwhile.
It is all very well to extol the virtues of my noble friend Lady Birk in respect of her endeavour in this connection. She deserves the highest credit and our gratitude; and of course we shall not forget that this was a victory for your Lordships' House. Indeed, if I may venture to take the matter a little further, there have been two momentous events in the course of this week: one was our delight in congratulating the Queen Mother on her 80th birthday, and the other was a victory for your Lordships' House against the Government. This really is a momentous item in the history of this country.
Anyhow, I speak on behalf of the Minister: he made a very good job of it. I preferred his speech today to that which he made last week, but that does not matter. You must never look a gift horse in the mouth!
Lord FOOT: My Lords, before the Minister replies, I wonder whether I might be allowed to intervene for one moment simply to say this: I am sure that my brother Michael would be very glad to be associated with all the tributes that have been paid to the virtue of this House this afternoon.
4.9 p.m.
Lord BELLWIN: My Lords, I am not sure that I ought to say very much more; nor do I intend to. I tried, when making my remarks, to do so as clearly and as slowly as I could because I felt that the matter was of sufficient importance that it should be put very, very carefully, and that each word should be so registered as to be understood. Therefore, perhaps the noble Lord, Lord Hatch, will excuse me if I refer him to Hansard for the detail of what I said. I am not sure how to respond to the noble Lord, Lord Shinwell, who I felt meant to be kind, although what he said could have been taken in all kinds of ways. But I accept it in the way that I feel he meant it to be taken.
Other than that, I do not feel that there is anything to add. We are dealing here with the will of Parliament, as it has come to its decision, and we accept that, as I said earlier. What has gone before in debate was always said sincerely, whether on the contrary belief or in favour, and those who spoke against the amendment meant it for the best of the people, as they saw it. It is the will of the majority and so be it. It is not really necessary for me to say any more than that, so I hope the amendment will be accepted.
On Question, Motion agreed to.

LORDS AMENDMENT
3 Clause 15, page 13, line 39, after ("price") insert ("that price to be determined by adding half the difference between the value of the dwelling-house at the time of completion of the transaction and the value at the time the notice exercising the right to buy was served.")
The Commons disagreed to the above amendment for the following reason:
4 Because it would provide for an increase in the purchase price and thereby destroy the purpose of the clause.
4.11 p.m.
Lord BELLWIN: My Lords, I beg to move that this House doth not insist

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on their Amendment No. 3, to which the Commons have disagreed for the reason numbered 4.
Amendment No. 23, as Amendment No. 3 was numbered in another context, would increase the price which a tenant, whose circumstances entitled him under Clause 15 to delay completion, would have to pay. On top of the price based on the value of his home when his notice claiming the right to buy was served, he would have to pay half of the difference between its value then, and its value on the date when the transaction was completed.
The provisions included in the Bill for deferred completion were intended to give extra help to tenants who wanted to move from renting to home-ownership, but whose finances at the time when they served their notices did not give them the right to a mortgage that would cover the purchase price. We felt strongly that people in this position should be shown a little extra consideration, if that would help them to get a foot onto the first rung of the home-ownership ladder. It was a tightly-drawn provision, available —and I must stress that—only where the circumstances of the tenant demonstrated that there was a case for it. No tenant whose income entitled him to a mortgage which covered the purchase price could simply choose to delay his purchase, with the benefit of a frozen price.
For these tenants, who, by definition, in view of their financial circumstances, are on the very edge of being able to buy, delayed completion must provide two things, if it is to be of any value. First, it must provide a definite price, on the basis of which the tenant can lay his plans and make his calculations. The finances of those who qualified would require them to plan ahead very carefully, and it would be impossible for them to plan with certainty, if they did not have a definite target at which to aim. The revaluation and adjustment of the purchase price, called for by Amendment No. 23, would take place only at the end of the process. In the meantime, the tenant would not know what the final price would be, and whether he would be able to afford it. That could mean up to two years of anxiety and uncertainty for the tenant.
Secondly, at the end of the period of delayed completion, and after the revaluation
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which would be required by Amendment No. 23, the tenant may find that, after all his careful planning, the price has once again been pushed beyond his reach. Taken all in all, a provision of that kind could hardly be regarded as being in the tenant's interests. If the principle of delayed completion is to be of any value, the Bill must provide for a fixed price. Anything else would nullify any benefit that the tenant might otherwise have received from such a provision.
Even before the Bill was drafted, the Government's position on this matter was absolutely clear. The principle of delayed completion at a fixed price appeared in the manifesto on the basis of which we came to power. The Bill contained a provision putting our commitment into practice, when it was given a Second Reading both in another place and in your Lordships' House. I do not underrate the strength of feeling of those noble Lords who voted for these amendments on Report, nor the pride that this House rightly takes in its efforts to make improvements, as it sees them, in legislation which comes before us. On very many other matters we have just been discussing your Lordships' view has been accepted. But on this particular issue I must ask the House to accept that Amendment No. 23 would much devalue a provision for which the Government have the clearest possible mandate. I urge your Lordships not to insist on this amendment. I entirely understand the points made on this amendment, but it was narrowly decided in a certain way. In the context of all that is going on, your Lordships may feel able not to insist on your amendment. My Lords, I beg to move.
Moved, That the House doth not insist on their Amendment No. 3, to which the Commons have disagreed for the reason numbered 4.—(Lord Bellwin.)
Baroness BIRK: My Lords, I shall not insist on the amendment, and I put the Minister's mind at rest about that. But I must just comment on this amendment. Again, I shall not rehearse all the arguments that we have gone through, but the amendment which was introduced into this House on Report was quite different from any of the other amendments that were moved in regard to the option. The Minister was quite right when he said

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that there has been strong feeling about this matter, and not only on this side of the House. We feel that, in addition to the discount, the option will give a financial advantage which is quite unwarranted, and will put the purchaser of a council house very far ahead in financial terms of the purchaser of any private property.
What this amendment does is to say that the profit should be split between the purchaser and the local authority, the landlord, which seems to me very moderate. It is really a halfway house. I can only express sorrow that the Government did not see fit to accept our amendment. But I do not think they will go back on their manifesto promise about the option, which would have made the whole matter very much fairer.
On Question, Motion agreed to.

LORDS AMENDMENT
5 Clause 18, page 14, line 44, at beginning insert (" the local authority with the consent of ")
The Commons disagreed to the above amendment for the following reason:
6 Because it would be inappropriate for orders to be made by local authorities rather than by the Secretary of State.
4.17 p.m.
Lord BELLWIN: My Lords, I beg to move that this House doth not insist on their Amendment No. 5, to which the Commons have disagreed for the reason numbered 6.
Amendment No. 29, which is now numbered 5, would allow local authorities to make orders designating areas, in addition to national parks and areas of outstanding natural beauty, within which the restrictions on resale provided in Clause 19 of the Bill would apply. Previously, the Bill was drafted to allow the Secretary of State to designate such additional areas by order, though, in practice, if a local authority feels that an order should be made in respect of all or part of its area, the Government expect it to take the initiative, and tell my right honourable friend why.
The amendment would not add significantly to the Bill, since the order of the local authority would still be subject to the Secretary of State's consent. Further, it would have a detrimental effect, because
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it would complicate administrative procedures and blur lines of responsibility for the operation of the safeguards provided for rural areas by the clause. First, while an order made by a local authority was being put to the Secretary of State, tenants who wished to buy in the area affected would not know whether they were to be able to buy on normal terms or on the special terms provided in the clause. This could deter tenants from applying, or even cast doubt on the status of the applications of those who did apply. To complicate matters yet further, it would still be for the Secretary of State, rather than the landlord, to designate the regions from which future purchasers must come where a locality covenant was to be imposed on right to buy sales. He would also still have to give or withhold consent, where a landlord wished to impose a pre-emption condition rather than a locality covenant.
The amendment would also give rise to confusion, because the orders made by local authorities would not, of course, be statutory instruments, as they would be if they were made by the Secretary of State. This raises a constitutional point, which I do not propose to stress, but it would also mean that there would be no authoritative source readily available outside the local authority, in which an interested third party could check precise boundaries within which a restriction on resale could be imposed.
This clause gives no genuine new element of discretion to local authorities, and I submit succeeds rather in muddying the waters. I would suggest, on administrative grounds alone, that the other place was right in disagreeing with it. I hope your Lordships will accept this explanation, and I beg to move.
Moved, That this House doth not insist on the said amendment to which the Commons have disagreed for the reason numbered 6.—(Lord Bellwin.)
Baroness BIRK: My Lords, I personally disagree with it enormously, but again I am not going to press my disagreement. I disagree with the reason: that it would be inappropriate for orders to be made by local authorities rather than by the Secretary of State. Our amendment, however, says "the local

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authority with the consent of the Secretary of State". Therefore, the local authority would not make an order on its own.
I will not rehearse all the arguments which have been used before—that again this is taking away the autonomy of local authorities, and that the Secretary of State would have the last word on it. In fact, if the amendment were accepted, a local authority would be in the same position as in the amendment which the Government have put forward on housing for the elderly, where the local authority takes the initiative and the Secretary of State determines. That is exactly what should happen here. It should not be, as the Government keep on talking about, a question of the local authority being able to take the initiative. But that initiative should be written into the Bill, so that the local authority can have very much more of a say and be very much more of an equal partner with the Secretary of State than it is. However, we have been through this many times before, so I shall not delay the House any further.
Lord HYLTON: My Lords, I listened very carefully to what my noble friend the Minister said about the technical considerations. I suppose that these may explain the single word "inappropriate" in Reason No. 6. By itself, it looks hardly adequate to have just one adjective as the reason for refusing an amendment. I should like to ask when the Secretary of State will publish criteria by which special rural areas are to be defined. Will these criteria be circulated in draft for comment by interested parties? And when do the Government expect that everybody will know where the areas are and what is to happen? This is going to have quite a considerable effect on the rights of individual, would-be purchasers.
Lord HATCH of LUSBY: My Lords, I heartily agree with the noble Lord, Lord Hylton. I am somewhat puzzled by the Minister's speech in support of the rejection of this amendment, because it is quite different from the reasons which he gave in speaking against the amendment when we were debating it. This amendment was carried by this House because there are many Members of this House who are desperately anxious about
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the preservation of the rural areas of this country and the facilities within those areas. As the noble Lord, Lord Hylton, has pointed out, just to say that our amendment is inappropriate is almost contemptuous of the debate which took place in this House. It is very weak to suggest that the reason for it being inappropriate is that orders should be made by the Secretary of State rather than by local authorities. Nobody has questioned this. The orders will, according to the amendment, be made by the Secretary of State, but on the advice of and at the request of the local authorities, who surely know more about their own areas and their own needs than does the Secretary of State.
As one who has been fighting, all the way through the Bill, for the rights of rural areas, may I ask the Minister once again a question which he has never answered, right from Second Reading onwards: What are the criteria that are going to be used to define a rural area as distinct from a place of natural beauty and the national parks? I hope that since our last encounter the noble Lord has taken the opportunity to visit the Worth Valley which I mentioned to him and which is only 10 miles away from Leeds, where he would have seen exactly what I have been trying to impress upon him: that there are very many areas in this country which could be defined by one person as rural and by another person as urban. May I ask the noble Lord to respond to the request of his noble friend Lord Hylton and to say how the criteria are going to be settled and when they are going to be published.
Lord BELLWIN: My Lords, could I say, first, that I wonder what the noble Lord, Lord Hatch of Lusby, thinks I have been doing since we had the debate to which he refers. If I had had the opportunity to visit my own home or the areas surrounding it I should have been pleased indeed, and I look forward to that pleasure before too long. So I have to tell the noble Lord that I have been unable to take advantage of the suggestion which he made, but that I certainly undertake so to do. I am sure that I shall then concur with him about the pleasantness which I shall see there.
Other than that, I feel as unable to answer some of the other observations

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which the noble Lord has made as I am to answer my noble friend Lord Hylton. However, I will certainly write to my noble friend and, if the noble Lord, Lord Hatch of Lusby, is interested, I will gladly send a copy to him. I have to say, however, that I understand that it is not for me in this House, at least on this occasion, even were I able—which I have said I am not—to go behind the reasons produced by the Committee which deals with reasons in another place, or even to try to give details of their arguments. Certainly at this stage I am in no position to do so. Having said that, I will try to get all the information I can and to send it both to my noble friend and to the noble Lord.
Before I sit down—I do not think we want a long debate—may I say that I understand entirely that this, like other points which have been made, is one of the areas where we disagree. However, as I said earlier and repeat again, we have accepted a great number of amendments. The ones which we did not accept we fought over and then came to a conclusion upon. What we are now dealing with is the residue of that which went to the other place. I hope that in the interests of moving on with the business and knowing that many of these matters were pretty tightly decided at the end of the day—I am not sure that this was one of them; I suspect that it was not—your Lordships will not insist on the amendment.
On Question, Motion agreed to.

CIVIL DEFENCE
4.29 p.m.
The PARLIAMENTARY UNDERSECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, with the leave of the House, I will now repeat a Statement being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement on civil defence.
"On taking office last year, the Government decided to accord high priority to the defence of the nation; and a review of civil preparedness for home defence was set in train so that this
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important element of our defence strategy could be considered as part of the improvement of our general defence effort. The review has been wide-ranging, embracing the responsibilities of many of my right honourable friends as well as my own. As a result I am now able to announce certain immediate steps which the Government judge to be necessary; these will extend as appropriate to Scotland, and my right honourable friend the Secretary of State for Scotland will be responsible for them there. I will also refer to parts of the review which are still continuing.
"I begin by emphasising that, despite the difficulties of the present international situation, the Government does not regard armed conflict with the Warsaw Pact countries as probable, let alone inevitable or imminent, provided that we maintain, as we intend, a firm commitment to peace while ensuring that our defence forces remain balanced and effective. We believe that to be seen to be prepared at home, as well as capable of military deterrence and defence, will make war less likely. Nevertheless, I would remind the House of what my right honourable friend said in paragraph 110 of his Statement on the Defence Estimates 1980. He said that Soviet strategists hold that any war in Europe is likely to escalate into a nuclear exchange, though it might start with conventional warfare, and that the warning time we might receive could be very little. This period of warning might, we believe, be measured in days rather than weeks.
"Against this background the Government consider that an expanded civil defence programme is both prudent and necessary to achieve an appropriate balance in our defence capability. To this end we propose to take the following immediate steps.
"First, with regard to the United Kingdom Warning and Monitoring Organisation, which exists to give the public warning of air attack and, in the event of a nuclear attack, to give warning of the approach of radioactive fallout and subsequently to monitor the intensity of fallout radiation: the organisation will now modernise its communications, replace certain obsolescent

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equipment and improve the allowances paid to the volunteers of the Royal Observer Corps who play a vital part in maintaining the warning and monitoring systems. There will also be additional expenditure on the completion of the organisation's administrative headquarters and the sub-regional headquarters for decentralised government. Extra expenditure will be incurred on the associated communications network, and on improvements to the arrangements for the wartime broadcasting service which, if the need ever arose, would be established to ensure the continuation of public broadcasting facilities even after large scale attack.
"A great deal of civil defence work must be done at local level, and the Government propose to double the money available for this purpose. We will consult the local authority associations about the allocation of additional resources for local planning and for training, and for the adaptation of premises by district councils to complete the pattern of local authority wartime administrative headquarters and communications. Effective civil defence arrangements depend upon co-operation between central and local government. I know that some concern has been expressed about variations in civil defence arrangements in different parts of the country. I am satisfied that the Government have adequate powers to ensure that proper standards of protection are provided throughout the country, and it will naturally be our aim with the local authorities to see that that is done.
"We recognise that many county and regional councils at present lack the resources to plan for community involvement in civil defence below district level. The Government are ready to make more money available to meet this need and will discuss with the associations the most effective ways of doing so. We are anxious in particular to enable local emergency planners to maximise the contribution made by the large number of citizens, both individuals and members of organisations, who wish to add their efforts to civil defence planning on a voluntary basis. Many individual volunteers are
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already active in the civil defence field and certain voluntary organisations are keen to play a fuller part. The harnessing of volunteer effort will be an important feature of our plans and I intend to make a special appointment of a person of high standing for this purpose. There will be a separate appointment in Scotland.
"At the same time there will be greater involvement in civil defence planning and training on the part of central Government departments, the emergency services, the Post Office and the National Health Service. There will be an increase in central training facilities for the senior staff at local and other authorities, including an expansion of the Home Defence College at Easing-wold. There will also be improvements in the arrangements for the operation of emergency port facilities. The stock of emergency fire appliances is being refurbished this year.
"The total additional cost of these immediate measures over the next three years will be about £45 million, and by 1983–84 expenditure on civil defence will have risen from £27 million a year before the review to £45 million a year, an increase of over 60 per cent. The additional costs will be covered by a reallocation of resources within existing programmes and without adding to the total of public expenditure.
"I turn now to certain general policy matters and further studies which are still in progress.
"In the face of an attack, dispersal is not a practicable policy, and in any event no part of the country could be regarded as safe from both direct and indirect effects of nuclear weapons. A study is being made of domestic or family shelters, and advice will be available to the public later this year on a range of structures which would provide improved protection at relatively low cost. This guidance will consist of design outlines for five different types of shelter, and the degree of protection provided by each. We propose that, additionally, a survey of existing structures suitable for communal shelter purposes should be conducted, and we will discuss with the local authority associations how best to do this.

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"We have also decided that it is right for information about civil defence and the likely effects of a future war involving the United Kingdom to be made generally available in peacetime. The public has a right to knowledge of these matters. We have already published Protect and Survive, and we will be examining ways of making more information available.
"The Government will also be studying the role and closer involvement of industry in defence planning.
"Finally, the review has emphasised the need to promote effective coordination at all levels and between all those with responsibility for civil defence. Ministers will be attending some of the conferences already planned in various parts of the country for this purpose.
"Mr. Speaker, the measures I have announced today are an important contribution to improving our civil preparedness: they are positive and cost effective. The Government are confident that they will be widely supported in this House and in the country."
My Lords, that is the Statement of my right honourable friend the Home Secretary.
4.38 p.m.
Lord BOSTON of FAVERSHAM: My Lords, I should like to thank the Minister, the noble Lord, Lord Belstead, for repeating this Statement, and I certainly welcome the review which has been carried out. It was right to carry out a thorough review. The Statement raises a large number of matters which perhaps we could return to on another occasion, so as to go into them in rather more detail.
I would ask the noble Lord, first, would he accept that the preambulary passages in the Statement, that the Government do not regard armed conflict with the Warsaw Pact countries as probable, let alone inevitable or imminent, are significant because they help to put this whole matter in perspective? So, while it would be quite wrong to be alarmist, it is indeed quite right to be prepared. I would ask the noble Lord whether he recalls the words of the noble and gallant Lord, Lord Carver, that in the event of
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a thermo-nuclear attack designed to knock out this country, no civil defence organisation could really achieve much, if anything worthwhile. So the context in which we are talking about the need for effective civil defence here is to limit the harm from the effects of attack, nuclear or conventional, less than that, assuming that is possible and sensible given the possibilities of escalation.
It is right to emphasise the great value of civil defence organisations and the role of voluntary organisations, and I would like to join in the tribute to them, and also to welcome the proposed appointment of a person of high standing to co-ordinate their activities.
I should like to ask the noble Lord, Lord Belstead about the public expenditure aspects of the Statement. He spoke of an increase in the amount, and I am wondering how this compares in real terms with what has been spent previously. The noble Lord the Minister said in your Lordships' debate on 5th March this year that home defence expenditure of £22 million at that time was not high, and it was a third of that in 1968 when civil defence was put on a care and maintenance basis by the previous Government. I am wondering how the new figures compare in real terms with that. Also, are the Government satisfied that the proposed expenditure is in fact sufficient? After all, if the Government consider that this is something which is not only worthwhile but indeed essential, and part of the necessary measures for the defence of the realm, then they should commit the necessary expenditure.
As to measures that people might be encouraged to take for themselves, it is true that there is some room here for self-help, but there is a danger in too much of a do-it-yourself exercise. After all, everyone has equal right to the minimum protection considered to be essential, but there is a danger that if left to themselves those who could least afford it or could least attend to it—and I am thinking of those in poor health, the elderly people, the infirm and the disabled—might be either left out or left with inadequate protection. I am wondering what steps the Government propose to take to ensure that the needy are not left out. Can the Minister give an assurance that the Government are satisfied about that aspect?

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I note that dispersal policy is not dealt with in the Statement. That will come as quite a surprise to many of your Lordships who expressed concern about this matter in the debate in March, and I am wondering whether it is simply that the Government have accepted that no part of the country is safe. I would certainly agree that the fullest possible information should be made available for people generally. The noble Lord, Lord Belstead, has referred to the booklet, Protect and Survive. I wonder whether the Government might consider distribution of a cheaper, leaflet version of that. Also in the debate in March the noble Lord, Lord Belstead, referred to the consideration the Government were giving to up-dating that booklet itself, and I wonder whether that is in fact still in hand. So far as the distribution of a cheaper leaflet version is concerned, I would mention that the GLC and the relevant London boroughs did in fact a few years ago embark on an exercise of this kind, warning people about the measures to be taken and the dangers from flooding. These things need to be done in good time. So far as that exercise is concerned, it is only now, if it is not wholly inappropriate to say so, that the information is beginning to sink in.
The only other point I would put to the noble Lord is whether the Government might consider a regular review of these matters. They are clearly very important. They clearly need to be up-dated from time to time. I am thinking of the example of the Defence Review and whether it might perhaps be appropriate to do a regular review of civil home defence as well, perhaps as part of that, or at any rate every so often.
Lord HOOSON: My Lords, I also think it was sensible of the Government to undertake this review, and particularly I would commend and approve the decision of the Government to modernise and improve the warning and monitoring facilities, if only for the fact that if we are all to be blown to smithereens it will be a comfort to your Lordships and to other people in this country to have at least a little warning of it. Can the Minister say whether the £45 million, which he says will be the annual expenditure after certain steps have been taken, includes expenditure
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on this warning and monitoring system, or whether that is not covered by a different Vote? The second matter about which I should like to ask the Minister is this. He quite rightly said that the public have a right to know about these things. Would he not confirm that no shelter exists that gives any adequate protection from the direct hit of a nuclear bomb, and no shelter exists whereby there can be any sustained protection from the indirect results of a nuclear bomb? It is important that people do not get the illusion that there are shelters or something that enables one to avoid the consequences of nuclear war.
4.46 p.m.
Lord BELSTEAD: My Lords, I am grateful to both noble Lords for the reception they have given to my right honourable friend's Statement. The noble Lord, Lord Boston, asked me about the defence assumptions and mentioned certain words which were spoken in your Lordships' House by the noble and gallant Lord, Lord Carver. Military defence planning is, of course, already based on the assumptions set out in the Defence Estimates for this year, and I would think from what both noble Lords have just said that they agree it is time civil defence planning came in line with those assumptions and those plans; this is what we are endeavouring to achieve in this Statement.
The noble Lord asked me about the total expenditure on civil defence. That in 1983–84 will reach £45 million, a 60 per cent. increase compared with the level of spending before the review was started. The noble Lord, Lord Boston, referred to future plans, wondering whether expenditure was going to be sufficient for future plans. Certainly the last part of my right honourable friend's Statement refers to the future and matters which we are continuing to plan and keep under review. With those plans, of course, we shall continue to keep under review the level of public spending.
The noble Lord then asked me specifically about the position of those who are disabled or old or needy in the event of attack. I think it is right that I should again draw attention to what was said in the Statement about the scope for voluntary efforts in civil defence, which the Government believe is very great. Of

1625
course, in addition to the national voluntary organisations—I particularly have in mind the British Red Cross, St. John Ambulance, and the Women's Royal Voluntary Services, which of course as well as being national operate at local level—we also have volunteers who are working in the field at county level, such as the Devon Emergency Volunteers and Wiltshire County Councils' Community Advisers. It is those organisations and those volunteers who, among others, we believe will particularly help the sort of people the noble Lord has in mind in the event of nuclear attack, in addition of course to other functions which volunteers will be able to discharge. The House might be interested to know something which was not in the Statement, which is that within the money doubled for local authorities—a point which was in the Statement—there will be £1 million extra for the organisation and training of volunteers.
The noble Lord, Lord Boston, asked me about dispersal policy. I think it has to be accepted that no part of the country could be considered safe from both the direct effects of muclear weapons and the result of radioactive fall-out, and this clearly is a serious impediment to mass dispersal schemes. But, of course, that is one of the main reasons why we believe that an expanded civil defence programme is both prudent and necessary.
Finally, the noble Lord asked me about two matters which I am grateful to him for raising. First, he asked about a leaflet version of Protect and Survive which, incidentally, was updated before it was brought out again. He also raised the question of regular reviews. I shall draw both those matters to the attention of my right honourable friend.
The noble Lord, Lord Hooson, asked me specific questions about the ability of shelters to protect those who are in them. I would aske the noble Lord, if he would not mind, to wait until a little later this year when, as the Statement said, we intend to make advice available to the public on a range of structures which could provide improved protection at a relatively low cost. I think that it will be at that moment that one will want to look at the details of shelter design.
Lord CHALFONT: My Lords, I should like to join other noble Lords in
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thanking the Minister for repeating the very comprehensive and important Statement, which I think deserves, before any protracted debate, the closest possible study. Also, I think that it is extremely appropriate that the Minister of State for Defence should be sitting on the Front Bench at this moment, because this is, of course, a matter of national defence. Indeed, there are some who believe that the liaison between the Home Office and the Ministry of Defence on these matters ought to be even closer and better integrated.
I should like to ask the Minister whether he is aware that the Defence Study Group of your Lordships' House recently held a seminar on this subject and that the minutes of that seminar are available in the Library of the House? He may find them illuminating. I should also like to ask the Minister two questions. First, would he not agree that perhaps there is a little too much emphasis on the volunteer aspect of this problem? Home defence, like other forms of national defence, is a highly professional matter, especially in the face of a possible air attack whether conventional or nuclear, upon this country. I wonder whether a sum of £45 million a year, which I understand from the Minister is what we might be spending by 1984, is thought to be really an adequate amount to spend on the defence of these islands, when we are spending something like £9,000 million a year on the rest of our defence budget.
I should like to ask one rather more important question. Would the noble Lord the Minister not agree that there is some danger in talking in such terms as "no civil defence programme can be effective in the case of a nuclear attack" and "no form of shelter can be a sufficient protection against nuclear attack"? Would the Minister not agree that the whole point of having a home defence programme is as a part of our integrated defence policy? Would he not agree that there is no sense in spending £5,000 million a year on a Trident missile, if we cannot ensure the protection of our own population?
Finally, will he take very careful note of the proposal put forward by the noble Lord, Lord Boston of Faversham, in respect of having a regular review of home defence? It seems that that is something

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that ought to be considered in consultation with the Ministry of Defence. I wonder whether the noble Lord can assure us that we may in future have a regular review of home and civil defence to go alongside the regular review of our national defence policy?
Lord BELSTEAD: My Lords, I should like quickly to reply to the points which have been put to me by the noble Lord, Lord Chalfont. Again I am grateful to him for his recognition of the importance of this Statement. I should like to pick up one of the points which he made in the middle of his remarks. The increase in expenditure which is now committed by the Government, by this Statement, is an increase of 60 per cent. by the financial year 1983–84. In the present economic climate that is a significant sum of money, and I think it shows a significant commitment by the Government and, when I say "the Government", I am, of course, speaking for all the Government departments not least the Ministry of Defence.
The noble Lord referred to too much emphasis upon volunteers. I point out to your Lordships that the scope for voluntary effort in civil defence is very great and, in addition to the voluntary organisations which I ventured to mention a few minutes ago, let us not forget that the whole of the United Kingdom warning and monitoring organisation is, so far as the Royal Observer Corps is concerned—the men actually in the field—manned by volunteers. The local authorities who, of course, are charged with a statutory duty under the regulations as regards civil defence responsibilities, are advised by scientific advisers who give their services in a voluntary capacity.
Finally, when the noble Lord said that the defence policy of this country should be an integrated policy, I think that he speaks to the converted when speaking in your Lordships' House. Certainly on behalf of the Government I acknowledge to the noble Lord that we realise—and it lies behind this statement—that to have a credible defence policy it is necessary to have a practical civil defence policy.
Baroness VICKERS: My Lords, from these Benches I should like to thank my
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noble friend for what he has said. Having worked in shelters during the last war I realise what a great benefit they can be. I should like to ask two questions. First, my noble friend has not mentioned anything about deep shelters. Will there be any fortification of deep shelters, which were, particularly in the undergrounds, very advantageous in the last war? Secondly, I was very grateful to him for mentioning the volunteers, and especially Wiltshire where there are already over 2,000 trained volunteers. Will he state that we can have a debate in the near future on this matter, because at present the House is rather thin on the ground and I think that it would be advantageous to hear the views of others and also perhaps get something more in the press which would give more confidence to the general public?
Lord BELSTEAD: My Lords, my noble friend Lady Vickers has raised the very important subject of shelter design to which the Statement does refer, and your Lordships may like to look at the relevant paragraphs. However, my answer to the specific point which my noble friend raised about deep shelters is that, of course, those should certainly form part of the discussions with the local authority associations which the Government have proposed to carry forward in order to see whether existing structures suitable for communal shelter purposes can be repaired. Clearly the point which my noble friend makes should form part of that.
As regards my noble friend's question about a debate, I think that that is a matter for the usual channels.
Lord BROCKWAY: My Lords, would not the Minister agree that his Statement has been more a survey of what can be done, than of what is to be done? Does he really believe that there is any safeguard for the great majority of the population of this country if a nuclear war occurred? Yesterday, the anniversary of Hiroshima was celebrated throughout the world. Has the noble Lord seen the statement of scientists in The Times that missiles carrying warheads could now be one hundred to a thousand times more destructive than the bomb which fell on Hiroshima?

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So far as plans are concerned, is it not the case that in the last world war deep offices were arranged for members of the Government and the Civil Service in London? I went down them and I was astonished by the equipment and the air-conditioning of those offices under Whitehall. Is it not the case that those plans are now being extended outside London? While they might save the occupants for a period, radioactive elements would continue and it would be very unsafe for the occupants to come up for many weeks. What would happen to the administration of the rest of the country? I am asking the noble Lord to appreciate that the solution to this problem is not to concentrate on civil defence, but to concentrate on preventing a nuclear war occurring.
Lord DENHAM: My Lords, before my noble friend replies to the noble Lord, Lord Brockway, may I say that I think we are getting a little out of order over this particular Statement. I do not want to stop short any noble Lord who wishes to ask questions, but if we could keep such questions to questions for elucidation, as is the custom of this House, rather than almost coming to a debate, I think that it would be a very great help.
Lord BELSTEAD: My Lords, if I may reply to the noble Lord, Lord Brockway—
Lord SHINWELL: My Lords, I want to make an observation on what the Chief Whip has just said. It is a mistake, particularly at the latter end of the Session, to begin to discuss what, in the future, may be the most important topic to the people of this country. Obviously, there must be a debate on the Government's review, even if it means the submission, the exposure, of intimate details. There is a tendency on the part of some people to complain that if details are furnished, our potential aggressors may be too well informed. I think we have to take that risk. The next point I want to make—
Lord DENHAM: Question!
Lord SHINWELL: My Lords, the whole purpose of our defence, which was raised by my noble friend Lord Brockway—
Lord DENHAM: My Lords, I do not want to stop the noble Lord, Lord Shinwell, but I wonder whether he would put his comments in the form of a question, because the Rules of Order carefully say that we do not debate on these occasions; we ask questions for elucidation.
Lord SHINWELL: My Lords, I am trying to put a question to the Chief Whip, because it seems to me that it is a mistake to begin with to discuss the matter at this stage. I think that the matter should be adjourned after until the Recess, when we will not only have this review before us, but also the investigations that have been undertaken by the Defence Group of your Lordships' House and by some private organisations outside. These matters must be dealt with. I suggest that rather than delving too deeply into the subject at this stage, we should adjourn it until we return after the Recess, when there should be a full debate on every aspect of the subject.
Lord DENHAM: My Lords, the noble Lord, Lord Shinwell is making exactly the point that I was making, only, of course, he did so with much more skill than I was capable of. This is not the occasion for a debate. No doubt the usual channels will be able to agree a time for a debate after the Recess. But in the meantime it is customary to allow noble Lords to ask questions for elucidation only. I should not like to deprive your Lordships, who need to know one or two points that are not quite clear, of that right. But if they could be as short as possible, we can get on with the very long day's business before us.
Lord PEART: My Lords, on behalf of the Opposition, may I say that I am certain it would be right and proper for us to debate this when we return after the Recess, at a time agreed through the usual channels. We have already had a debate on this and I see no reason why we should not have one later, and so make progress now.
Lord BELSTEAD: My Lords, under the circumstances, perhaps I could reply in only one sentence to the noble Lord, Lord Brockway, I would draw the attention of the noble Lord to a sentence which came quite early in the Statement where my right honourable friend said:

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"We believe that to be seen to be prepared at home, as well as capable of military deterrence and defence, will make war less likely".
Lord DE CLIFFORD: My Lords, may I point out to the noble Lord that the subject of refugees appears to have been omitted from the Statement. In areas on the edge of this subject there is great worry. Perhaps at some future date the noble Lord could elucidate on it. Secondly, in any further matters put forward, will he please include elucidation on how farmers should handle their animals and whether contaminated animals can be milked et cetera. It would be nice to hear that in the form of a Statement.
Lord BELSTEAD: My Lords, this is precisely the sort of matter into which we can look into in more detail if we have a debate when we return after the Recess. The Statement was at pains to point out that these matters cover almost all the Government departments, as many of your Lordships know. I think that the noble Lord will find that we can look into this when we come back after the Recess, as, indeed, we can look into the first point which he put to me to which I think the increased spending by local authorities and voluntary organisations has some relevance.
Baroness HYLTON-FOSTER: My Lords, can the noble Lord say just a few words about what is expected of the three voluntary aid organisations? We understand that we are to man the first-aid posts. However, we have not the remotest idea how many there are throughout the country or their locations. Will the noble Lord be bringing any pressure to bear on local authorities and whatever the appropriate authority in the health service now is to encourage them to tell us what to do?
Lord BELSTEAD: My Lords, I think that it is most important—and I welcome the opportunity to say this in reply to the last question—that the role of the coordinator, whom my right honourable friend will be appointing—which I think will be an extremely important post—is to harness voluntary effort to best effect. I think that that is how I can best answer
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the important question which the noble Baroness has asked me.
Lord DENHAM: My Lords, even at the risk of doing something of which I was accused a few weeks ago, of stopping the noble Lord, Lord Leatherland, in his prime, I can only try to interpret the feeling of your Lordships' House. From where I sit the feeling of your Lordships' House seems to be that we have probably given this matter enough consideration at the moment, so perhaps we could carry on with the business of the day.

HOUSING BILL
5.7 p.m.
Consideration of Commons reasons and amendments resumed.

LORDS AMENDMENT
7 Clause 22, page 18, line 1, after ("so") insert ("and of his reasons for doing so")
The Commons disagreed to the above amendment for the following reason:
8 Because the reasons for intervening are set out sufficiently in subsection (1).
Lord BELLWIN: My Lords, I beg to move that this House doth not insist on their Amendment No. 7, to which the Commons have disagreed for the reason numbered 8.
This amendment would come into play when a landlord had failed in its duty under the Bill towards a tenant who wished to exercise the right to buy, to such an extent that the Secretary of State had decided to serve a notice under Clause 22 invoking his powers to intervene in the sale. The events we are concerned with are therefore in the realm of hypothesis, and I sincerely hope and trust that responsible and proper conduct on the part of landlords will ensure that they remain there. The amendment would require the Secretary of State's notice to include a statement of the reasons for his intervention.
My Lords, what, in fact, would the effect of this requirement be? It would not inform landlords of anything that they did not already know. The reasons for the intervention would lie in the policies which they themselves had been following. They would have received prior notice of the Secretary of State's

1633
intention, and before that the relevant details of the individual case would normally have been canvassed between the local authority and my right honourable friend's department in the course of his preliminary inquiries.
It was rightly suggested at Committee stage that a statement of reasons would not be so necessary if (as will for all practical purposes be the case) there had been consultation beforehand. In fact, the only likely purpose that a statement of reasons would serve for a landlord seeking to deny the right to buy would be to provide a further procedural peg on which it could hang a challenge to the Secretary of State's action, either in further discussion with my right honourable friend's department, who would be acting on his behalf, or in the courts.
My right honourable friend will be anything but eager to use his powers under this clause. There is no question of his doing so arbitrarily, or in any case where there are no strong grounds for believing that the landlord has failed in its duty towards a person validly seeking to exercise his statutory right to buy. If his powers should ever have to be used, we owe it to the tenants concerned to ensure that they have a prompt and effective remedy on which to rely. This amendment would add nothing to the effect of the Bill as it would work in practice, and it would prejudice the interests of the tenant, who would already have suffered delay and frustration enough, without the further difficulties of challenge to, or litigation over the exercise of the Secretary of State's intervention powers.
I ask your Lordships to accept that reserve powers of this kind—unwelcome though their presence in the Bill may be in some quarters—must be capable of prompt and effective use, if they are to serve the purpose for which they are designed. That purpose is simply to ensure that tenants cannot be denied the rights which Parliament has given them in this Bill. That principle has been upheld once again by the disagreement of the Commons with this amendment. In the circumstances, I wonder whether I could urge your Lordships to accept the judgment of the other place in this matter.
Moved, That this House doth not insist on their Amendment No. 7 to which
1634
the Commons have disagreed for the Reason No. 8.—(Lord Bellwin.)
Baroness BIRK: My Lords, I do not intend to insist on this amendment, but I cannot let the opportunity go by without again registering my feeling about this whole clause and the fact that the Government have been so obstinate about quite a simple amendment. All it does is ask the Secretary of State to state his reasons. I shall not rehearse all that I have said before and the Minister has said in reply, but it still seems to me to be important if the local authorities want to challenge what the Secretary of State said in the courts, then, by having his reasons given in writing, they have something to go on. I feel that this is a case of extreme obstinacy. It really is not a matter of principle, but at this point there is obviously not going to be any way of pursuing it further.
On Question, Motion agreed to.
5.11 p.m.

LORDS AMENDMENT
9 After Clause 109, insert the following new clause:
Housing subsidies
("—(1) The provisions of section 24(1)(B) of the Housing Subsidies Act 1967 shall have effect where a person borrows, or two or more persons borrow jointly, from a qualifying lender on the security of a freehold or leasehold estate of the borrower, or of one or more of the borrowers (including an estate held jointly or in common by the borrower, or one or more of the borrowers and one or more other persons) in land in Great Britain, and the following conditions are satisfied:—

(a) that the loan is or was made as part of a scheme under which not less than nine tenths of the proceeds of the loan are or were applied to the purchase by the person or persons to whom it was made of an Annuity ending with his life or with the life of the survivor of two or more persons (in this section referred to as "the Annuitants") who include the person or persons to whom the loan is made;

(b)that at the time the loan is made the person to whom it is made or each of the Annuitants had attained the age of 65 years; and

(c)that the person or persons to whom the loan is made or each of the Annuitants uses the land on which it is secured as his own residence.

(2)The borrower or borrowers may by notice in writing to the lender in such form as the Ministry may direct (in this section referred to as an "Option

1635
Mortgage") elect that the loan shall be subsidised in accordance with the provisions of Part II of the Housing Subsidies Act 1967 and the Option Notice shall be treated for all purposes as if it were an Option Notice made under the provisions of section 24 of the said Act.")
The Commons disagreed to the above amendment but proposed the following amendment in lieu thereof:
10 After Clause 109, insert the following new clause:
Subsidised loans—further application of Part II of 1967 Act
(" .—(1)In relation to a loan which satisfies the two conditions stated in subsections (2) and (3) below Part II of the Housing Subsidies Act 1967 shall have effect as if the loan were for or in connection with one or more of the purposes specified in section 24(1)(b) of that Act.
(2)The first condition is that the loan—

(a)is made part of a scheme under which not less than nine-tenths of the proceeds of the loan are applied to the purchase by the person or persons to whom it is made of an annuity—

(i)ending, if the loan is made to one person, with his life or with the life of the survivor of two or more persons who include that person, and

(ii)ending, if the loan is made to more than one person, with the life of the survivor of two or more persons who include the persons to whom the loan is made; or

(b)was made under such a scheme before the commencement of this section.

(3)The second condition is that each of the persons mentioned in subsection (2) above has attained the age of sixty-five years at the time the loan is made (or, if the loan was made before the commencement of this section, had attained that age at the time the loan was made).")
They have made the following consequential Amendment to the Bill:
5.12 p.m.
Lord BELLWIN: My Lords, I beg to move that this House doth not insist on their Amendment No. 9 but accept in lieu thereof Amendment No. 10 proposed by the Commons, together with consequential Amendment No. 11, which has the effect of applying this provision to Scotland.
My Lords, as the House knows, I announced on 29th July in answer to a Question from my noble friend Lady Faithfull that the Government had agreed that the option mortgage scheme should be extended, in the way proposed in the amendment passed by this House, to provide additional income to elderly non-taxpaying owner-occupiers who buy an annuity on the security of their home.
1636
As the sponsors of the amendment intended, this will help elderly people to remain longer in their own home.
But the amendment passed by your Lordships is incompatible with the statutory framework of the option mortgage scheme. The amendment proposed by the Commons remedies this defect, but fulfils the intention of your Lordships' amendment. I should like to pay tribute to noble Lords from all parts of this House who have argued so forcefully for this concession, and in particular to the noble Lord, Lord Banks, who in the last few months alone, has argued the case for this amendment on four occasions before your Lordships.
The Bill requires a number of detailed amendments to be made to the option mortgage scheme; we shall need to ensure that proper accounting arrangements are made. I cannot yet say exactly when we shall be able to implement the new clause, but I can assure your Lordships that it is our intention to do so as soon as possible. I beg to move.
Moved, That this House doth not insist on their Amendment No. 9, but agree to the Commons Amendment No. 10 proposed in lieu thereof.—(Lord Bellwin.)
Lord BANKS: My Lords, I should like to thank the noble Lord, Lord Bellwin, for his explanation of the new Government amendment and also for his kind reference to myself. I should like also to thank the Government for accepting the intention of the amendment which I moved at the Report stage in this House and which this House approved. The decision by the Government and the approval obtained in another place yesterday for this new amendment has given much satisfaction to all who have wanted to see this reform introduced, both organisations and individuals.
Of course the greatest satisfaction will be felt by those elderly non-taxpaying home owners who will now be helped to secure a modest increase in income, as the noble Lord, Lord Bellwin, pointed out, which will allow many of them to go on living in their own home, as they would wish to do. I am glad that the noble Lord, Lord Bellwin, said that it was the intention of the Government to see that this provision is in operation as soon as possible.

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In conclusion, I should like to thank all noble Lords in all parts of the House who have supported the introduction of this reform.
On Question, Motion agreed to.
Clause 144
11 Page 94, line 25, after ("109") insert ("to")
Lord BELLWIN: My Lords, I beg to move Amendment No. 11 as a consequential amendment.
Moved, That this House doth agree with the Commons in their consequential Amendment No. 11. —(Lord Bellwin.)
On Question, Motion agreed to.

LORDS AMENDMENT
12 After Schedule 22, insert the following new Schedule—
SCHEDULE B

  HOUSES IN MULTIPLE OCCUPATION: MEANS OF ESCAPE FROM FIRE
  Exercise of powers of local authority
  1. If it appears to a local authority that a house which is occupied by persons who do not form a single household is not provided with such means of escape from fire as the local authority considers necessary the local authority may exercise such of its powers under this Schedule as appear to it most appropriate; and it shall do so if the house is of such description or occupied in such manner as the Secretary of State may by order specify.
  Powers available to local authority
  2. —(1) The local authority may serve a notice on any person on whom a notice may be served under section 15 of the Housing Act 1961 specifying the works which in the opinion of the local authority are required to provide the necessary means of escape from fire and requiring the person on whom the notice is served to execute those works within such period, not less than twenty-one days from the service of the notice, as may be specified in the notice.
  (2) The period specified in the notice may from time to time be extended by the local authority.
  (3) Where the local authority serves a notice on any person under this paragraph it shall inform any other person who to its knowledge is an owner, lessee or mortgagee of the house of the fact that the notice has been served.
  3. If it appears to the local authority that the means of escape from fire would be adequate if part of the house were not used for human habitation the local authority may secure that that part is not so used.
  4. The local authority may secure that part of the house is not used for human
  1638
  habitation and serve a notice under paragraph 2 above specifying such works only as in the opinion of the authority are required to provide the means of escape from fire which will be necessary if that part is not so used.
  5. For the purpose of securing that a part of the house is not used for human habitation the local authority may, if after consultation with any owner or mortgagee it thinks fit to do so, accept an undertaking from him that that part will not be used for human habitation without the permission of the local authority.
  6. If the local authority does not accept an undertaking under paragraph 5 above with respect to a part of the house, or if, in a case where it has accepted such an undertaking, that part of the house is at any time used in contravention of the undertaking, the local authority may make a closing order with respect to that part of the house.
  Enforcement
  7. Any person who, knowing that an undertaking has been accepted under paragraph 5 above, uses the part of the house to which the undertaking relates in contravention of the undertaking, or permits that part of the house to be so used, shall be guilty of an offence and liable on summary conviction to a fine not exceeding £50 and to a further fine of £5 for every day, or part of a day, on which he so uses it or permits it to be so used after conviction.
  Consultation with fire authority
  8. A local authority shall, before serving a notice, accepting an undertaking or making a closing order under this Schedule, consult with the fire authority concerned.
  Exclusion of Rent Act protection
  9. Nothing in the 1977 Act shall prevent possession being obtained of any part of a house which, in accordance with any undertaking in pursuance of this Schedule, cannot for the time being be used for human habitation.
  Interpretation
  10. In this Schedule expressions defined in the 1957 Act have the same meanings as in that Act.
  Application and amendment of enactments
  11. Part II of the 1957 Act shall apply to a closing order made under this Schedule as it applies to a closing order under section 18(1) of that Act, but the ground on which, under section 27(2) of that Act, the local authority is required to determine the order shall be that it is satisfied that the means of escape from fire with which the house is provided is adequate (owing to a change of circumstances) and will remain adequate if the part of the house with respect to which the order was made is again used for human habitation.
  12. In section 17(1) of the Housing Act 1961 for the words "either of the two last foregoing sections" there are substituted the words "section 15 of this Act or

  1639
  Schedule B to the Housing Act 1980"and for the words from "in the case of a notice" to "that section" there are substituted the words "in the case of a notice under that Schedule, that the notice, is not justified by the terms of that Schedule".
  13. In section 18(1) of the Housing Act 1961 for the words "section fourteen, section fifteen or section sixteen of this Act" there are substituted the words "section 14 or 15 of this Act or Schedule B to the Housing Act 1980".
  14. In section 61 of the 1969 Act for the words "section 14, 15 or 16 of the Housing Act 1961"there are substituted the words "section 14 or 15 of the Housing Act 1961 or Schedule B to the Housing Act 1980".
  15. In section 29(7) of the Land Compensation Act 1973 for the words "section 60 of the Housing Act 1969 "there are substituted the words "Schedule B to the Housing Act 1980"and for the words "section 60(2) of the said Act of 1969" the words "paragraph 5 of the said Schedule B.".")
  The Commons agreed to the above amendment and proposed the following amendment thereto:
  13 Leave out paragraphs 12 to 14 and insert—
  ("12. Any reference in the provisions relating to houses in multiple occupation (that is to say Part II of the Housing Act 1961, Part IV of the Housing Act 1964 and Part IV of the 1969 Act) to section 16 or Part II of the Housing Act 1961 shall be construed as a reference to this Schedule; but the functions of a local authority under this Schedule shall not be among those referred to in section 70 of the 1969 Act (review of housing conditions by local authorities).")
  Lord BELLWIN: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 13 to the Lords' Amendment No. 12.
  My Lords, you will notice that the new schedule that appears on the Order Paper as Amendment 12 is in fact something that your Lordships agreed at Report stage in this House; what is now for discussion is Amendment No. 13, which is a Commons amendment to that schedule. This is a simplifying and tidying amendment which seeks to ensure that, for the purposes of local authorities' various supplementary powers regarding the service of notices, appeal procedures, enforcement, and so on, the new schedule may be read as an integral part of the main body of HMO legislation in the Acts of 1961, 1964 and 1969. I beg to move.
  Moved, That this House doth agree with the Commons in their Amendment No. 13
  1640
  to the Lords' Amendment No. 12.—(Lord Bellwin.)
  Lord HYLTON: My Lords, I think I should say on behalf of my noble friend Lady Vickers and the right reverend Prelate the Bishop of London that we have made some progress in this matter of hostels and houses in multiple occupation. I should like to ask my noble friend the Minister why we have to have the last sentence in Amendment No. 13, which reads:
  "but the functions of a local authority under this Schedule shall not be among those [that come under] section 70 of the 1969 Act".
  It seems very odd, because that section is a comprehensive section laying a duty on local authorities to inspect the housing conditions in their districts and to make appropriate plans.
  I should have thought that the question of hostels and houses in multiple occupation was very much part of their functions and something where great human suffering can arise and occur. It seems to me strange that this should be taken out. I should like to ask the Minister why this is.
  Lord BELLWIN: My Lords, my noble friend Lady Vickers raised this point at the Third Reading and I explained then, and still stand by my explanation, that we should not be happy with the imposition on local authorities of a double duty. The Government have made it quite clear that we shall be giving consideration as to how my right honourable friend will exercise his order-making power under the new schedule. Any duty laid on local authorities by such an order would be additional to the duty to inspect laid by Section 70, and I therefore cannot see that the latter duty should be imposed.
  Quite rightly, we spoke at some length on this before, because it is a matter of considerable concern. My noble friends Lady Vickers and Lord Hylton are right to be concerned, because this is a matter which, potentially, is fraught with many possible dangers and problems that can arise from what might happen. In saying this now, I hope that I said so with equal concern when it was raised in the earlier stages of the Bill. In the discussions we are having with local authorities through their associations on this matter, there

  1641
  are many aspects of this which it is simply not that easy to deal with. When you are talking about the kind of duties my noble friend suggests we impose as a duty, you are talking about something that has enormous implications. While I am not saying at the moment that that is something that does not have to take place at some time in the future—nor am I saying that it must—I am trying to make clear that one does not go into that kind of situation without the most careful consultation, discussion and consideration. That is the best answer I can give my noble friend.
  Lord HYLTON: My Lords, I am grateful to my noble friend for what he has said, but it seems that the amendment reduces the existing duties of local authorities, and that is what we want to avoid if we possibly can.
  On Question, Motion agreed to.

  CIVIL AVIATION BILL
  5.21 p.m.
  Lord TREFGARNE: My Lords, I beg to move that the Bill be now read a second time. This Bill is in two Parts. Part I gives effect to the policy outlined in another place on 20th July last year regarding the introduction of a private sector shareholding in British Airways Part II gives effect to a number of other aviation policies, the most important of which reflects the change in the basis of the future relationship between Government and the Civil Aviation Authority. I shall start by looking at the Government's proposal to sell shares in British Airways. In doing so, I will seek to define both our long-term objectives and the part which the Bill plays in helping us to meet those objectives.
  Some people talk about the Government selling off state assets as though this were going to be some sort of unsavoury auction or bazaar, with items going to the highest bidder without regard for the future of the industries concerned or their contribution to the economy. Nothing could be further from the truth. Our proposals in respect of British Airways recognise the fact that our national airline has to operate on a fully commercial basis if it is to succeed in an increasingly
  1642
  competitive international aviation market. We therefore plan to put BA on a proper commercial footing so that it can shape its own future, and to substitute the disciplines of the commercial and financial markets for the existing regime of Government control which is applied to nationalised industries. We shall do this by changing the status of BA from a public sector nationalised industry to a private sector company incorporated under the Companies Acts in which a proportion of the shares will be offered to the public. I should make it quite clear that there will be no separate disposal of any part of BA's operations and it will remain our premier national airline.
  It is our firm belief that British Airways will benefit from being given independence from the Government in this way. There may in the past have been good reasons for Governments of the day involving themselves very closely in the affairs of our major airlines; when Imperial Airways was developing an Empire-wide network of air routes, when BOAC was helping the war effort by transporting troops and supplies, when BEA and BOAC were pioneering the use of jet passenger aircraft. In those days it may have been right for the Government to stand in loco parentis. However, British Airways has grown up; indeed, it is now the world's largest international scheduled operator, and I believe it will be well able to stand on its own feet.
  The international airline industry faces perhaps the most difficult and challenging time in its history and I do not pretend for one moment that life for a private sector British Airways Limited is going to be easy. However, I am quite convinced that its success is best assured by being free to respond to the pressures of the market, rather than to the diktats of Whitehall standing in judgement over how the business is run—the amounts it may invest, what aircraft it should buy and the amounts it may borrow.
  I turn to the provisions of the Bill designed to enable us to pursue the policy I have described, and in doing so will outline the Government's views on certain related questions not specifically covered in the Bill. Your Lordships will have noted that there is one provision in Part I of the Bill that is not related to the sale

  1643
  of shares. This is Clause 1, which reduces the public dividend capital of the British Airways Board by £160 million, thereby implementing the undertaking given by the previous Administration in February 1979. The provision completes the new financing arrangements for Concorde which have been agreed with British Airways and which have already been reflected in the airline's accounts.
  Your Lordships will recall that a joint review group was set up in 1978 to consider British Airways' financial structure and concluded that the results of the airline's Concorde operations are not sufficient to cover amortisation of the supersonic fleet or pay a dividend to the Government on the capital used to acquire the aircraft. I do not think it necessary to dwell on this provision at length, since copies of the Review Group's report which explains more fully the need for this reduction in public dividend capital are in the Library. However, I should just make the point that this provision relates solely to the affairs of the British Airways Board and is in no way related to our intention to sell shares in the airline.
  However, the remaining clauses in Part I of the Bill are directly related to that intention. In this respect, our aim is to create a company in which the Government will initially retain a majority shareholding, but with other investors such as individuals, pension funds and other institutional investors, and employees of the airline, holding the remainder of the shares. The Bill contains the framework for the achievement of that aim by providing in Clause 2 that on an appointed day, all property, rights, liabilities and obligations of the British Airways Board shall become those of the successor company, which will be incorporated under the Companies Acts in the ordinary way.
  Clause 3 provides for the share capital of that company to be issued to persons who will hold the shares on behalf of the Crown. Clause 4 provides that the total amount of share capital to be issued on vesting day shall be equal to the amount of public dividend capital held by the British Airways Board immediately before that day, but apart from this the financial structure of the airline will he unchanged.
  1644
  At this stage British Airways will have been transformed from a statutory corporation, governed in all its actions by an Act of Parliament, to a limited liability company. The next stage will be for the Government to offer shares in the company for sale. Clause 3 provides that those who hold shares on behalf of the Crown may deal with them—which means dispose of them—on such terms and in such manner as the Secretary of State, acting with the consent of the Treasury, may direct. Our intention is to offer a substantial minority of the shares for sale, but there is no undertaking that the Government will continue to maintain a majority holding. Such a commitment would oblige the Government to take up a certain proportion of any future rights issues, and it would be unwise to bind ourselves or our successors in this respect or to a restriction on the number of shares which might ultimately be sold.
  Clause 5 enables the Secretary of State subsequently to acquire ordinary voting shares in the successor company or rights or securities which carry entitlement to or may be converted into such shares. This power would facilitate the taking up of rights issues or the acquisition of voting shares in the market. It is subject to the target investment limit described in Clause 6 which is to be set at the level of voting rights exercisable immediately after the initial flotation. But because, as I have said, the Government intend initially to sell a substantial minority of the shares, it follows that the target investment limit will be set at a majority level. Thus, if the Government's shareholding should ever be reduced for whatever reason, they will be able, should they wish to do so, to restore a majority shareholding in British Airways.
  The reason for this power is to provide a longstop provision. During debates in the other place fears were expressed that the successor company could fall into foreign hands, or be taken over by another company with malign intent. The Government consider those possibilities unlikely, but in the event of any such danger the Government could use their powers to restore a majority holding. I might add that there will also be provitions in the articles of the successor company limiting the voting rights of foreign-held shares. Incidentally, copies of the draft articles are available in the Library.

  1645
  So we shall have belt and braces to guard against a foreign takeover.
  The remaining Clauses in Part I are purely technical. Clause 7 deals with transitional provisions and the eventual dissolution of the British Airways Board. Clause 8 provides that British Airways shall be deemed to comply with the requirements of part of the Trustee Investments Act 1961 for the purposes of the initial flotation. Clause 9 gives interpretations of certain terms used in Part I.
  I turn now to consider the wider questions which are not specifically addressed in Part I of the Bill, but which will I hope amplify the general policy and the considerations which lie behind it. First, let me say a word about timing. Part I of the Bill itself incorporates no timetable for the flotation, but merely the legislative framework for the change of status on an appointed day and a subsequent sale of shares. That omission is quite deliberate because we wish to have complete flexibility in choosing our time. The sale of shares will take place when we consider the time is right, taking into account the need for a successful flotation and the interests of all concerned.
  The Government are fully aware that the international civil aviation industry is at present going through a difficult time, due largely to the rapid increase in fuel prices over the last year or so, together with some falling off in demand for air travel. British Airways have shared these problems, as their results for 1979–80, which were announced last week, demonstrated. Your Lordships will also have seen reports that British Airways continues to face problems in the current year, and the board has initiated a plan of action to maximise profits and maintain its competitive position.
  These are problems which face the airline industry worldwide, and we welcome the action which BA management are taking to ensure that they get back on to the right track as soon as possible. Its results can certainly stand comparison with those of many foreign carriers. The industry has faced similar problems before in the mid-1970s, and British Airways showed its ability to recover then. It can, I believe, do so again. Meanwhile I emphasise that, bearing in mind that this Bill has yet to complete its full parliamentary
  1646
  passage, it is too early to take any decisions on a date for a sale of shares. We have no commitment to any particular date, and we shall continue to preserve flexibility, so that we can choose the right date in due course.
  With regard to the shareholding that the Government are to maintain, your Lordships will wish to hear something about the relationship between the Government and the successor company. Our intention in establishing British Airways as a limited company is to ensure the maintenance of a strong and competitive business that will stand entirely on its own feet. Although the Government for the present will retain at least a substantial shareholding, the company will not be the creature of the Government; we do not intend to control the company. It will stand or fall by its own efforts, and this must be recognised by all concerned.
  Our objective will be to appoint initially an experienced and independent board of directors, who will in future determine business policy and assure the continuity of management at both board and lower levels. The Government will. not thereafter wish to intervene in the commercial decisions of the company, and circumstances are not readily foreseen in which the Government would seek to mobilise their shareholding in opposition to the board of directors.
  We wish British Airways to be a perfectly ordinary private sector company. We do not want the existing paraphernalia of controls over the airline's capital expenditure; we do not want their borrowings to be governed by cash limits; we do not want power to guarantee those borrowings or to make loans to the company; we do not wish to take any action that might lay the Government open to allegations of influencing the commercial decisions of the company. We intend that British Airways should be quite independent of the Government, and we believe that is where its best interests lie. We do not propose that there should be specifically appointed Government directors on the board of the new company.
  There is one further matter which is not covered in Part 1 of the Bill, but which is an important element in the policy. It concerns the undertaking given

  1647
  by my right honourable friend the Secretary of State in another place on 20th July last year that
  "special arrangements will be made to enable employees of British Airways to take up shares in the enterprise should they wish to participate in its future and share in its growth."—[Official Report, Commons, 20/7/79; col. 2183.]
  We believe that the employees of British Airways should also be given the opportunity to acquire a tangible stake in the company and that they should be able to do so on favourable terms.
  We do not subscribe to the view that there must necessarily be opposition between the interests of shareholders and employees, and we certainly do not wish to preserve such an adversary relationship where it may be considered to exist. As a general principle, a greater degree of share ownership by employees in the company for which they work is an important step towards breaking the dangerous and damaging "them and us" syndrome in British industry.
  The Government intend to set a good example in this respect by offering shares to British Airways employees on favourable terms at the time of the flotation. A number of possible arrangements are under consideration, including an offer of two shares for the price of one, with exemption from income tax on the free share, as provided for in Clause 46 of the recent Finance Act; a share option scheme; a straightforward, if modest, give away of shares; and priority allotment of shares for employees at the full price. Full details of the arrangements which are eventually decided will be announced in good time for the share sale.
  I turn now to Part II of the Bill. This Part contains a number of provisions amending the law relating to civil aviation, and I shall comment on all the more important of these during the course of this speech. However, there is no doubt that the most significant clauses in Part II are Clauses 11 and 12, and therefore I propose to deal with these in some detail before proceeding to comment upon the remainder.
  Clause 11 effects four major changes in the Civil Aviation Act 1971. First, it amends Section 3 of the 1971 Act, which sets out the general objectives of the Civil Aviation Authority, by removing the
  1648
  current objectives of the authority to secure that at least one major British airline not controlled by the British Airways Board has the opportunity to provide air transport services and to encourage the contribution of the civil aviation industry to the United Kingdom's balance of payments and national prosperity. The former objective is being removed because it is no longer necessary or desirable to distinguish between British Airways and other airlines following the change in status of British Airways proposed by Part I of this Bill. Moreover, there is an outstanding need to change this objective in Section 3(1) (b) following the decision of the Court of Appeal in the case of Laker Airways Limited v. The Department of Trade, when the Appeal Court decided that this subsection and paragraph had a rather different meaning from that which had been widely understood by both the industry and the then Government.
  The effect of the removal of this objective will be simply that in future all British airlines will be able to offer to provide any service. It will then be for the Civil Aviation Authority to decide which airline or airlines should provide those services in the light of the objectives which it is the authority's duty to pursue under the Act of 1971, as amended by this Bill.
  The objective of encouraging the aviation industry to contribute to the balance of payments and to national prosperity is being deleted because it is an automatic consequence of the other objectives of the authority. If the Civil Aviation Authority properly addresses itself to its duty under Section 3(1)(a) of the 1971 Act, to secure that British airlines provide services at the lowest charges consistent with a high standard of safety and an economic return to the efficient operator, and to secure the sound development of the United Kingdom civil air transport industry, then the authority can hardly fail to encourage the industry to contribute to the balance of payments and to national prosperity. Since Clause 11 is concerned with the setting out of the CAA's objectives in a proper manner, it is therefore appropriate that we now dispense with this unnecessary provision.
  Subsection (1) also has the important effect of putting the CAA's duty to further the reasonable interests of users of air transport services on an equal footing with

  1649
  the authority's other objectives, instead of being a subordinate duty as it is at present. This reflects the Government's intention in this Bill to ensure that the consumers' interests will in future carry at least as much weight as the airline industry's interests when the CAA is exercising its air transport licensing and other functions. I am sure your Lordships will agree that this amendment establishes the proper balance between the general objectives which it is the CAA's duty to pursue.
  The second major change effected by Clause 11 is the abolition of the Secretary of State's power to give guidance to the Civil Aviation Authority. The 1971 Civil Aviation Act, which established the CAA, adopted the unusual method of regulating a statutory undertaking by means of the issue of written guidance. At the time this was an understandable decision: the CAA was an entirely new body, and the extent of the areas in which it would become involved was not and could not be known. Unfortunately, experience of the guidance has shown that it is a flawed mechanism. The most cursory examination of the guidance issued in 1972 and 1976 reveals that much of the guidance serves to do no more than encourage the CAA to behave itself and to use its common sense when carrying out various detailed aspects of its functions; and where the guidance attempted to do more than this by going beyond the terms of the 1971 Act, it has run the risk of being overturned by the courts. This was the fate of paragraphs 7 and 8 of the 1976 guidance, which set out the objectives for the licensing of long-haul routes and established a sphere of interest for British Caledonian Airways, since the Court of Appeal held, in the case of Laker Airways Limited v. Department of Trade, that these paragraphs were ultra vires and consequently invalid.
  The essential problem with the power to give guidance is that either it says nothing useful or it is in danger of being judged to be ultra vires by the courts. It follows that the proper manner of regulating the activities of the CAA is for Parliament to set out the authority's objectives fully in primary legislation. This is what the remainder of Clause 11 achieves. The abolition of the power to give guidance does not mean that undue power is being handed to the authority. It means,
  1650
  rather, that the objectives and duties of the authority will in future be contained in the appropriate Act of Parliament. I hope your Lordships will agree, therefore, that this Bill represents an improvement in the constitutional propriety of the legislation.
  The third major change in existing legislation made by Clause 11 is the introduction into the Civil Aviation Act of 1971 of a new Section 3A, which imposes on the CAA a duty, subordinate to its other duties in Section 3, to have regard to environmental factors in exercising its aerodrome licensing functions in respect of aerodromes specified by the Secretary of State. Subsection (4) of the clause imposes a similar environmental duty on the CAA in respect of the authority's exercise of its air transport licensing functions. These provisions therefore impose upon the authority specific statutory duties when exercising its relevant functions which replace the general environmental duties which are imposed on the authority by the policy guidance. In the case of the CAA's aerodrome licensing functions, the duty will apply only where the Secretary of State specifies a particular aerodrome, as it is hoped that local consultation and action will be sufficient in most cases to ensure that proper care is taken of environmental considerations. Where this is not the case, however, then the Secretary of State will be able to specify the aerodrome concerned for the purposes of Section 3A.
  The fourth major change to existing legislation is made by subsection (4) of Clause 11, which inserts into the Act of 1971 a new Section 23A. This new section sets out those considerations to which the CAA shall have regard when exercising its air transport licensing functions. The section takes up several of the CAA's existing duties, which are currently contained in the policy guidance. I will not therefore dwell on these restated duties, but will draw the attention of noble Lords to subsection (2) of the new Section 23A. It lays down that the CAA, when considering whether to grant an air transport licence, and when weighing up the effects of granting a licence on existing services, shall have regard in particular to the benefits which may arise from licensing two or more operators to provide the services in question.

  1651
  The Government took the opportunity of introducing this new provision into the Bill in another place because of an uncertainty expressed in certain quarters as to the ability of the CAA to take proper account of the advantages to consumers which may arise from a due measure of competition. The purpose of this provision is to establish that the authority can and indeed should take account of these benefits, and to ensure that the interests of the airline passenger have a prominent place among the CAA's objectives. I am sure that I need not remind your Lordships how significantly the consumer may benefit from competition. The revolution in the level of fares on the North Atlantic route and in the variety of services on offer to passengers followed directly from the introduction of a proper measure of competition. It is the Government's hope that a similar change will come about on the London to Hong Kong route, and, indeed, I believe that the variety of fares and services which are already available on that route suggest that such a change is already in train. In the future it is the Government's intention that the CAA will take the initiative in identifying opportunities where the opening of a route to competition would enable a much wider public to have access to air travel.
  I turn now to Clause 12 of the Bill. When consultations took place last year on the proposed legislation, several respondents were of the view that it would be helpful for the CAA, in the absence of the policy guidance, to publish an account of the manner in which it proposed to apply the duties and objectives set out in the 1971 Act as amended. This was a sensible suggestion, and Clause 12 therefore requires the CAA to publish a statement of its air transport licensing policies within six months of this Bill receiving Royal Assent. It also provides for the CAA to carry out appropriate consultations with representatives of the air transport industry and with users of the industry's services before publishing its statement. Finally, subsection (3) of the clause empowers the Secretary of State to require the CAA to publish a statement of the policy it intends to adopt in respect of any particular matter relating to its air transport licensing functions. This establishes a mechanism whereby expressions of concern
  1652
  as to the CAA's exercise of its functions may, if the Secretary of State agrees, be resolved.
  Part II of this Bill contains a number of other clauses relating to civil aviation law. I will not weary your Lordships by detailing the purpose of each of the less important clauses, which I think are adequately described by the Explanatory Memorandum. However, I would draw your Lordships' attention to the following clauses as making changes of import in the law. Clause 10 confers on the Secretary of State powers to require British air transport businesses to place at his disposal the whole or the relevant parts of their undertakings in time of war, actual or imminent, or in the event of a great national emergency. In the past, the Secretary of State has exercised such powers only in respect of British Airways, but, of course, the change in status of British Airways proposed in Part I of this Bill would make it inappropriate for BA to continue to be singled out in this way. Equally important is the increased need for access to back-up for the country's military forces in the light of recent world developments, and Clause 10 therefore extends the Secretary of State's emergency powers to cover all United Kingdom air transport businesses.
  Clause 13 sets out in a more straightforward manner the borrowing powers of the Civil Aviation Authority, and provides for an increase in the CAA's borrowing limit from £125 million to £200 million in order to cover the major investment programmes planned by the authority over the next few years. The CAA's current outstanding debt is £102 million, of which £81 million was borrowed, through the Secretary of State, from the National Loan Fund, with the rest being raised from the European Investment Bank and on the international money markets. It is likely that the CAA's future borrowing needs will continue to be met from a variety of sources, with an increasing proportion of those needs being provided for by loans in US dollars from international money market sources. This will permit the CAA to match its dollar income against an appropriate dollar debt, so mitigating the effect of exchange rate movements on the authority's trading results.

  1653
  Clause 17 abolishes certain Government controls over the CAA which were appropriate when the authority was dependent on grant in aid but are no longer relevant now that grant in aid covers less than 20 per cent. of the authority's expenditure. Clause 17 will enable the CAA to employ such staff and pay them such salaries as the authority considers proper and it will also terminate Government control over the CAA's pension scheme.
  Finally, I would draw attention to Clause 24 which enables the British Airports Authority to acquire land by agreement. This provision will apply generally to all the authority's airports but its immediate effect will be to enable the BAA to purchase property in the wider area of 2,500 acres sround Stansted airport which will not be the subject of a formal planning application or a compulsory purchase order until such time as a need is established for its future development. It will allow the BAA to alleviate the hardship of those with property within this area who, because of the uncertainty of the situation, would have difficulty selling on the open market and who would be unable to benefit from the statutory blight provisions which apply when land is the subject of a compulsory purchase order. This Clause fulfils the commitment made by my right honourable friend the Secretary of State in his Statement in another place on 17th December last year and which I repeated to your Lordships.
  This Bill is designed to secure the sound development of British Airways as a normally-constituted private sector limited company and to establish on a firm legislative basis the objectives and duties which it is the Civil Aviation Authority's duty to pursue. I now commend the Bill to your Lordships.
  Moved, That the Bill be now read 2ª.—(Lord Trefgarne.)
  5.52 p.m.
  Earl AMHERST: My Lords, I think the whole House will be indebted and grateful to the noble Lord for his detailed and clear exposition of this Bill. I should like to start by saying that we on these Benches welcome the proposals to provide participation of the workforce of British Airways in the new shareholding and to give them certain preferential treatment in the buying of shares and, I
  1654
  believe, also in the disposal of shares to a certain limit. We shall look forward to be told the precise details of these when the parties concerned have agreed.
  For some time now the airline business has been in recession, and is likely to go on being in recession. It is not surprising that the latest financial report of British Airways shows a less happy picture than it did a year ago. Despite the amalgamation of BEA and BOAC which took place eight years ago, the reverberations of the staff difficulties that resulted have still not finally settled. The airline is in process of slimming down its fleet of aircraft and subsequently the disposal of the resulting surplus. Taken together, it does not seem to be a propitious moment to contemplate drawing up a prospectus for launching a new company. I understand that the complications involved are not likely to be ironed out before the summer of next year, that is, in 1981. It is possible that by that time the financial horizon may have become more encouraging. That time may be right; but is there ever a right time?
  The Bill says that one of its objectives is to free this new company from Government interference and to get the Treasury off its back. It will no longer have to seek ministerial approval for the purchase of new equipment and it will be free to go to the market for new finance. So far so good. But does this not also mean that the Government now get off the financial hook to provide new funding? I am not clear from the Bill what the resulting Government holding will be when the Secretary of State has disposed of its shares to public ownership. We on these Benches hope that it will not be allowed to be lower than 51 per cent.—if only to preserve the company from being taken over by interests which may not be British as well as seriously prejudicing the ownership and control attaching to the designation of an airline to a particular international route.
  I understand from what the noble Lord has said that if there was a danger of interference in the company's control, the Government would step in; but he did not tell us how this will be done. If I remember correctly, a somewhat similar argument arose when we debated the denationalisation of Aerospace. I think the point was brushed aside by its being

  1655
  said that the articles of association could be relied upon to take care of all that. As I said at the time, but to no avail, it is unwise to rely on articles of association as these can be changed at any time by a board resolution. I hope that if and when it is necessary for the Government to take action in the matter they will not rely on articles of association. I hope that the noble Lord when he comes to reply will be able to tell me of this.
  This brings me to the question of board membership. The Bill says that the Secretary of State will not appoint Government directors but will select members from outside the Government orbit. But, whether the Government's final shareholding will be more or less than a majority holding, the shares still will be Government shares and will be the property of the general public. Should there not be at least one Government board member to represent this interest? Presumably there will be a considerable gap in time between this Bill becoming law and the issue of shares to the general public. In the meantime, all the shares will be owned by the Secretary of State. Presumably there will be an interim board to be selected by the Minister. What then will be the status of this board vis-à-vis these shares and the pressures of Government policy?
  I turn now to the Civil Aviation Authority, or that part of it which deals with the functions relative to the granting of licenses to airline operators. I imagine that it is well realised that these licenses are a big asset, if not the most important asset, of any airline. All the skills, sophisticated equipment and hard work are of no avail if the operator does not have a licence to operate and use them; so that if an airline company has any cancellation, modification or other alteration of its licence, this can cause great damage to the value of its main asset and to its equity value. I suggest that the Bill as it now stands requires quite a lot of clarification and definition of the functions and obligations of the CAA in this connection and provision for them should be made clear by inclusion in the Bill.
  When an operator is granted a licence, it is required to make suitable provision for finance, equipment and staff to meet the obligations of that licence. It seems
  1656
  proper that the operator should have some protection against any sudden withdrawal or modification of its licence. There should be established therefore a minimum period of validity for these licences. It should be made incumbent upon the CAA if and when it decides upon a cancellation or a modification of a licence to make a full public statement of its reasons for doing so; and there should be proper time provided for prior discussions, the preparation of adequate defence, the right of appeal and, if appropriate, opportunities for arbitration. Such provisions should be incorporated in the Bill.
  Recently we were confronted with somewhat startling action by the Secretary of State who, apparently without new evidence, save possibly the expression of opinion by an interested party, within a few weeks of the granting of a licence by the Civil Aviation Authority overruled the CAA and seriously modified the licence. If this is to be the order of the day, these CAA operating licences will be rendered valueless. Surely, there should be some provision for protection against such ministerial U-turns. Meantime, on these Benches we shall be happy to support the Second Reading of this Bill.
  6 p.m.
  Baroness BURTON of COVENTRY: My Lords, I hope that my remarks today will be able to stand up to the scrutiny of the most knowledgeable and distinguished speakers who follow me. A long time ago, in July 1971, we had the Second Reading of the then Civil Aviation Bill. In that debate I remember raising three main points: the structure of international air fares; charter flights; the proposed Civil Aviation Authority and consumer affairs. Obviously much has happened since then, but at that time I asked for a major reappraisal by all Governments of the whole balance of air transport effort. I think that most speakers in that debate felt the same. Today Governments are doing just this. They have had to, my Lords. Charter flights; cheaper scheduled flights, particularly in Europe; the position of IATA; the attitude of IATA and membership of IATA have all made reappraisal necessary.
  But I suggest that we have a major new problem to take into account, it may be throughout the world but

  1657
  certainly in this country, and that is the problem of airports. While considering whether we have new airports or new terminals, whether we manage with expansion of existing facilities, to my mind one question comes more and more to the fore, and that is: Are passengers made for airports or airports for passengers? On short distance flights today from London to Paris or London to Brussels, we spend more time getting to airports and from airports, and we spend more time on the ground than we do in the air.
  Since 1971—reverting to my three main points—we have made considerable progress on the fares front and on charters. But where are we on consumer affairs? Today, as in 1971, I deliberately avoid using the words "consumer complaints". There are many consumer matters affecting travellers which are not complaints and the sooner everyone leaves behind that old fashioned concept, the better.
  Today I want to speak on one aspect only, one better discussed on Second Reading than in Committee. What I really want is to find out the general attitude of the Government in the area concerned. I have so informed the Minister. In 1971 I was by no means the only speaker in the debate who criticised the Bill and the apparent attitude towards the consumer. Indeed, my noble friend Lord Beswick asked, if we were to be given so much detail, why could reference not be made to the function of the authority as custodian of the consumer interest? Lord Beaumont of Whitley, speaking from the Liberal Benches, felt that the failure of the Bill we were then discussing was that there was virtually no mention of the duties of the consumer. So the House will not be surprised that what I want to talk about today is the position of the air traveller.
  When this new Bill first appeared, I felt encouraged and I trust that I will feel the same when we hear what the Minister has to say when he comes to reply. The encouragement was derived from the fact that in 1979 the Secretary of State for Trade obviously felt the same as many of us had felt in 1971. As the House will have noted, the draft new Bill which appeared in October last suggested the repeal of sub-paragraphs (b) and (c) in the old Section 3 so that "the furtherance of the reasonable interests of
  1658
  users of air transport services" now ranks equally with sub-paragraph (a). That has already been mentioned by the noble Lord, Lord Trefgarne, in his speech today.
  Mr. Nott reinforced this attitude during the Second Reading of the present Bill when he said, at col. 49 of Hansard of the other place on 19th November, 1979:
  "The whole emphasis of the task to which the CAA was charged in 1971 was to put the airlines first and to promote the British civil aviation industry. The airline users' interest was not the first consideration".
  This change is to be found in the new Clause 11(1), and airline users thank the Secretary of State.
  Airline users need such official encouragement. The House will remember that it took us two years until July 1973 before the Airline Users' Committee was established, and if it had not been for this House we should not have had that body. Neither the industry nor Government wanted it. During those past six years I believe that the Airline Users' Committee has been useful both to the travelling public and to the airlines, but it has been severely handicapped. As a statutory body we could have accomplished much more, and I should like to explain why. At the moment there are far too many committees with the resultant demarcation arguments. Any air traveller, if he has problems, wants the matter dealt with. He does not want passing from committee to committee. Neither does he want to hear the various committees arguing as to which part of the whole they are responsible.
  Among other things, I spent my six years on the Airline Users' Committee asking for it to be made statutory or, if not the AUC, one other body. At Second Reading in another place many references were made to the additional powers being given to the Civil Aviation Authority. Does this mean that the Government intend to continue the practice by which the industry consumer body is appointed and financed by the authority responsible for the civil aviation industry? However fair the Civil Aviation Authority may be, and whatever its intentions, that seems to me to be the wrong approach.

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  The House will remember the many occasions on which independent statutory powers have been sought for the Airline Users' Committee. I am sure that Members will remember the last Government admitting that they recognised the Airline Users' Committee as the consumer body,
  "specifically promoting the interests of all air travellers".
  Furthermore, of all the committees so recognised by the Government, only the Airline Users' Committee was not to be given statutory status in the then pending legislation. In other words, only the air traveller was not to have his affairs dealt with by a statutory body which, most importantly, would have given it the
  "corollary right of advance information and consultation on the relevant consumer aspects affecting air travellers by the industry concerned".
  That is a quote of course from statutory committees. I should be glad to have the thinking of the Government on this aspect irrespective of the date on which it is intended to change British Airways from a public corporation into a Companies Act company. The noble Lord mentioned that, and I gather that it is not before the autumn of next year at the earliest.
  In the past the Airline Users' Committee had the misfortune of being a hybrid creature under the disposition of the Department of Trade and the Department of Consumer Protection. This provided endless opportunities for those responsible to say that nothing could be done. Dating back to 1973, there has been deep and entrenched opposition to the Airline Users' Committee being made statutory. Most of this came through the Department of Trade. I regret that for so long a period the department gave precedence, approval and backing to this entrenched opposition rather than to the users of air transport. We now have new faces at the department, and I am hoping that the Ministers concerned will feel able to look at this matter again.
  If there were to be this new willingness, how could the matter be approached? During Second Reading in another place, references were made to the environment and the necessary environmental considerations to be taken into account in all these matters; and, indeed, the noble Lord,
  1660
  Lord Trefgarne, referred to these matters in his opening remarks today. I did try to pursue further both the environmental point and the problem of too many committees, as far back as 1975. Indeed, the report of the Select Committee on Nationalised Industries for the Session 1975–76 did print, at Appendix 11, a paper of mine, at page 117. This was titled, Airline Users' Committee: Terms of Reference. The paper had been prepared for the Airline Users' Committee and was reproduced by permission. I need not weary the House with much detail on this, but I should like to comment on the environmental aspect.
  Difficulties have frequently arisen from the overlapping of the Airline Users' Committee and the British Airports Authority. There is little real identity between the airport committees and the airline user. As an example, whereas an airline traveller is the concern of the airline with which he has booked, in fact, for a time he is the responsibility of an airport authority. He has no ticket from the airport authority and indeed he probably knows nothing of this divided responsibility; but it exists.
  As the passenger is concerned with handling at various airports, to get into the air, and numerous authorities are therefore involved, I maintain that some form of organisation is needed so that passengers may know where they stand. To me, it is quite clear that air travellers will not be looked after adequately until there is one statutory committee charged with this work. The airport consultative committees have a dual function, representing the interests of users and people living in the vicinity. But these are quite divided interests. It would appear that the arrangements would be much more effective if there were airport committees representing the interests of only the people in the vicinity of each airport, and one statutory committee representing the interests of air travellers generally. Obviously such a change would greatly hearten the environmentalists, who have many problems today when new airports, new terminals and even new runways are being discussed.
  It is not only the user who is affected—indeed, I would say it is not mainly the user who is affected—environmentally on these matters, but rather the people

  1661
  who live round the suggested airports, terminals and runways. What an opportunity, it seems to me, is thus offered to airport committees; that surely should be their function. After all—I think I should quote this—the terms of reference of the airport consultative committees set up by the British Airports Authority are:
  "In the management and administration of any aerodrome, the Authority shall provide for the users of the aerodrome, for the local authorities in whose area the aerodrome or any part thereof is situated, or other local authorities whose areas are in the neighbourhood of the aerodrome, and for other organistions representing the interests of the persons concerned with the locality in which the aerodrome is situated, adequate facilities for consultation with respect to matters affecting their interests, and shall in doing so give effect to any direction given to it by the Minister".
  If Ministers are willing to consider this matter, I am convinced that progress could be made. In the past this willingness has not been apparent.
  Now I come back to the Civil Aviation Authority. However fair such a body may be, I think it is indisputable that the consumer function of an organisation such as the Civil Aviation Authority is different from that of an independent Airline Users' Committee. I think it is wrong fundamentally—and always have—that the Airline Users' Committee should be financed by and appointed by the Civil Aviation Authority. If I am told that the Airline Users' Committee is independent, I would merely state that its members and its chairman are appointed by the Civil Aviation Authority. I feel that I am entitled to add here how glad I am that Mr. Clinton Davis, now in Opposition, agrees with me. It would not be in order to quote his exact words, but during the 20th sitting of the Committee in another place, at column 1031, Mr. Davis made clear that he now regarded the close association of the Airline Users' Committee with the Civil Aviation Authority as a drawback to the Airline Users' Committee.
  My suggestions were reproduced in a report made four years ago—to be exact, on 5th February 1976—and referred to previously. But I am glad to be able to call in aid a more recent one, again from the Select Committee on Nationalised Industries, for the session 1978–79, and made on 2nd April 1979. In this later report, at paragraph 56, and following a recommendation of the National Consumar
  1662
  Council, the Select Committee recommended:
  "That the Government should examine whether consumer representation in the field of air transport might be improved, perhaps through extending the remit of the Airline Users' Committee to include airports, through giving the Airline Users' Committee statutory status, or through setting up a consumer body to consider air safety."
  So I ask the Government to consider giving the Airline Users' Committee statutory status and giving the airport consultative committees more scope by asking them to take on all environmental issues.
  I was encouraged by the fact that Mr. Norman Tebbit, the Minister responsible in Committee, stressed during the 15th sitting, at column 744, his concern for the interests of the residents near airfields, who might or might not be consumers of air transport services, adding that the provisions put into the Bill were to increase rather than to decrease the importance given to environmental considerations. Subsequently, a member of the Committee asked who should have a look at and be responsible for environmental problems. I have just made a suggestion—namely, that the airport consultative committees should do the job. I should think that this suggestion would have added force because of the remarks made by the chairman of the Civil Aviation Authority, Sir Nigel Foulkes, and reported in The Times on 30th July. Sir Nigel was criticising a section of this new Civil Aviation Bill which proposed environmental responsibilities for the authority in air transport licensing, which was also mentioned by the noble Lord, Lord Trefgarne. Sir Nigel went on to say:
  "The Authority is a specialised organisation, trained and equipped to serve civil aviation. It is hard to see how a non-governmental body like ours could resolve the often incompatible claims of the aeroplane and the environmental objector".
  Recalling how this House, from all sides, has reacted over past years, I have no doubt that agreement exists that airline travellers must have some organisation to speak for them. Arising from this, I have for the Minister four questions of which I have given notice.
  It was stated in Committee that at present the right of access to information is only discretionary so far as the organisations representing users are concerned, whereas the airline industry in all its aspects has statutory rights. Is that

  1663
  correct? The previous Secretary of State expressed fears that, after the Bill became an Act, all that MPs would be able to do —and I include this House—would be to write polite letters to the Civil Aviation Authority asking it to change its views on certain aspects. Is this correct? Or may we take as correct the statement made by Mr. Tebbit, when he said during the 14th sitting, at column 738:
  "There are still enormous numbers of opportunities for the posing of parliamentary Questions".
  I hope that is so. Such opportunities will certainly not be overlooked in this House, on both sides of this House.
  My last question concerns the obvious necessity of having an organisation to speak for air travellers. if we cite problems well known to this House such as the West London Air Terminal, the bus services to Heathrow, taxis from the Victoria terminal and indeed their cost from anywhere, and a realisation that passengers actually have luggage, I think it must be accepted that we cannot leave such matters to people who control the organisations producing these problems. Can the Minister comment on this?
  Finally—and I am sorry to have taken up so much time but it is essential that the background is on record in this battle which we have not yet won—whether or not the Government feel able to accept any legislative amendment in this spill-over period, they must, I think, agree that the present situation is not satisfactory. If making the Airline Users' Committee a statutory body requires legislation, would it not be possible as an interim action to consider changing the terms of reference of the relevant committees—something I put forward as long ago as 1975? That would help, otherwise I assure the Minister that demarcation problems will remain to the detriment of air travellers.
  That is for the short term. For the long term—I do not know whether the Minister can say how long that will be—I realise that the whole position of consumers and the nationalised industries is under review by the Minister of State for Consumer Affairs and that we shall eventually have a Green Paper on this. May we have an assurance from the Minister that consumers of air travel will
  1664
  be included in this review, as both the Civil Aviation Authority and the British Airports Authority come into the category of nationalised industries? So I ask for the interim measure of amending the terms of reference and the longer-term one of including the air traveller in the review of the future position. These are two modest requests. The Secretary of State wishes to enhance consideration of consumer interests. The Under-Secretary of State, Mr. Tebbit, said in another place during the Second Reading, at col. 164:
  "We shall put the passengers further up in the pecking order. We believe that airlines exist for passengers."
  I have maintained, always, that without passengers there would be no airlines. Apparently, the Government agree. What do they intend to do?
  6.23 p.m.
  Lord BOYD-CARPENTER: My Lords, a major Civil Aviation Bill comes before Parliament generally only about once in a decade. When it does, it is a matter of very great public importance for it involves the regulation and control of a major and a highly successful British industry. It is not always fully appreciated that we in this country have the second largest civil aviation industry in the free world. I have to use that qualification "the free world" since the cloud of military security hangs over the civil aviation activities as it often hangs over the accident records, of the communist world. But after the United States, though a long way after, of course, British civil aviation is the second in the free world. It is a major industry. In connection and in partnership with our tourist industry, the two are the biggest earners of foreign exchange. It is also an industry in which we are highly efficient. Indeed, it is an industry that includes the only British nationalised industry which is at the same time fully exposed to world competition and makes a profit.
  Lord BESWICK: Question.
  Lord BOYD-CARPENTER: I know what my noble friend has in mind. He has in mind the industry over which he presided with such great distinction, but he will also recall the limitations of the competition to which it was exposed with its built-in purchaser in the shape of

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  the British Government. I am sure the last thing my noble friend wants to do is to diminish in any way the remarkable achievement of British Airways in one of the most competitive businesses in the world, making a profit year after year. Now I will certainly give way. No? I am very glad if I appear to have satisfied. I was only going to say "my noble friend," because in many ways he is.
  Therefore, the theme of what I am beginning to say is that a Bill of this sort is a matter of major importance which I hope the House will examine carefully not only tonight, when perhaps, somewhat unhappily, it comes on at the tail end of exhausting parliamentary sittings, but also very carefully in Committee when we come back to it during the spill-over, because it really is important to get it right. This is an industry in which, as I say, we as a country are successful. Our airlines, public and private, have the highest reputation. They are highly competitive. Both the public and private sectors are leaders in the move for international cheap fares, and technically safety-wise the skill of their pilots and the admirable service given by their cabin crews are the highest in the world. It is therefore owing to this industry that we should get it right.
  I feel that the form—I am not talking about the substance at the moment—of Part II of this Bill is somewhat unfortunate. As noble Lords will see, it proceeds by seeking to amend large parts of the Act of 1971 and, indeed, to write into it certain entirely new provisions. That is a very confusing way of legislating from the point of view of those who have to carry out the legislation. I should have thought that a more workmanlike way of doing it would have been to repeal the 1971 Act in toto and to have re-enacted it with these amendments. We would then have had the whole of the relevant legislation in one statute.
  If that be at this stage impossible, I must ask my noble friend why we cannot have what used to be called in another place Keeling schedules; that is to say, a schedule to the Bill setting out how the 1971 Act sections would look if the provisions in this Bill were put into them. As it is, if one is to judge what the effect of a good deal of Part II of this Bill will be, one has to do some sort of paper
  1666
  and scissors work with the 1971 Act. That really is an extremely inconvenient way to legislate. I would ask my noble friend to consider whether Parliament is being treated very fairly and very well by legislation being in this form.
  Coming now to the substance, I begin that with a reference to Part I. I personally welcome the transformation of British Airways from a state corporation into a company under the Companies Act. I welcome it particularly because of the opportunity which it gives to introduce employee shareholding. For some reason which I do not understand this provision seems to have caused a certain irritation to the Opposition in another place. It seems to me a wholly admirable provision, particularly in an organisation like British Airways, which in the past has suffered from industrial trouble and in which employee shareholding may very well help to weld together all who work in it with a sense not only of common purpose but of common interest. I very much hope the employee shareholding provisions will be a success.
  As some of your Lordships know, I speak on this aspect of things with a little knowledge inasmuch as the company of which I happen to be chairman today was one of the leaders in this country in introducing employee shareholding and in which today over 90 per cent. of our United Kingdom workforce hold shares. I therefore see the benefits of employee shareholding very close up, and I am absolutely delighted that British Airways is to have a similar advantage.
  On the other hand, I am a little puzzled by what my noble friend said about arrangements for the board. If the British Government, on behalf of the British taxpayer, are to remain a majority shareholder in the new company they cannot, as I see it, divorce themselves from responsibility for at any rate a large number of board appointments. To do so surely would be really to fail to discharge the duty which falls on shareholders, who have a responsibility in the ultimate for seeing that their board is properly composed. If the British Government, whether as a majority shareholder or merely the largest shareholder—I understand they may he either—simply wash their hands of board appointments, that would be an abdication which would seem to go against the whole

  1667
  spirit of today and against the way in which the Companies Act is operated. I hope that my noble friend will be able to clarify this and be able to tell us that the Government—not as Government but as shareholders—are intending to exercise proper influence in board appointments.
  My noble friend said something to the effect, before the changeover takes place, of equipping British Airways with a new but adequate board. I should like to hear a little more from him as to how he proposes to do that, and I should like also to take up a related point. My understanding is that the present very able chairman of British Airways, Mr. Ross Stainton, is due to retire in November. We have had no intimation as to who his successor might be and we are already in the month of August. British Airways are facing another major transition as well as the constant competitive struggle in which they are involved, and I am not sure that it is treating them terribly well to leave the question of the succession to the chairmanship over so long. I should like my noble friend to give some indication that an early announcement will be made.
  I pass now to Part 11. I welcome the abolition of the guidance. As your Lordships know, I lived under two successive guidances for five years and I never thought they were a satisfactory instrument. They were neither legislation nor straight administration, and they sought to influence the decisions of the authority without actually clearly instructing it to do something or clearly leaving it to the authority; and, as the event proved, they were subject to abuse.
  I was very surprised to hear my noble friend's reference to the Court of Appeal decision in Laker against the Department of Trade when he said that it gave what was "to the industry" a surprising interpretation of Clause 3(1)(b) of the 1971 Act. I can only tell him, having at that time access to legal advice which appears to have been of somewhat higher quality than that which was then available to the Department of Trade, that it came as no surprise to me. And it seems to me now, re-reading the decision, that the Court of Appeal came to the perfectly obvious conclusion that the second guidance was plain contrary to the terms
  1668
  of the 1971 statute and, as the guidance plainly could not override the statute, was invalid. My noble friend's indication (almost a suggestion) that he was among those in his then capacity who was surprised by the Court of Appeal's decision, surprises me. If it does not sound too Irish, my Lords, I am surprised that he was surprised!
  The object of removing the guidance, as I understand was said in another place, was to strengthen the independence and authority of the Civil Aviation Authority. I welcome that. Your Lordships may feel, and perhaps it is true, that I have to admit to a certain bias in view of my past connection with that body; but I think it is commonsense that if you hive off a great deal of responsibility for civil aviation from Government to an outside body, the sensible thing is to leave the fullest responsibility with that body. There is an old saying:
  "There is no point in keeping a dog and barking yourself."
  It seems to me the greatest mistake for Government to duplicate the administration of civil aviation and maintain both a statutory independent authority and at the same time retain a good deal of power with Government themselves.
  I welcome very much this decision to strengthen the independence of the authority; but here again there is a "puzzlement", reference to which has already been made. While this Bill with, inter alia, this purpose was going through Parliament, the Secretary of State, for the first time since the authority was set up, allowed, and allowed somewhat dramatically—I think the noble Earl, Lord Amherst, referred to it as a "startling" decision—the appeal on the Hong Kong route.
  I shall not comment on the merits of the Secretary of State's decision, but I think the procedure followed merits examination, and it may well be that noble Lords may point to some amendment to this Bill which should come at Committee stage. The authority, at a public hearing and acting quasi-judicially, heard all the evidence and heard it cross-examined; and it came to the conclusion, right or wrong, that there was only sufficient traffic on the route for two airlines. The Secretary of State did not

  1669
  hear any evidence. He had, of course, the shorthand note of the evidence which was given before the authority, but one does not know what other information or advice he had. One does not know, though one may suspect, whether he had representations from the Government of Hong Kong, possibly through the Foreign and Commonwealth Office.
  Lord TREFGARNE: My Lords, I am greatly obliged to my noble friend for giving way. I am sure my noble friend will recall, when I remind him, that the appeal procedure to the 1971 Act provides specifically that the Secretary of State, in considering an appeal, may only take into account those matters which were taken into account at the original licence hearing.
  Lord BOYD-CARPENTER: My Lords, I do recall those provisions. I do not, of course, know how the Secretary of State acted or what information he had. It was certainly indicated in Hong Kong that strong representations were being made to Her Majesty's Government, and I cannot believe that the Secretary of State was wholly unaware of those. But I am obliged to my noble friend for touching on a point I was going to make. Were a Secretary of State, in considering an appeal, to take into account anything other than what was on the shorthand note of evidence, it would mean that he was hearing views, sound or unsound, which had not been given, as the evidence at the hearing had, before the other parties and was liable to be cross-examined, but which had come to him direct.
  If, as could be the case, other considerations were taken into account, I think this is a matter against which at the Committee stage of this Bill we might consider taking legislative precautions. If my noble friend assures us when he has had a chance to make inquiries, because I realise he does not serve in the particular department concerned, that no such matters were taken into account, I, for one, would find it most reassuring; but that would not necessarily mean that one ought not, when legislating, to take precautions against possible actions in the future of a Secretary of State who was less conscientious.
  For the Secretary of State to allow an appeal, which he is legally entitled to do,
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  has very unfortunate consequences. When the authority has granted a licence, the airline in question knows, or thinks it knows, that it has the right to operate and the ambience, the competition in which it is going to operate. If, months later, the decision of the authority is altered on appeal, then the value of the licence and the incentive to get on and operate it are both very much diminished. I should like to hear from my noble friend—I cannot expect him just to say that this was an aberration of the Secretary of State, because if he did say that he might find himself translated to some other appointment—whether this was a very exceptional action of the Secretary of State and that that dignitary, hopefully, does not intend to do it very often again.
  This was, after all—I hope that I am not making heavy weather of this—the first time it had happened in the eight years of the authority's operation, and there is some heavy onus on a Minister who, from his desk, overrides the result, not of a decision of the authority itself, but of a decision quasi-judicially arrived at, subject to rules which could be enforced by the High Court and carried out in a way inspected by the Council on Tribunals, but with none of those safeguards operating against himself. I very much hope that we may hear a good deal more of this, either tonight or during the later stages of the Bill.
  I welcome very much the addition which was put in in another place at the Report stage—my noble friend, with his usual tact, slightly brushed over the fact that it appeared only at the Report stage—which puts into the new Section 23A, which is being put into the 1971 Act, an instruction to the authority to bear in mind the benefits which competition may bring. As the Bill was introduced with what one might call the British Caledonian clause of the 1971 Act taken out, the Bill looked as if it was beamed at being rather restrictive of competition. But I think that the balance has been very much restored by this amendment which has been put in in another place, and I should like to say how much I welcome it.
  I come now to the duty in the new Sections 3A and 23A, which is imposed on the Civil Aviation Authority to take account of environmental considerations. It is my impression—and the quotation

  1671
  which the noble Baroness opposite gave from the speech of Sir Nigel Foulkes the other day confirms this—that the authority is not over-enthusiastic about taking on this new responsibility. I can understand this, but, on the whole, it is probably right that responsibility for taking into account environmental considerations should lie where the main decisions are made. On the whole, I am more on the side of the Government than of my successor on that point.
  But having taken this step to transfer this environmental responsibility to the authority, logically the Government might well go further. They might transfer, in particular, one of the most important of the environmental restrictions on aviation, the night curfews at certain major airports —my noble friend in his previous capacity suffered from these at Gatwick—which are imposed at the moment by the Department of Trade. They are rather unusual restrictions in some sense, in as much as they fall only on aviation.
  No one interferes with or restricts the night operation of railways, though railways operate, as the House knows, through the centres of big cities, through residential areas and through the otherwise quiet countryside. There is no night limitation on heavy trucks, bumping and vibrating their way through small country villages. Only aircraft are restricted in this way, and this can have very serious consequences for the viability of airline operations. As the former chairman of Air New Zealand once pointed out to me, aircraft earn money only when they are in the air, and Air New Zealand was at one time the most profitable airline in the world, because its aircraft averaged 14 hours of the 24 in the air.
  British airlines, and all airlines operating into our major airports, are very restricted by these night schedule restrictions and they have grown with the years. They have moved forward in the morning and backward in the evening, until they constitute quite a considerable handicap for aviation. It seems to me that there is everything to be said for handing over their operation to the body which is responsible for the wellbeing of the airline industry; that is, the Civil Aviation Authority.
  1672
  In case noble Lords think I have exaggerated their impact, I should like to give the House one positive example of the way, as at present framed and as at present administered, they operate. On the night of 28th July 1979, just over a year ago, four fully loaded British Airways 747s failed, for a variety of reasons, to get off before the night curfew came down. The British Airports Authority informed them that no flexibility could be allowed. They simply were not allowed to depart, though they were ready to depart; each of them, as it so happened, with 400 passengers. Your Lordships can well understand the difficulties and unpleasantness that this caused.
  British Airways, by Herculean efforts, got three of the batches of 400 passengers into hotels that night, though they had in one case to go as far as the Tower Hotel in the City of London, which is a long way from Heathrow, to get accommodation. They simply could not find accommodation for the passengers in the fourth aircraft, who simply spent the night in the departure lounge at Heathrow. There was nothing, except those curfews and the inflexibility of their administration, which prevented all these passengers from being safely and comfortably on their way. The unfairness is that most of those passengers will hold that as a grievance against British Airways, who not only had no responsibility for what happened, but were, of course, in financial terms—having to pay for the hotel accommodation—major sufferers from the happening itself.
  Passing quickly from that, I welcome very much Clause 17 to which my noble friend referred. Clause 17 abolishes the control by the Government over the pay, remuneration and pensions of the Civil Aviation Authority staff. There is a history of this, of which my noble friend is aware, but the House probably is not. These provisions were put in the 1971 Act, in order to protect the interests of a large number of civil servants, who at that time were being transferred from the Civil Service to the Civil Aviation Authority. My noble friend Lord Glenkinglas—with whom I have discussed the matter in the last 24 hours, and who authorises me to say that he agrees with me—then in the House of Commons, gave assurances that this condition of Government approval of CAA salaries was inserted simply to

  1673
  protect those transferred civil servants from being paid less by the Civil Aviation Authority than they were getting as civil servants: a natural and proper protection for civil servants compulsorily transferred.
  But my own experience was that the Government of the day, and in particular the Civil Service Department, used these powers for the exactly opposite purpose, to restrict and restrain increases in the pay of the authority's staff. It is not that when we started as an authority we were anxious to be lavish or extravagant. It simply was, as many of your Lordships will know, that when you are moving from a Civil Service-based system to a commercial system, as we were indeed ordered by Parliament to do, you very often want to pay a number of people quite a lot to do the job which several people have been doing before. This is the way to get a streamlined and efficient organisation. But for years the Civil Service Department blocked our efforts to improve the pay of certain of our staff, using the powers which Clause 17, I am delighted to see, now abolishes.
  I was told, among other reasons, when I argued this—noble Lords who know me will appreciate that I did argue this—that one of the things which the Civil Service was frightened of was that if we paid more than Civil Service rates we might have an advantage in recruiting high-grade staff, as compared with the Civil Service itself. It was a real abuse of power. To give credit where it is due, I failed to get any substantial alleviation of this during the Government of Mr. Heath, but the administration of Sir Harold Wilson—though I did not trouble Sir Harold personally with this—proved more helpful and a breakthrough was established after a year or two. But, again, this is a power which can be abused and which I am really delighted to see being eliminated.
  Finally, I welcome, as did the noble Baroness who preceded me, the elevation of the interests of consumers, the airline passengers, to the same level of importance in the authority's consideration as the interests of the airlines. If I may say so, if any single individual has been responsible for that change it is the noble Baroness, who by her utter determination—she will not mind my saying her ruthless determination—succeeded eventually in
  1674
  persuading the Government of the day to take this very important and very justifiable step.
  I do not wholly go along with her—she will not expect me to—about the Airline Users' Committee. Whether it would have benefited from statutory powers I do not know. I do not think that any statutory powers that it had had would have been anything like as big a contribution to its efficacy as was the appointment to it, for which I can claim responsibility, of both the noble Baroness on that side and my noble friend Lady Trumpington on this side. If noble Lords were to ask me whether statutory powers or two noble Baronesses are the more effective, I would come down on the side of the noble Baronesses.
  I agree very much with what the noble Baroness, Lady Burton of Coventry, said about the extension of the powers of the Airline Users' Committee, whether statutory or not, to cover the treatment and handling of passengers at airports. It is indeed, as I think she will agree with me, at airports that most of the problems of passengers arise. On the whole, once safely in the air their troubles are over.
  The Airline Users' Committee found, as the Civil Aviation Authority found, that the British Airports Authority's attitude—that this was their matter and the concern only of their airport consultative committees—very much diminished the value of the work which the Airline Users' Committee did for the airline passenger. The British Airports Authority's story has always been that they have their own airport consultative committees, but, as the noble Baroness has said, they are not orientated to the passenger. They are very largely recruited from the adjoining local authorities. Their concern is the very proper and important one of noise, nuisance and pollution, and the interests of the passengers are of no particular concern.
  The noble Baroness indicated that she might consider putting down an amendment in Committee, and I think it might be a good idea if an amendment could be drafted to secure that in respect of passengers and their handling the jurisdiction of the Airline Users' Committee should be extended from the airlines, which it already covers, to whichever is the airport authority concerned. I think that this is a very important Committee point.

  1675
  There are innumerable other points which someone with my past experience would feel tempted to inflict on the House. However, I am very conscious of the fact that we are near the end of an exhaustive and exhausting Session, so all I will do at this stage is to say that on the whole I welcome the Bill. I think that in general it marks a considerable march forward. It merits quite close examination in Committee to make it even better so that when it emerges it will help forward the progress of one of our greatest industries, an industry upon which this country and its economic progress is becoming increasingly dependent.
  6.54 p.m.
  Lord BESWICK: My Lords, I am delighted to follow the noble Lord, Lord Boyd-Carpenter, for three reasons. First, I see that he is sporting a tie which matches mine. Secondly, it gives me an opportunity to fill a gap in his knowledge with regard to the competitive character of British Aerospace. If the noble Lord remembers the circumstances under which British Airways insisted on buying all-American aircraft, and if he will refresh his memory of our last report, which showed that over 60 per cent. of what we sold earned foreign currency overseas, I am sure he will not wish in any way to denigrate the efforts which were made. Thirdly, I am delighted to follow the noble Lord because in other respects I am going to agree with much of what he said.
  Lord BOYD-CARPENTER: My Lords, if the noble Lord will allow me to say so at this early stage, I agree with very much of what he has said. Indeed, I can claim the credential that I was a member of the British Cabinet which in the early 1960s over-ruled the determination of British Airways to cancel their order for the VC.10 and made them take the VC.10, and therefore was entitled to great credit not only for the good that did the British aircraft industry, but for the good that did British Airways to have what was then the most comfortable aeroplane in the world.
  Lord BESWICK: My Lords, I am bound to tell the noble Lord that the situation has changed a good deal since those palmy days.
  Lord BOYD-CARPENTER: I fear so, my Lords.
  Lord BESWICK: It is not my purpose to contest the principle behind the proposal to establish British Airways Limited. However, as the noble Earl, Lord Amherst, and the noble Lord, Lord Boyd-Carpenter, have said, I am concerned with the procedure and the mechanism which is involved in this change.
  I make this general point: what British industry needs at present, in my view, is a sense of continuity. That goes for British Airways. With the amortisation of aircraft spreading over anything from five to 15 years, it manifestly damages the British effort if the structure and ownership of an organisation is to be changed with each new Parliament. British Airways seems to me today to be under a board and a management team as good as and probably better than in any recent period. The board members together now constitute a formidable body of airline experience, and for my part I think that it is a pity that changes are proposed. I should have liked to see the present team left to prove themselves.
  The questions that I want to put relate to the uncertain character of certain aspects of the proposed changes. First, the Bill refers to a target investment limit. I should like the noble Lord to tell me a little more about this. How is that target to be expressed? Is it to be expressed in a number of shares, or in a percentage of shares? Or is it to be expressed as a percentage of whatever is the share capital at any one time?
  Will the noble Lord the Minister say something more about the proposed relationship between the company and the Government? My personal view—again, like that of the noble Lord, it is based on a certain amount of experience—is that those working for British Airways are as important, in their way, as the customer. I am sure that my noble friend Lady Burton of Coventry will agree with me. Together they make up the business. For them the company structure could—and I emphasise the word "could"—be as satisfactory, or satisfying, a corporate form as a statutory corporation. Certainly if the company remained wholly Government-owned, or partly employee-owned, if you like, then

  1677
  I would venture the opinion that it would be more satisfactory than the existing formula of a statutory corporation, with all that that implies in terms of Treasury intervention. But it is precisely this issue of relationship which is so clouded.
  I understand that various ministerial spokesmen have said that the company will operate like a normal company. I believe that is what the noble Lord himself said. That is fine, or it could be fine. But then the noble Lord goes on to say that board members will be independent. As far as I understand him, he is implying that the Government will not be nominating board members. Now what exactly is this independence? Although the noble Lord emphasises that it will be a normal company, how does one reconcile the operations of a normal limited liability company with a body in which the board members are independent of the largest shareholder? I am bound to say that I do not know of any other normal company in which the majority shareholder deliberately, as a matter of policy, says that they will leave the appointment of directors to a minority interest. I feel that we shall have to look at this much more carefully, and I am reinforced in that view by what the noble Lord, Lord Boyd-Carpenter, has had to say. I should also like the noble Lord to say something about the position of the present board members of British Airways in two situations—the initial situation in which the company is wholly Government-owned and the situation which will arise after the sale, if any, of a proportion of the shares.
  I understand that the appointments of present board members were all extended until November, but what is going to happen in December and onwards? I have already paid my tribute to the dedication of the executives now responsible for British Airways, but it would seem to me that the Government are imposing upon that dedication in the present situation. Of course, there will be uncertainties about the future but could not the noble Lord be a little more helpful so far as timing is concerned? The appointed day will be one for Government decision. Can the noble Lord not tell us when it is intended that the statutory corporation will hand over, as the Bill provides, to the new company? What
  1678
  day will that be? More difficult, I appreciate, but still I should have thought the Government would have some idea—what sort of time have they in mind so far as the sale of shares is concerned? The noble Lord used the magic word "flexible", but managers have to manage; they have to take decisions; they want to know something about the future, and I should have thought he could have been a little more helpful than that.
  Then may I ask the noble Lord what procedure will be followed for this sale? Will the issue be underwritten? If so, will the underwriters decide when, or is the variable factor going to be the price, the date being fixed by the Government and the underwriters saying at what price they think they can dispose of the shares?
  I have only one other and more detailed question on the first part of the Bill and that relates to the proposed powers to be taken in Clause 10. In a time of great national emergency and with the onetime great resources of RAF Transport Command now a matter of history, I should have thought that the powers proposed to be taken are reasonable; but can the noble Lord say whether they apply to personnel? Reference is made in the Bill to "persons managing that business" but what about the other individuals—pilots, for example? Are they to be subject to the same powers and to the same penalties? Probably the noble Lord can inform us on that point.
  Turning to Part II of the Bill, I accept the basic doctrine which I understood lay behind Clause 11. The memory of the noble Lord, Lord Boyd-Carpenter, goes back some distance, but I think probably mine goes back the same length of time. It is almost exactly 36 years since I put forward the proposal that there should be an authoritative body outside a Government department responsible for air transport licensing functions as well as other aviation responsibilities. I recall discussing the problems enjoyably and I hope constructively, with the late Ronald Edwards, whose Committee made such a valuable contribution to later developments.
  I have seen, sometimes from afar and sometimes from quite near, the growth in the responsibility and the effectiveness of

  1679
  the licensing body from the original Air Transport Advisory Council to the Air Transport Licensing Board, through the successful formative period under the distinguished chairmanship, if I may say so, of the noble Lord, Lord Boyd-Carpenter, to the present authority, which has come to deserve a well-merited reputation for careful work and sound judgment.
  Given that reputation, built up over the years, it was, as others have said, all the more surprising that the Secretary of State should overturn the CAA decision on the Hong Kong route. It is difficult—and most informed observers would say impossible—to see how the Secretary of State was in a better position than the CAA to assess the traffic potential. If he has better analysts or researchers at his disposal, or if he has superior advisers, then I suggest they be given the job of licensing—they should take it over—but, if the Civil Aviation Authority is to be responsible, I should have thought action of that kind was unwise. Despite what the noble Lord himself said in an intervention, most people would say that it was an exercise in appeasement; appeasing the surprisingly influential interests in Hong Kong. If that is so, it will not be the first time, within my certain knowledge, that the Hong Kong tail has wagged the United Kingdom dog.
  Be that as it may, the important thing now is to re-establish the authority of the authority. We need to restore the confidence of industry in that when they have a decision in their favour an operator can plan accordingly, invest accordingly and not see—40 days before a service is due to start—that the decision has been changed by the Secretary of State. Conceivably we might find an appropriate amendment which would give a clearer understanding of the circumstances—exceptional circumstances, one would expect—under which the Secretary of State would see fit to override the CAA. At present the Secretary of State—and this was emphasised by the noble Lord—cannot consider evidence not available at the hearing. But, of course, that rule makes it all the more difficult to understand his action in regard to the Hong Kong decision. But it is known in our legal processes for new evidence to come to light and for exceptional procedures to be provided.
  1680
  I suggest that there could be such occasions when, properly, the Secretary of State should look again at a given decision, or he might be in a better position to assess the national interest outside the purview of the authority. Or, of course, we have provision in other fields where an appeal will lie on a point of law. I accept that in a democratic country there should be a possibility of appeal in certain circumstances, but I am inviting the Minister to consider defining the limits within which an appeal would be heard.
  Perhaps I might add this. We might all have confidence in the discretion of the present ministerial team at the Department of Trade, but ministerial reshuffles are not unknown and indeed sometimes there are things called elections and it is not entirely impossible to conceive a less reliable incumbent in the ministerial office in that department. I hope the noble Lord will be able to say that he will consider an amendment; or at least would it be possible to have a carefully considered statement at Committee stage, after consultation with industry, which would do a little more to restore the structure undermined by the Hong Kong decision?
  On the question of fare structures, I would pay a tribute to the efforts made by the Secretary of State to get more imagination and enterprise in the European fares structure. So far, however, the success seems to be limited. In these matters I would suggest that a more indirect approach and a wider dialogue can very often assist in the development of a policy. At some point I hope the noble Lord will tell us what is being done, or what can be done, to stimulate discussion in European circles.
  I believe there has been too much protectionism over fares in the past. On occasions the cartels have certainly appeared over-strong. However, I hope that we are not now going to lurch over to the other extreme. A complete free-for-all or a dramatic price cutting will not necessarily help the air traveller of the future. In my view, one cannot properly apply the economics of the street market to air transport. The recent spectacle of operators bidding against each other for the North Atlantic standby passenger resembled nothing more than the barkers at a fairground, and that is

  1681
  not, in my view, consistent with the dignity or indeed the efficiency of this industry.
  I add this. The economy and the comfort of air travel since the war has importantly, and probably most importantly, been advanced by improvements in equipment both on the ground and in the air. The wide-bodied aircraft and the high bypass ratio engine have probably been more significant as contributions towards the wellbeing of the passenger than any fare cutting. But if that kind of equipment is to be developed, then there must be sound customers able to invest hundreds of millions of pounds. The ability of an operator to raise capital for modern equipment is in the real interest of the traveller, and when we hear arguments about fares in the future I hope that point can be borne a little more in mind.
  At Committee stage I hope we can look more closely at the provisions relating to the environment. I, for my part, would take for granted that if there was an application to operate a shuttle service from Heathrow in the early hours of the morning using 707s, or dare I say VC.10s, the authority would have some questions to ask about noise factors. I followed as carefully as I could what the noble Lord, Lord Trefgarne, had to say on this point, but are these provisions intended to make the CAA the authority on environmental matters? Are they really the body for that? Have they the staff? If it is going to cost them more money, are the Government going to provide that finance or will it have to go in airport charges? I would ask the noble Lord, are the questions involved really for technical consideration or are they not more a matter for political judgment? I am sure the ideas which my noble friend Lady Burton put forward deserve study, and I hope we can consider them at Committee stage. But my view at the moment is that the sort of problem that will have to be faced is one in which the Minister responsible should be seen to be taking responsibility.
  Like other noble Lords, I have a certain number of other questions, but I have my eye on the clock. I look forward with confidence to the noble Lord, when he comes to reply, giving me just a little more information and satisfying me on
  1682
  some of the points I have ventured to raise. I hope that that may well help us to have an even more constructive Committee stage.
  7.14 p.m.
  Lord MORRIS: My Lords, I should like to say at the outset that in general I welcome this Bill wholeheartedly. However, I wish to restrict my observations to that part of the Bill that deals with the new set of objectives set for the Civil Aviation Authority and in particular those objectives in respect of the environment. By virtue of Section 3(2) of the Civil Aviation Act 1971, the authority has the duty to perform its functions in such a manner as it considers is in accordance with guidance given by the Secretary of State after approval by each House of Parliament. The current guidance provides that:
  "in exercising its functions the authority should take full account of the need to minimise disturbance caused to the public from noise, vibration and pollution arising from aircraft operations and should advise the Government on operational and economic aspects of achieving this objective. It should co-operate in Government policies designed to protect the environment, encourage airline and airport operators to adopt such policies, and generally assist the Government in implementing those policies".
  Read as a whole the guidance appears clearly to envisage that with regard to the environment the Civil Aviation Authority's main duty is to advise and co-operate with the Government. Together with the powers exercised by the Secretary of State under Section 29 of the Act of 1971, the provisions of the guidance on environmental matters—as interpreted and acted upon by the Civil Aviation Authority—have to date worked very well. In particular, the Civil Aviation Authority has been able to avoid any significant conflict between its duty to secure the provision of air services of a satisfactory standard and its obligations (as distinct from specific statutory duties) under the guidance.
  My Lords, as your Lordships are aware, it is now proposed in this Bill to amend Section 3 of the Act so as, inter alin, to revoke the Secretary of State's power to give guidance to the authority. On environmental matters, that which is little more than earnest exhortation is to be replaced by a specific statutory duty placed upon the Civil Aviation Authority
  "to have regard to the need to minimise as far as reasonably practicable"

  1683
  the whole series of items affecting the environment which are within the body of the Bill, and I will not weary your Lordships with them.
  I believe it is objectionable to impose on the Civil Aviation Authority by order a statutory duty to take account of additional and more far-reaching factors than those pertaining to the Secretary of State's own statutory powers in respect of these matters. Furthermore, I believe it would be quite wrong to impose upon the Civil Aviation Authority a duty
  "to secure that British airlines provide air transport services which satisfy all substantial categories of public demand…"
  together with the conflicting duty to minimise adverse effects on the environment and disturbance to the public.
  The judgments that would be required in respect of"specified"aerodromes are essentially political judgments. The Civil Aviation Authority is not constituted to make judgments of that nature. It is motivated and professionally dedicated to the support, encouragement and development of civil aviation and would certainly be seen in that light by the environmentalists, or indeed any other kind of protestational neurotic. The judgments required concern the delicate balance between conflicting legitimate interests. Such judgments are for governments and not for a body corporate that is not the servant or agent of the Crown, not directly accountable to Parliament.
  With regard to the provision of services by British airlines, and the reasonable interests of users of air transport services, the Civil Aviation Authority has, and would retain, specific statutory duties to which its environmental duties would be subordinate. In effect this would afford to airlines a measure of protection that would not be available to, say, air taxi operators and private aviation. I believe it to be questionable that the Secretary of State should have virtually unfettered power arbitrarily to "specify" aerodromes without prior consultation of any sort. Mind you, I cannot envisage any Secretary of State so doing. However, he has no obligation to consult. Furthermore, the Bill makes no provision as to the particular matters that may or may not be taken into account by the Civil Aviation Authority in relation to the
  1684
  licensing of "specified" aerodromes; nor does the Bill deal in any way with the conditions that could be attached to an aerodrome licence for environmental reasons. Section 29 of the Act of 1971, dealing with the Secretary of State's powers and duties, does set bounds and imposes requirements.
  In order that it could be seen to have discharged its statutory duty fully, the Civil Aviation Authority would be obliged, in considering the licence of a"specified"aerodrome, to establish machinery for obtaining and considering the views and claims of the licensee, the users of the aerodrome and those who claim to be adversely affected by its operation. It might well be necessary to have public hearings on the lines of those for some air transport licences.
  Again, no provision is made for appeal against Civil Aviation Authority decisions reached after taking into account, as would be required by the Bill, environmental matters. Nor is there any provision for procedures to be followed by the Civil Aviation Authority in considering, for example, a request to revoke or substantially restrict the licence of a "specified" aerodrome.
  It would no doubt be necessary to amend the Civil Aviation Authority Regulations so as to provide for appeal against Civil Aviation Authority decisions, and it is difficult to contemplate any arrangement other than an appeal to the Secretary of State. It seems to follow that any Civil Aviation Authority decision with regard to a "specified" aerodrome, would be the subject of appeal either by aircraft operators who felt that they were unduly restricted, or—more likely—by those aggrieved by continued disturbance. As the Secretary of State would have to take the decision in the second instance he might just as well take it in the first. It would save a lot of unnecessary complication and work.
  I would suggest, with respect, that it seems absurd to give the Secretary of State power to impose on the Civil Aviation Authority, by order, a duty to do things which he himself is already specifically empowered to do by virtue of Section 29 of the Act of 1971, and will presumably continue to do in respect of the four aerodromes already designated; namely,

  1685
  Heathrow, Gatwick, Stansted and Prestwick.
  As your Lordships are aware, there are 130 aerodromes currently licensed by the Civil Aviation Authority, a large number of which could generate environmental complaints, with the consequent temptation for officials in the Department of Trade to offload the problem of dealing with the complainants by urging that the aerodromes be "specified", thus passing the buck to the Civil Aviation Authority. News travels fast and it would soon become known to the environmentalists that, instead of a situation whereby the Department of Trade had managed to contain environmental action to four major aerodromes, there was machinery by which pressure on the department would result in "specification" and access to an appeal machinery which had not existed previously, and which had not been needed previously, so far as I am aware.
  Make no mistake about it; in this respect Her Majesty's Government are abrogating their duty to govern. They are passing on to the Civil Aviation Authority—a body corporate, not the servant nor the agent of the Crown—nor answerable to Parliament—a duty to take political decisions. In so doing I believe that they are making a rod for their own back, for any person aggrieved at Civil Aviation Authority decisions will, by whatever means are at his disposal, be they foul or fair, inevitably appeal to Government for satisfaction, and meanwhile place a spanner in the smooth working of the Civil Aviation Authority.
  7.26 p.m.
  Lord ENERGLYN: My Lords, first, I should like to pay a tribute and extend my thanks to the noble Lord, Lord Trefgarne, for the clarity of his presentation of the Bill in your Lordships' House. Equally, or rather superiorly, I should like to extend my thanks to the noble Lord, Lord Boyd-Carpenter, for giving us the benefit of his incomparable knowledge of this interesting aspect of British life.
  So far, we have heard speeches dominated by our fear for the future of passenger air traffic. But I should like to fulfil a duty, and that is, to help to
  1686
  emphasise the point made by the noble Lord, Lord Boyd-Carpenter, that this is an extremely important Bill and it is vital for the future of this country. Therefore, I should like to turn from air passenger traffic to air cargo.
  Since the war we have been accustomed to thinking of commerce without paying due regard to the units of energy involved in the production of various commodities —that is because we have had cheap oil and we have had cheap coal. But now the reality of life has been enforced upon the trading countries of the world that certain countries can hold them to ransom because they—and they only—contain these supplies of fossil fuels. So, the units of energy come very much into the cost evaluation of our international trade routes. We now find that technologists are concerned with the criticism of the fuel efficiency of engines. I forecast that we shall see technologists producing new types of engines—engines which will reduce the usage of fuels of a conventional type. However, I do not want to develop a kind of Jules Verne pattern of talk; I should like to stay with the facts as I understand them.
  The pessimists, of course, will say that they see the future of the internal combustion engine coming to an end because of the exhaustion of our liquid hydrocarbon fuels; in other words, the combustion engine is a wasting asset. We find, on the other hand, that supplementary or remedial measures are being taken by countries like Japan, by adding sails to ships to increase their speed and to reduce fuel costs. The traditional propeller of a ship will soon be completely changed and we shall see the use of plastics in driving ships through the seas —something that we have never thought of before. We shall see the hulls of ships lined with silicones that will reduce the friction and the buoyancy of the ships and so reduce the amount of fuel used for sea transport. And so, too, it will be in the air.
  I was fortunate, after the war, to be in contact with Professor Andre Houberechts, a Belgian professor, who, to keep sane in a prisoner-of-war camp, worked out the mathematics of the thermo-dynamics of jet propulsion. That brought me into contact, naturally, with Whittle. As an interesting aside, if your Lordships wish

  1687
  to see the first Whittle engine you must go to the University of Louvain, and Professor Houberechts' department, where Whittle gave him an engine as a memento of the vast amount of mathematics he carried out as a prisoner of war.
  So, in those early days I was educated by these masterminds into looking at jet propulsion. They were, in their brilliant way, instructing me on the value of bubbles and gases and how one day we would be not just driving an engine through the sky with hydrocarbons, but driving it through the sky with mixtures of hydrocarbons and water. We are already beginning to see that happen. We know that we can get the same energy out of mixtures of hydrocarbons and water as we can out of straight hydrocarbons. But the driving force of water is far superior to hydrocarbons. One has only to think of gazing at the fantastic performance of Old Faithful in Yellowstone Park to appreciate the enormous power of a steam jet. One has only to go into a power station to see a steam turbine at work to appreciate what happens if we could convert, effectively, water into a stream of gas. So we shall see all these things happen.
  But I do not want to bore your Lordships with these anecdotes; rather, I want to draw to your attention, or to place on record, the growth in this country and in other countries of air cargo. Again, the orthodox mind will say:"Ali, yes, it is quite all right to fly expensive commodities like flowers from Nairobi to Frankfurt, perfumes or whatever, but only the specialist commodities can be economically transferred from A to B by air". But when one looks at the scene as it is at the moment, when one looks at every sophisticated and industrialised country in the world, what does one see? The basic industries are becoming more and more indigenous and less and less viable as exporters of the old gross products of industry, for example, iron and steel and motorcars. On the trade routes of the world of tomorrow or even today we shall see the sophisticated products that the world wants—for example, chemicals, which will not stand up to the rigours of sea and road travel but which must get from A to B fast and safely.
  1688
  Therefore, in this debate I should like to underline the importance in the growth of our air freight industry. It has some exciting potentials for Britain. Let me give your Lordships one example of how this could not only work to the benefit of the world trade routes, but also how it has a significant effect upon the politics and social behaviours of countries in which at one time we had a parental interest.
  Let us take, for example, Zambia, Uganda or Zimbabwe. They are all land-locked countries, throttled, by one disturbance or another, and so unable to export their products and, therefore, their economies are stifled. If we could import into these countries the ability, for example, to process their metals and fly the metals out—not the gross minerals—we would then create trade routes which would make air transport viable. I have had the privilege of discussing this with President Kaunda, and so to illustrate my point let us take the case of the Copper Belt. There there are waste tips of enormous size containing considerable percentages of copper, and particularly cobalt and selenium. The new revolution in the extraction of metals will be away from the use of heat for smelting metals. We now have compounds which, if you want a new word in your list of chemical jargon, are called "chelates". These compounds suck metals onto one end and throw the wasted part out at the other end; they are scavengers. They can isolate metals and purify them without the use of heat. I have explained to the people in Zambia that we make those chemicals; that we could fly them in and fly the cobalt out.
  What I am talking about? Cobalt is fetching about £20,000 a tonne. I am talking about an annual trade between Zambia and Britain of £80 million per annum. If somebody tries to tell me that this is not a viable prospect for air transport, then I shall wonder what has happened to my mental reasoning. Therefore, I give that example simply to emphasise the point that at the moment probably only about 20 per cent.—and I defer to correction here—of our air traffic is devoted to cargo.
  Just as the cargo ships of old produced the passenger ships, so the improvement of cargo airships will increase the available money for improving the conditions for

  1689
  the passengers for whom the noble Baronesses are pleading. I am also excited by this prospect of reverting to airships. I know that many people are allergic to airships after the R101, but to me they make sense because an airship is like a helicopter—it can land anywhere and can lift greater tonnages than an aircraft. I was immensely cheered to read in the press and to see on television that a company in the Isle of Man is building airships. This was triggered off by a company called—and noble Lords will see that I do not have to declare an interest because I am not sure of its name—Redcoat Cargo Limited. This company has been in business flying freight from here to Africa. It is interested in these airships that have been built which are capable of carrying 60 or 70 tonnes of freight at about 80 miles per hour. That is a viable possibility. In an article published in the Daily Mail on 4th August the managing director, Mr. Owen, of Redcoat Cargo said:
  "If we were able to introduce the airship into service today, we would be able to reduce all our freight prices by 25 per cent."
  Therefore, I thought that it was my duty to place on record in this Second Reading debate these remarks which may be helpful when it comes to the Committee stage in ensuring—as the noble Lord, Lord Boyd-Carpenter, said—that we must get the Bill right; therefore, we must not have in the Bill any obstacle to the development of the distribution of merchandise around the world by means of airships or aircraft.
  7.37 p.m.
  The Earl of KINNOULL: My Lords, I think that one could truthfully describe some of the noble Lords who have so far taken part in this debate as godfathers of aviation. The standard may now drop a little in experience, but not in enthusiasm. My noble friend Lord Boyd-Carpenter described our civil aviation industry as the second largest of the free world. I would venture to add that it comes first when one looks at the influence of aviation in the free world; when one looks at the innovations, the development of markets and the fact that we have been able to bring air travel to many people; when one looks at the standards of service of our airlines and, above all, at the standard of our safety record. It is a
  1690
  20th century industry at which I think we excel. Therefore, any civil aviation Bill which comes before Parliament, as other noble Lords have said, is of great importance. It must foster and maintain our market share and, indeed, make our industry continue to thrive.
  I hope that this Bill will achieve that, although I do not quite share the obvious enthusiasm of my noble friend Lord Boyd-Carpenter for the considerably increased independence of the Civil Aviation Authority on licensing in the future. However annoying policy guidelines have been to the Civil Aviation Authority in the past, they were a direct line between the Minister and the authority and, indeed, between Parliament and the authority. I now wonder, although I am sure that my noble friend will reassure us later, whether there is some severance of that link.
  The decision to transform British Airways from a nationalised body into a mixed economy body is something I certainly support. Its twin objectives of employee participation in the equity and a mixed economy vehicle are, I am sure, good ones. It is of course a testing time for the private sector's nerves to take a share in British Airways when the market is in somewhat of a recession, costs are rising, profits are falling, and the capital needs are simply vast. But I have little doubt that the challenge will be taken up.
  As other noble Lords have said, and indeed as the noble Baroness said, one would like to add one's tribute to the past management and staff of British Airways and wish them well in the future. Anyone who has seen the dedication of service of Mr. Ross Stainton or Mr. Roy Watts and their team will know of their enormous achievements in steering British Airways to the size and influence it enjoys today. It is truly a giant among international airlines, with a great and much envied reputation.
  Turning to Part II of the Bill, civil aviation's increased independence is certainly a matter to which I hope we shall return in Committee. It is certainly a matter which most British airlines watch with, I would almost say, considerable apprehension: how the appeals structure will operate; what grounds of appeal will be allowed to the appellants. These, as

  1691
  the noble Lord, Lord Beswick, said, are points which I hope we shall clarify later.
  There is one particular issue on the existing appeals structure of which I have given notice to my noble friend and which I should like to raise briefly tonight. It concerns the helicopters for North Sea oil. It concerns particularly Class 7 licences, which my noble friend Lord Boyd-Carpenter was instrumental in introducing in, I think, 1973. The House will know that Class 7 licences were designed to combine maintaining opportunities for competition among British operators with a degree of protection for our industry against unfair foreign competition. It is a policy followed avidly throughout the world by no less than Canada, the United States of America and even Norway.
  The North Sea helicopters service is a vast, vital connection to our rigs. It carries something over 100,000 passengers a month going to and from the rigs. As the House will know, they often operate in appalling conditions. The spin-off benefit of this industry for the helicopter industry itself is that with the support and enthusiasm of British Airways one is now seeing the development of what is known as the WG31, the new Westland helicopter, which is likely to be due to come into service in 1982.
  There was a recent case of a Class 7 application by the Helicopter Hire Company. I do not wish to discuss the merits of this case, but it went to appeal. It was contested by two of the main British operators in the North Sea. The opposers' case was principally that the applicant was a small British company which in all commercial reality was owned by a large American company with large interests in Mexican Gulf operations. In other words, this was foreign competition coming in through the back door.
  At the application stage the financial information regarding that company was quite rightly not available to the opposers, on the grounds of commercial confidentiality. But when it came to appeal the financial aspects of this company were obviously an important matter, and indeed it was necessary to know whether its financial strength could meet its commit
  1692
  ments. The publication of the Minister's decision came in this form. The Minister said:
  "The authority"—
  that is, the Civil Aviation Authority—
  "is empowered to decide not to disclose certain information supplied to it in confidence about the finances of applicants for air transport licences. It was mainly on the basis of undisclosed information that the authority satisfied itself on the fitness and financial control of Helicopter Hire Limited."
  The Minister then went on to say:
  "The confidential information on which the authority relied was not before the Secretary of State in his consideration of the appeal."
  That is a seemingly unsatisfactory situation because it seems that the Minister, in judging the merits of the appeal, was not privy to certain salient facts. That may be incorrect, but I would ask my noble friend why the financial information was not before the Minister. Does he indeed have the power to call for that financial information, or is there a gap in his powers? Is the original purpose of the Class 7 licence being undermined by this case? I hope that my noble friend will have time to reply to those points tonight, but if not we can of course come to them at Committee stage.
  My last point is that the popularity of the Civil Aviation Authority among British airlines at the present time is, when it comes to the level of charges, an acute matter. My noble friend knows this well. This relates to charges for the use of airports, security checks, navigation services, and so on. But my noble friend may not know that a recent survey throughout the world showed that if an airline was carrying a passenger from New York to Washington, the charges were £1·47p per passenger; New York to Montreal cost £2·73; London to Glasgow cost £17·87; and London to Paris cost £13·19. These are staggering figures, and I would ask my noble friend whether he endorses the view that the charging policies of the Civil Aviation Authority should encompass much more public accountability. Finally, I should like to wish this Bill success, wish its objectives success, wish the Civil Aviation Authority success in their new and undoubted responsibilities and indeed wish the industry success.
  7.47 p.m.
  Baroness TRUMPINGTON: My Lords, you have already heard that I was brought into this particular world by my noble friend Lord Boyd-Carpenter and nurtured by the noble Baroness, Lady Burton of Coventry. With parents like these, plus the fact that I am at present chairman of the Air Transport Users' Committee, it would be unusual if I did not have a special interest in today's debate. The noble Baroness, Lady Burton, will recognise that, while I agree with many of her views, I shall disagree with others. Unfortunately there has been no collusion between us, so I trust your Lordships will forgive a certain amount of brief but necessary repetition.
  As the noble Baroness said, the Air Transport Users' Committee was formed in 1973 by the Civil Aviation Authority. Its membership consists of regular air travellers drawn from all over the United Kingdom, among whom are several with long and specialist experience of civil aviation from every point of view. The last time we needed new members we advertised. Well over 400 replies were received, and the present excellent, in my view, committee is largely based on the pick of that bunch.
  The terms of reference of the Air Transport Users' Committee are:
  "To make reports and recommendations to the CAA for furthering the interests of air transport users, including the investigation of complaints against the suppliers of air transport services; to co-operate with any airport consultative committees which are charged by airport proprietors with furthering the interests of air transport users inside their airports."
  It is in discharging the latter part of our terms of reference that we undergo considerable difficulties.
  It is the view of the Air Transport Users' Committee that a person becomes an airline user the moment they buy their ticket. From then on their welfare becomes our concern. But during the time a passenger is inside an airport until he boards his aeroplane his interests lie in the hands of the airport consultative committee. The moment he leaves the airport to board his plane he reverts to the care of the AUC. Your Lordships will appreciate that I am, in the main, referring to the airport consultative committees of Heathrow and Gatwick.
  1694
  Let me turn for a moment to the terms of reference set out for the airport consultative committees. As the noble Baroness, Lady Burton, and my noble friend Lord Boyd-Carpenter said, their terms of reference deal mainly with noise abatement and problems concerning the communities adjacent to the relevant airports. However, what neither of them mentioned was their terms of reference under the headings,"Passengers' Services Sub-committee". The airport consultative committees are required:
  "(a) to consider, on their own initiative or by direction of the Consultative Committee, any question in connection with the airports affecting passenger-user interests; (b) to act as an advisory body to the Consultative Committee on such matters; and (c) to report to the Consultative Committee on their consideration with, where appropriate, recommendations."
  Thus, to give the simplest kind of example, when a passenger writes to the Air Transport Users' Committee complaining first, that there were no trolleys at Heathrow and, secondly, that somebody smoked incessantly in the non-smoker part of the aeroplane, the Air Transport Users' Committee can deal only with the latter part of the complaint and is compelled to refer the complainant to the consultative committee for action with regard to the complaint about trolleys.
  This is not only difficult for the public to understand but is time-wasting and inefficient. It is also difficult for the AUC to understand. I have had conversations with the two relevant Ministers in another place concerning the present ridiculous situation. So far, neither of those conversations has borne fruit, but I am always hopeful.
  I am therefore asking my noble friend whether he would consider adding a short paragraph to the Bill amending the terms of reference of both the Air Transport Users' Committee and the airports consultative committees in such a way as to make the Air Transport Users' Committee responsible for the care of the passenger from the moment he buys his ticket right through to the end of his journey. I realise there are difficulties involved in what I am asking, but I can see no other way to resolve the anomaly which exists at present. The Air Transport Users' Committee has neither sufficient funds nor members to take up places which might be offered them to sit

  1695
  as members of the various consultative committees.
  The noble Baroness, Lady Burton, recommends that we should become a statutory body. She will not mind my saying that she has always held a one-woman minority view on this point, even from the days when she was a member of the Airline Users Committee. But the Air Transport Users Committee members do not wish to become a statutory body. They fear that, by so doing, first their powers of action might be curtailed and, secondly, that membership by category might be forced upon them. Further, the committee gains immense advantage through its close but independent association with the CAA. The closeness of that association has never muzzled the views of the committee; they have felt entirely free to bite the hand that feeds them, and have done so.
  The other side of the coin is that through our close association with the CAA we have ready access to information, research and advice when we call for such things. All these advantages save money, apart from being really positive advantages which we might lose if we lost that close contact. We members of the AUC, unlike members of statutory bodies, are unpaid. A further point made by my committee is that we would cost the taxpayer a great deal more money should we become a statutory body. I agree that the appointment of members and the chairman by the CAA could be seen as a weakness, but no appointment nowadays is made without full consultation with, and agreement by, the entire committee, and I do not think the board of the CAA would act against the committee's wishes. I have no idea how members of statutory bodies are appointed, so I must leave that question in the air.
  With deference, having discarded the statutory body angle, the only remaining possibility seems to be—and I am supported in my view both by the British Tourist Board and the Scottish Consumer Council —to take the action I have already suggested, which is to re-write the various terms of reference of the AUC and the consultative committees, and I would most emphatically seek the aid of my noble friend to include such a paragraph in the final version of the Bill.
  1696
  Regarding Clause 15 of the Bill, in the view of the Air Transport Users Committee this is virtually a repetition of Section 36 of the Act, with the single exception that the authority replaces the Secretary of State as the person empowered to disclose information. We have strongly represented for a very long time our view that the user of air transport suffers, principally but by no means exclusively, in the matter of air fares because operators in Europe, which include the United Kingdom, are not required to publish regularly and promptly meaningful operational data such as is legally imposed on United States airlines in America, and indeed on British airlines when they land in the United States.
  My committee believes that the transference of the responsibility from the Secretary of State to the authority for determining what, if any, operations information shall be capable of being disclosed is altogether too feeble an amendment. The conditions which have to be satisfied can be laborious and time-consuming. We therefore strongly urge that Clause 15 of the Bill should adopt a bolder and more positive approach to this real problem. We should like to see a revised amendment to Section (36)(1) of the Act as set out in Clause 15 of the Bill, but deleting subsections (1)(b) to (d) inclusive and substituting the following subsection (1)(b):
  "(b) the Authority determines to disclose the information".
  That would give the authority the power to disclose without the ramifications of receiving representations from the persons affected. I wish the Minister all good fortune with the Bill and I look forward to hearing his comments on the many points that have been raised this evening.
  7.57 p.m.
  Lord PONSONBY of SHULBREDE: My Lords, I wish at the outset to welcome the noble Lord, Lord Trefgarne, back from his extended tour of South America. We note how quickly he has been put back into harness in having to move the Second Reading of a major Bill so soon after his return. We have had a number of fascinating and erudite speeches this evening, but I am afraid I must bring your Lordships back to the hard reality of the major purpose of the Bill, which in Part I is designed to make British Airways

  1697
  into a normally constituted company. I do not think the proposals in the Bill will actually make British Airways a normally constituted company.
  It is ironic that the Bill should be brought to this House for Second Reading so soon after British Airways announced a sharp fall in their profitability, with the announcement that their retained profit for the year ending March 1979 was down from £62 million to £4 million. It is ironic because the Government's open-skies policy, which is of immediate benefit to the consumer, has undermined and will continue to undermine the profitability of British Airways, though I agree there are many other factors which have caused this undermining of the profitability of British Airways.
  The ability of the Government to ensure the success of any public issue of shares will depend very much on timing. That will be crucial to the marketing of shares, and the noble Lord, Lord Trefgarne, pointed out that the Government were retaining flexibility as to when in fact they will market shares in British Airways Limited. It is clear that for an issue to be successful, British Airways should be able to show itself to be in a strong business situation in a favourable international climate. I think that that is unlikely to be the case for some time. Indeed, it could well be that a Government of a different political hue will be in power by the time that it is expedient to proceed with the sale of these public assets. Furthermore, it could well be that the sale will never take place; and I should regard that as a very satisfactory result to this Bill.
  One wonders what is the reason behind the proposals in the Bill. In moving the Second Reading of the Bill the noble Lord stressed the need to give British Airways more freedom of management control; freedom from the diktats of Whitehall, he said. Yet it is of course always within the power of Government, of any particular Government, to give British Airways as it now stands that freedom. It is not necessary to have a Bill of this nature in order to give British Airways the particular freedoms that the noble Lord talks about. It may be that the noble Lord wishes to ease the pressure on the public sector borrowing requirement by taking British Airways outside
  1698
  it. That could possibly be a reason for the Bill. However, I believe that the truth is, as we all recognise, that we have the Bill before us today because it is a part of the dogma of the Government that public assets should be sold off. I believe that this is misguided and that it will do nothing for the industry.
  I fear that with this Bill we shall be in the same difficulties as we were in with the British Aerospace Bill, which we debated earlier this Session. We do not know how much of the shareholding the Government intend to keep. The Government's current policy apparently is to retain a 51 per cent. shareholding, but that policy may change, and Parliament as a whole does not have the faintest idea whether eventually the Government will sell 10 per cent. or 90 per cent. of the shareholding, if indeed they ever sell any shares at all. Certainly I agree with the view expressed by the noble Earl, Lord Amherst, that it should not drop below 51 per cent.; and of course this is the Government's current policy.
  However, if this is the Government's current policy, one is amazed that, as the major shareholder of British Airways Limited, they do not wish even to appoint a single director to the board to look after their majority shareholding. Surely there should be watchdogs to look after the public interest at British Airways. I cannot end my comments on Part I of the Bill without joining other noble Lords in paying tribute to the high quality of service provided by British Airways as well as the dedication of British Airways staff, all of which I hope to enjoy tomorrow.
  I now wish to turn to Part II of the Bill. We have heard very authoritatively —particularly from the noble Lord, Lord Boyd-Carpenter—about the work of the Civil Aviation Authority. Certainly our view would be that the Civil Aviation Authority should operate within parameters laid down by the Secretary of State and should be accountable to Parliament. Until recently the Government's view appeared to be that the Civil Aviation Authority should be a totally autonomous non-governmental organisation, but with the Hong Kong decision that appears no longer to be so. Thus, if this situation is to be repeated, the Civil Aviation Authority could find

  1699
  itself becoming a show body, with arbitrary decisions being made elsewhere by the Secretary of State.
  The noble Lord, Lord Boyd-Carpenter, very forcefully underlined the difficulty for airlines caused by the kind of action that has been taken in the past by the Secretary of State. My noble friend Lord Beswick, with whom I would agree, also underlined that point. It is important that the authority of the Civil Aviation Authority should be re-established so that airlines will know that once they have a decision from the CAA, they can go ahead and plan on that basis.
  While speaking about Part II of the Bill, I should also like to raise the question of the charging policies of the British Airports Authority. As noble Lords will be aware, I have always been concerned about the vitality of the British tourist industry. In my view, to some extent this depends on the maintenance of the predominant position of London's airports in the European travel market. It is not beyond the bounds of possibility that if airport costs are too high, this could persuade airlines to switch to other, less expensive European airports. The current charging policies of the British Airports Authority, which are based on the need to finance future developments, are I believe open to question. I think that one should question whether it is right to ask present users to pay for services which will be used by future users. I believe that this is a point that your Lordships should question when we come to the Committee stage of the Bill.
  The debate is taking place a little later than I had expected and I do not wish to detain the House further, other than to say that I am sure that your Lordships will give the Bill a Second Reading. I think that I have underlined the fact that we are against the major purpose of the Bill, and we shall scrutinise it in great detail in Committee.
  8.7 p.m.
  Lord TREFGARNE: My Lords, I have been posed with a considerable task this evening: to answer the very many points that have been raised. Therefore, perhaps your Lordships will forgive me if I reduce to the very minimum the opening general remarks of my reply and
  1700
  then deal with as many points as possible in the time remaining. If there are any points which inadvertently I fail to touch upon, perhaps your Lordships will forgive me and allow me subsequently to pick them up from Hansard and deal with them in correspondence with those of your Lordships concerned.
  We have had a wide-ranging and constructive debate upon this important Bill. Dealing first with Part I, I should like to take this opportunity once again to stress two important points in connection with the change in the status of British Airways. First, it is the whole of the undertaking of the British Airways Board that is being vested. There is no question—as I think the noble Lord, Lord Ponsonby of Shulbrede, suggested—of any part being sold separately, hived off, flogged off, asset stripped, or whatever one may call it, under the provisions of the Bill. Secondly, the undertaking will be vested in a Companies Act company, but that company must be one in which all the shares on vesting day are owned by the Crown. Thus, there is no question of the undertaking being vested in a company that has connections with any other existing company or organisation. We are convinced that British Airways Limited should be a normal private sector Companies Act company not some kind of hybrid, quasi-nationalised industry.
  Turning now to Part II, I must make it clear that in no sense is the Bill intended to bring about what has become known as an "open skies" regime. Regulation by Governments is currently a pervasive feature of the civil air transport scene. This country cannot, acting alone, force other countries to dispense at one fell swoop with the regulatory mechanisms that have been created over a long period. Therefore, the Bill seeks to ensure that where competition will be beneficial, and where the United Kingdom has the power to bring it about, it will be the duty of the Civil Aviation Authority to see that that competition is introduced.
  Let me now turn to the large number of points that have been raised, which I shall try to deal with as succinctly as I can. First, the noble Earl, Lord Amherst, speaking from the Liberal Benches, mentioned Government provision of funds for British Airways. In fact, the Government do not provide loan finance for

  1701
  British Airways. British Airways borrow in the market, mainly from banks in the United States—and they do so in dollars—to finance their capital programme. It is true that this is currently with Treasury guarantees, which will not be available to the successor company, but this will be the only change.
  The noble Earl also asked what would be the status of the successor company and its relationship with the Government when 100 per cent. of the shares were owned by the Government prior to the flotation. Our thinking on this is that the change of status should take place fairly near the time of the flotation, when the date is known. This would restrict to a relatively short period the existence of the successor company with 100 per cent. Government ownership. Meanwhile, British Airways would of course continue as a nationalised industry.
  The noble Earl also asked me about foreign shareholders. He again raised the fears, which have indeed been expressed in debates in the other place, that the successor company could fall into foreign hands or be taken over by another company, perhaps with malign intent. Although as I indicated in my opening speech the Government consider these possibilities remote, there are belt and braces, to which I briefly referred, which act as a safeguard against such a possibility. First, the belt. There will be provisions in the articles of the successor company, a draft copy of which is in the Library, to provide that foreign-held shares carry only one-tenth of the voting rights; and linked to these will be transparency provisions to ensure that the company will be able to determine the nationality of the beneficial ownership of all shares. Any shareholder not being able to satisfy the company of his nationality will be treated as foreign, and the voting power of his shares reduced accordingly. However, we recognise that certain rights of investment may be available to nationals of other Community states. Such rights as exist are protected by the proposed articles of the company.
  However, there are other provisions, which I might call the braces, under Clauses 5 and 6 of the Bill, whereby the Government have the power to acquire British Airways Limited shares in the market if it should ever be considered
  1702
  desirable or necessary to restore the level of the Government's holding at the level which they held immediately after the initial sale of shares; in other words, a majority shareholding. Thus there will be a long-stop which could be used in the event of any takeover or control from an unwelcome source.
  My Lords, may I turn now to the questions put to me by the noble Baroness, Lady Burton? She queried whether this Bill would affect the ability of Members of Parliament to ask Questions about civil aviation policy and about the CAA's exercise of its functions. The simple answer is that it will have no such effect. This Bill is removing the Secretary of State's power to give guidance, which I have already explained is a flawed power, and is instead setting out the authority's objectives and duties in primary legislation. It does not alter the Secretary of State's overriding responsibility for civil aviation matters. Therefore, the ability to question the Secretary of State on civil aviation matters remains unimpaired. Of course, in future it will not be possible to frame Questions which refer to the power to give guidance, but it will, for example, be possible to query whether the CAA's policies are sound in relation to the objectives laid on the authority by the 1971 Civil Aviation Act as amended by this Bill. So I hope your Lordships will agree that there is no question of this Bill changing the ability of Members of the other place or of your Lordships' House to ask Questions relating to civil aviation policy.
  My Lords, the noble Baroness also asked whether it was true that the right of access to information was only discretionary as regards the consumer organisations, whereas of course the airline industry has statutory rights. The statement which was made in Committee in another place was made strictly in the context of air transport licensing, and the reference related to certain rights which are conferred by the Civil Aviation Authority Regulations 1972 upon such persons as the holder of an air transport licence, the holder of an aerodrome licence and the holder of a road service licence. The Government accepted that there is a need for greater disclosure of economic information, and to this end accepted a proposal for the insertion of a new clause,

  1703
  now Clause 16 of the Bill. This clause confers upon the Civil Aviation Authority greater ability to publish economic and statistical information relating to air transport licensing, and it is thought that this will meet the needs of those consumer organisations which seek more information about air transport licensing matters.
  The noble Baroness also asked, as I think did my noble friend Lady Trumping-ton, at least by implication, whether there was not an obvious necessity for a single organisation to speak for air travellers. Primary responsibility for looking after the needs of air travellers rests, of course, with the Civil Aviation Authority. The authority, in order to cope more successfully with this task, has set up the Air Transport Users' Committee, which the noble Baroness knows well since she was herself a distinguished member until September last year. This body is completely independent minded, and is by no means under the control of the organisations which she has in mind. If the noble Baroness has any positive suggestions as to ways in which the committee's service to the public could be improved, I am certain that the present chairman, my noble friend Lady Trumpington, would be more than happy to consider them.
  My Lords, my noble friend Lord Boyd-Carpenter criticised the form of Part II of the Bill. He was concerned about the fact that this Bill will of course have to be read in conjunction with the 1971 Act, and I confirm that that, for the moment, is the case. However, I am hoping at a later stage in these proceedings to bring forward certain technical pre-consolidation amendments in the hope that it will be possible in the near future to bring forward general civil aviation consolidating legislation, which I agree with my noble friend is much needed.
  My noble friend Lord Boyd-Carpenter also asked about the possibility of a new chairman for British Airways. The Government are urgently considering the chairmanship of British Airways in the light of the fact that, as my noble friend said, Mr. Stainton's term of appointment expires towards the end of this year. Your Lordships will not expect me to speculate on the question, but I can give an
  1704
  assurance that it is a matter to which the Government attach great importance and that an announcement will be made as soon as a decision is taken.
  My noble friend Lord Boyd-Carpenter, and also, I think, the noble Lord, Lord Beswick, asked me about the general position of Government directors in the future company. As I said in my opening speech, it is not our intention to appoint special Government directors to the board of British Airways Limited on a continuing basis. Of course, the initial board of British Airways, as it will appear in the prospectus for the sale of the shares, will be one to which all the members have been specifically appointed by the Government as promoters of the scheme. Since at that time the Government will own 100 per cent. of the shares, it is natural that they will appoint all the directors as promoters of the company. However, these directors will not be chosen as the agents of Government but as individuals who are considered best able to run the airline successfully as a fully commercial enterprise.
  It will be the duty of those directors, as of any other director of a company, to act in the best interests of the company itself, and not to promote any extraneous interest, be it that of the Government or of anybody else. Therefore, the initiative as regards changes in board membership will lie primarily with the board itself, as in the case of any normal company. However, the appointment by the board of any new directors during the year—for example, to fill a vacancy arising—and the reappointment of directors retiring by rotation will be subject to the approval of the shareholders at the following annual general meeting. Like any other shareholder, the Government will be empowered to vote in respect of resolutions proposed by the board relating to membership of the board. I do not readily foresee circumstances in which the Government would use their majority vote to veto the proposals of the board in this respect, but should this occur the Government's prime consideration in deciding how to exercise their rights will be what is in the best interest of the company.
  The essential point is that the company will be run by directors in whom the shareholders, including the Government,

  1705
  have confidence. The Government will not interfere in the day-to-day management of the airline by its directors. There is no place in the successor company to British Airways for directors appointed by the Government to do the Government's bidding or ensure that Government policy is followed in cases where the real interests of the company as a company dictate otherwise.
  Lord BESWICK: My Lords, I am most grateful to the noble Lord for giving way. The noble Lord said that there would be no question of the majority Government shareholder veto-ing any appointment to the board. Can he not be a little more positive than this? In the first place, there will presumably be a short-term appointment in the wholly-owned Government company. Is there to be no security offered to the executives who accept appointment to that board—an assurance from the majority Government shareholder that they will be appointed to the successor company?
  Lord TREFGARNE: My Lords, it is certainly the intention that the successor company will at the outset enjoy the services of the directors of all the corporation at the time of vesting; but thereafter the directors will enjoy the same employment protection arrangements as do the directors of any other company of this nature.
  The noble Lord, Lord Beswick, also asked me about the target investment limit. I can do no better than draw to the noble Lord's attention Clause 6(2)—page 6, line 22—where the target investment limit is defined. It

  "(a) shall be expressed as a proportion of the voting rights exercisable at general meetings of the successor company; and

  (b) shall he equal to the proportion of those voting rights which is carried by the Government shareholding at the time when the order fixing the limit is made."

  I hope that is what the noble Lord had in mind.
  Lord BESWICK: My Lords, this is not a Committee stage, of course, but I would direct the noble Lord's attention to Clause 5, which refers to the need for purchase of securities. Is the cost of those securities within the target limit or not?
  Lord TREFGARNE: My Lords, I shall have to take advice on that. Perhaps I may write to the noble Lord. The noble Lords, Lord Ponsonby and Lord Beswick, raised the question of the timing of the vesting and the sale of shares. I can only reiterate what I said in my opening speech. Part I of the Bill incorporates no timetable but is only the legislative framework. The Government have made it clear that no decisions have been reached on timing. We wish to maintain complete flexibility to choose the best time. Sale of shares will take place when we consider the time is right, taking into account the need for a successful flotation and the interests of all concerned. The earliest possible time for a flotation would be, I suppose, the summer of 1981; but I must emphasise that it is too early to take any decision at this time.
  The noble Lord, Lord Beswick, asked about the Government's relationship with the successor company. As I said in my opening remarks, we wish British Airways to be a perfectly ordinary private sector company. We intend that it should be independent of the Government. Although, after the initial sale of shares, the Government will have a majority holding in the successor company, we shall stand right back from the running of the company and not interfere with any aspect of its commercial and financial operations. These matters will be entirely in the hands of the board of directors.
  The noble Lord, Lord Beswick, also asked whether the powers in Clause 10 could be used in relation to the staff of an airline other than the managers. The answer is, yes, indirectly. The power to give direction to the management presupposes that the management in the company have the necessary internal control to be able to run the airline in question, including, for example, to require a pilot to fly aircraft from point "A" to point "B". I hope that that satisfies the query in the noble Lord's mind.
  The noble Lord, Lord Beswick, and my noble friend Lord Morris asked about the environment duties which will be conferred upon the CAA in certain circumstances. As an all-embracing duty, it may, on the face of it, sound attractive; but it could have serious disadvantages. With such a broad statutory obligation,

  1707
  the authority could not be confident of taking any steps without laying itself open to litigation on the charge of failure to carry out its environmental duties. A more satisfactory solution is to attach this duty to the specific functions of the authority where environmental questions may arise. Two such areas which will be left uncovered by the abolition of the power to give guidance are aerodrome licensing and air transport licensing, both of which are therefore covered by the environmental duty imposed on the CAA by Clause 11 of the Bill.
  I turn now to the question raised by several noble Lords, by the noble Lord, Lord Beswick, and, I think, by my noble friend Lord Boyd-Carpenter, relating to the recent appeal decision in connection with the Hong Kong service. It has been claimed that the decision was at variance with the purpose of this Bill—that is, to give greater scope and responsibility to the Civil Aviation Authority. I submit that that is not so. It is desirable to have a licensing procedure so that an independent body can examine all the relevant facts and take a decision accordingly; but an appeal mechanism is also desirable since, in the end, aviation policy must be subject to judgment by the Government of the day on the basis of the criteria laid down in the Act. My noble friend Lord Boyd-Carpenter asked specifically whether this recent decision heralded some new departure in appeals procedure. I can assure him that it does not. The circumstances on the Hong Kong route were very exceptional. As my noble friend pointed out, this is the first time since the CAA became responsible for these matters that the Secretary of State, any Secretary of State, has overturned a decision of the authority and I fancy that it will be a good while before he does so again.
  Lord BOYD-CARPENTER: My Lords, before leaving the point, can my noble friend tell the House what was so exceptional about this case?
  Lord TREFGARNE: My Lords, I would refer my noble friend to the remarks of my right honourable friend and his right honourable friend, the Secretary of State, when he made the announcement on this matter in another place on
  1708
  17th June. He indicated very clearly the criteria which he had taken into account in this matter. The reference is column 1359 of the Hansard of the other place on 17th June. I would refer my noble friend to that.
  Lord BESWICK: My Lords, that reference was to the assessment of the traffic potential on this route. If the Secretary of State is going to take a judgment on traffic potential, he can take that judgment on almost any application that is made.
  Lord TREFGARNE: My Lords, think that there were four applicants before the Civil Aviation Authority and that it was very exceptional indeed for there to be such wide disparity in the traffic forecasts which came before the authority on that occasion. My right honourable friend, as he said at the time, preferred the estimate of Laker when he arrived at his decision.
  Lord BOYD-CARPENTER: My Lords, my noble friend has said—and I have read the Statement of my right honourable friend and his right honourable friend—that what was exceptional was the difference in the traffic forecasts. Surely, there has hardly ever been a licensing case before the authority where there has not been a dispute over traffic forecasts. That is what all these cases are about. What his right honourable friend did not explain was what, in this case, in relation to the traffic forecasts, was so unusual that it could not be said to arise in any other case whatever. The problem is that his right honourable friend was putting his judgment, which in the nature of things is less instructed against that of the professional authority who are weighing traffic forecasts every day of their working life.
  Lord TREFGARNE: My Lords, my right honourable friend, as the Secretary of State, is charged with considering these matters; and he did so. I am prepared to back his judgment in this case against that of the authority.
  The noble Lord, Lord Beswick, and the noble Lord, Lord Boyd-Carpenter, referred to the general position regarding the duty of the Secretary of State when considering appeals. I should explain that Section

  1709
  24(6) of the Civil Aviation Act 1971 (which provides that the Secretary of State shall make regulations conferring the right of appeal to him from decisions of the Civil Aviation Authority with respect to air transport licences) also lays down that the Secretary of State, in considering appeals shall have regard to the duties laid upon the Civil Aviation Authority by Section 3 of the 1971 Act. It is the Secretary of State's duty when deciding appeal cases to have regard to exactly the same criteria as the Civil Aviation Authority must employ when deciding licensing applications. This will continue to be the case in future. The only change to Section 24/6) of the 1971 Act which this Bill makes is to add a reference to the new Section 23(a) inserted in the 1971 Act by Clause 11. This new section sets out the duties of the authority in respect of air transport licensing and it is therefore appropriate that the Secretary of State should, when considering appeals, have regard to the general objectives of the Civil Aviation Authority as laid down in Section 3 of the 1971 Act, as amended by this Bill, and to particular decisions of the Civil Aviation Authority when exercising their air transport licensing functions as laid down in the new Section 23(a).
  My noble friend Lord Kinnoull raised the question about the information available to the Secretary of State in connection with an appeal, particularly where there was some confidential information which had been made available to the Civil Aviation Authority in confidence and which was not subsequently made available to that Minister when the appeal came to him. My right honourable friend regards this situation as unsatisfactory, and consideration is being given to amending the regulations relating to the appeal procedure to overcome the difficulty. I hope that clears up the point.
  My noble friend and also the noble Lord, Lord Ponsonby, raised the question of the British Airports Authority and Civil Aviation Authority charges. BAA charges fall outside the scope of the Bill, but I think the principle is the same as I will enunciate now for Civil Aviation Authority charges, which is that the CAA has been charged with making its finances work out correctly. Progressively over the years, with one or two hiccups, it has improved the situation.
  1710
  If my memory serves me rightly, it is now virtually breaking even.
  My noble friend drew comparison between charges levied in this country and elsewhere. The principal explanation—no doubt there are some differences in costs—is that in other countries they do not seek to recover all the costs in the same way as we do.
  My noble friend Lady Trumpington seemed to be somewhat at variance with the noble Baronesss, Lady Burton of Coventry, about the status of the Air Transport Users' Committee. I would not wish to put myself between the two noble Baronesses in their discussion on this matter. I will take note of both their views. The point raised by the noble Baroness, Lady Burton, is one that we shall wish to consider, and we shall consider. I would not wish to make any commitment on the outcome of that at the present time.
  My noble friend Lady Trumpington drew attention to the different terms of reference of the Air Transport Users' Committee, on the one hand, and the airport consultative committees, on the other. Again, it is a matter that I am prepared to look at. There is some benefit in having the separate bodies. They perform separate functions. The AUC, for example, is a centralised body, while the consultative committees of course relate to specific airports. I will consider what the noble Baroness says and see if there are any suggestions that I can put to her.
  Baroness BURTON of COVENTRY: My Lords, I have had a good innings, and I will not take up the time of the House, but I asked the Minister about the terms of reference of the relevant committees. I said I had put this forward in 1975. I wonder whether it could be considered as a short-term measure, and a letter would not suffice for that. I asked the Minister something which I think is important: Whether the position of the air traveller could be considered in the review being conducted by his right honourable friend the Minister of State for Consumer Affairs on which we are to have a Green Paper. Is it possible for him to give an answer on that?
  Lord TREFGARNE: My Lords, I cannot give an answer to that without

  1711
  consideration. I should have been better informed about that than I am. I apologise to the noble Baroness for that omission. I will certainly consider the question of the terms of reference of the two committees to which she referred, although without commitment at this point. Time is short and we have another debate to follow. I do not think there is any particular point that I will try to deal with now. I hope that your Lordships will give this Bill a Second Reading.
  On Question, Bill read 2a, and committed to a Committee of the Whole House.

  MARRIED WOMEN'S POLICIES OF ASSURANCE (SCOTLAND) (AMENDMENT) BILL
  8.34 p.m.
  Lord WYNNE-JONES: My Lords, I beg leave to move that this Bill be now read a second time. The Bill is a small—
  Lord TREFGARNE: My Lords, if the noble Lord would speak into the microphone there would be an improvement in audibility.
  Lord WYNNE-JONES: My Lords, this Bill is a small, non-contentious one. It was introduced into another place as a Private Member's Bill, and I was asked to take it over in your Lordships' House by an honourable friend, Mr. McKelvey, Member for Kilmarnock, who introduced it into the Commons. In introducing this Bill, I want to make it clear that it has a very simple purpose: to put women in Scotland on the particular issue of assurance policies in the same position as is applied by the law of this country.
  The Scottish Law Commission looked at this matter some time ago and they stated:
  "We have received from more than one source proposals that the Married Women's Policies of Assurance (Scotland) Act of 1880 should be amended."
  The Council of the Law Society of Scotland proposed to the Commission that the 1880 Act should be brought into line with the Married Women's Property Act 1882, which applies to England and Wales. That is the purpose of the Bill:
  Assurance (Amendment) Bill
  1712
  to bring the Scottish law into line with the law which applies to England and Wales.
  The difference is an odd one. According to the 1880 Act it was only possible for a married man to have an assurance policy for the benefit of his wife and children; it was not possible for a married woman to have a similar assurance policy. The English Act allows this.
  It is perfectly clear that we would not wish to have any discrimination between women north of the Border and women south of the Border except in so far as they may be fairer in one part than in the other. But not surely in terms of assurance policies. I was reminded by my noble friend Lord Ross of Marnock that Robert Burns had a comment on this in which he referred to the rights of women. He said that the rights of women merit some attention. I am sure that your Lordships' House would not wish that this discrimination, which has continued for so many years, should remain. As it is an entirely non-contentious Bill, I hope that your Lordships will accept it without further discussion. I beg to move.
  Moved, That the Bill be now read 2a.—(Lord Wynne-Jones.)
  8.39 p.m.
  Lord ROSS of MARNOCK: My Lords, I gladly follow my noble friend. I will not inflict upon your Lordships the full Burns quotation, although it is short:
  "When Europe's eye is fixed on mighty things,
  The fate of empires and the fall of kings;
  While quacks of state must needs produce a plan,
  And even children lisp the rights of man;
  Amid the mighty fuss just let me mention,
  The rights of women merit some attention."
  There is more of it, but that is enough, my Lords. I think my noble friend put the case beautifully and wonderfully. It was my successor in Kilmarnock who had the good fortune to introduce this Bill into Parliament. I have been preoccupied with other things, and I could not have done as good a job as the noble Lord, Lord Wynne-Jones, has done in this House. The Bill merits the attention and the support of this House, and I gladly support it.
  8.40 p.m.
  Lord LYELL: My Lords, I hope it would be fitting that we on these Benches

  1713
  should say one or two words on behalf of the Government about how grateful we are to the noble Lord, Lord Wynne-Jones, for outlining so very cogently the purpose of this Bill. He has my particular sympathy, since it was three years ago that I, too, did what he is doing and assisted rather complicated Scottish legislation through your Lordships' House. I think the House would agree that the noble Lord has made a very great success of piloting this Bill through your Lordships' House tonight. We on the Government Benches welcome this Bill as a modest but an overdue measure to remedy an anomaly which has existed since the Victorian era. As we have heard from the noble Lord, it is a slight but nevertheless valuable fruit of various deliberations which have gone on in Scotland, especially, as I am told, of the Scottish Law Commission. Certainly since its inception in 1965 the commission has examined other more weighty, more interesting and possibly more important matters, but nevertheless this particular Bill is very desirable. We see that it is necessary that minor deficiencies in the law be corrected, and this is what the Bill seeks to do.
  We believe that the Bill is in tune with our times. It extends to the women of Scotland a right which their menfolk have enjoyed for a century. The Bill may not be regarded by the women's movement as a particularly significant advance, but we on these Benches, and especially I, as a spokesman for various Scottish affairs, welcome it as a major step forward in the right direction. It secures for women in Scotland the same right as has existed since 1881 for women in England and Wales. At last, when I find this happy acronym of MWPA, I shall know that I am acutely right. I always used to get it down as the Married Women's Property Act. I was told, "No, you've got it wrong; that's the English Act". When I was doing my training in Scotland—no doubt the noble Lord, Lord Ross, would concur—I used to get nought in my exams, but now I think this Bill is going to correct me. We are very grateful to the noble Lord, Lord Wynne-Jones, for putting it forward, and we support it.
  On Question, Bill read 2ª, and committed to a Committee of the Whole House.

  OVERSEAS AID AND THE BRITISH ECONOMY
  8.43 p.m.
  Lord HATCH of LUSBY Lord HATCH of LUSBY rose to ask Her Majesty's Government what part the promotion of increased purchasing power in the developing countries plays in their strategy for reviving the British economy.
  The noble Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, first of all may I welcome back the Minister who is to reply, hoping that during his tours he has been able to see something of the peoples that we are talking about tonight and the way in which they live. At the same time, I would extend to him my sincere sympathy. Not only has he to take two debates running, but, quite frankly, without any personal affront to him, I do not believe that he is the man who should be on the Front Bench answering this debate. This debate is an economic debate, and it is not the responsibility of the Foreign Office to answer for economic policy. I hope also that, following the various exchanges we have had between each other, I can make it quite clear at the beginning of the debate that I am talking about economics, economic policy and their consequences for this country and the rest of the world; I am not talking about aid, although aid will also come into it.
  We are holding this debate in a world situation which has been described by two notable economic reports in the past few months in these terms. First, the Brandt Commission Report stated that the 1980s could witness even greater catastrophes than the 1930s. Secondly, the Commonwealth committee of experts set up by the Commonwealth Conference in Lusaka last year has reported in similar terms:
  "There is anxious questioning whether we are on the brink of an economic disaster comparable to the great depression of the 1930s".
  It is in that context that I want to put the Question that is on the Order Paper in my name. At the moment we see one stark, central fact in the world economy. It is that there are in the industrial world about 20 million people unemployed—calculated by the OECD to rise to 23 million by 1981—whereas, on the

  1715
  other hand, 15 million people in the third world are dying every year from nothing more than lack of food. This is an horrific commentary on the state to which we have brought human society.
  I am asking the Government what part their economic strategy has to offer for the rest of this century to the British position in this situation. So far as I can summarise it—and I would be happy to be corrected if I am wrong—the present Government's policy is based upon what they call the control of the money supply in order to cure inflation; and they always put the cure of inflation as their first objective. It would appear that, in order to do so, their strategy is to move resources to the rich, as we saw in the first Budget they introduced last year, in the hope that the rich will invest in British industry. At the same time, of course, this had to be paid for, and was paid for principally through the raising of VAT.
  Secondly, the Government appear to believe that in order to control the money supply they must maintain high interest rates; that sterling must remain expensive in the world money markets; that public service prices should be increased; that the power of labour, through the trade unions and through industrial relations, should be reduced; that wherever possible Goverment should be withdrawn from the economy, except, of course, when it comes to increasing armaments; and that if the consequence of this is, as it has been over the past 12 months, rapidly increasing bankruptcies and unemployment, that is part of the price that must be paid. And even if, as, again, has been seen during the past 12 months—it is now forecast to increase over the next 12 months—this policy is to reduce industrial production in this country, and the public services, then that is also a part of the price that has to be paid.
  Of course, there are hiccups. We have seen recently Government money allocated to firms like Dunlop, and, I believe, Bowaters, the paper people. We have seen the subsidies to Inmos, and we have seen the establishment of enterprise zones, all of which brings the Government and Government money into industry. What basically I am asking is: if this is a fair summary of the Government's economic policy, what then? What reason is there
  1716
  to suppose that after this policy has been followed through to its ultimate this is going to lead the British economy into any fixed state of recovery? Indeed, at what point in this continuing policy are the Government going to say, "We have now done what we set out to do; now we can see a recovery in growth in industry, in exports and in the economy as a whole"? That is the question which I never heard answered. I have put it to a number of economic Ministers and I have seen no rational answer to the question of why this policy should lead to economic recovery. But in the meantime it certainly has effects on trade and on our exports.
  We have seen only this week the announcement that the British Overseas Trade Board is going to have its resources so reduced that next year Britain will have only a half of the trade missions sent abroad that it has had in 1980. The employers' organisation, the CBI, has forecast a 3½ per cent. drop in production this year. Again, as I have emphasised so often from these Benches, the money that has been released to the rich does not normally go into British industry; as we saw in the years 1970–72, it leaves the country. Since the exchange controls were lifted last October £3½ billion have left this country. The Government often say that that is investment abroad and that we get some returns from it. It is not wealth-producing. Much of this money goes into the property market in the United States and on the Continent. Most of this money always goes to the developed countries, not the developing countries, as has been our historic experience since the 19th century.
  So we are to see our industry quite deliberately decimated. We are to see real economic growth deliberately cut. Again the CBI is forecasting that economic growth will be cut by 5 per cent. by next year. Do we not see in this the insidious beginnings of the demand for protectionism to defend our industries and our industrial workers against the competition from abroad? Protectionism is the death knell of Britain as a trading nation and the opportunities which I shall mention later on which are open to us. Again, surely the Government have seen by now that, however much money they may release to the rich sectors of our

  1717
  community, that money is not put into risk capital.
  The risk capital in this country today comes very largely from the multinational companies who can move their money about and who, for example, in microelectronics have already begun to get a monopoly control of the market. I give you the example of titanium which, noble Lords will remember, we were talking about a few weeks ago. The Government had to put money into the production of titanium because it was at risk on Teesside and no private company would go into it. But when it comes to the larger area of micro-electronics we there see a shrinking number of large multinational companies taking control of it. So we are to see, apparently, as a result of this policy, an ever increasing small hold over the vital development areas of our industry and the future industries of this country, the risk industries, depending on a Government that are not prepared to subsidise them.
  There have been alternatives offered to this scenario. The Brandt Commission was one and the Commonwealth experts' report was another, but the Government have continued to display the same attitude in international economics as they are displaying in domestic economics in this country. For example, in their reply to the Brandt Commission they say that the international capital markets can continue to play the primary role in recycling OPEC surpluses, dead against everything that the Brandt Commission has analysed. After all, the Brandt Commission was composed of some very distinguished people in the world who, I would think, know as much as, if not a great deal more than, the Government's economic advisers.
  The Government say further in their memorandum:
  "The Government believes strongly in the merits of the present economic system".
  They showed that belief at the Venice conference when, along with the Americans, they blocked the consideration of the Brandt Commission Report, which was supposed to be and which was announced by the Germans as being one of the principal objectives of that conference. In this Government reply, which was published and which came from the Foreign Office, there is a completely
  1718
  negative attitude to everything suggested or analysed in the Brandt Commission Report. It has been described in the words of the Observer as a "miserable document", "mean", "callous", "short-sighted", "pompous", "mealy-mouthed". It has been described by the Sunday Times as one of the shoddiest documents ever produced by a British Government with fatuous bromides about keeping faith in the needs of the present world economic system.
  If the Government believe, as they state in this document, in the present international economic institutions, then two-thirds of the world's population are doomed to a very bitter future. In the developing countries we have already seen the mounting debt that is inevitably built up among the non-oil-producing developing countries as the price of oil rises and as the price of manufactured imports rises, too. Let us have no doubts about this: much of that debt is owed to commercial banks in Europe and in North America. Let us not forget what happened when banks began to default at the end of the 1920s and the consequences for the world throughout the 1930s. It is by no means unlikely that, unless either the present international institutions are reformed or replaced by more relevant ones, then we shall begin to see the defaulting of commercial banks on the same scale as we saw at the end of the 1920s.
  Have the developing countries to rely on the IMF as it is at present constituted and as it at present operates? If they have, then they are doomed to a policy of deflation, which means immediately that they are unable to sustain their purchases of imports from this country and from the rest of the industrial world. They are also doomed to massive unemployment. Remember, my Lords, that between now and the end of the century, 2,000 million more people will be living in this world and 80 per cent. of them will be living in the third world. Already—and this figure means almost nothing—there are 59 million registered unemployed in the poor world. That is only the tip of the iceberg of the massive unemployment that one knows exists in every one of the developing countries.
  What does that lead to? What did it lead to in the 1930s? What arose then

  1719
  from the starvation and monetary collapse that we saw at the end of the 1920s?— violence of every kind: civil, internal violence, and eventually international violence. And it is this policy which has led some of the developing countries to begin to talk about what is known in technical terms as "de-coupling". All that "de-coupling" means is that there is a strong movement among some developing countries to break away from their interdependence with the industrial world, to break away from that world and to go it alone. It is not very far from the attitude that has been taken by OPEC already, and there are other countries producing commodities like copper, tin and rubber, who are looking for the same kind of solution as the oil-producing countries have done. I do not believe that is going to help them, but I am certain it is not going to help us.
  I want to put briefly, and finally, an alternative; and I admit fully at the beginning that I am not here trying to provide a panacea for all the economic ills of the world. I am suggesting a part—I believe an important and indeed a crucial part—of what can be done in these circumstances in order to revive not just our economy but the world economy, and the British economy as a part of that world economy.
  We have to open the bridge between the growing number of unemployed in this country and those who are starving in the third world. We have to set our minds against indiscriminate protection. I admit there can be a case made out for a measure of protection for certain sectors of our industry as they change from one stage to another; but that must be discriminatory protection, always keeping the door open to the third world countries.
  I will give one example, in order to dispel a myth. It is normally very widely considered that our textile industry in this country is being undermined by competition from the third world. The average British family spends £250 a year on clothes. Of that £250, £190 is spent on clothes made in Britain, £35 is spent on clothes made in the developed world —mainly Europe, Japan and North America—and only £25 out of the £250 is spent on clothes made in third world countries. So let us get rid of that myth.
  1720
  The real competition which industry faces in this country comes from the developed world, the industrialised world in Europe, North America and Japan, and not from the third world.
  I would suggest that we might consider tonight—I hope the Government will consider it—that there is a special responsibility on Government to give a lead in a new economic direction, and I would base my plea on the authority of the former leader and Prime Minister of the Conservative Party. I would ask the Minister who is to reply—I should like to ask the Members behind him, but they do not appear to be very interested in this subject—whether or not the party opposite are repudiating what Mr. Heath said in the speech he made in another place on the Brandt Commisson Report. All the way through that 37-minute speech was the emphasis: "This cannot be left to the private sector: this is Government responsibility".
  What is Government responsibility? It is, first, to increase the resources and techniques of the research and development sectors of our industry in order to discover how our ageing, traditional industries can be transformed into industries which can supply the kind of goods that are desperately needed and can be sold in the third world. Secondly, it is to provide the risk capital which is essential for new technological development which is relevant to the needs of the third world; and to invest and to use what we set up—the National Enterprise Board—in order to take the risks that, in the short term, are essential if a long-term trading policy is to be developed.
  I would suggest very seriously—indeed, I hold both parties responsible for the lack of such a policy in the past, although I believe that we were getting towards it in the latter years of the last Parliament—that the Government get together with employers and the TUC and work out a strategy of retraining so that, instead of trying to maintain industries which are doomed in the next 10 years, we find the means of retraining workers to take part in industries which have some prospect of success. I suggest that we imitate some of our industrial competitors, by giving interest-free loans for exports which can produce the kind of trade resurgence for which I am asking. I ask that it be con-

  1721
  sidered whether tax concessions can be granted to export-oriented industries.
  I also ask that the Government recognise, as is seen all the way through the Brandt Commission's Report and the Commonwealth committee report, that the industrialised world must sit down around the table with the OPEC countries—and remember, my Lords, that we are now an oil-producing country—and, indeed, with the Eastern European or communist countries, to look at this world situation and see how we can get a stable, though undoubtedly increasing, price for our energy, without damaging the third world and providing the third world, from the profits of the oil-producing countries, with the wherewithal for their economic health to enable them not just to thrive, but to buy our goods.
  Above all, I ask the Minister to respond to the specific proposal made in the Brandt Commission's Report that there should be a small—and I emphasise "small"—summit meeting early next year, because from what knowledge I have, and the contacts I have had, that summit will take place. It will take place either with British co-operation or without Britain being represented.
  I said at the beginning that this was not a debate about aid, but that aid must come into it. As we know, aid has been cut by this Government. All I would say about aid is that it is already providing the workers of this country with about 40,000 jobs per year, but that—and I emphasise this point to the noble Lord, as I have done so many times before—if aid is linked with trade and with industrial development, it becomes much more valuable both to the third world peoples and to ourselves. Certainly, it is a much greater safeguard for the future of the people of this country than the monies spent on cruise or Trident.
  There is a great opportunity here, if only we have the imagination to see it, for a world that is at present outside the market, a world which consists of virtually two-thirds of the human race. I believe that in this year of 1980 we, as a human race, are standing on a precipice. We have two choices. We can go forward and as a human race fall on to the rocks below, or we can turn around in time to plough the land that is now untilled.
  9.11 p.m.
  Lord GLADWYN: My Lords,
  "As I was coming up the stair,
  I met a man who wasn't there.
  He wasn't there again today,
  I wish, I wish he'd go away."
  The man who was not there is the ex-Chancellor of Germany, Herr Willy Brandt, and I am afraid that he is going to be there for a long time to come. In fact, as they used to say about the poor in the old days, I greatly fear that he will be always with us. So I make no apologies for restricting my brief remarks to the Brandt Report. I know that we have had one debate about it, but I want to regard it tonight from a slightly different angle from that employed by the noble Lord, Lord Hatch. More especially, also, I should like to end up with what I hope will be a constructive suggestion which I trust will appeal to the Government, though I must say I doubt it.
  I think we might concentrate for a moment on what I might call the anti-Brandt movement which is, I fear, becoming increasingly popular in this country. This seems to me to be two-fold. First, there is the right wing or true blue assault, which we might call anti-Brandt "A". This contends broadly, if my interpretation is right, that there is no need for the West, or the richer or the "industrially developed" countries to do anything to assist the poorer ones, more especially those in Africa and in the Indian sub-continent. If those countries are over-populated and poor, it is chiefly their own fault. Other Third World countries, such as Taiwan, South Korea, Singapore, Hong Kong and so on, have made the grade by their own efforts, so why should not the rest? More especially, India is usually singled out. If she would only rid herself of her cows and her corrupt administration, she might profitably follow the example of China, which has never received any aid at all, beyond a little from Russia in the late 'forties, but, nevertheless, has at least succeeded in feeding her 1,000 million people adequately and is now organising herself industrially on what seem to be profitable lines.
  In any case, the great bulk of the poorer countries—I am still explaining the anti-Brandt "A" thesis—are now run by dictators, usually soldiers, who know how to put aid to their personal advantage

  1723
  and who deal with any uprising on the part of their starving subjects by purely military means. So why should we transfer resources on a huge scale to these people, who will only pour them down the drain or use them for prestige undertakings, or even for tribal wars, or wars against a neighbouring country? Why, in other words, should we lower our own standard of living without effectively raising that which, in the modern jargon, is known as the under-privileged third of the human race? They were much happier when they were ruled by the West; now that they have chucked us out, it is up to them to face the consequences; they have got to trade with us, anyhow. That is the hard-boiled, anti-Brandt "A" thesis.
  What I call the anti-Brandt "B" thesis is rather different. It is that of the extreme Left, as I understand it. This denounces the authors of the report as conscious, or unconscious, capitalist promoters of industrialism and, hence, of wage slavery for the masses in the developing lands which should, theoretically, hermetically seal themselves off from all corrupting Western influence and concentrate on pulling themselves up by their own bootlaces. Mainly agricultural communities should also, no doubt, make arrangements for disposing of their raw materials by barter means, in economies run by the equivalent of the Chinese "Gang of Four".
  I rather doubt whether the anti-Brandters of all tendencies have really absorbed the report's central message. That there are, and that there have been, many abuses in the administration of aid is certain. That it invariably has a qualitative effect is questionable. That the inhabitants of many new "liberated" nations were, from a purely material point of view, better off under colonial rule is demonstrable. That the West, by introducing modern hygiene and discouraging tribal wars and such practices as suttee were, with the best intentions, responsible for the population explosion is undoubted.
  But, irrespective of aid, the unfortunate thing—the thing that will not go away—is that, as things are, some thousand million people will by the end of the century probably be both starving and under leaders controlling areas of great interest to the industrialised West by reason of
  1724
  their possession of vital raw materials essential to the development of the West's economy. And what happens if, long before then, they repudiate the debts to the West by means of which, up to now, world trade has been largely financed? What happens to our own exports then? Will not a slump be upon us, compared with which the present recession will be looked back upon as a period of great prosperity? Unless the fully industrialised States propose to reconstitute their old empires by physical means, which is not, I think, actually suggested by even the most hard-boiled anti-Brandters, there is a real problem which must be faced, somehow.
  But if we reject both anti-Brandt "A" and anti-Brandt "B", it is still clear that the general application of the Brandt remedies, the remedies as proposed in the Brandt report, will be extremely difficult. That is no doubt why the Government in their commentary, if not damning the report with faint praise certainly praise it with faint damns, fully accepting hardly any of its major proposals, or at least only those which, they say, have already been substantially adopted. For even in the event of the major thesis—that is, the really massive transfer of resources—appealing to the industrialised West, which seems quite unlikely, it will also necessarily involve, for its success, the willing co-operation of those former third world but now extremely rich countries, the members of OPEC.
  A widely held view in these countries, unless I am wrong, is that since the war the immense increase in the gross national product of the industrialised States in OECD—the "Western miracle" as it has been called—has been largely the result of very cheap energy supplied by them under contracts entered into when they were still exploited, as they would say, by the imperial powers and their agents, the big oil companies. Now they are, perhaps not unnaturally, intent upon getting back some of the money to which they feel they were previously entitled. And, of course, at the back of their minds is also the thought of what they are going to do when the oil runs out or, conceivably, is replaced by other forms of energy.
  Obviously, despite this, the best solution, which I think can hardly be denied from the point of view of everybody, would be

  1725
  so to recycle the colossal sums accruing annually to the OPEC countries in the shape of petro-dollars that the poorer third of humanity will be able to continue to provide the industrialised states with the raw materials they need—no doubt at a profit which will enable them in their turn to develop some kind of industry—and the industrialised countries will thus be enabled to keep their factories going in order to turn out the goods and services that many of the OPEC and other countries need and can only get in this way. After all, what is the point of accumulating huge surpluses if you cannot get the things you want and more especially if, owing to the effect of a world slump, in many currencies you are not sure for how long your investments will retain their intrinsic value?
  For a few years after 1973, at the beginning of the crisis, this recycling worked to some extent owing to the admirable activities of the private banks but now, for various reasons which I need not go into, it is becoming increasingly difficult. In fact, this broad objective, if acceptable, can probably now only be achieved—and I hope the Government will accept this thesis—by some high level negotiated settlement between the three broad groups involved in the OECD, OPEC and the poorer and developing countries.
  The other point that I wish to emphasise is that successful negotiations would clearly have to involve concessions by all three groups. In other words, as I see it, the West will have to content itself with less growth and hence with a somewhat reduced standard of living; the oil countries will have to be prepared to reduce their present enormous profits from oil and to moderate at least to some extent their instinct to conserve, and the poorer developing countries, whether they like it or not, will have to forgo many of their original ideas about industrialisation and be largely content with labour-intensive projects involving the continued maintenance of their vast and increasing populations on the land. To that extent there may even be something in what I have called "anti-Brandt B". Here the example of China is one which might well be followed. After all, China contains about two-thirds of all those people in the world enjoying an income of less than about 300 dollars a year. Naturally,
  1726
  in such a reorganisation of the trading systems of the entire non-Communist world the great multinational companies will have to be brought in and will have to play a major role.
  Whether all this is possible is another matter. The example of UNCTAD, where after many years of discussion there has been no agreement on some new world trading arrangements under which the poorer countries could find a more profitable market for their goods, is not encouraging, to say the least, although perhaps Lomé may have pointed the way. At a moment when the West has simultaneously to cope with unemployment and inflation and I am afraid that on the whole OPEC seem to be after what they can get, such a conference might indeed be impossible to organise. It would certainly be worse than useless to summon it unless there was a reasonable chance of success. Even at this distance of time we might be warned by what happened at the World Economic Conference summoned by Mr. Ramsay Macdonald in London in 1933, although at the same time we can hardly disguise the fact that the failure of this conference was followed after a few years by World War II.
  So perhaps things will have to get worse before all concerned are forced to consider the concessions that all will have to make and in the meantime we can only continue with the aid that we are contributing, however inadequate that may be. Aid by OPEC countries, already considerable, may perhaps be stepped up—we can only hope it will be—and the Fund and the Bank, as the Government point out, will no doubt expand their activities even more, and of course I agree with the noble Lord, Lord Hatch, that trade is much more important than aid. So we shall go on, although I greatly fear that we may be overtaken by events. In that case the great beneficiary will of course be the Soviet Union. There are many more potential Cubas on the horizon besides Nicaragua, and the Russians will certainly know how to exploit them in order to increase their already great power and influence in the world.
  What then can we do to prepare people in this country for what is likely to happen to us, whatever Government may be in power? I think it should be

  1727
  continually emphasised that nobody owes us a living and that, in spite of North Sea oil, hard times are ahead. We obviously cannot, so to speak, buy ourselves out of a world slump by paying ourselves more money, and, in emphasising this, the Government—whatever may be thought of their techniques—are clearly right. But we might, I think, encourage all concerned to agree that a streamlined and efficient British industry, perhaps running with the emphasis on new rather than on old-established lines, is necessary if we are going to survive as an independent nation. Nor is there any reason to doubt that the EEC, if it had the sense, would with the aid of the European Parliament, approve great schemes for rationalising production of certain goods for which there is a world market, such as aircraft. That, I think, would help us to weather the storm.
  What is rather depressing is the way we seem to be preparing, as a nation, for the difficulties that obviously lie ahead. You would have thought, for instance, that one of our chief objectives since the war would have been to build up a body of competent technicians in all branches of industry who would, under good management, have been able to get things moving and the most capable of whom would occasionally have been able to move up into management itself. Maybe I am misinformed, but, as I believe, the Germans and certainly the Russians have been far more successful in this line of business than we have been. Perhaps it is our fault; perhaps it is our whole system of education that is at fault. Certainly some experts seem to think so, alleging that we are producing an elite of arts graduates, higher mathematicians and scientists on the one hand and a mass of nearly unemployable illiterates on the other.
  My Lords, I have strayed a little, I fear, from the central theme of the Motion moved by the noble Lord, Lord Hatch, but I think I am justified. For, unless we can organise ourselves better we shall be less able—in spite of North Sea oil—to withstand the shock to our social system which will be administered by the threatened super-slump, always supposing that we cannot solve the major triangular equation to which I have already referred. So, to sum up, I would not myself accuse the Government of being ill-intentioned,
  1728
  they will be delighted to hear. I suspect that their intentions are entirely good. I listened to Mr. Hurd giving evidence to the House of Commons Select Committee the other day, and of course he was impressive, a very impressive man. But what I fear is that they have not the imagination to see that existing international structures, established in very different circumstances nearly 40 years ago, are probably incapable, unless reinforced and greatly strengthened, of containing the new forces now abroad in the world, which, unless harnessed, may produce—will produce, I am sure—some kind of explosion.
  I do not say that other governments in the highly industrialised states are much more imaginative than Her Majesty's Government. In all democracies governments cannot go very much ahead of public opinion, which has certainly not as yet come to the conclusion that hard times, in the present condition of the world, are inevitable, and holds, rather, that increased prosperity is only just around the corner if only the Government pursue the right kind of policy.
  My Lords, the issues raised by the Brandt Report are so grave and so fundamental that I wonder whether the Government might not find it useful to have them considered by some all-party Parliamentary body. It might be some joint permanent commission of Lords and Commons—I think that might appeal to the noble Lord, Lord Peart—which could consider this fundamental set of questions, taking the advice of experts of every political complexion and reporting periodically.
  Many of the difficulties raised by the Government in their paper may be insuperable—I admit that—but on other points perhaps their opinion might become less negative when studying the periodical findings of a body such as I have described. Is this a foolish suggestion? The Minister who is to wind up this debate will no doubt tell me that it is! I am quite used to the rejection of my bright ideas. But I have been told by responsible parliamentarians that it might be a starter.
  It will be seen that, while I entirely recognise the difficulties of the Government—or indeed of any British Government—when confronted with Brandt, I suspect that they are so daunting as to promote a strong desire to brush the whole

  1729
  thing firmly under the carpet. For instance, I can well imagine a Government Whip, pestered by a young man eager to reform the world along with that rather doubtful monetarist, Mr. Edward Heath, having recourse to the immortal words of the old song:
  "Can't you see your mother doesn't like it?
  Wotcha wanta talk about it for?"
  That is an attitude, a state of mind, which I feel might at least be modified, if not reversed, were my proposal for an all-party re-examination of Brandt to be by any chance adopted—although I must say that I doubt whether it will be.
  9.32 p.m.
  Lord SOPER: My Lords, the House will be grateful I am sure for the opportunity to discuss a matter of such vital importance as that which has been introduced in this particular Unstarred Question by my noble friend Lord Hatch of Lusby. Earlier today it was reported that the noble Lord, Lord Carrington, speaking in Mexico, said that the economic situation in the world dwarfs every other consideration, even that of Afghanistan. I believe that the significance of this Motion will be judged in relation to the words of the noble Lord, Lord Carrington, rather than by the number of people engaging in this debate in your Lordships' House at this comparatively late hour.
  I would presume to begin at a point which has not as yet, I think, been stressed, but for me it is the right beginning. Perhaps owing to the ministrations of television, certainly because of the publicity which these matters have aroused, there are millions of people in the world today who are acutely conscious of the deprivations of life and livelihood, of the sheer poverty and destitution, of millions of our fellow creatures. It is from that standpoint that I believe the ultimate virtue of a debate of this kind can emerge.
  I would break a gentle lance with my noble friend Lord Hatch. We are really talking about aid; what we are not talking about is alms. The strictly Islamic concept of alms, as a moral obligation in a static relationship to poverty, which alleviates the suffering of those who are impoverished and spiritually blesses those who engage in this Godly activity, is to me, no answer—in some senses it is a contempt—for the real problem which must
  1730
  be seen, I believe, in a dynamic situation in which aid is an ongoing process, which not only benefits those who receive it, but progressively, by a geometrical progression almost, increases the viability and the welfare of those who exercise it. That is the thrust of the Brandt Commission's Report to which I shall continue to refer.
  It relieves, it seems to me, a great many people from the dreadful sense that there is nothing that can be done except the provision of alms, of charity. However, the Brandt Commission, perhaps for the first time, sets forth in conclusive language, at least to me, that the benefit which can accrue from raising the standards of living among those who are impoverished is itself a contribution to the welfare of those who discharge this responsibility. That seems to me to be the point of departure for such a debate as that in which we are now engaged.
  My trouble is that I do not believe that, even if the Government have carefully read the Brandt Commission Report, they have assessed its true significance. At least the debate in the other place—as far as I was able to understand it—revealed that they were talking in terms of a continuation of a situation to which they had been committed, rather than accepting the revoluntionary concepts of the commission, which indicated beyond all peradvanture that we were now living in a revolutionary age, in a different kind of society, and that the traditional methods— whether they be monetaristic, which I abominate; whether they be laissez-faire; whether they be the traditional uses of IMF and the World Bank—are no longer competent to deal with an ongoing situation in which the real problem requires an entirely different approach to world poverty.
  It is this which commands my attention, and I would presume to say a little more about it from the standpoint of the Brandt Commission. We must encourage people to believe that a Government must do more than Governments have traditionally been able to do—you cannot make people good by Act of Parliament, but you can make it much more difficult to be bad. What is so much more required today is the promotion of a sense that ordinary people, through their governmental authority and power, can in fact do something about the terrible consequences

  1731
  of this poverty and, to me, the insufferable conditions which are portrayed on the television screen and against which, even hardened as I am, from time to time I feel compelled to close my eyes. To me this is the point of departure. For I believe it is possible, if the Brandt Commission's recommendations are put into operation, that through governmental activity we can in fact satisfy that increasing sense of obligation on the part of millions of decent people throughout this world to do something practical about the poverty and destitution which is such a terrible curse, and an avoidable one at that.
  The Brandt Commission and, indeed, Mr. Edward Heath are quite convinced that individual action from a monetaristic or traditional standpoint will certainly not meet the case. I should have thought that those who have read the commission's report with assiduity would be left in no doubt that that is so. It demands Government activity, and the very processes whereby the Brandt Commission proposes that we should embark upon such activity are the absolute contrary to those processes which are now being advocated in the present Government as the solution of our own domestic troubles. Those troubles will not be solved until we see, as the Brandt Commission suggest, that we live in one world, and whatever may be the programmes which are envisaged and put into practice in one place, they must correspond in essence with the programmes which are universally applicable, or they will certainly not survive the test and the opportunity to succeed. Therefore, the Brandt Commission proposes—and not with particular precision—that there should be an attempt to create a world conservation of energy and a world development fund, as it could be, in such a way as to increase the capacity of those who are now impoverished not only to benefit themselves, but, as they benefit themselves, to produce an increase in the trading facilities upon which we depend.
  To me this is an absolutely important and fundamental issue, and I hope that it will be sufficiently recognised by a Government, of whatever colour, that the Brandt Commission was not some Socialist gathering committed to some kind of Cloud Cuckoo Land of promise
  1732
  and Utopia, but a very practical and in many cases a conservative one which, when confronted with the evidence, was honest enough to recognise that, whatever its preconceived notions, the evidence was more important.
  I would venture to make one or two other remarks. One of the troubles of the present situation, as is advertised in the report of the Brandt Commission, is that if you stimulate the capacity of underdeveloped countries to produce and, therefore, to purchase from the developed countries, the outcome all depends on what you persuade them to purchase. Unless there is a radical reduction in the whole arms business over this planet, these underdeveloped countries will be encouraged to use their resources, and their increasing resources, not to feed their hungry but to provide the weapons ultimately of their own destruction and everybody else's.
  Therefore, into this debate I believe the whole question of disarmament naturally must flow. For unless we can provide an opportunity of stimulating trade in those things which are peaceable and required, rather than in this hectic and calamitous rush to impoverish those who are already poverty stricken by the added burdens of an increasing arms race, we shall indeed have developed the capacity of some of these underdeveloped countries to require our commodities. They will require the means of death, and will not survive in any cataclysm in which they and we are involved.
  Finally, the Brandt Commission recommends that there should be a world conference. It seems to me that this is at least the simplest and the basic requirement. I am well aware, quoting again the noble Lord, Lord Carrington, that an exchange of rhetoric is no substitute for a real approach to the problem that confronts us. But I believe that there is an increasing willingness—and in this I would include even the Soviet Union—to recognise, perhaps belatedly, that the kind of world in which we now live does not permit, even with modifications, the application of the traditional concepts of world finance, and that that act of beneficence, which has so often been regarded as "alms and charity", can now itself be a means of progress. To that end I commend to the Government the strength

  1733
  and the swing of this particular Brandt Commission Report as it affects the particular notion to which we are invited to pay our attention today. Our good and our benefit ultimately depend on sharing with others, and as we increase their capacity to live, so we ourselves are blessed.
  9.42 p.m.
  Lord RITCHIE-CALDER: My Lords, I always find it very difficult to follow my noble friend Lord Donald Soper because I feel so totally inadequate. But I want to take up from him where he left off. Beyond any question whatever, as Lord Carrington pointed out in Mexico, the situation we are facing throughout the world in economic terms is much more serious than our anxieties, which we may be able to avert, about the situation in Iran or the situation in Afghanistan. This lemming-like process towards an economic collapse is visible and clear. All the time we are saying, "When and how?". It is not a question of "Now or if"; it is, "when and how".
  The answers we have to find. The answers we are discussing here in this Unstarred Question tonight are quite clear. They are what my noble friend Lord Hatch said: this is an economic question. May we just stick with the emphasis on what are the economic issues involved. Let me be quite clear: the situation in which we see the world today is a confrontation—and this is quite clearly the reason why we had the Brandt Report—between the haves and the have-nots, between the so-called North and the so-called South, and between the third world and the highly-developed world.
  Over the last years, as many of my noble friends may have done, I have sat in on many discussions on the New World Order. It is what in fact the Brandt Report is trying seriously to rationalise. Implicit in the Brandt Report is the acceptance of the arguments of the New World Order. The old world order is not standing up. It cannot do so, and all the patching and applications of Band-aid that we are using in the present situation are not staunching the haemorrhages of the world economy.
  This is something I have lived with in a positive way for the past 30 years. As
  1734
  I have previously told your Lordships, I have travelled many millions of miles in consideration of the problems involved in the development of the developing world. From the word "go" it was clear that any idea that we could impose our self-evident wisdom on the developing world was quite wrong. With the best intentions we tried to do it; we tried to transfer our preconceived ideas of what would be good for them without asking them what they really wanted. Over those 30 years we have seen genuine, decent and proper attempts by the aid systems of the world—by the United Nations agencies and all the other aid means—to try to stimulate the capacity of people to help themselves.
  That is the essential point, and that should appeal to the party opposite. While we have been trying to do that, let us remember that we are talking about a situation—we know this to be true—where there is a vast bog of world poverty in which people are submerged. I remember that we talked glibly about what we called a leap across the centuries. It was the developed world's intention to help. We committed ourselves to help them, as Truman did when he committed the American people in what was known as Point Four. We all wanted to help to make a great advance from the past into the present-day and into prosperity.
  But if you are going to leap, you must have solid ground to leap from. I am talking—indeed, we are still talking—about an impossible bog of poverty throughout the world, a bog from which they cannot leap. At least we—the United Nations and its agencies and others —have been trying over the years to put down not a bridge between the past and the future, but the planks and duckboards on that bog so that the peoples themselves could struggle out. The trouble is that we have taken away the duckboards. The present Government are cuttng down the United Nations development programme to one-half, and it is the UN programme that I am specifically talking about: trying to put the infrastructure into the developing countries in ways that those countries cannot do in terms of capital and expertise. They are trying to put that infrastructure in to enable the peoples concerned to help themselves, yet we are depriving them of that opportunity.

  1735
  The Government have spurned the Brandt Report. As I say, they have sneered at the New World Order, which I assure noble Lords with all the passion at my disposal is no longer rhetoric; the New World Order is a force in the world. It is the working creed of the third world and it will presently become, if we leave it, an instrument of OPEC, and we see OPEC trying to take over. As I say, this Government have diminished the functional capacities of the United Nations and its specialised agencies. And while the phrase we used to use was "a great leap across the centuries", we have tripped them up on the way.
  We hoped in those days, and I still believe—I shall continue so to hope and believe during the life I have left to me—that we can, with the help of the well-off and technologically advanced countries, give the developing countries (without imposing ideas on them or putting on what we call technological fixes, and without delivering them over to the multinational corporations) the capacity to help themselves. They can come into the 21st century, and the Brandt Report has shown us positively how they can do so.
  This is incredible. This country of Britain had an Empire and a Commonwealth on which the sun never set. It was a Commonwealth embracing every race, colour, and creed; every geographical feature in the world; every geological resource. It was a colonial Empire that fed our factories with materials and our people with food, and which provided our commercial empire and bought our goods. That great dispersed area, which is now co-terminous with a great part of the third world, was the basis of our authority, our prosperity and our wealth. It also gave us an experience of dealing with people, of understanding their needs and aspirations. They are no longer our subject peoples, but we must never
  1736
  disown them. We need the help of the third world peoples and they need our help.
  I say with all deference to, and affection for, my noble friend Lord Soper that what I am talking about is not charity, not even alms, because the beggars' thanks is almost invariably the beggars' curse. People do not like to be beholden. It is not charity. What we are talking about tonight is positive, enlightened self-interest. It is investment in our industrial future, as we once invested overseas in our industrial past.
  Why on earth cannot the present Government see that the clear and indicative role of Britain in this world today is to be as we were in the 19th century, the positive leaders. Think of how we did it. Think of how we capitalistically exploited the world in the 19th century. We in our factories, in our industries, in our steelworks, built the railways of Latin America, and from Latin America we got our frozen meat. We exploited the countries in this sense by providing the means by which our factories could produce their goods. I believe that this is still true. I am not talking about capitalist exploitation. I am talking about the positive lead of this country to find its outlets, real outlets, in a creative way, which we are capable of doing.
  Every one of us who has been in the developing field knows that every situation in the developing world is a new situation. One has to think about how things can be developed, and one has to improvise to meet them. We have that capacity. We have the insight of our colonial experience. We know what we ought to be doing about the situation, yet we are throwing it all away in a most ridiculous way. It is ridiculous that we are not using the wasted resources of our country today to develop the kind of appropriate technology by which these people can in fact help themselves.
  9.54 p.m.
  Lord BROCKWAY: My Lords, at this late hour I hope to speak briefly. I believe that I shall be able to do so following the series of excellent speeches that we have already heard. I want to express gratitude to my noble friend Lord Hatch of Lusby, not only for initiating the debate, but also for the very thorough and constructive contribution that he has made. I was shocked to read the White Paper which the Government issued in comment upon the Brandt Commission's Report. It rejected entirely the basis of the report's recommendations, and made very incidental and superficial suggestions about how probably the greatest problem in the world today, the poverty of the majority of people on this earth, can be solved. I find it difficult to believe that the noble Lord, Lord Carrington, endorsed that. Indeed, the speeches which he has delivered on the same subject have been so different in their approach and in their spirit to the terms of that Paper as to amount almost to an official repudiation of it.
  There are two reasons why all Governments must now face this problem. The first is the fact that we are living on a planet where a third of the population are existing in hunger. I often find it difficult to tolerate in one's own personal life conditions of comfort, and sometimes of luxury, when one knows that so many millions of people on earth are facing starvation. Only this morning The Times states that in the sub-Sahara area of Africa, from Gambia to Somalia, a thousand people are dying every day from hunger. The Times reports that, according to the United Nations Food Council, at least 60 million people are suffering from food shortages in the world at the present time. This is in contrast to the extraordinary fact that the technical methods of production of food and all that is necessary for life have now reached a stage which has never previously been approached in the history of man. We have become more technically efficient, and yet more people are hungry.
  As I have said, there are two reasons why our Government and all Governments have to face this issue with a new urgency. One is the fact, which I have already stressed, of the hunger in the world. I
  1738
  ask the Government to look at this related subject for one moment. The Governments of the world are spending their millions of pounds every day in preparation for the destruction of life. A mere fragment of what we spend on military expenditure in the world, according to the Brandt Report, could end hunger and poverty within a decade; and the most urgent issue in all political life today is to seek to transform the money which we spend on preparation for death to the cause of the cultivation of life.
  I want to make one particular appeal to members of the unaligned nations of the world. It is to the OPEC countries. Some of them are contributing considerably in policies to end hunger in Africa and parts of Asia. They are doing so mostly to those territories which have Moslem populations. But if my voice could possibly reach them, I would say that the millions which they are now making because of their control of oil supplies in the world they should be devoting to their fellow unaligned nations to end the poverty which exists in those countries. I just hope that some echo of my voice tonight may reach the unaligned nations of Western Asia.
  The second reason why we have to deal with this problem so urgently is the fact that there is no way out of the world recession and unemployment, no way out of dealing with unemployment in our own territories, except by increasing the purchasing power of the masses of people in the world. I was a Member of another place in the early 1930s when we passed through a similar recession to that which we have today. It was then admitted that the cause of the recession in the world was the diminished purchasing power of the peoples of Africa, Asia and Latin America. I am not saying tonight that that was the cause of the present recession in the world. But I am saying, emphatically, that there will be no way out of world recession unless we succeed in increasing the purchasing power of the majority of the population of the earth which is in Africa, Asia and South America.
  These are the two reasons why we are asking the Government tonight to reconsider their policy. Their Paper on the

  1739
  Brandt Report is something of which every person of human feeling ought to feel ashamed. I hope that the appeals which have been made in this House tonight—not only in the presence of the noble Lord, Lord Trefgarne, but, I am quite sure, reaching the eyes if not the ears of the noble Lord, Lord Carrington—will cause the Foreign Secretary to think again and seek to make the contribution which many of us believe he is seeking to make within the Cabinet of this country for a policy which shall be more realistic and shall be more humane.
  10.3 p.m.
  Lord BIRDWOOD: My Lords, the last thing I expected when I came to the House late this afternoon was that I would find myself on my feet making this, almost the last day of our Session, even longer; but I saw how may people on my party Benches were prepared to contribute to a debate which, albeit a short one, I consider to be in its quiet and very unfashionable way, on one of the most important topics raised in this House in the last few months. I am not going to say I am ashamed of my party—of course I am not. It seems extraordinary to me that I speak on this topic from the Government Benches of, let us say, the seventh most important industrial power in the world. I am not going to keep noble Lords very long.
  Listening to people speak, I was puzzled that noble Lords—except for the last speaker—did not concentrate on what seemed to be the core issue of Lord Hatch's Question, which was increased purchasing power. That is the central issue. I cannot help but be reminded of a conversation that I had with Herman Kahn a short time ago. I am sure everyone knows he is from the Hudson Institute. He said to me—and he said it as vehemently as he knew how—that it is far more destructive to watch while world trade withers to nothing than it is difficult to rebuild after a war. That is exactly what we are doing. We are watching while protectionist barriers go up again in a way that historians can only know about from reading archives of the 1860s.
  I also recall in this House, I believe 10 years ago, I reminded noble Lords that
  1740
  the ratio in terms of value added was that we in this country were exporting engineered products with a value of £600 a tonne and importing at £3,000 a tonne which—to use Lord Ritchie-Calder's words—from the point of view of enlightened self-interest was complete madness as regards the ultimate industrial health of this country. Nothing has changed. I should imagine that we can now extrapolate those figures. It is no harm that we are exporting products with a low value added ratio because we are exporting them to countries which, with any luck, will start to make those products and remove our markets altogether.
  If I leave your Lordships' House tonight with a single point it is that this country must continue to crank up its technology —our value adding must be higher and higher—because if we do not we shall have no markets. We have very little else to offer a developing world—and offer we must.
  10.9 p.m.
  Lord ORAM: My Lords, I am glad to follow the noble Lord, Lord Birdwood, and compliment him on having briefly filled a noticeable gap in the list of speakers with which we have been provided. We listened to his words with appreciation, coming from the only Conservative Back-Bencher to have joined in this debate.
  Like other noble Lords, I very much appreciate the initiative which my noble friend Lord Hatch of Lusby has taken in asking this Question tonight. During my time in your Lordships' House I cannot recall an Unstarred Question which was more pertinent or more important, as others have said, than the Question which is before us tonight. It points directly to the essential message of the Brandt Commission Report, namely, the interdependence of the economies of the developing and the developed nations to a degree, which is a critical degree, which has never been the case before today. I hope that when the Minister replies he will be able to produce evidence that the Government have at last taken that message to heart, because I must say that there is little, if any, evidence to that effect in the Government's

  1741
  memorandum commenting on the Brandt Report. As other noble Lords have said, the Government's White Paper is most disappointing.
  The Brandt Report analysed in a masterly fashion the whole series of economic and social problems which face the peoples and Governments of the world. It pointed both to the enormity and the urgency of those problems, and for that reason much of it made depressing, even frightening, reading about the future. Yet, despite that, it is a document of hope. It puts forward a whole series of positive proposals, aimed not only at the economic development of poor countries of the world, as so many reports and proposals have been in the past, but at avoiding in the rich nations the economic calamities which face us all if nothing adequate is done. For example, something must be done about the vast debts owing to us, a problem to which the noble Lord, Lord Gladwyn, drew our attention; something must be done about the arms race, which devours our resources; something must be done about the energy crisis, which affects us all; something must be done about the hungry millions in today's world and the many more hungry millions threatened for tomorrow's world. These are no longer only the problems of the Southern Hemisphere; we are now all involved.
  There was a time, not so many years ago, when it was possible to say, as did the official recently quoted in The Sunday Times, "They have their problems and we have ours". But how sadly wrong he is in today's world. It was once possible, for example, to look at India, to see the millions there without jobs or with only seasonal jobs, and say, "Mass unemployment is India's problem; ours are the more sophisticated problems of affluence". But today we know only too well that their problem is our problem, too. Not so long ago we looked at the countries of South America, and it was scarcely believable that the so-called banana republics—again, not so very many years ago—should be suffering from inflation rates and interest rates of the order of 20 per cent. That struck us almost as comic. That was the problem from which we thought we were mercifully immune. But, indeed, things are different now. We could look at the countries of
  1742
  Africa and pity them for their stagnant economies, low growth, low productivity, lack of energy resources. Those were their problems; ours were different. But, again, is it not true to say that today our problems are the same as theirs?
  What my noble friend Lord Hatch has done by asking his Question this evening is not just to point out that economic problems are now global and not sectoral, but to show that we cannot overcome our problems unless we overcome the problems of the developing world as well. We need their markets if our people are to have jobs. We need to sell to them if our industrial life is to revive. At the same time they can only be real markets if the international monetary system is reformed in the way in which the Brandt Commission proposes, and only if there is the substantial increase in the transfer of resources for which the commission calls.
  That is why I found, as my noble friends have repeated, that this Government's White Paper is a bleak and disappointing document. Far from facing up to the need for a new approach to development finance, we are told that the Government believe strongly in the merits of the present world economic system. Far from recognising the need for increased aid programmes in the interests of our economy as much as that of the developing world, the Government bluntly refuse to accept the targets of 0.7 per cent. of GNP by 1985 and 1 per cent. by 2000 AD.
  Indeed, one reads this White Paper in vain to discover what positive steps the Government propose to take either in the home economy or abroad in response to the challenge of Brandt. The only answer that I can discern is that the Government propose to remain complacent and to be satisfied with what is already being done, or rather is not being done. In paragraph after paragraph one reads that the Government are already doing this, that or the other thing, apparently ignorant of the fact that current policies are leading us to doomsday and that the Brandt Commission has spelled out with great clarity the need for a change in direction and a fundamental change in the relationship between the nations of the North and the nations of the South.

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  In the paragraphs which summarise or purport to summarise what the Government are doing—and I have read them with great care—I can detect nothing that was not being done already or would not in all probability have been done if the Brandt Commission had never been formed and had never met. The Brandt Commission has made no impact upon the thinking of Government Ministers. The only passages which strike a note of confidence are those in which the Government are urging someone else to do something. "Let the developing countries adopt different policies", our Government say. "Let private investment be the means of development. Let the multinationals serve the interests of the underdeveloped world. Let the private banks provide more finance. Let OPEC come to the rescue. Let other people do things", say the British Government, "but please include us out". We are too busy perhaps turning Britain into an underdeveloped country to be able to do much for the rest of the world.
  If all this was motivated by good old-fashioned selfishness, there might be something to be said for it. If it served the interests of the British economy one could at least understand, if not accept, that we should be asked to eschew altruism. But the truth is that the policies that are being pursued are in the interests of neither Britain nor the third world. And I suggest that my noble friend has done well this evening in calling attention to the interdependence of both sets of interests which, as I have said, is the central and urgent message of the Brandt Report.
  I invite the Minister, in answering my noble friend's Question, to point to any change in Her Majesty's Government's policies which has arisen from the two years' work of Herr Brandt, Mr. Edward Heath and their colleagues. I do not believe that he can point to any such change or any such result but, if I am wrong, then I shall be delighted to be contradicted.
  10.21 p.m.
  Lord TREFGARNE: My Lords, I want to start by thanking the noble
  1744
  Lord, Lord Hatch, for his understanding in connection with the timing of this debate. As the noble Lord knows, it was not possible for me to answer him on the day he originally selected, and although I know he regards me as second best on this occasion I very much appreciate his agreement to postpone his Question until today. I welcome this debate. We have considered today a number of ideas for improving the conditions of the developing countries and how these might relate to our own economic policies. Many noble Lords have referred to the ideas in the report of the Brandt Commission. I can therefore take this opportunity to repeat the Government's concern about the troubled prospects for the world economy over the coming years and about the dangers which this creates for developing countries in particular. I made clear our concern in the debate in your Lordships' House in March this year; I reaffirm it today.
  Furthermore, the Government fully subscribe to the view set out in the Brandt Commission Report that all countries, rich and poor alike, will benefit from progress in dealing with these problems. As my noble friend the Secretary of State said in Brasilia a week ago:
  "We face a common challenge. It is to ensure that the world economic system adapts and evolves so that it works efficiently to the benefit of all".
  The noble Lord, Lord Hatch of Lusby, has asked Her Majesty's Government:
  "what part the promotion of increased purchasing power in the developing countries plays in [our] strategy for reviving the British economy".
  The Government strongly subscribe to the view that one of the most potent forces for increasing economic growth, whether in Britain, other developed countries or the developing world, is by the increase of international trade. If we buy more from developing countries, that increases their export earnings and gives them greater purchasing power, enabling them to buy more from us and others. We have always relied on developing countries for the supply of many raw materials and increasingly they are sending us their exports of manufactures. Developing countries, in turn, are important markets for our capital goods and for our financial and other services.

  1745
  The Brandt Commission have made this point well on page 68 of their report, where they say:
  "There is ample historical evidence that expansion of trade is and has always been one of the mainsprings of the world economy. For most countries, balanced trade expansion is a less inflationary form of raising the level of economic activity than stimulation through increases in domestic public expenditure".
  The Government have always participated actively in international negotiations designed to remove obstacles to world trade, to increase the volume of flows in both directions, and thus to enlarge the purchasing power of developing countries and of our own citizens. I will mention four sets of recent negotiations which are relevant. The first are the multilateral trade negotiations concluded in 1979 in the GATT, which will come into operation during the 1980s. These negotiations not only brought about a reduction in tariff levels, as earlier GATT rounds have done; they also made important progress in reducing non-tariff barriers which inhibit trade flows.
  The second is the conclusion in 1979 of the Lomé Convention between the Community and its member states and 58 countries of Africa, the Caribbean and the Pacific. We hope that this convention will enter into force later this year. It will provide for duty-free entry to the Community market for the 58 countries concerned for virtually all their trade, both in manufactures and in agricultural products. The convention also has an important aid element. The third area concerns the European Community's Generalised Scheme of Preferences, which provides preferential access to Community markets for manufactures and certain processed primary products from developing countries. The Community is currently reviewing the structure of this scheme, and we shall be active in discussion with our partners in seeking ways of directing its benefits more effectively to the poorer developing countries, while limiting preferences for the better-off and most competitive beneficiaries. Fourthly, we welcome the conclusion at the end of June of the negotiations to set up a Common Fund for commodities.
  All these events will benefit developing countries, by helping them to increase their purchasing power through higher trade flows. They will also benefit us.
  1746
  This fits in with the pursuit of mutual advantage advocated in the report of the Brandt Commission. In this context, I should recall that the Government have been criticised for defending the existing world economic system and reliance on market forces. But the advantages which I have mentioned have been gained by adapting the existing economic system, as the Government favour, and not by overthrowing it. Furthermore, the benefits have largely been achieved by a reduction of barriers to trade, for the most part erected by Governments, and allowing greater freedom for the market to operate.
  These benefits have been achieved, furthermore, at a time of great economic difficulty for many countries, including the United Kingdom. At such times, pressures for protectionism increase. But the Government have always made clear their determination to continue to resist protectionist pressures to the maximum extent possible and to maintain the open trading system. Some sectors of the British economy are in serious trouble and need some temporary help. But our objective is to limit such special arrangements to the minimum.
  Some progress has been made, but I readily admit that there is room for more. We could do more to promote increased purchasing power in developing countries in one very simple way—if we created a larger market for their exports. If the British economy grew faster, we would help the developing countries as well as helping ourselves. The Government are determined to revive the British economy so as to achieve more durable levels of growth. But we must control inflation first. Inflation not only infects our own economy; there is a further penalty which directly affects the developing countries. Inflation drives up the price of the goods which they need to buy from developed countries, and shifts the terms of trade against them. The developed countries have often been reproached, with justice, for not bringing inflation under control. The overriding objective of the Government's strategy has therefore been, and remains, to reduce the rate of inflation. Without such a reduction there can be no prospects of restoring the confidence and stability essential for investment to flourish so that Britain's long-run economic decline can

  1747
  be reversed. This kind of approach is very much in line with that of other industrialised countries. As the Venice Summit Communiqué said "inflation stifles growth" and the Communiqué stressed the need for
  "determined fiscal and monetary restraint … to break inflationary expectations".
  The Government's economic strategy is a strategy for the medium-term. Our intention is progressively to reduce the growth of the money stock to about 6 per cent. a year by 1983–84, and we shall pursue the policies necessary to achieve this aim. A key element in this strategy is a reduction in public expenditure. The plans announced in the public expenditure White Paper show a reduction of 4 per cent. in the volume of public expenditure between 1979–80 and 1983–84. This will allow a progressive reduction in the PSBR as a percentage of GDP from 5 per cent. in 1979–80 to about 1½ per cent. in 1983–84.
  Inevitably the period ahead will be a pretty painful one. There will be a temporary loss of output and jobs as the economy adjusts to a lower rate of inflation, and this, coupled with the impact of world recession and worsening competitiveness, will squeeze both demand for our goods and profits. But attempts to relax fiscal and monetary policy would quickly be revealed as self-defeating, leading not to sustainable increase in output but to extra inflation and a worse long-term problem.
  The most important single factor governing our competitiveness, and so the outlook for profits, output and jobs, is the level of pay settlements. Over the past year—partly reflecting the backlash of the previous Government's rigid pay policy—pay settlements have been much greater than the country can afford. But we do not have to go on in that way; the quicker wage negotiators recognise that excessive pay increases lead not to high pay but to fewer jobs, the less painful the process of adjustment will be.
  There are growing signs of realism in pay settlements. CBI figures indicate that half the workers in manufacturing are settling for 15 per cent. or less, and another CBI report recently told of many single figure settlements in the West
  1748
  Midlands. People are realising that excessive pay increases mean lost jobs, and they have taken the sensible course and lowered their sights. In the engineering industry and the textile industry there are numerous examples of low settlements which have been influenced by concern about lost markets and redundancies. So people are beginning to put jobs before pay increases by concluding realistic settlements.
  Another sign that the Government strategy is working is the slowdown in the rate of inflation. The increase in the retail price index has peaked and there will be a big fall in the July figure. The Government's strategy for the revival of the British economy is clear and it is working. It will lay the economic foundations for the sustainable increase in economic growth that we all want. But I have not concealed that it will be difficult and painful.
  But some noble Lords have argued that we could short-circuit this painful process. It is suggested that we could restore growth without fuelling inflation and escape from recession by massive transfers to developing countries. These transfers would enable the developing countries to purchase additional goods from us, which will provide work for unused capacity in our countries. This would be of advantage to the developing countries, by increasing their purchasing power, but also to developed countries, like the United Kingdom, by reducing unemployment and surplus capacity. Noble Lords have argued that this is a further example of the mutual advantage which the Brandt Commission Report recommends. This is an attractive suggestion. I wish I could follow it without hesitation. But it is, I fear, like the pot of gold at the foot of the rainbow. The closer you get the further it recedes.
  There is no doubt that extra transfers, provided they are put to productive use, would be extremely helpful to developing countries, especially the poorer countries without access to private finance. But there is great uncertainty about the impact on developed countries. The fundamental question is this: what would be the origins of this massive transfer? It would chiefly be, as I understand it, official finance. This is additional public spending. How would this additional public spending

  1749
  be financed? There are only two ways. This additional public spending could only be financed either by increasing the burden of taxation or by extra public borrowing. This could jeopardise the slow-down in monetary growth which is essential if inflation is to be lowered. There is no guarantee that extra public spending on aid by the United Kingdom would lead to higher output and employment in this country. There is a risk instead that it would lead merely to depreciation of the exchange rate and higher inflation.
  The Government are already committed to a substantial aid programme. Of course, the economies we have made in public spending, to which I have referred, have obliged us to make cuts in that programme. But of the seven summit countries, we gave in 1979 the second largest share of our GNP in aid. When health has been restored to the British economy, the Government hope that aid will increase again. The restoration of the economy will also mean the revival of an active private sector in Britain, which is the driving force for economic growth. It is very largely the private sector which imports and exports, for the benefit of developing countries. Furthermore, that same private sector will also be free to invest overseas for the benefit of developing countries, particularly since the Government have removed restrictions on outward investment.
  What I have said about aid policy, my Lords, refers to Britain and reflects the very severe inflationary constraints upon us. When other countries, whose economies are stronger than ours, can increase their aid spending, we welcome and applaud their actions most warmly. The German Government, for example, have recently decided on a substantial increase in their official aid. This amounted in 1979 to 0·44 per cent. of GNP, a lower proportion than for Britain, which contributed 0·52 per cent.
  Lord HATCH of LUSBY: My Lords, will the noble Lord allow me? I think this is a very important point which should be got over to the public. The figure which the noble Lord has just given—and I am sure he does not want to deceive anybody—is a figure which has been changed at its basis since the election. As I understand it, and as the noble Lord's
  1750
  right honourable friend in another place has indicated, the present percentage of GNP calculated by the Government as official aid includes promissory notes, whereas before it did not do so. Consequently, the figures which the noble Lord is now giving should not be compared with the figures that were given by the previous Administration, because they are based on different criteria.
  Lord TREFGARNE: That may well be, my Lords, but I was using the figures as a basis of comparison between ourselves and West Germany. Since Germany was last year the second largest western aid donor after the United States, this increase makes an important contribution to meeting the needs of developing countries. But the German Government are enabled to take this action because their inflation is only at 6 per cent.
  We have also supported increases in the resources available to the international financial institutions, notably the increase in the capital of the World Bank, by an extra 40,000 million dollars (no less), and the replenishment of the International Development Association by 12,000 million dollars, to which Britain will contribute 10 per cent.
  I turn now to the various points (or as many of them as I can manage) that have been raised during the debate this evening. In his opening speech the noble Lord, Lord Hatch, said that overseas investment went chiefly to the developed countries. I understand that figures are not available for the period since the removal of exchange controls, but direct investment by British firms in developing countries has risen from £359 million in 1975 to £800 million in 1978.
  The noble Lord, Lord Hatch, also asked about the Government's attitude to a possible North-South summit. May I answer him by quoting the words of my noble friend Lord Carrington, speaking in Caracas earlier this week, when my noble friend said:
  "A 21-nation summit meeting to consider the world's economic problem has been proposed. The problem certainly justifies discussion at the very highest level. My Government would give its full support to a summit designed to inject impetus and co-ordinate realistic action towards a solution of the many difficulties I have described, but such a summit must be prepared carefully and should not be the occasion merely for a further exchange of rhetoric".

  1751
  I fancy that every noble Lord would agree with those sentiments, and I certainly think that our reception of that proposal is not the cool one which has been described. In parenthesis, may I recall that the noble Lord, Lord Gladwyn, on that particular point, reminded the House that the late Mr. Ramsay Macdonald had mounted such a conference in the 1930s, followed swiftly by World War II. I hope the noble Lord was not seeking to draw any comparison between then and now.
  The noble Lord, Lord Gladwyn, also asked if the Government would consider setting up a joint commission of both Houses to examine the issues raised in the Brandt Commission Report, Perhaps I may reflect upon the noble Lord's proposal, but in another place the Foreign Affairs Committee has already begun consideration of this subject and has held a session with a Foreign Office Minister, to which the noble Lord referred, and we would certainly not wish to complicate that committee's work.
  Lord GLADWYN: My Lords, if I may explain my proposal a little further, I quite realise that the Brandt Report is being examined by that House of Commons Committee. My proposal for a joint commission would be to examine the longer-term issues and to report periodically over a period of a year or two.
  Lord TREFGARNE: My Lords, I am obliged to the noble Lord for that further clarification. As I said, I will consider what the noble Lord has said, and write to him in due course.
  The noble Lord, Lord Soper, I think supported by the noble Lord, Lord Brockway, stressed the contribution which disarmament could make to the development of the poorer countries. The Government recognise the disparity between defence spending and aid. We are, furthermore, committed to the pursuit of measures of arms control and disarmament by international agreement. But arms control must be balanced and disarmament measures must have verification provisions. The massive military spending of the Warsaw Pact obliges us to insist upon this.
  1752
  I would not wish it to be thought that the Government are being unreasonable or unthinking in their response to the proposal for massive transfers, while others are ready to subscribe to it. This is not the case. I would like to quote to you a passage from the report of the Group of Independent Experts from Commonwealth countries on the world economic crises which was published during July. The relevant passage is as follows:
  "The view that what the industrialised countries are at present suffering from is a deficiency of aggregate effective demand in the Keynesian sense is strongly disputed by many knowledgeable observers. On their view, additional aid would certainly be inflationary unless it was financed by additional taxation. Advocates of a greater aid effort would need to prove their point that more aid, whether financed from taxation or from expansion of money supply, is preferable to more domestic government expenditure. In other words, in the short-run the case for a larger aid effort must rest on public expenditure priorities; it derives little if any support from macroeconomic demand management considerations except under conditions of deep depression".
  Lord GLADWYN: My Lords, if I may intervene for one moment, is it not a fact that the report says that this project for a transfer of resources should be largely based on taxation, for instance, on armaments expenditure, or even on certain forms of trade?
  Lord TREFGARNE: My Lords, I think, with respect, that that is another point.
  I would sum up the Government's position in the following terms. We have examined with care the proposals for massive transfers which have been proposed and expounded by noble Lords this evening. We doubt that, in our present economic circumstances, we can benefit from them. The control of inflation must be the first priority of our economic policy. We are now achieving this. The restoration of the British economy to health is the best contribution that we can make to improving conditions for the developing countries. If the United Kingdom becomes a growing market, the purchasing power of developing countries will be increased by their expanding sales to us. My Lords, I yield to no one in my confirmation of the assiduity of the noble Lord, Lord Hatch, in this and related matters, but I hope the noble Lord will agree on reflection (and having

  1753
  regard to what I have said) that our policy is the right one.
  Baroness RYDER of WARSAW: My Lords, before the noble Lord sits down, could there please be a further debate on this vital Brandt Commission Report, which affects all mankind, in the next Session of Parliament?
  Lord TREFGARNE: My Lords, there have been two such debates, I think, in your Lordships' House and others in another place. I cannot think that there will not be more.

  DUNDEE PORT AUTHORITY ORDER CONFIRMATION BILL
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  EASTBOURNE HARBOUR BILL
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  FOOD STRATEGY PLAN: THE GAMBIA
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