Sitting of 20 February 1980

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

    Oil Conservation
    Mr. Wallerasked the Minister of Transport what consideration he gives to the factor of oil conservation when judging the economic value of new road projects.
    The Parliamentary Secretary to the Minister of Transport (Mr. Kenneth Clarke): Estimates of savings in vehicle operating costs, including fuel costs, are incorporated in the economic assessment. Both these and the underlying traffic estimates assume that fuel prices will increase in real terms in future. We therefore attempt to measure the oil savings which better roads can produce and anticipate the effects of higher oil prices in our road planning.
    Mr. Waller: Does my hon. Friend accept that the present rapid increase in the price of oil strengthens the argument for new roads, bearing in mind that such new roads, especially those of motorway standards, tend to prevent stop-go motoring which uses more fuel?
    Mr. Clarke: I entirely agree with my hon. Friend. That is a relevant factor that should be taken into account in connection with road planning. Traffic jams can be very wasteful of fuel. In all our transport planning we have to take account of the energy saving implications.
    Mr. Anderson: On what assumptions are the Government working regarding the correlation between real increases in fuel prices and consumption?
    Mr. Clarke: The fuel price forecasts that we are working on at the moment
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    allow for the crude oil price to treble between 1977 and 2000, and we try to make some assessment of the possible impacts of that on vehicle and road use.

    Motorway Network
    Mr. Roy Hughesasked the Minister of Transport what is the likely effect of recent public expenditure cuts on the completion of the motorway network.
    The Minister of Transport (Mr. Norman Fowler): The public expenditure and roads programmes are still under review, but the most urgent schemes should still be able to go ahead as soon as they are ready.
    Mr. Hughes: Could the Government consider separate funding arrangements for the motorway network? In Wales, for instance, the completion of the M4 is gobbling up the bulk of road expenditure. If Wales is to have any future as a viable economy are there not certain road schemes that should be given the highest possible priority?
    Mr. Fowler: I do not think that we could consider a new funding arrangement. Clearly the hon. Gentleman has a point for the Welsh Office. What I can say to the hon. Gentleman is that our road programme is very substantial and we have in mind the importance of the kind of road about which he is talking.
    Mr. Kenneth Carlisle: In assessing his priorities for the road network, will my right hon. Friend bear in mind the need to provide bypasses for those cities that suffer acute traffic congestion, especially those that are important industrial centres which have—
    Mr. Speaker: Order. I believe that the hon. Gentleman is anticipating someone else's question on the Order Paper concerning bypasses.
    Mr. Fowler: I am well aware of the problems of the Lincoln bypass. All I say at this stage is that I have every sympathy and intend to place far more emphasis upon bypasses taking traffic away from the residential areas.
    Mr. McNally: Is the Minister willing to fight within the Cabinet for the concept that if industrial regeneration and recovery is our ultimate objective the motorway system, particularly in areas

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    such as Greater Manchester, will play an important part and should not be chopped now for short-term reasons of expediency?
    Mr. Fowler: I have great sympathy with the point put by the hon. Gentleman. Roads such as the M25 remain a very high priority as do other industrial routes. Indeed, our road building strategy is to put first emphasis on the regeneration of the economy.
    Mr. Trippier: May I ask my right hon. Friend about his proposals for lighting all motorways? As motorists are now accustomed to travelling on unlit motorways, does he not agree that there would be significant savings in public expenditure if he were to remove the urgency of completing that programme and redirect some of that money, through the local authorities, into maintaining and repairing existing major or secondary roads, some of which are in an appalling condition?
    Mr. Fowler: I have sympathy with the point about road maintenance. That is clearly something that we shall look at. We put lighting on the motorways only when we are convinced that the savings in terms of road accidents justifies it.

    British Railways Board
    Mr. Bagierasked the Minister of Transport if he will relax the cash limits applied to the British Railways Board.
    Mr. Fowler: I have no plans to change either the external finance limit for 1979–80 or the 1980 ceiling on the public service obligation grant.
    Mr. Bagier: Is not the Minister aware that the cash crisis facing British Rail is now fairly desperate? Is he aware that British Rail has been forced to put a ban on recruitment in the next four weeks and to stop urgent repairs to the tracks? Will he not agree that the only alternative to lifting the cash limits is a further massive increase in charges, to which the public will react violently?
    Mr. Fowler: I would not agree with the hon. Member on the last point. The British Railways Board has taken stringent measures, and I pay tribute to it for its ability to live within the cash limit. Measures such as these are what
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    it is all about—that is what living within the cash limits means.
    Mr. Garel-Jones: Perhaps in the course of his next meeting with the British Railways Board—and I recognise that this falls slightly outside the context of the question—my right hon. Friend would raise the matter of the very serious train crash which took place in my constituency—
    Mr. Speaker: Order. Perhaps the hon. Member could put that question under some other heading. He has, after all, drawn my attention to his misdeeds.
    Mr. Spriggs: Is the Minister aware that the answer he has just given about the financing of British Rail simply will not do? Will he have another think about this because one of the greatest and most urgent needs at present is that of conserving oil and the best way to do that is to help British Rail electrify more and more lines?
    Mr. Fowler: The cash limit that we are talking about is largely unchanged from that left by the last Government. Of course railway policy is important, but it cannot be insulated from the rest of the economy.
    Mr. Michael McNair-Wilson: Will the Minister say whether, in imposing cash limits, he is giving the chairman of British Rail sufficient flexibility about the amount of the network that he must continue to run?
    Mr. Fowler: If the point of my hon. Friend's supplementary question concerns rural services, I have made it abundantly clear to the chairman of British Railways that any option concerning the cutting of rural lines is not one that we would support. We believe that improvements are possible in the economics of British Rail and that the most important need is for improvements in productivity.
    Mr. Booth: Has the Minister overlooked the fact that in its corporate review British Rail pointed out that the investment allocated to continuous welded rail was sufficient to support only 19,000 track miles? In view of the accident which has taken place as a result of a welding failure, will he at least reconsider how far this development will be limited by the decision that he has taken on British Rail finances?
    Mr. Fowler: I shall certainly consider the arrangements for continuous welded rail but I am sure that the right hon. Gentleman would not want it to be thought that the cause of the accident was any lack of investment in the system at that stage. I do not believe that that is remotely the case. We have announced an inquiry on this matter, but the right hon. Gentleman's point was certainly not the explanation for the crash.
    Mr. Garel-Jones: Following those remarks, will the Minister agree that tribute must be paid to people in my constituency, particularly those at the Watford general hospital, who admitted 45 people in one and a half hours, and also to the employees of British Rail and the local police who acted very promptly and very well in the circumstances? Will the Minister give my constituents an assurance that the findings of the inquiry will be published, and will he ensure that some thought is given to what might have happened had one of the trains carrying nuclear fuel waste been in the vicinity?
    Mr. Fowler: I join my hon. Friend in paying tribute to the emergency services and the staff of British Rail. I have ordered a public inquiry into this matter and the results will be published. On the question of what would have happened had this been a flask train, I do not think that any risk to the public would have been involved.

    Channel Tunnel
    Mr. Whiteheadasked the Minister of Transport if he has now received the Cairncross report on the Channel tunnel; and if he will make a statement.
    Mr. Ron Lewisasked the Minister of Transport if he has now received the Cairncross report on the Channel tunnel; and if he will make a statement.
    Mr. Fowler: Sir Alec Cairncross has given me his initial impression of the BRB scheme. Further work is in hand and I will make a statement as soon as possible.
    Mr. Whitehead: Has the Minister gathered from this initial statement that a single-track tunnel of the type recommended would be a sound investment,
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    particularly as finance is available, both from the EEC and the money markets? Will he make a statement next Transport Question Time as we do not want waiting for Cairncross to become the parliament equivalent of waiting for Godot?
    Mr. Fowler: I take to heart the point that the hon. Member makes and I shall consider whether a statement will be made at the next Transport Question Time. The whole point is that we have asked Sir Alec Cairncross to have a continuing look at whether the project, as at present conceived, is financially viable. That is what Sir Alec will do and that is the matter on which I await his advice.
    Mr. Lewis: Is the Minister aware that a decision in favour of the Channel tunnel would give a great morale boost to a quarter of a million railway men and women? Will he accept that a Channel tunnel will be a considerable asset to the nation's export investment and to tourism?
    Mr. Fowler: Obviously there are great advantages, but I am sure the hon. Member will agree that, if we are to have a Channel tunnel, it is important to get the right Channel tunnel. We are at a very early stage in our deliberations. The Government are certainly not committed to a Channel tunnel, and I ask the hon. Member to await my further statement.
    Mr. Costain: Will the Minister make certain that the Cairncross report is available to the House before Transport Question Time so that we can ask intelligent questions about it?
    Mr. Fowler: The purpose of what Sir Alec Cairncross is doing is to give personal advice to me as the Minister. His inquiry would not be considered to be a Royal Commission or anything of that kind. I shall wish to make a statement giving the maximum amount of advice to the House, on which the House can reach its own conclusions.
    Mr. Dalyell: May I raise a question that was raised at the last Transport Question Time about the steel-using aspects of the Channel tunnel? Has the Minister looked at this matter?
    Mr. Fowler: This is one of the things that we shall continue to look at. I hope

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    that the hon. Member will await my further statement.
    Mr. Prescott: Is the Minister aware of the EEC documents on Community transport infrastructure projects, which was published in November? Is he aware that future rail projects do not include a Channel tunnel? Has he drawn this omission to the attention of the Council of Ministers and does he think that such a project is dependent on Community finances? Does "further work" mean another rail and road project?
    Mr. Fowler: The short answer is that the infrastructure instrument is under discussion and has a long way to go. Clearly, European finance would be one of the points that we would have very much in mind. I hope that at some stage the Opposition Front Bench will make their position on the Channel tunnel unequivocably clear.

    British Railways (Subsidiaries)
    Mr. Andersonasked the Minister of Transport what proposals he has received from the British Railways Board about the future of its subsidiary businesses.
    Mr. Fowler: At my request, the Railways Board has made proposals to my Department for involving private capital in its subsidiaries. I have now asked it to examine the opportunities more widely, including the possibility of setting up a holding company. I am discussing this with the chairman.
    Mr. Anderson: Does the Minister recognise that he has made a significant statement? Does he accept the fundamental difference between the involvement of private capital that he proposes and hiving-off? Will he give a clear undertaking now to the House that he will not sanction the hiving-off of valuable British Rail assets, such as the shipping and hotel interests, and that he does not see the arrangements he has outlined as a prelude to eventual hiving-off if the collaboration projects are successful?
    Mr. Fowler: We are talking about the involvement of private capital in operations like hotels, Sealink and property. How that is arranged and organised is clearly a matter for discussion between myself and the chairman of the British Railways Board. I can certainly
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    give the hon. Gentleman an assurance on that point. Our belief is that this will provide better opportunities for the subsidiaries which. I believe, have not had those opportunities in the past, and also better opportunities for those people who work for them.
    Mr. Bob Dunn: The House welcomes any proposals that will place British Rail on a stricter and sounder commercial basis, but does my right hon. Friend not agree that these proposals must make for greater efficiency? Does not he also agree that there must be greater efficiency in services for commuters, especially in the south-east area of Southern Region, which is currently experiencing a 70 per cent. decline in services leaving Londan stations for areas in the South-East?
    Mr. Fowler: I agree with the hon. Gentleman's point about commuter services, although this does not strictly arise out of the issue of subsidiary businesses. The point my hon. Friend makes about the efficiency of subsidiaries does arise. It is one of the aims of any new arrangement that they should be more efficient and that they should have greater opporunities and a greater commercial future than they have at the moment.
    Mr. Cook: Will the right hon. Gentleman give an undertaking that, if British Rail is successful in attracting private capital, that capital will be exempt from the financial external limits? Does he not appreciate that if it is not so exempt, the effect of attracting private capital will not increase the resources of British Rail by one quid but will merely result in a reduction in the amount of money it obtains from the public sector?
    Mr. Fowler: I cannot give an assurance of the kind that the hon. Gentleman wants at a time when I am discussing the plans with the chairman. I believe that an arrangement of this kind gives, or would give, however organised—whether by a subsidiary grouping company or some other way—more commercial freedom to the subsidiary companies and, therefore, provide a better future for those working in them.

    M6 (Barthomley Link)
    Mrs. Dunwoodyasked the Minister of Transport what starting date he now

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    envisages for the Barthomley link from Crewe to the M6.
    Mr. Kenneth Clarke: I must ask the hon. Member to await the forthcoming roads White Paper.
    Mrs. Dunwoody: I thank the Minister for that forthcoming answer. As his right hon. Friend has taken my constituency out of the development regions, is he aware that we need this link desperately for our industrial development? Will the Minister do whatever he can to expedite the decision?
    Mr. Clarke: I announced a preferred route for the Barthomley link in August last year after meeting a number of representatives of the area. We are now preparing the design of the preferred route and undertaking the necessary traffic surveys to support it. Work is proceeding and, when the White Paper emerges we shall be able to give an estimated date for its construction.

    Port of London Authority
    Mr. Moateasked the Minister of Transport if he will make a statement on the future of the Port of London Authority.
    Mr. Fowler: As I announced on 7 December, I have set a strict financial limit on the total of Government assistance to the authority. Subject to adjustments to cope with inflation and the latest forecasts, this is set at the level promised by the last Government.
    Mr. Moate: Does my right hon. Friend realise that, in the town of Sheerness, we not only have a truly magnificent steelworks but an outstandingly successful port? Will he make it clear, or try and establish with the Port of London Authority, that the future of the PLA in no way includes any plans for taking over the Medway and the port of Sheerness?
    Mr. Fowler: Yes, Sir. I am aware of the points that my hon. Friend rightly makes about the steelworks and the port of Sheerness. None of the proposals that we have made on the future of the port of London affects in any way the future arrangements for Sheerness.
    Mr. John Carlisle: Has my right hon. Friend any information about present industrial problems in the Port of London Authority and whether he expects a settlement in the near future?
    Mr. Fowler: As my hon. Friend knows, there is a strike, and the port at the moment, is at a standstill. I do not believe that it would be helpful, at this time, for me to comment on the strike at the port. I know that both management and unions are making efforts to solve the problems. I gather that a meeting is currently going on, organised by the Transport and General Workers Union, and that there is to be a further meeting on Friday. I would only say that I very much hope that this strike can be brought to an end. It is clearly doing no good at all to the future prospects of the PLA.

    Driving Test Centres
    Mr. Doverasked the Minister of Transport how many new driving test centres he expects to open in the next 12 months.
    Mr. Fowler: Most of the new examiners I am recruiting can be accommodated in existing centres. Some new centres will be required and I am discussing the provision of these with my hon. Friend the Minister for Housing and Construction.
    Mr. Dover: Will my right hon. Friend say what are the limiting restraints on the provision of new test centres throughout the country?
    Mr. Fowler: One of the limiting factors at the moment is budgetary. The second is finding sites for the centres. Using my hon. Friend's constituency as an example, there is no site suitable at present to house a new centre. We are hoping that one will be found. I pay tribute to the pressure that my hon. Friend has brought on the Government on this matter.
    Mr. John Evans: Will the right hon. Gentleman tell the House how many of the new examiners that he hopes to appoint will be situated in the North-West of England, where the waiting list for driving tests is growing ever longer? Surely, some of the new centres should be situated in the North-West to alleviate the enormous backlog that exists.
    Mr. Fowler: We are trying, clearly, to increase the number of driving examiners. There is a later question on the Order Paper about this matter. The average waiting time for driving tests in the North-West is 22 weeks. That compares with a national average that is four weeks longer.
    Mr. Mudd: Will my right hon. Friend, in examining his policy towards the creation of further driving centres, bear in mind that it makes greater sense financially and that it is more convenient for additional inspectors to be appointed, wherever possible, to the existing centres rather than indulging in further proliferation of the rent, rates and acquisition costs involved in extending the network of test centres?
    Mr. Fowler: That is a suggestion that we have taken very much on board. But the fact is that, in some parts of the country, it is impossible to find accommodation for the numbers that are needed to reduce the waiting list for driving tests.

    Bypasses
    Mr. Edwin Wainwrightasked the Minister of Transport how many English towns over 10,000 population do not have a bypass.
    Mr. Kenneth Clarke: Of some 300 such communities served by trunk roads, nearly 200 are at least partially relieved of through traffic by specific bypasses or major new routes. We intend to make progress with as many urgently needed bypasses of this kind as our resources will allow.
    Mr. Wainwright: Does the Minister realise that the nation deplores the attitude of the Government towards the maintenance of good roads throughout the country? Does he agree that, following a mild winter, compared with last year, the Government are feeling complacent? Is he aware that many villages throughout the country are shattered by what has happened to their buildings and houses due to the passage of heavy vehicles that should be carried on bypasses? Will he take some action?
    Mr. Clarke: We are not complacent at all. We are continuing with a perfectly effective roads planning programme consistent with the resources that are
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    available. When the hon. Gentleman talks of a mild winter, he refers, presumably, to the fact that we shall not underspend so much this year on the trunk road budget. That, I believe, is because the roads programme is being managed more efficiently than under the previous Government.
    Mr. Robert C. Brown: Will the Minister seriously reconsider the roads programme in the North East, bearing in mind the extremely heavy unemployment in that area? Will he consider bringing forward the date of the city western bypass, Newcastle, the western inner ring road and the Redheugh Bridge?
    Mr. Clarke: We are considering ail those schemes in the context of the review now taking place. We shall produce a White Paper in April. I am aware of road needs in the North-East. All the schemes that the hon. Gentleman mentioned have been under consideration in recent months.
    Mr. Booth: Does the hon. Gentleman recall that, only two days ago, the Ministry put out another press notice saying that the M25 would have the highest priority in the road programme during its construction and would have first call on the Ministry's finances for roads? How can he reconcile that with assuring my hon. Friend the Member for Newcastle-upon-Tyne, West (Mr. Brown) that the Newcastle schemes are being considered? Surely they are being considered only in a secondary way, after the Minister has determined his priority on the M25.
    Mr. Clarke: We have always said that the M25 has the highest priority in our roads programme, and I reaffirm that. However, it does not take up all the available funds and we must consider a proper regional distribution of the remaining resources in drawing up the roads programme for the whole country.

    Road Construction
    Mr. Knoxasked the Minister of Transport how much has been spent on new road construction in the past two years; and how much he anticipates will be spent in 1979–80 at constant prices.
    Mr. Kenneth Clarke: Expenditure on trunk and local roads in England was

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    £544 million in 1977–78 and £516 million in 1978–79. I expect £562 million to be spent in 1979–80. All these figures are at 1979 survey prices.
    Mr. Knox: Does my hon. Friend agree that, despite the improvement in the current year, we do not spend enough on new road construction? Does he agree that if we are to have an efficient and internationally competitive economy we should spend a higher proportion of total public expenditure on new road construction?
    Mr. Clarke: No part of transport expenditure can be immune from the present financial situation and the need to achieve constraints in public expenditure, but road programmes can have a part to play in the revival of our industrial manufacturing economy. We have maintained spending this year, and, indeed, we are slightly increasing it because we are not falling so far short of our plans as the previous Government always did.
    Mr. Hardy: Does the Minister agree that, while he may be right to give some priority to new road construction, the condition of thousands of miles of existing roads in Britain leaves a great deal to be desired? Is he further aware that the backlog is mounting, and that it could be decades before we catch up?
    Mr. Clarke: I do not agree that conditions are as bad as the hon. Gentleman claims, but I accept that many local authorities are not in a position to make economies on road maintenance and we therefore have to reflect that fact in the balance of resources distributed to the remainder of the transport programme. We have shifted some resources from trunk road building to trunk road maintenance because of the need to get maintenance on the faster roads with heaviest traffic up to the required standard.

    Driving Tests
    Mr. Viggersasked the Minister of Transport what progress has been made in shortening the waiting period for driving tests.
    Mr. Fowler: The key to shorter waiting periods is more driving examiners and we have recruited more than 250 since last May. Waiting periods are now beginning to come down, but I am determined to
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    bring about further improvements as quickly as possible.
    Mr. Viggers: is my right hon. Friend aware of the widespread anger that the Government should allow a six-month delay in driving tests in an area that is meant to provide a monopoly service? Is he further aware that there is appreciation of his determined effort to reduce the driving test waiting times, unlike the previous Government who were complacent? Why is it not possible to recruit examiners—if not men, why not women?
    Mr. Fowler: The waiting periods are coming down and have been reduced to an average of 26 weeks, though that is not remotely good enough. In my hon. Friend's constituency the delay is down from 19 weeks to 16 weeks, but obviously we want to make much more progress. My hon. Friend has put his finger on an important area where much more recruitment is possible, namely in getting more women into the service. I hope that more women will come forward.
    Mr. Gummer: Can my right hon. Friend explain why the previous Government cut back on the number of driving examiners when it is a self-financing service? Are we not suffering now from that action?
    Mr. Fowler: Indeed we are. It is one of the mysteries of the previous Government—though only one—why they did that. When I took over as Minister of Transport I inherited a waiting list of 800,000. That is why we have given priority to sorting out the muddle left by the previous Government.
    Mr. Christopher Price: Is the Minister aware that his reference to 26 weeks puzzles me, since many of my constituents are having to wait much longer and my son has just been offered a test on 26 October? Why is the position in London worse than that in the rest of the country?
    Mr. Fowler: Because the Metropolitan area is one of the most difficult areas in which to find driving examiners. The 26-week figure is only an average. I hope that in London, as elsewhere, we shall be able to improve the situation. What I said about seeking to recruit more women driving examiners has particular application in London.

    M1
    Mr. Brightasked the Minister of Transport why work on the widening of the southern part of the M1 will not start this financial year as scheduled.
    Mr. Kenneth Clarke: All action was suspended pending the resolution of a High Court challenge against the compulsory purchase order for the acquisition of the necessary land. The Department has very recently been notified that the challengers do not intend to proceed with their notice of motion. I am glad to say that we shall, therefore, shortly be able to invite tenders for the work. Unfortunately, there is not now time for the work to be started this financial year.
    Mr. Bright: Given the amount of time and fuel wasted on that stretch of the motorway, will my hon. Friend ensure that work will not be delayed still further through lack of finance once the problems have been overcome?
    Mr. Clarke: I am well aware of the time and petrol that I waste, as do many of my constituents, every time we drive to London.
    Mr. William Hamilton: Go by train.
    Mr. Clarke: Now that we finally have the legal problems cleared up, public expenditure restraints will not hold back the contract.
    Mr. Dudley Smith: Is my hon. Friend aware that it is impossible to travel on the M1 without meeting a multitude of road works? Does he not think that a special effort should be made to put the premier road in Britain into working order, if only for safety reasons?
    Mr. Clarke: About 15 or 20 years ago traffic demands in the neighbourhood of Watford were underestimated and the strength of the carriageway needed for modern traffic was underestimated. A great deal of work has to be done to get things in order and, as I indicated in reply to an earlier question, we are diverting some resources from new building to maintenance, in order to get the M I up to the desired standard.

    Trunk Road Schemes
    Mr. Lennox-Boydasked the Minister of Transport if he will make a statement
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    on the criteria which he is using in his review of trunk road schemes.
    Mr. Kenneth Clarke: The criteria include economic return, importance to industrial traffic, environmental impact, how the schemes accord with the Government's regional policies, and the views of local people.
    Mr. Lennox-Boyd: I thank my hon. Friend for his helpful answer. Bearing in mind that no Minister can ever be as generous with road expenditure as he would like, may I ask whether my hon. Friend can indicate that he will not be cheeseparing about the preparation pool, particularly when he considers the deserving cases of roads that lead to major industrial sites, ports and nuclear power stations such as the road from the M60 to Heysham?
    Mr. Clarke: We shall look at any reasonable suggestions for additions to the preparation pool, but our immediate problem is the marshalling of priorities among the 400 schemes in the present road programme. I am aware of the pressure to trunk the route into Heysham, which my hon. Friend and others often press, and we shall look at any scheme that is put forward. I should not like to hold out any false hopes that there is a likelihood in the near future that national funds will be committed to the improvement of that local route.
    Mr. Robert C. Brown: Given the Minister's own criteria, how can he justify abandoning the Dishforth-Leeds motorway link, which is essential for traffic travelling from the North-East to Lancashire?
    Mr. Clarke: We have not abandoned it. We have abandoned the inquiry, which was too closely directed to improvements in the existing A1, which are the least important parts of the improvements needed there. We have every intention of proceeding as quickly as possible with the design of the new link from the M1 to the A1, and fresh proposals will be published as soon as possible indicating the route to the east of Leeds.
    Mrs. Kellett-Bowman: Bearing in mind the criteria that my hon. Friend has just enumerated, does he agree that when the Government make a majority policy decision, for example to build a nuclear

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    power station, they should take more account of the impact that it will have on the citizens of the area and should will the means to make the project a success by providing proper access to it?
    Mr. Clarke: I am aware that the new power station is a factor to be taken into account, and we look at all relevant factors in assessing how much a road is part of the national network. Essentially, the discussion is about whether it should be paid for as part of the national trunk road scheme or financed as a local authority scheme. We have to assess the needs of Heysham and that part of Lancashire on the basis of the same criteria that we apply to the rest of the country.

    British Railways (Freight)
    Mr. Hooleyasked the Minister of Transport what is the financial target for British Railways freight services in 1980–81.
    Mr. Kenneth Clarke: We propose to announce a short-term financial target for the freight business very soon.
    Mr. Hooley: Does the Minister agree that, whatever the financial target may be, the chances of achieving it will not be enhanced if British Rail goes ahead with its proposal to close the valuable trans-Pennine Woodhead line through the most modern rail tunnel in this country and cut out the modern marshalling yards at Tinsley?
    Mr. Clarke: British Rail is still consulting about that proposal. Indeed, it has been consulting for months. As I have indicated in previous replies to the hon. Member and others, there is no ministerial role in the decision about the future of a freight-only line. It is modern, but it is electrified to a different system from the remainder of the electrified track. The future of the freight business depends in part on concentrating on the right traffic and the right facilities and altering the nature of the freight business to make sure that it matches its market more exactly.
    Mr. Moate: Does my hon. Friend agree that there is no case for subsidising British Rail freight? Can he say whether the financial target will allow for freight to carry its fair share of track costs and also make a full return on capital?
    Mr. Clarke: I accept what my hon. Friend says. There is no case at all for subsidising freight traffic. I cannot anticipate my right hon. Friend's announcement about the actual level of the financial target, but getting a proper return on the capital employed must be one of the criteria to be aimed at.
    Mr. Leadbitter: The Minister says that a decision will be made soon on the financial target for freight. Will he acknowledge the need to listen to the views of hon. Members and those members of the trade union movement who are interested in transport, particularly in the trans-Pennine lines, before the target announcement is made? Talks have taken place but we have not yet made representations to him. Will the hon. Gentleman agree to listen to our views before the financial limits are announced?
    Mr. Clarke: Yes.
    Mr. Michael McNair-Wilson: In the context of British Rail freight services can my hon. Friend say how many section 8 grants are being processed by his Department.
    Mr. Clarke: I cannot give an exact answer but section 8 grants are welcomed by my Department and are always granted in suitable cases. We have rejected only one application since we came to office.
    Mr. Snape: Does the Minister agree that the subsidy now being paid to British Rail's main competitor the heavy goods vehicle—is totally unjustified in that those vehicles do not meet their full track costs? Why does he not behave as a true Tory and withdraw that subsidy as soon as possible?
    Mr. Clarke: The aim is that all modes of traffic should bear their proper track costs and receive no subsidy from public funds. My right hon. Friend has already announced our intention to alter the rate of road vehicle excise duty on heavy goods vehicles as soon as legislative time is available in order to achieve that aim.

    Motorways
    Mr. Bevanasked the Minister of Transport what proportion of roads expenditure in 1980–81 will be devoted to motorways.
    Mr. Fowler: I must ask my hon. Friend to await the publication of the roads White Paper.
    Mr. Bevan: Assuming that the White Paper will show a substantially reduced proportion compared with previous years will my right hon. Friend indicate what progress can be made towards completion of the essential strategic motorway programme in the West Midlands and especially of the M42?
    Mr. Fowler: The M42 inquiry is going ahead. The West Midlands is already well served, as my hon. Friend knows. Clearly the needs of the West Midlands and other industrial areas will be kept in view when we publish the White Paper.

    Motorway Accidents
    Mr. Iain Millsasked the Minister of Transport if he is satisfied with his Department's encouragement of measures to reduce the danger of accidents caused by lorry-induced spray on wet motorways.
    Mr. Kenneth Clarke: We are continuing to look for more effective ways of reducing spray but there is no simple design solution. The only obvious but effective remedy is for for drivers of heavy vehicles to keep their speed down in wet weather and for other drivers to keep clear of them where possible and ensure that windscreen wipers are in good order.
    Mr. Mills: Would my hon. Friend be prepared to consider some form of consultative document that would encourage vehicle and vehicle component design—particularly of tyres—so as to make some contribution to reducing vehicle-induced spray?
    Mr. Clarke: A great deal of research is going on, using the Department's engineers, TRRL and Southampton university, into possible means of reducing spray from heavy goods vehicles. My hon. Friend has great expertise in the matter of tyres and I agree that improved tyre design would help. No design solution has so far been found but we are continuing to look for better methods.
    Mr. Cryer: Has the Minister noticed this afternoon the stream of complaints about lack of maintenance on motorways, and the problems of heavy traffic? Is there not a case for subsidising British
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    Rail freight so that lorries can be taken off the roads and their loads carried by rail? We would thus conserve energy and at the same time preserve our vital rail network for the future.
    Mr. Clarke: The previous Government rejected any form of direction of traffic. They found, as everyone else found, that that was totally impracticable. The two modes of transport are often not in direct competition as some forms of traffic are more suitable for rail and other forms are more suitable for roads. The answer is to try to accommodate both methods using the resources available and making a sensible choice of priorities.
    Mr. Dykes: Is the Minister aware that juggernauts are becoming an increasing menace everywhere? The particular problem on motorways is that juggernauts are going too fast in the centre lane for ordinary motorists. Is he aware that they often give the private motorist a difficult time, and, if the private motorist will not yield, they move into the fast lane which causes difficulties on overcrowded motorways? Will the Minister look carefully at the problem and give advice to the hauliers and their drivers?
    Mr. Clarke: I agree that juggernauts are not popular. It is obviously necessary to carry on designing our roads to take traffic out of residential areas, where it is a particular nuisance. I agree that there is bad behaviour on motorways but sometimes private motorists hog the middle lane and stop the faster-moving heavy goods vehicle drivers making the progress that they would wish along the central lane. We give guidance in "Driving" about proper behaviour on motorways. We hope that motorway driving standards in all types of vehicles will improve.
    Mr. Stoddart: Is the hon. Gentleman aware that he could be accused of complacency following his answer to the original question? Does he not realise that the spray from heavy lorries is most dangerous? I am quite sure that it causes many accidents and creates much fear among motorists. Will the Minister please give this matter priority in his research?
    Mr. Clarke: I said that we are undertaking research and have placed a new research contract in November last year with Southampton university. This is a

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    serious problem and we have not yet found the solution to reducing spray.

    Motorway Service Areas
    Mr. Leeasked the Minister of Transport when he proposes to introduce the necessary legislation to dispose of motorway service areas.
    Mr. Fowler: Legislation is not required. Arrangements for the disposal of motorway service areas in accordance with my policy statement of 22 October are well under way. I have appointed Messrs. Richard Ellis, one of the leading firms of chartered surveyors, to assist me with sales.
    Mr. Lee: I thank my right hon. Friend for that answer. Will he tell us what his plans are for relaxing the rules governing advertising slogans bearing the names of operators in service areas? Has he any intention of using a starring system—or something similar—for facilities at motorway service areas?
    Mr. Fowler: The answer to both questions is "Yes". The policy of the previous Government was that Government should solemnly undertake inspections by the Department four times a year in an attempt to check standards at motorway service areas. We have rejected that and have given new freedom to operators in order to ensure greater competition. We plan to introduce a star rating system which, we hope, will be assessed by the motoring organisations. We believe that, by allowing the service area operators to advertise their own names, it will make a contribution to improving the services.
    Mr. Foulkes: In all seriousness, will the Minister explain how these proposals will improve the appalling standard of service—alongside high prices for food—at the private enterprise motorway service facilities? Does he realise that their standards make a British Rail pork pie look like a gourmet item?
    Mr. Fowler: That would be an unusual attribute. We have had 20 years of control of motorway service areas, with Government Departments solemnly sending out inspectors to look at the standard of fish and chips in motorway cafes. That did not improve results. We believe that competition will effect an
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    improvement and that is why we have introduced it.

    Transport Supplementary Grant
    Mr. Boothasked the Minister of Transport which metropolitan authority has had the largest cut in transport supplementary grant between 1979–80 and 1980–81; and what percentage this represents of its 1979–80 grant.
    Mr. Fowler: Tyne and Wear county council was allocated 46 per cent. less transport supplementary grant for 1980–81 than for the current year.
    Mr. Booth: How can the Minister expect a metropolitan authority to carry out its statutory duty to develop and maintain good passenger transport services—at a time when the costs of those services are rising—if he chops 46 per cent. off the grant? Surely that is a totally unreasonable proposition? The right hon. Gentleman should find the funds to enable the metropolitan authorities to carry out the duties laid upon them by this House.
    Mr. Fowler: The Tyne and Wear authority is a special case, because of the leasing of rolling stock and the use of extra loan sanction outside the TSG system. The fact is that Tyne and Wear still does comparatively well.
    Mr. Bagier: Is the Minister aware that the Tyne and Wear metropolitan authority has just increased its rates by 30 per cent? Did the cut in the transport grant have an effect upon that increase?
    Mr. Fowler: Without examining the arrangements it is difficult to comment. The Tyne and Wear authority is treated fairly compared with other authorities.
    Mr. Robert C. Brown: Is the Minister aware that the scandalous cut of 46 per cent. in the Tyne and Wear transport grant has resulted not only in a savage increase in rates but, more importantly, in a savage reduction in bus services? Is he aware that that is having a serious detrimental effect on an area which is already under-privileged?
    Mr. Fowler: It is unrealistic to talk in those terms. I have already explained the reason for the reduction to the right hon. Member for Barrow-in-Furness (Mr. Booth). I cannot believe that, under any

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    objective analysis, it can be said that the Tyne and Wear authority is being badly treated in the provision of transport facilities.

  CIVIL SERVICE

    Pensions
    Mr. Meacherasked the Minister for the Civil Service how many retired civil servants and other public servants received, at the last increase in their public pension, a rise of more than £50 a week.
    The Minister of State, Civil Service Department (Mr. Paul Channon): Figures for the public services as a whole are not available centrally. As to the Civil Service in particular, the number is 18, out of a total of 348,000 pensioners.
    Mr. Meacher: Is this not yet another example of one law for the poor and another for the rich under the present Government? Is the Minister aware that the Government are refusing to increase unemployment benefit in line with inflation—an insurance benefit paid for by contributions—and that that act will push millions into poverty? Is he aware that at the same time they are paying out huge, fully inflation-proofed increases to former top civil servants who receive pensions of over £15,000 a year? Does the Minister not agree that a limit must be imposed upon the rich before the poor are made to suffer more?
    Mr. Channon: Whatever the merits or demerits of inflation-proofing it is ridiculous to launch a campaign against 18 people. The hon. Member is basing a campaign on about .005 per cent. of the 348,000 people involved.
    Mr. Bruce-Gardyne: What progress has my hon. Friend made in the search for a new and improved mechanism to check on the computations of the Government Actuary in arriving at the real value of index-linked pensions in the public service?
    Mr. Channon: The Government are continuing to study this matter with urgency. I hope that we shall be able to come to conclusions and make announcements before long.
    Mr. Arthur Lewis: How many of the 18 former public servants have highly paid jobs such as bank managers and
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    directors because of their Civil Service experience? How many of them are in the other place receiving £16.50 expenses which is worth another £100 a day if one takes tax into account?
    Mr. Channon: I cannot answer questions about individuals. The hon. Member has been kind to me in the past, but I have to say that that is a typical question for him.
    Mr. Budgen: Has my hon. Friend any plans for obliging those who are in receipt of index-linked pensions to pay substantially more in the course of earning those pensions?
    Mr. Channon: The Government are looking into the whole question of inflation-proofed public service pensions. The issues are extremely difficult. We hope to be able to ensure a stystem which is acceptable to the public servants and the taxpayers.
    Mr. Wrigglesworth: Is the Minister aware that his answer to the hon. Member for Knutsford (Mr. Bruce-Gardyne) will be deeply disappointing to many retired public servants and to the Civil Service staff side because for about a month he has been unclear about how the investigation is to be carried out, and, indeed, why it is to be carried out? Did he not say a few months ago that he had the utmost confidence in the Government Actuary's figures? Why is the investigation necessary and who will carry it out?
    Mr. Channon: It is interesting that the hon. Member should be so against an investigation into public service index-linked pensions when there is such disquiet about the issue. I have the greatest confidence in the Government Actuary but the question of index-linked pensions goes far wider than the Civil Service. It goes through the whole of the public services. That is why the question is not relevant to the issues at stake.

    Staff Side (Meetings)
    Mr. Strawasked the Minister for the Civil Service when he expects next to meet representatives of the staff side.
    Mr. John Evansasked the Minister for the Civil Service when last he met representatives of the Civil Service trade unions and if he will make a statement.
    Mr. Channon: I am meeting them constantly and will be meeting them again next week.
    Mr. Straw: Do the Government intend to settle this year's Civil Service pay claim within the framework of the national pay agreement?
    Mr. Channon: The normal processing of pay evidence is proceeding. No decision has been taken. The reports were received only in the last week or so. It is far too early to announce a decision.

    Computer Maintenance
    Mr. Butcherasked the Minister for the Civil Service what savings in Civil Service expenditure he has identified from changes in computer maintenance.
    Mr. Channon: Arrangements have been made with International Computers Limited to maintain certain computers in use beyond the life originally planned for them. An estimated saving of some £40 million up to 1985 is expected from this life extension programme.
    Mr. Butcher: May I congratulate my hon. Friend on making such savings in his Department? Does he agree that there is further scope for the use of computers in Government Departments generally, in view of the ever-increasing complexity of Government business and the reductions in the cost of computer hardware?
    Mr. Channon: I entirely agree with my hon. Friend. I shall pursue this matter as vigorously as possible. I am grateful for his question.

    Redundancies (Scotland)
    Mr. McQuarrieasked the Minister for the Civil Service how many persons at present employed in Scotland in offices which are under his control will be made redundant under the proposed public expenditure cuts for the current year; and if he will identify these by region and by numbers involved.
    Mr. Channon: Before redundancy is declared, the agreed procedures provide for a number of measures to be considered, including the redeployment of surplus staff to other Departments. Until all this has been completed, it will not be possible to say whether there will be any
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    redundancies in the Civil Service as a result of public expenditure reductions. We intend to keep redundancy to a minimum. It is most unlikely that there will be any in the current financial year.
    Mr. McQuarrie: I thank my hon. Friend for that reply. Is he aware that it will be welcomed in Scotland where unemployment is 8·9 per cent? When he comes to consider redundancies, will he take that unemployment rate into consideration?
    Mr. Channon: I shall certainly take anything that my hon. Friend says into consideration. I take his views seriously, especially those about dispersal. I have no reason to believe that the chance of Civil Service redundancies in Scotland is worse than elsewhere.
    Mr. Penhaligon: Does the Minister expect to see any further transfer of Civil Service jobs from Southend to Scotland?
    Mr. Channon: That is an interesting thought. I shall have to consult Mr. Edward Taylor about that.
    Mr. Robert Hughes: Since the Minister is still saying that he is in favour of public service dispersal to Scotland, will he be supporting his former colleague, Teddy Taylor, in his by-election campaign in Southend, East?
    Mr. Channon: With vigorous enthusiasm. I am looking forward to a convincing victory.

    Staff Side (Meetings)
    Mr. Wrigglesworthasked the Minister for the Civil Service when he expects next to meet the national staff side of the Whitley Council.
    Mr. Channon: I refer the hon. Member to the answer that I gave today to the hon. Member for Blackburn (Mr. Straw).
    Mr. Wrigglesworth: In view of the speculation about further cuts in public expenditure and Civil Service manpower, will the Minister explain, the next time he meets the national staff side of the Whitley Council, when further cuts are to be made and when a definitive announcement will be made to clear up the anxiety in the minds of civil servants?
    Mr. Channon: If there were a further announcement about cuts I would naturally tell the national staff side at the earliest opportunity. I refer the hon. Member to my statement of 6 December. There has been no significant change since then.
    Mr. Bruce-Gardyne: Can my hon. Friend assure the House that work is still proceeding with all possible urgency on the options of 10, 15 and 20 per cent. economies?
    Mr. Channon: My hon. Friend knows that those figures were not targets. In my statement on 6 December I said that a number of studies were being conducted in the Departments, notably in the Ministry of Defence, the Department of Health and Social Security and the Department of the Environment on further savings, which, I hope, will be in addition to what I believe to be the largest programme of savings announced at any one time.

    Departmental Expenditure
    Mr. Squireasked the Minister for the Civil Service what progress he is making in cutting expenditure in his Department.
    Mr. Channon: Expenditure by the Civil Service Department in the current financial year—1979–80—will be contained within the revised cash limits announced by my right hon. Friend the Chief Secretary to the Treasury on 26 June 1979, which took account of a 3 per cent. reduction in the pay component. A further reduction of £2·3 million—10½ per cent.—is planned by the end of the fiancial year 1983–84.
    Mr. Squire: I thank my hon. Friend for that answer. Will he accept that one of the more effective ways of reducing Civil Service expenditure is to reduce the duplication of jobs carried out by central and local government? Will my hon. Friend encourage his right hon. and hon. Friends to extend the removal of controls along the line suggested by my right hon. Friend the Secretary of State for the Environment?
    Mr. Channon: I most certainly agree with my hon. Friend's remarks I am grateful to him for drawing my attention to the matter. It is an issue about which I shall continually press my colleagues.

RHODESIA
Mr. Shore (by private notice)asked the Lord Privy Seal if he will make a statement on recent acts of terrorism in Rhodesia, and the arrangements for securing free and fair elections in that country.
The Lord Privy Seal (Sir Ian Gilmour): The situation has not changed substantially since my statement of 13 February. Elections on the white votes' roll took place on 14 February.
The Governor is continuing his consultations with party leaders with the aim of stemming political intimidation, which is making it extremely difficult for the majority of parties to campaign in certain areas.
Although there has been a disturbing number of violent incidents, the total number of casualties since ceasefire day is less than frequently occurred in a single week previously. Investigations are being pursued into a number of incidents, including the bombings in Salisbury on the night of 14 February.
Five hundred and forty volunteers from the police will travel to Salisbury this weekend to reinforce supervision of polling stations. We are grateful for the splendid response from the volunteers, and are sure that their presence will make a material contribution to the prevention of intimidation at the polls.
Mr. Shore: While thanking the Lord Privy Seal for his statement and noting with satisfaction the continued reduction in the acts of violence, I would not be doing my duty if I did not express, as one incident follows another, my growing anxiety at the course of events and the urgent need to reinforce confidence both inside and outside Rhodesia in our capacity to insist on effective and evenhanded administration in the closing phases of the election campaign.
What is now the total number of ceasefire breaches reported to the Ceasefire Commission, how many are attributed to Mr. Mugabe's followers, and how many to other parties? Have the Patriotic Front representatives on the Ceasefire Commission either volunteered, or been asked, to deal with their own dissident groups, as laid down in the Lancaster House

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agreement? What information has the Lord Privy Seal about the clandestine bombing of the Salisbury churches by members of the Selous Scouts? Surely, that unit, above all others, should have been confined to barracks and closely monitored.
Is it not clear that the Governor is much hampered by lack of independent information when making his decisions? How else would the Minister explain the conflict of evidence between the claim of Government House that the Mount Darwin area is one of the worst areas of intimidation and the public statement today, of the British election supervisor, that that is not true?
What action does the Lord Privy Seal propose to take to compel the withdrawal of the unlawful presence of the Rhodesian security forces from within the perimeter of the guerrilla assembly area Bravo, following the strictures upon the security forces made by the Australian captain in charge of the Commonwealth monitoring force?
As it is clear that threats to the ceasefire and the election process come from many sources, I strongly urge the Government not to take any measures that would incite the already strong suspicions of partiality, to make better use of the Commonwealth observer forces, especially at the polling stations when the votes are cast, and to consider whether the parties to the Lancaster House conference should not now be collectively reconvened to attempt to allay the widespread suspicion that exists and to discuss the handling of the difficult and dangerous post-election position that lies ahead.
Sir I. Gilmour: The right hon. Member for Stepney and Poplar (Mr. Shore) spoke of the need for even-handed administration. I wish that he had been a little more even-handed in the past. His persistent tendency to find fault with the Governor's administration, to give no praise where it is due, and to make the position seem even worse than it is, does him and his party no credit.
The right hon. Member asked about the number of ceasefire incidents. Thirteen are attributed to the security forces and the auxiliaries; 22 to ZIPRA; 11 to the old ZIPRA area of operations; 93 to ZANLA; 35 to the old ZANLA area of
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operations; and 17 to bandits with PF weapons. Fifteen are unattributable.
The right hon. Gentleman asked about the incidents on 14 February, and he attributed them to the Selous Scouts. Those serious incidents are being investigated. It is far too early to attribute blame, just as it is far too early to attribute blame for the appalling murder of the Roman Catholic missionary near Fort Victoria today.
The right hon. Gentleman said also that the Governor lacked independent advice, and drew attention to the remarks of the British observer about Mount Darwin. In saying that, he contradicted himself. The British observer is one only of the many sources of British advice open to the Governor. It is largely on British advice that he has been acting. There are many election observers and the election supervisor who are giving the Governor advice. I regret the general tendency of the right hon. Gentleman's remarks.
Mr. David Steel: I wish to ask the Lord Privy Seal about the progress of investigations into two specific incidents. One incident concerned two members of the security forces, who were found blown up in their car. They were thought to have been in disguise. The second incident concerned the land mine under Mr. Mugabe's car.
On the general scale of violence and intimidation, whether carried out by the Patriotic Front or the auxiliaries, is the Lord Privy Seal—despite the additional police for the polling stations—satisfied that the monitoring force does not yet require further reinforcement?
What is happening about the charges against Mr. Garfield Todd?
Sir I. Gilmour: The right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) will be aware that I have already commented on the events of 14 February. Those serious incidents are being investigated.
As to the deplorable attack on Mr. Mugabe, a remote control explosive charge was detonated on the road to Fort Victoria airport. Mr. Mugabe and his party were returning from an election meeting. We understand that following the explosion the attackers opened fire on the damaged vehicle, but fortunately Mr. Mugabe was unhurt. Some of his

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officials were either shot or slightly injured. Urgent police investigations are in hand.
The right hon. Gentleman is misunderstanding the function of the monitoring force. They are there to monitor. They are not there to prevent intimidation. That is something that they cannot do. It is worth saying, in passing, that they monitor the auxiliaries.
I told the House last week about the charges against Mr. Garfield Todd. We do not have full details yet, but they concern aiding and abetting terrorism. Last week Mr. Todd saw the Rhodesian Attorney-General, who, in the light of Mr. Todd's statement, is considering whether the prosecution should proceed.
Mr. Amery: Is there any truth in press reports that there are between 4,000 and 5,000 Mugabe guerrillas, at least, still in the bush and that there are about the same number of Mr. Nkomo's force held in reserve on the other bank of the Zambesi? Does that not represent some threat of intimidation to the holding of free and fair elections?
Sir I. Gilmour: In the nature of things, it is impossible to estimate accurately the number of Patriotic Front guerrillas who have not assembled, but the figures given by my right hon. Friend in relation to ZANLA are unlikely to be wide of the mark. As he knows, there is considerable contrast between what has gone on in the east of the country and what has gone on in the west. The same kind of thing has not taken place in the west. The ZIPRA forces have concentrated and there have been relatively few incidents in the west of the country.
The presence of a large number of guerrillas who have not assembled in the eastern part of the country has produced considerable intimidation. The House should realise that every party other than ZANU P F has complained about the intimidation. Both Mr. Nkomo and Bishop Muzorewa have been unable to hold meetings in certain areas. Of course, that represents discrimination of a very serious kind.
Mr. Whitehead: Does the right hon. Gentleman agree that it is because we deplore acts of intimidation from any quarter that we are particularly concerned about apparent acts of clandestine sabo-
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tage carried out by security forces under the control of the Government? Is this not a case for the formal restraint of the Selous Scouts until the elections are over?
Secondly, will the right hon. Gentleman join the House in deploring a reported statement by the South African Government this afternoon threatening military intervention if things do not go in a way that they approve in Rhodesia?
Sir I. Gilmour: I have not seen the statement to which the hon. Gentleman referred, so I cannot comment. I deplore all acts of intimidation. I wish that the Opposition were equally even-handed. I have already referred twice to the deplorable events on 14 February, but it is too early yet to attribute blame, just as it is too early to attribute blame for other equally deplorable incidents.
Several Hon. Members rose—
Mr. Speaker: Order. I must warn the House that for the debate on the Scottish economy I am already aware that many more right hon. and hon. Members want to speak than will be called. Furthermore, this is an extension of Question Time. I propose to take two more questions from either side of the House.
Mr. Maxwell-Hyslop: What arrangements have been or will be made to ensure that any of the British police seconded to Rhodesia who are injured or killed there will be entitled to compensation no less generous than they would receive from the Criminal Injuries Compensation Fund if they suffered death or injury in Britain?
Sir I Gilmour: That is an extremely important question. We hope that the contingency will not arise. However, I shall draw my hon. Friend's remarks to the attention of my right hon. Friend the Home Secretary.
Mr. Buchan: The Minister asked for an even-handed attitude from the Opposition. Is he aware that the anxiety, both internationally and here, is due to the lack of even-handed attitude that we have been getting from him and from Lord Soames? Has he forgotten the Lancaster House agreement, under which both sides were to be used? How does he square that with the running free of the previous

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rebel forces—the Selous Scouts, the auxiliaries and the security forces, on which he bases his entire case?
Sir I. Gilmour: With respect to the hon. Gentleman, I was at Lancaster House. I am not unaware of the terms of the agreement, and they have not been broken. The Lancaster House agreement stated that if all the Patriotic Front forces assembled the Governor would have no need to deploy the security forces from their bases. Unfortunately, that has not happened. Therefore, there has been a need to deploy some of the forces. It is as simple as that.
Mr. Gummer: Does my right hon. Friend agree that an even-handed attitude would be helped if, in public statements by the Opposition, the fact that there are still large numbers of guerrilla forces who have not yet reported was deplored? Is it not a pity that today a long question was asked without that statement being clearly made?
Sir I. Gilmour: I agree with my hon. Friend. It is fundamental to what has been happening in Rhodesia over the past few weeks that several thousand guerrillas have not assembled and have been exercising considerable intimidation. That is not disputed by anybody, except possibly in this House. Everybody in Rhodesia, including Mr. Nkomo, agrees about it. I hope that the House will finally take it on board.
Mr. Hooley: If the situation in the eastern part of Rhodesia is as uncertain as the Lord Privy Seal described it today, is there not an overwhelming argument for strengthening the monitoring forces so that the eventual outcome of the election will be acceptable to the international community?
Sir I. Gilmour: The hon. Gentleman is misunderstanding the function of the monitoring forces. They are there, first, to see that the security forces behave in a proper manner and, secondly, to see that the Patriotic Front forces behave in a proper manner in their assembly camps. They are not there to prevent intimidation. In the nature of things, they cannot conceivably do that.
Mr. Shore: I make it absolutely plain that we deplore all breaches of the cease-
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fire, including those made by substantial numbers of Mr. Mugabe's guerrillas. There should be no question about that at all. I also make it absolutely plain that we have great confidence in all the efforts made by our own people in Salisbury. But the right hon. Gentleman should not get so over-sensitive and touchy about very proper questions about the behaviour of a Rhodesian civil, police and military organisation that has defied this country for 15 years.
I should like to ask one final question. Will the right hon. Gentleman tell the House whether any serious discussions have begun or are due to take place about the dangerous and difficult post-election situation that will arise with so many armed men owing so many different allegiances in different parts of Rhodesia?
Sir I. Gilmour: There have been discussions on what the right hon. Gentleman rightly calls a difficult and sensitive problem. I should be deceiving the House if I said that a complete solution had been found. There is not one. But there has been considerable consultation, and we must hope that things turn out not too badly.
I repeat, the right hon. Gentleman makes an error in maintaining that the Governor is relying on the advice of Rhodesians. There are many British people there on whose advice he is relying.
To end on a less controversial note, I hope that the right hon. Gentleman will have an enjoyable, successful and educational tour of the area.
Mr. Faulds: On a point of order, Mr. Speaker. I hesitate to cross swords with you, Sir. You know my warm regard for you, but—
Mr. Speaker: Order. I know the hon. Gentleman. Nobody crosses swords with Mr. Speaker. An hon. Member may submit a point of order, and I presume that that is what he is proposing to do. If he wishes to cross swords, he had better come and have a cup of tea, and we shall do it privately.
Mr. Faulds: I withdraw my weapon, Sir.
Mr. Cryer: That makes a change.
Mr. Faulds: I simply pose a question of appropriateness. Is it right that we should be denied an opportunity of pursuing questions on Southern Rhodesia—which is in a very volatile and dangerous state and for which the House is entirely responsible—simply because we are moving to a debate on the Scottish economy, which is not likely to improve much in the next five years under the present Government?
Mr. Speaker: Order. I remind the hon. Gentleman that there are statements with questions to follow. There is then to be an application under Standing Order No. 9. I want to be as fair to the Scots as to everyone else.

EUROPEAN COMMUNITY (AGRICULTURE MINISTERS' MEETING)
The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker): With permission, Mr. Speaker, I should like to make a statement about the Council of Agriculture Ministers which took place in Brussels on 18 February. My hon. Friend the Minister of State and I represented the United Kingdom at that meeting.
The Council had a preliminary discussion of the Commission's price proposals for 1980–81, together with the package of economy measures which the Commission presented to the Council in November. Several member States argued that the proposed price increases were far too modest, and they pressed for much higher increases. I emphasised that as we are by far the largest net contributor to the Community budget we had a special concern to see the cost of the CAP brought under control. I pointed out that the Commission's proposals would produce only a relatively small overall saving on the estimated budgetary cost of the CAP and that that was acheived only by the raising of substantial additional revenues through the proposed levies on milk. I said that firm price restraint was necessary, particularly for those commodities in structural surplus, including milk, sugar and wine.
On the main problem commodity, milk, I argued that the Commission's proposals were intended to prevent further surplus, and that they would do nothing to tackle the level of the existing surplus.
I said that the Council needed a plan to achieve a steady reduction in surpluses. I opposed the exemptions from the co-responsibility levy which would discriminate against the United Kingdom, as well as the Netherlands and Denmark, who supported my stance. The details of the milk proposals are now to be studied further by a group of senior officials.
The Council had a further discussion on sugar, but it did not reach agreement. I supported the Commission's proposal to cut maximum quotas by 1.3 million tonnes. However, I made it plain that even the Commission's revised quota

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proposal for the United Kingdom discriminated strongly against the United Kingdom, in that it would still involve a 24 per cent. cut in our present maximum quota, compared with a cut of only 5 per cent. in other member States, and in France and Germany. Other countries objected to the quota allocations, and any decision was deferred until the next meeting of the Council on 3–4 March.
Again we opposed any extension of the existing temporary scheme for high priced end of season distillation of wine, stored under the long-term contracts.
In a further discussion of sheepmeat there was wide recognition in the Council of the serious consequences for the Community which resulted from a failure of one member country to obey the law. There was some discussion of possible interim arrangements to apply until a definitive sheepmeat regulation could be agreed. I made clear once again that the obligation on the French Government to respect the Court ruling was quite distinct from the question of Community arrangements for this sector.
I asked for and received from Vice-President Gundelach an assurance that whatever further discussions might take place on interim arrangements the Commission would play fully its role as guardian of the Treaty. I also said that I would not accept any arrangements under which one set of member countries gave financial aid to another member country to enable it to obey the law. Nor would I accept any endorsement by the Community of intervention in the sheep-meat sector.
Mr. Mason: I am sure that the House is grateful to the right hon. Gentleman for that report. Is he aware that last year he told the council that the Commission had the wholehearted support of the British Government for a general freeze on prices? He failed in that, because thereafter food prices were increased. This year the right hon. Gentleman stated again that he wanted a price freeze but only for those products that are in structural surplus. That will include milk and sugar. We are pleased to note that the right hon. Gentleman is resisting the Commission's present proposals. I hope that he can assure the House that he will not give way again.
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This time he must be as tough as the French have been against him on the question of lamb.
Is the Minister prepared to accept increases in beef and cereals, because there is no mention of them in his statement? Does he intend to argue for retention of the butter subsidy which he obtained last year? What are his views on retention of the beef premium? Further, is he aware that the British consumer and taxpayer now want a total freeze on prices, an end to subsidised food mountains, and a promise from the Government that the CAP will be reshaped to give us a better deal?
Finally, even if the Commission's proposals—as distinct from the farmers' demands—for a 2½ per cent. average increase on prices are accepted, it will cost the British consumer £150 million. Price restraint is important, and we hope that the right hon. Gentleman will fight for it.
Mr. Walker: I find the right hon. Gentleman's questions quite extraordinary. He was a member of a Cabinet which in all discussions on price fixing agreed to price increases for every commodity. His Cabinet agreed further price increases on every commodity that was in surplus, including milk and sugar. He was a member of a Government under whom the cost of the Community budget rose from £l½ billion to £7 billion. I do not want lectures from the right hon. Gentleman on how to conduct price negotiations, particularly as the last price negotiation was the only one at which Britain gained a net advantage.
We have made it clear that we are in favour of a price freeze on milk and sugar. The Commission has put forward a proposal for a beef cow subsidy limited to the first 15 cows in any herd, which would discriminate considerably against the British beef herd. We have said that we are willing to consider such a beef cow subsidy, provided that it applies to all beef cows and not to a limited number so that British industry would benefit.
On the beef premium, the position is such that we must wait to see whether there is a satisfactory interevention system, and a satisfactory beef cow subsidy system which would retain the confidence of British beef producers. Unless that happens, we consider that it is

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essential to continue with the beef premium system.
We are opposed to the eradication of the butter subsidy for the United Kingdom while the Community continues to give export subsidies to the Soviet Union.
Mr. Peter Mills: Will my right hon. Friend bear in mind that the retention of the butter subsidy is extremely important for the consumer? It is also a matter of clawing back some of the finances that we have paid in to the Community. Will he also bear in mind that it is a matter of principal? It is better and certainly fairer to ensure that consumers within the Community are subsidised rather than the Communist world.
Mr. Walker: The British Government have stated firmly that we are against providing subsidised foods for the Soviet Union. We have constantly pursued that view. Under the previous Labour Government a great deal of subsidised butter was exported to the Soviet Union. In the price fixing discussions last year that were denounced by the right hon. Member for Barnsley (Mr. Mason) we obtained the best butter subsidy ever obtained for the British consumer. That was one small way of remedying the injustice of the British contribution to the CAP. I pointed out to the Council of Ministers at the meeting on 18 February that as the biggest contributor to the budget, in spite of our benefit under the butter subsidy, we expected the best possible restraint in CAP expenditure.
Mr. Geraint Howells: I welcome the Minister's statement, and I agree entirely with the stand that he is taking in Europe. I believe that he should stand firm in support of the dairy and sheep producers in Britain, which he has done. When does he believe that we will be able to reform the CAP? What plans has he to help our beef producers?
Mr. Walker: Obviously I, too, would like to see speedy reform of the CAP. It is obviously operating against the interests of Britain. I believe that it is also operating against the interests of Europe as a whole, because of its domination of the entire European scene. Other matters of importance could be undertaken by Europe if the CAP was not such a dominant issue. However, the speed with which the reform is
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achieved is not in my control; it is in the control of nine member countries, of which Britain is only one. I can assure the hon. Gentleman that we will do everything in our power to hasten that reform.
Regarding the beef producers of Britain, I was shocked that the Commission, which had mentioned to me, in discussions prior to its price fixing proposals, the potential of a beef cow subsidy in the current state of the market, put forward a proposal that limited the number of cows to the first 15 in any herd. Britain produces 27 per cent. of the beef herd in Europe, and therefore such a subsidy should be of net benefit to Britain. However, because of the manner in which it has been framed, Britain would be a net loser. I am unwilling to accept that proposal.
Mr. Hardy: Does the Minister agree that the Council meeting did not make sufficient progress in preparing for the necessary adaptations that are required for the widening of Europe? Does he agree that the adaptation has to begin and that the maintenance of the present level of surpluses is quite unhelpful?
Mr. Walker: As I made clear in my statement, it could be argued that the Commission is proposing for the first time to limit future surpluses in the milk sector. However, when those surpluses are of the present gigantic proportions, I agree that that is not sufficient action. We require proposals that will reduce—not immediately because of the economic and social effects that will have—over a tolerable period the massive existing surpluses that are costing the taxpayers of Europe so much.
Mr. Kimball: Is my right hon. Friend aware that fat lamb this spring is fetching less per kilo than store lamb fetched last autumn? That is a serious situation. Does he agree that if the French could be made to comply with the European Court ruling we would have no need to set aside taxpayers' money for intervention in either the sheepmeat or the beef market.
Mr. Walker: We are the biggest producers and consumers of sheep in Europe and, as such, under the Treaty, we should have enjoyed the rights of freedom of marketing throughout the Community. Eight of the nine member countries agree

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with that theme and the Commission also agree with it. That is why I hope that the undertaking that I quoted in my statement from the Commission will be carried through and that the Commission will seek an interim injunction against the French for their continuing illegal practices.
Mr. Spearing: Will the Minister confirm that the continuing stance on the prices that he has mentioned today is in no way linked to fisheries policy? Will he tell the House whether it is linked to any other policy, in particular to the arrangements for the import of New Zealand butter and lamb?
Mr. Walker: As far as we are concerned, it is totally unlinked. I cannot guarantee and I will not prophesy that other countries in their arguments for price fixing will not use—as they have always used in every price fixing argument—the position of New Zealand. If Europe pursued a policy that destroyed an economy such as New Zealand, that would do immense damage to the Western world and, in the longer term, to Europe as a whole.
Mr. Nicholas Winterton: I welcome my right hon. Friend's statement, which, I am sure, will be welcomed by the farming industry, but will he give a firmer commitment not to make any concessions on milk which would be disadvantageous to the dairy farmer in this country? Will he also indicate what discussions he has had with his European colleagues about the use of some of the European funds for the promotion of liquid milk and milk products?
Mr. Walker: Last year, the Commission made proposals which exempted from the co-responsibility levy a whole range of farmers and which operated distinctly against the British dairy farmer. As my hon. Friend knows, we refused to accept that and I made clear that that was totally unacceptable to us.
I repeated at this Council meeting that, having gone through the experiences of last year—when Britain stated categorically that she would accept no levy which discriminated against the British dairy farmer—I was surprised that the Commission came forward with new proposals this year that repeated the same
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error. I made perfectly clear that in way would we repeat our performance of last year. I categorically stated that if there is to be a co-responsibility levy it will be one that does not discriminate against the British dairy farmer.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call those hon. Members who have been rising, but I shall be grateful if questions are kept brief.
Mr. Dykes: Is my right hon. Friend aware that the whole House will support him in pressing for price freezes on some products and restraint on other products? Will he assure the House that he will have the full support of the NFU and the European Parliament in this regard, bearing in mind reports of a change of attitude in the latter body?
Mr. Walker: It is not for me to guarantee constant support from either the European Parliament or the NFU. Therefore, I cannot commit those bodies to the approach that they will make on those matters. However, it is not in the interests of British agriculture or British taxpayers to pay enormous sums of money to finance surpluses that British farmers do not produce.
Mr. Dalyell: Ethyl alcohol? What was the rather laconic reference to the end-of-season distillation of wine in the statement? BP Chemicals, Grangemouth, has to make a major investment decision of over £50 million. What advice should be given in these circumstances?
Mr. Walker: As far as the discussion of the alcohol regime is concerned, I hoped that that matter would be on the agenda. It was at the last Council meeting before the price fixing and it was hoped that such items would be on the agenda. In fact, it was not on the agenda. Only the wine package was on the agenda, in which there is the factor of the distillation of surplus wine into alcohol, which we oppose. Until the price fixing is out of the way, I doubt whether the alcohol package will come on to the agenda. We have made perfectly clear to the Commission the position of the synthetic alcohol industry in this country and our requirement that the potential of that industry should not be handicapped and undermined. To some extent, while the existing situation, which is favourable

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to our synthetic alcohol industry, continues and until such time as the matter comes on the agenda—
Mr. Dalyell: What about the investment decision?
Mr. Walker: I recognise that. Alas, the agenda is not in my control. There is no doubt that during March, April, May and June price fixing will dominate the agenda. I registered our views on the topic to the Commission at the last Council meeting.
Mr. Speaker: Order. I do not wish to be unfair to the hon. Member for Huntingdonshire (Mr. Major). He was on the point of getting to his feet when I said that I would call only those hon. Members who had been rising. I shall call the hon. Gentleman later.
Mr. Marlow: Is my right hon. Friend aware that, although we are encouraged by what he has said, many people will feel that the Council has been concerning itself with detail? The people of this country are fed up with paying vast amounts of money for the surpluses in richer countries in Europe. Is my right hon. Friend aware that, unless and until radical and far-reaching changes are brought about in the CAP whereby countries pay for their own surpluses, there is a risk that the majority in this country, including a large number of Conservative Members, will wish to take up the French suggestion that we should become an associate member of the Community.
Mr. Walker: There are many political, trading and economic factors which make it important for Britain to remain part of the European Community. At the recent one-day meeting, for the first time in the history of the Community, the Commission made proposals on the milk surplus which mean in reality the imposition of a national quota. Through the extra levy, that will also mean national financing of that extra surplus. As one Opposition Member has already pointed out, that is unsatisfactory from this country's point of view because, while it might deal with extra surpluses, it does not deal with the massive existing surpluses which we are financing. I hope to draw that fact to the attention of my colleagues on the Council of Ministers.
Mr. Stoddart: Is the right hon. Gentleman aware that he will have the support not only of the House but of the whole country in resisting further increases on all products, not only those in structural surplus? Will he point out to his counterparts in Europe that the British consumer is paying £70 per head more for his food as a result of our membership of the Common Market? The British consumer is getting fed up with that and will not stand for it for much longer.
Mr. Walker: Putting the matter into perspective, I hope that the House will recognise that the burden of finance is primarily involved with the financing of the disposal of surplus products. For example, this year's budget is about £7 billion. The total of all price increases, including items in surplus and items not in surplus, is £200 million. Therefore, it is not the dominating factor. The dominating factor in the CAP is the disposal, at massive expense, of surpluses that Europe does not require. We must concentrate on that area.
Mr. Major: I am grateful, Mr. Speaker, for your traditional tolerance.
Will my right hon. Friend enlarge on the Commission's proposals for sugar? Is it not a fact that the revised proposals call for a 10 per cent. reduction in our A quota and a 75 per cent. reduction in our B quota? The comparative figures for France are 2·6 per cent. and 11·6 per cent. respectively. As France is in structural surplus—unlike Britain—is not that proposal entirely unsatisfactory? Will my right hon. Friend assure the House that the Government will treat the proposal accordingly?
Mr. Walker: It is a totally unsatisfactory proposal. It is also unsatisfactory that we have to make a considerable contribution towards financing the disposal of those surpluses, despite the fact that we make no contribution to them. I am willing for Britain to accept a cut in its quotas. That would not mean a cut in our production as that has never reached its quota position. The figures for last year show that British agriculture is totally capable of reaching its quota position. It would save us money if there were a cut in the quota for this year, and I am advocating that. However, I do not accept that countries such

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as France which produce an enormous surplus of sugar should have a cut in their overall quotas of 5 per cent. while Britain which produces no surplus of sugar has a cut of 25 per cent.
Mr. Leighton: In the plainest terms, will the Minister reassure the House that he will maintain his resolute objection and, if necessary, will veto any price increases right across the board? I think that that was the answer that he recently gave to his hon. Friend the Member for Holland with Boston (Mr. Body).
Mr. Walker: I have never maintained the view that all prices—including commodities that are not in surplus—should suffer no increase. There is no logic in that. There are plenty of areas in which the Community can produce more food and become more self-sufficient. That would be of great interest to British agriculture. The price increases proposed are of pretty modest proportions. In a budget of £7,000 million they amount to £200 million in total. The greater part of that £200 million goes on items in surplus. It is perfectly reasonable to say that we shall oppose price increases for those items in surplus, such as milk, sugar and wine. However, I am not willing to state that we should categorically oppose any price increase in other commodities.
Dr. David Clark: Will the Minister protect the interests of the British consumer by resisting any reduction in the butter subsidy with the vigour that the French applied to protecting their interests in sheepmeat?
Mr. Walker: I shall not do it illegally as the French have done. However, on the estimates for 1980 Britain will be in net deficit on the common agricultural budget to the sum of about £1,200 million. The next worse-off country is Germany, which is in net deficit to the sum of about £400 million. All the other countries are beneficiaries. The fact that Britain receives a unique advantage as regards the butter subsidy that I achieved is not just of benefit to Britain; it benefits butter producers in several other Community countries. For example, at the last Council meeting Denmark and several other countries supported the retention of the British subsidy. In the current circumstances, it
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is perfectly reasonable to continue with that advantage. As the hon. Gentleman has said, it benefits British consumers.
Mr. Spriggs: Is the Minister aware that Britain pays a major part of the contribution to the Community budget? Why does he support the export of butter to foreign countries? Surplus butter could be supplied to the British housewife.
Mr. Walker: The hon. Gentleman's remarks are contrary to everything that I have said this afternoon. At every Council meeting of Foreign Ministers and Agriculture Ministers this Government have been totally opposed to subsidies on foodstuffs—whether on butter or anything else—that are sold to the Soviet Union. That remains the position. Last year this Government negotiated the biggest butter subsidy that the British consumer has ever enjoyed.
Mr. Strang: Will the Minister reconsider his attitude to the variable beef premium? Surely he must accept that a beef cow subsidy and a modification of the intervention arrangements are no substitute for the benefits of the variable premium. Not only does that premium guarantee prices to our farmers; it reduces intervention. As a result, beef is more readily available to consumers at lower prices. In view of the announcement to the effect that there will be no special summit to deal with our budgetary problem, will he bear in mind that agriculture accounts for 80 per cent. of the total budget. As the agricultural price package must be unanimous, that is the one area in which the Minister can exercise leverage over the other member States.
Mr. Walker: I only wish that the hon. Gentleman had exercised that leverage when he was a Minister. Throughout the period of office of the previous Labour Government, the CAP went up and up, as did our contribution to the Community. The Labour Party never used any leverage. Every year the Labour Government agreed to price increases on butter, sugar and milk. All of those products were in surplus. However, I am glad that the hon. Gentleman has had a conversion.
The beef premium scheme was introduced because a Labour Minister of Agriculture, Fisheries and Food decided

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not to operate the intervention system for an important and crucial period. That tremendously undermined the beef market in Britain. The scheme came in on that basis. Since then the cost of administering it has been far greater than the payments that have been made to farmers. I would not eradicate that system unless I had a better system and one that improved the beef premium system. At the moment I do not have an improvement on that system. I am therefore against the Commission advocating its abolition. If I had an alternative that cost less in administration and that gave more benefit to beef producers, I should be glad of it.

OVERSEAS AID
The Minister for Overseas Development (Mr. Neil Marten): With permission, Mr. Speaker, I should like to make a statement on overseas aid. Soon after assuming office, the Government instituted a review of the policies governing the overseas aid programme. This review is now complete. Our ability to support development overseas is dependent on the state of our economy and the need to strengthen it. Nevertheless, the Government will continue to provide aid to the developing countries on a substantial scale. Official aid continues to be an essential element in development, especially for the poorest countries. Within the limits of our resources we must seek to relieve poverty in the developing world so as to create conditions for greater peace and stability and to contribute to the growth of world trade on which Britain so critically depends.
Trade is of the greatest importance for the developing countries. If the free world were to slide down towards protectionism we would all suffer, but the consequences for the developing countries would be particularly serious. We provide a substantial market for their products and will encourage others to do the same.
Private investment can and should play a greater part in development, and we hope that the relaxation of exchange controls will further encourage British firms to invest overseas. We believe that it is right at the present time to give greater weight in the allocation of our aid to political, industrial and commercial considerations alongside our basic developmental objectives.
We need to maintain the strength of our ties with the Commonwealth, to which the greater part of our bilateral aid now goes, and to fulfil our obligations to our remaining dependencies. We must also be able, when necessary, to offer help and encouragement to other friendly countries. The greater part of our bilateral aid is tied to procurement in the United Kingdom and so provides valuable orders for British firms. Our contributions to multilateral institutions also enable British firms to compete for very substantial business, financed by

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them all over the world. We are examining means by which they might get a greater share of this business.
Since 1978 about 5 per cent. of the bilateral aid programme has been made available from the aid-trade provision for sound developmental projects—which are also of commercial and industrial importance for British firms—in developing countries to which we do not normally provide aid, or where the planned allocation is already committed. In order to maintain the value of this provision in real terms, its share of the bilateral aid programme will now be increased.
The unallocated margin in the aid programme will be increased, so that we can respond more effectively to new developments where our political or commercial interests are involved.
Our commitments to international agencies and bodies will absorb a larger proportion of the aid programme over the next few years. As we need more room for manoeuvre in bilateral aid, we shall need to look critically at our expenditure on multilateral aid programmes.
Improved inter-departmental arrangements will ensure that all these considerations are brought together.
The administration of the aid programme is being examined in a thoroughgoing management review of the Overseas Development Administration to ensure that the programme continues to be managed effectively and economically.
Much can be done with our aid programme, which is to the mutual advantage of the developing countries and ourselves, and we shall therefore concentrate on using it in that way.
Dame Judith Hart: Will the hon. Gentleman accept that the statement basically endorses the aid strategy of the Labour Government, which comes rather oddly after a discussion on wine surpluses in the EEC? Our strategy has been nibbled at the edges, but substantially remains. Does the hon. Gentleman accept that the proposals in the statement appear to have been influenced at a critical stage by the publication of the Brandt report?
I hope that I shall not embarrass the Lord Privy Seal—who is not in the Chamber—the Foreign Secretary or the hon. Gentlemen, but will they accept my con-
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gratulations on their powers of persuasion and influence on their free-market, monetarist and anti-aid colleagues at a crucial point?
My first question concerns the substantial scale mentioned. What scale? We provided for a 6 per cent. increase, in real terms. At present, there is a 5 per cent. cut, in real terms. What will happen next year?
The aid and trade provision was opposed by a number of Conservative Members when I introduced it. By how much is it to be increased? Most importantly, will the developmental criteria under which it was established be fully maintained?
What proportion of the aid programme is to be unallocated?
I recognise that essentially the bilateral programme is cut in a reduced programme of aid and with multilateral commitments that cannot be evaded. The hon. Gentleman today endorsed the strategy of aid to the poorest countries. How far will the proposals nibble at the fringes of that aid? I noted the provision of £15 million to Turkey, which can scarcely be called aid to the poorest. That aid came out of the reduced aid budget.
Are the Government continuing the emphasis on rural development and income creation among the rural poor, who constitute 78 per cent. of the population of the developing world and upon whom the whole theme of interdependence is based?
We have already asked for a debate on the Brandt report. Although not strictly a question for the hon. Gentleman, could we discuss the issues raised in the statement in a general debate on where we are going in our relationships with developing countries?
Mr. Marten: I am grateful to the right hon. Lady for her congratulations, although I am not sure who is being congratulated. I shall pass them on when I read Hansard tomorrow.
The timing of debates is for my right hon. Friend the Leader of the House. No doubt he will also read Hansard tomorrow.
The right hon. Lady suggested that we were endorsing the previous Government's

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policies. She must know that due to the previous Government's commitments, which we are honouring, there is little room for manoeuvre to change policies. Any change must be gradual. I believe that that answers her point.
The right hon. Lady referred to financial matters concerning the aid-trade provision, the increase in the aid programme and contingencies. The aid framework is not finalised, and perhaps she will await the publication of the White Paper.
We are pressing on with a great deal of rural development for the benefit of the poorest people.
Mr. Onslow: Will my hon. Friend accept that his statement will be more widely welcomed when the country sees that he is not merely turning down the hosepipe of aid employed by his predecessor but directing scarce resources in genuinely advantageous ways, in our interests as well as those of the recipients? Does he agree that the more that that is seen to be our objective, and the less indiscriminate multilateral aid that we are involved in, the more likely there is to be genuine public support? Will my hon. Friend confirm that he did not need the assistance of the Brandt commission to make up his mind?
Mr. Marten: The review was produced before the Brandt report was published. My hon. Friend states absolutely correctly that political, industrial and commercial considerations will now play a more prominent part in our considerations.
Mr. Higgins: My hon. Friend said that some of our aid is to be at the service of British foreign policy. Does he therefore accept that if such aid is used to sustain corrupt and dictatorial regimes against the will of the people it will harm our overseas reputation?
Mr. Marten: I hope that we do not use aid to sustain corrupt regimes. We shall bear such factors in mind in our consideration of the political and developmental content of aid.
Mr. Alton: When drawing up the statement, what consideration was given to the Brandt report and programme for survival? When does the hon. Gentleman anticipate that we shall reach the
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target of 0·7 per cent. of our gross national product for overseas aid to which successive Governments have pledged themselves?
Will the hon. Gentleman snake a statement on full-cost fees for overseas students? Does he agree that that is one way in which many poor countries are discriminated against, because they will have to reduce their quota of students sent to this country? Will he consider the abolition of fees for students from poorer countries?
Mr. Marten: On the hon. Gentleman's last question, the answer is clearly "No". I shall not consider the abolition of fees for overseas students.
Mr. Alton: For those from poorer countries.
Mr. Marten: As I said earlier, the review is complete and it is on that review that I am reporting. The review was produced before the Brandt commission published its report.
In the past year we achieved 0·48 per cent. of the United Nations' target.
Mr. Brocklebank-Fowler: Do the Government propose to look seriously at the Brandt report? If so, in what time scale? Secondly, when will my hon. Friend's Department finish the management review and publish its proposals? Thirdly, what steps does my hon. Friend propose to ensure that British industry benefits to a greater extent from contracts awarded internationally under the European Development Fund?
Mr. Marten: We are taking steps to see whether British industry can get more contracts under the EDF. The British Overseas Trade Board is looking into the matter urgently. The management review should be complete in about July. I believe that it will be an internal review, and it is unlikely to be published.
Mr. Guy Barnett: I welcome the attention that the hon. Gentleman is paying to the rural aspect of aid, but did he see the recent letter in The Times from Mr. Ewart Parkinson, drawing attention to the problems of urban poverty in developing countries? Will he accept—it is relevant to the political considerations that he may have in mind—that urban poverty can often be damaging to a

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regime that is attempting to deal with economic problems generally?
Mr. Marten: I am afraid that I did not read the letter in The Times. It is one of many that escaped me. I shall look it up and read it. I take the hon. Gentleman's point about urban poverty. It is reflected in the fact that some Governments keep down the price of food for reasons of urban poverty, which results in a lack of food production in developing countries.
Mr. Kershaw: Will my hon. Friend look favourably on the operations of the Commonwealth Development Corporation, which provides a very cost-effective way of giving aid to the mutual benefit of both sides?
Mr. Marten: Yes, we will certainly do that. Indeed, I am afraid that another review is taking place of the Commonwealth Development Corporation.
Mr. McNamara: Will the right hon. Gentleman accept that not everyone accepts what my right hon. Friend has said, namely, that this is merely a nibble at his programme, but that it is a magnificent bite at it, because it has in so many ways changed the whole policy and bearing of the programme? Will the right hon. Gentleman tell the House which of the multilateral aid programmes are to be reduced and indicate where the surpluses are to come for the unallocated margin and for the increase in the 5 per cent. bilateral aid programme? Does he also realise that his statement is nonsense until we know the amount of money to be made available and the financial constraints within which he is working?
Mr. Marten: Yes, we will be looking at all European Community and United Nations multilateral agencies.
On the question of the timing of this statement, I am very sorry that the hon. Member finds it nonsense, but I thought it right to make the statement. We can perhaps discuss the financial implications when the White Paper is published.
Mr. Speaker: Order. I propose to allow another five minutes for questions on this before we move on. I hope that the questions and answers will be brief.
Mr. John Townend: Will my right hon. Friend accept that, with the con-
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tinuing need to reduce public expenditure, the majority of the British public would give high priority to a reduction in overseas aid especially to those countries that consistently oppose Britain's foreign policy?
Mr. Marten: Many differing views are, of course, held about aid and its purpose, and whether it should be greater or smaller. If we have a debate on the Brandt report, no doubt that matter will be extensively discussed.
Mr. Newens: Will the hon. Gentleman recognise that any cuts in aid, whether multilateral or bilateral, will hit not only developing countries but British exporters? Is he aware of the extent to which British exporters are already at a disadvantage compared to their competitors in the less advanced countries? What will he do to ensure that the situation does not worsen?
Mr. Marten: We hope to help British exports through the aid-trade provision and, of course, 70 per cent. of the bilateral aid is tied. Furthermore, the British Overseas Trade Board is taking steps to see whether we can get more business out of the multilateral agencies. There are great opportunities there for business men, if they will seize them.
Mr. Body: What is the Minister doing to press his partners in the Common Market to be less selfish and protectionist to those Third world countries that have not the advantage of being in the ACP block, because if the level were reduced at least some part of this aid would not be as urgently needed as it is now?
Mr. Marten: I am grateful for my hon. Friend's observation. When I attend the next meeting of the Council of Ministers I shall bear that point in mind.
Mr. Greville Janner: As the Minister has indicated that he regards overseas aid not only as a measure of compassion but as one of enlightened self-interest, will he not repudiate the comments of his own side about turning off the hosepipe of aid, which, after all, is aid to people who are in desperate poverty? Will he also please state that this reference to the political implications does not mean that countries like India are to have their aid cut off?
Mr. Marten: Of course, countries such as India and Pakistan will not have their aid cut off. We still hope for a substantial aid programme to those countries. However, on the whole, Parliament is a reflection of what the public think, and I am sure that many people think just that. It is perfectly fair to reflect this view.
Mr. Aitken: Since my hon. Friend told us that he completed the review before the Brandt report was published, and since it is fair to say that his review has met with some disappointment in almost every section of opinion in the House today, may I ask him when he expects the Government to produce a constructive set of proposals and a review of the Brandt commission's very important new ideas?
Mr. Marten: As the right hon. Member for Lanark (Dame Judith Hart) said in her letter to The Times today, we need time for reflection—"a pause for reflection" was the expression that she used. I think that the Government are quite right not to make a quick response. We need to study very deeply this most important document.
Mr. Spearing: Will the Minister agree that his statement today has meant a change in the criteria of British aid policy? Could he say when and how he will announce the change in multilateral commitment that he mentioned in his statement?
Mr. Marten: Yes, the hon. Gentleman has got it right exactly in the expression that he used. We shall proceed to have talks on multilateral aid to see where we can make economies and also benefit more from it. That will happen over the months ahead.
Dame Judith Hart: What is disappointing about what the Minister has said today—may I ask him, perhaps, to remedy it?—is that he seems to pay no account at all to the analysis of global issues that affect the global economy and also our own economy and society in the cast-off remarks that he made about the Brandt report. I am sure that he does not really mean that. May I give him the opportunity to correct the impression that he has conveyed?
Mr. Marten: I have made no "cast-off remarks," whatever they are. I merely think that it is sensible for Governments and political parties to take their time in considering the full implications of the Brandt report. It is absurd just to throw off a comment, as it were. It is, of course, very important. I have referred at least twice to its importance. We are going to study it in great depth before we commit ourselves to comment on it.

STEEL INDUSTRY (PICKETING)
Mr. John Stokes (Halesowen and Stour-bridge): 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 claim by picket leaders
"that 2,000 steel workers and miners will descend on the Sheerness Steel Company on the Isle of Sheppey, that coachloads of steel workers and miners are travelling from Yorkshire, Scotland, the Midlands and South Wales to the steel plant, together with 300 miners from Kent, and that as a result, a serious breach of the peace will occur, in addition to possible damage to property, and inconvenience and danger to local people."
I submit that this is a specific matter because the threat has actually been made and is now in process of being carried out. It is a very important matter, as you yourself stated on Monday when I made my earlier submission, which should concern this House. I have grave doubts that even some 500 London police will be sufficient to prevent violence and disorder throughout today and I fear that some workers will be prevented from entering the factory or from carrying out their duties, or will be harassed when they try to leave.
Since I wrote to you before 12 o'clock today, Mr. Speaker, in spite of some serious incidents at Sheerness involving very large numbers of pickets—including at one time a charge of some 1,000 pickets against the police and some 19 arrests—I understand from a more recent report that the situation is quieter but still menacing. Meanwhile disorder has broken out in Lanarkshire, in Scotland, where, up to 2 pm, which is the last time I received information, about 11 pickets have had to be detained by the

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police. I have no doubt that other disturbances are being planned in different parts of the United Kingdom and will continue to be until suppressed.
Finally, I submit that the matter is urgent for the reasons that I gave in my earlier submission on Monday—namely, that these massive demonstrations and disorders cannot be allowed to continue if Parliament is to be responsible for "peace and tranquillity" in the realm, as we prayed earlier this afternoon.
Mr. Speaker: The hon. Member for Halesowne and Stourbridge (Mr. Stokes) gave me notice before noon today that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
" That 2,000 steel workers and miners will descend on the Sheerness Steel Company on the Isle of Sheppey, that coach loads of steel workers and miners are travelling from Yorkshire, Scotland, the Midlands and South Wales to the steel plant together with 300 miners from Kent, and that, as a result, a serious breach of the peace will occur, in addition to possible damage to property, and inconvenience, and danger to local people."
As the House will understand, I have given a great deal of thought to the hon. Gentleman's submission. As I indicated on Monday, I view the matter with deep concern, as does the rest of the House. There are many factors that I have to take into account. As the House knows, in the language that is normally used in the House, I have to take into account the several factors set out in the Order, but to give no reasons for my decision.
After anxious thought I am of the opinion that this is not the time to grant this application and, therefore, I cannot submit the hon. Gentleman's application to the House.

CONTROL OF INTERCEPTION
4.42 pm
Mr. Bob Cryer: I beg to move:
That leave be given to bring in a Bill to further control electronic interceptions, eavesdropping, and telephone interceptions; and for connected purposes.
In 1765 in the Court of Common Pleas Mr. John Entick brought an action for trespass against a Minister called Carrington challenging a warrant issued by the Minister to seize John Entick's papers. Lord Camden, in finding for the citizen, said:
"To search, seize and carry away all the papers of the subject on the first warrant: that such a right should have existed from the time whereof the memory of man runneth not to the contrary, and never yet have found a place in any book of law is incredible… If it is law, it will be found in our books. If it is not to be found there, it is not law."
The right of the Secretary of State for the Home Department to authorise the tapping or bugging of phones is not to be found in our books—certainly not in legislation authorised by Parliament. The nearest statute is the Post Office Act 1953. Section 58(1) of that Act permits interference with postal packets under the authority of the Secretary of State.
The first 15 pages of the Birkett report of 1957 were devoted to considering the sources of authority for tapping. Bugging was not then a matter of concern. The report sets out the procedure whereby the Home Secretary authorises each tap. Paragraph 56 states:
"In our opinion each warrant should in future specify the name and address or telephone number of the person who is the subject of the warrant."
However, a report in the New Statesman of 1 February stated:
"Only the police, we were told, stick to the procedure of obtaining a warrant before placing a tap; the secret agencies have 'carte blanche'. Their activities may be covered by a general warrant, which counts as 'one' in accounts given to Ministers even though hundreds of lines may be involved."
When I questioned the Home Secretary the right hon. Gentleman sought refuge in a blocking reply and thus prevented further questions for three months. Ex-Inspector Dick Lee, who headed the successful "Operation Julie" drugs investigation, is reported as deploring the risk

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of abuse under present arrangements. He told the New Statesman:
"It is an executive Decision—there's absolutely no accountability."
In the recent Malone case, Sir Robert Megarry, the judge in the case, said that interception is a matter which:
"cries out for legislation".
My Bill provides an answer to that call.
Recent reports of tapping have included such wide-ranging items as the ISTC headquarters at Rotherham, where a special picket was arranged at which only the police turned up. There was phone tapping of the black participants at the Lancaster House conference. An editorial in the New Statesman of 15 February suggested that between 2,000 and 3,000 taps per year are authorised. Conservative Members have referred to bugging by the Customs and Excise that is apparently well outside the terms of cases involving:
"a substantial and continuing fraud which would seriously damage the revenue or the economy of the country if it went unchecked."
That is a quotation from the Birkett report. Hence there is a cause for public concern.
It is against a not unsurprising background of declining public confidence in governmental institutions that democratic accountability to the House for the actions of the Government should be restored, especially on such an important issue as the interception of private telephone calls by the State. My Bill will put into legislative form some of the proposals made by the Birkett committee of 1957.
It is not part of my proposition that the police should be handicapped in their pursuit of serious crime. However, in view of continuing public concern, my Bill will require that an application for a Home Secretary's warrant to authorise interception of communications must be made on a sworn information or affidavit. That would apply Patrick Gordon Walker's view in his minority report of 1957.
Three conditions will be required for the granting of a warrant. First, the offence must be serious. It must be defined as a crime for which a man with no previous record could be expected to be sentenced to not less than three years'
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imprisonment. If a group were involved, at least one person would have to be so regarded.
Secondly, the Home Secretary must be satisfied that normal methods of investigation have been tried and have failed.
Thirdly, there must be good ground for believing that an interception will result in conviction.
In Revenue cases the criteria in paragraph 66 of the Birkett report will apply. That means that warrants will be issued only where a case
"involves a substantial and continuing fraud which would seriously damage the revenue or the economy of the country if it went unchecked."
The criteria for security service warrant applications will cover the same criteria as warrants for the police, but with the proviso that injury to the national interest will be an additional ground.
In his statutory annual report to Parliament, the Home Secretary will be required to define that additional ground to indicate the areas that he deems to be covered by the term. If hon. Members question that, I remind them that between 1909 and 1953 lotteries were felt to be against the national interest. Mail was intercepted over the years on that ground; hence, in my view, the need in broad terms for a statement on the issue.
The security services will be expected, like the police, to have regard to securing convictions in their applications for interception. No material obtained by warrant will be disclosed to private individuals, private bodies or domestic tribunals of any sort. That would put into law paragraph 101 of the Birkett report. A schedule to the Bill will set out the form of warrant to be used by the Home Secretary. The name, address and telephone number of the person concerned will be listed on the warrant and the period of the validity stated.
On completion of the inspection the warrant will be returned to the Home Secretary with information as to the use of the material obtained and, where any prosecution is undertaken, a statement that all tapes have been destroyed. A weekly review of warrants will be required of the police, security services and Customs and Excise and all unused warrants must be cancelled and returned forthwith to the Home Secretary.

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The Bill will make illegal any unauthorised phone-tapping or electronic eavesdropping and will also give power to the Home Secretary to make regulations, by affirmative resolution of the House, for the control of surveillance by private organisations or individuals and the introduction of a licensing system for the security industry to ensure conformity with those regulations.
Lastly, there is the crucial element of accountability to this House. The Bill will require the Home Secretary to lay an annual report before Parliament. That report must state the number of warrants issued, though not the persons concerned. It surely is reasonable that Parliament should know the extent if not the nature of the tapping. In 1955 Birkett recorded a maximum figure of 241. If in 1982, for example, 5,241 were recorded I think that it would be reasonable that Parliament should know why.
Since the likelihood of conviction is an important justification for the issue of a warrant, it will be necessary to publish the number of convictions gained as a guide to the effectiveness of interception. The policy of national interest as defined by the Home Secretary will also be included so that any changes can be recorded and possibly debated.
This Bill will not require details of actual interceptions to be published, but
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it will give elected representatives information about the extent of policies governing interception. My hope is that it will help to restore confidence to an area of activity which is provoking great concern, and that Parliament will once again become the guardian of democracy and accountability. At a time when the Post Office is about to change from its present electro-mechanical system to system X, which is an electronic system which will be extremely easy to tap, it behoves Parliament to ensure accountability in what is very shortly to become a completely electronic age.
Question put and agreed to.
Bill ordered to be brought in by Mr. Bob Cryer, Mr. Ernie Ross, Mr. Stuart Holland, Mr. Andrew F. Bennett, Mr. Jim Marshall, Mr. Frank Allaun, Mr. Tony Benn, Mr. Neil Carmichael, Mr. Norman Atkinson, Mr. Russell Kerr, Mr. Christopher Price and Mr. Dennis Canavan.

CONTROL OF INTERCEPTION
  CONTROL OF INTERCEPTION
  Mr. Bob Cryer accordingly presented a Bill to further control electronic interceptions, eavesdropping, and telephone interceptions; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 29 February and to be printed. [Bill 149].

SCOTTISH ECONOMY
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wakeham.]
4.52 pm
The Secretary of State for Scotland (Mr. George Younger): I am very glad that a day has been found by the Government upon which we can debate the state of the Scottish economy. To a certain extent it is a bit of a departure that this is so, because during the previous Government's term of office no Government day on the Floor of the House was devoted to a discussion of the Scottish economy. The only two days that we did have, I think, were asked for by the right hon. Member for Western Isles (Mr. Stewart), although an Adjournment debate was requested by Mr. Jim Sillars. All the other debates were in Opposition time in the Estimates debates upstairs. I suppose that one should be sympathetic towards the previous Government. They were perhaps anxious to have as little as possible said about their deplorable economic record. Nevertheless, I am glad that we have time today.
We have started this debate rather late and there are many who wish to speak. Therefore, it will not be possible for me to cover every aspect of the Scottish economy in the time available to me. I will try to cover those aspects that I hope will be of most interest to hon. Members, but if there are points upon which I do not touch and to which hon. Members would like answers, I am sure that my hon. Friend the Under-Secretary will hope to catch the eye of the Chair and will answer as many questions as he can.
There is no doubt whatever that the economies of the Western world are going through a very difficult time. The general state of world trade and lack of world economic recovery is the most important and serious factor against which any kind of policy for economic expansion in this country must operate. Therefore, we must now look at how the Scottish economy is faring against what is a very difficult economic background generally.
I should first point out that there are huge variations in how things are going within Scotland. Some parts of Scotland are doing very well, particularly where
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North Sea oil is a major factor, whereas other parts—such as our older heavy industrial areas in West Central Scotland and Dundee—have very serious problems which are deep-seated and not easy to solve. One of our top priorities must be to concentrate help in these areas to ease the human problems and to build a new industrial base for those areas.
We all know that since the war there has been continuous loss of employment in traditional manufacturing industry. The fact that Scotland has a large concentration of that type of industry has made our difficulties greater and caused our unemployment rates, at various times, to he as much as double the national figure. Since 1970 we, like the rest of the United Kingdom, have suffered from a considerable loss of competitiveness vis-a-vis our overseas competitors and an increasing penetration of imports into our own markets.
Manufacturing output in the United Kingdom is now no higher than it was in 1974, and since 1975 exports of finished manufactured goods have risen by less than 12 per cent. against an increase of 65 per cent. in imports of such goods. Over the five years from 1973 to 1978 our average growth rate in the United Kingdom fell below 1 per cent. a year—less than half that achieved by France or West Germany.
While North Sea oil contributed significantly to an improvement in Scotland's relative economic position in the early 1970s, from about 1976 Scotland has done significantly less well than the United Kingdom as a whole. Unemployment in Scotland has risen in comparison with unemployment in the United Kingdom as a whole. The total industrial output has risen at a slower rate in Scotland than elsewhere—just over 1 per cent. Between 1975 and 1978 compared with 4 per cent. in the United Kingdom—and there is a similar pattern for manufacturing output alone.
Against those worrying figures there is one surprising feature that we sometimes overlook, which is that even in these difficult times there has been a continuous growth of employment. The total number of people in employment in 1979 was about 35,000 greater than in 1970; that was brought about by the loss of 128,000 jobs in the manufacturing, primary and construction sectors and was more than

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balanced by a gain of 161,000 jobs in the tertiary sector. But in net terms these new jobs were insufficient to provide employment for all the additional people who came on the labour market during that period. That is why the unemployment rates have risen, to the great concern of successive Governments. That is a matter that has not been referred to sufficiently often and it is a factor that we should bear in mind.
When we took office in May of last year we faced a difficult and deteriorating situation and an acute need to create a climate in which the rate of generation of new jobs could be enhanced. We inherited the aftermath of a rash of major industrial closures which had taken place under the previous Administration and we were faced with further closures which had become inevitable by the time the previous Government demitted office—for example, Goodyear, SKF, Pye, Monsanto and Prestcold. At the same time, companies were experiencing acute problems as a result of the rising level of wage settlements, the events of last winter, and a severe squeeze on their liquidity.
The future of the Scottish economy depends crucially on changing its balance by encouraging the productive and wealth-creating sectors and allocating a higher priority to them. It is their success and their profits which pay for all our public spending programmes. It is because these sectors have been declining under the previous Government's policies that we must now reduce our public spending. This readjustment is painful for us all. No one likes to offer reduced services to his constituents. But at least there is one great benefit that has come about as a result of the events of 1979 and the last general election. It is now common ground between the two main parties in the House that public spending simply could not continue at the rate planned by the previous Government. The right hon. Member for Heywood and Royton (Mr. Barnett) and the Shadow Chancellor himself are both on the record on this matter, and although they now oppose every cut in expenditure, as parliamentary life requires, they are nevertheless clearly committed to cutting their own spending plans, should they ever need to face such a situation again.
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Of course it takes time to make changes. We have been trying to do the equivalent of stopping a runaway train. But industry in Scotland can now read the clear signal that the Government recognise that it must have the priority now. We do not intend to impose any bureaucratic Government planning agreements, new regulations or interference. We will set industry in Scotland free to get on with the job of satisfying the customers.
It often occurs to me that we have spent so much time over the past few years arguing between ourselves and trying to sort out our internal troubles that in many cases we have forgotten and ignored that key person, the most important VIP for the Scottish economy—the customer. I hope that both managment and unions will be brought together and will understand the wishes and the needs of the customer. If that could be done, a great many of our industrial problems would be solved and many of the new markets that we seek would be satisfied.
Mr. Norman Buchan rose—
Mr. Younger: If the hon. Gentleman does not mind, I shall not give way. I am rather reluctant to give way today because many Members want to speak, and I know from experience that if one gives way it prolongs one's speech.
We have already made an important move in the right direction. Our first priority must be—and the last Government always said that it was their priority too—the reduction of the rate of inflation. The fiscal and monetary policies which are designed to this end are critical to everything that is important to Scottish industry. This is neither easy nor painless. We have never pretended or deluded ourselves that this could be done quickly with immediate results. For the time being it has meant that we have interest rates that are very much higher than we would wish. We are well aware of the impact that this has on individuals and industry, but the House should understand that, however painful that is, the alternative is worse. The alternative is to allow inflation to proceed unchecked with all the disastrous consequences that that would have on jobs, employment and future prospects.

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The success of the strategy that I have described will be the major determinant of Scotland's economic performance, and it is based on letting industry get on with the job itself. But this is not to say that there is no scope for constructive Government involvement with industry. However, Government must not prop up or encourage the development of non-viable enterprises, because that does nothing to create lasting employment: In fact, it acts as a brake upon the kind of industrial change which we need if we are to overcome our current malaise, and it can severely damage the profitability of successful industry. In the present circumstances the Government have a genuine and valuable role to play in, for example, redressing the regional balance of the United Kingdom by seeking to attract viable projects into areas of greatest need and by providing, through their agencies, some of the facilities required by industry in such areas.
The first step that we took on coming into office was to consider how the policy instruments that were available to us could be made useful and effective, more cost-effective and more consistent with the overall aims of industrial policy. I should like to mention four of these in particular—regional policy, the Scottish Development Agency, the Highlands and Islands Development Board and the special employment measures.
We inherited a regional policy the most outstanding quality of which was its lack of discrimination. Almost half of the country was designated as assisted areas. Projects there were eligible for selective assistance from the taxpayer whether or not such support was necessary to secure their development. Such a policy, in a period when the quality of mobile investment available was shrinking, fell far short of being effective, and by placing extra and unnecessary burdens on the taxpayer, it penalised successful industry as well. It was clear to us that the hallmark of any successful and effective regional policy must be firmly to discriminate in favour of those areas where the need was greatest.
Mr. Robert Hughes rose—
Mr. Younger: I think I will press on. I am sure that the hon. Member will
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be able to intervene later. I do not wish to be unco-operative, but it will take far too long if I give way.
Mr. Hughes rose—
Mr. Younger: I shall give way just this once.
Mr. Hughes: On 19 July last year, the Secretary of State announced that there would be a special survey of the way in which the oil industry was affecting the economy of North-East Scotland. When will he announce the result of the deputation that went to see his colleagues in the Department of Industry? That deputation asked that there should be no change of status in the North-East until the report from the special survey had been made. Did not the Secretary of State try to con us then, and will he come clean now?
Mr. Younger: I appreciate the hon. Member's great concern about this matter, but I still think that such interventions will delay my speech. The study which I commissioned is under way and we shall get the results as soon as possible. I assure the hon. Member that he will be informed of them as quickly as possible, because I know of his interest.
The point about regional policy is that its resources must be concentrated on the areas of greatest need, and assistance must go to operations which would not be developed otherwise and which offer the prospect of secure and productive employment.
Some people have suggested that the changes that we have made will inhibit development in Scotland as a whole. Those people have not looked at the facts. Scotland now has a greater proportionate share of the industrial population living within special development areas than before—37 per cent. now as against only 30 per cent. before—and in recognition of the very severe difficulties of West Central Scotland we have extended that special development area to include Kilmarnock, Troon, Ayr and Largs. The level of assistance in SDAs remains at its former level. It now has a stronger pulling effect for providing jobs in those areas than it had before. That is something that I hope everyone will welcome. I emphasise that regional policy

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is not about stimulating industry generally. By its very nature it is about discrimination in favour of those areas where there is greatest need. That is why I suggest that the present balance of the new policy is better than the old.
I fully appreciate the concern of areas which are being downgraded, and I will be watching very carefully how this turns out. In that way any adverse effects can be taken into account in the revision that we have promised to all areas that are being downgraded by more than one step before the final step is taken in July 1982. Regional policy must be discriminating if it is to work. Those in the areas that are being downgraded have the complete assurance that a further review will take place before the final step is taken, and I hope that everyone will produce the necessary evidence and views so that we can make sure that the decisions taken are the right ones.
The second subject that I wish to discuss is the Scottish Development Agency. We have always acknowledged that the agency has a major role to play in the regeneration of Scotland's industrial infrastructure and the provision of facilities for industry, particularly in the form of industrial estates. But we were concerned at the extent of the agency's powers of investment in private industry, and at the distortion which these powers could cause, both in sectors where the agency was active, and in the overall priorities of the agency itself. The agency's previous guidelines encouraged it to see itself as an investment bank for Scotland with ancillary rehabilitation and factory-building powers. We see it, by contrast, as a mechanism for the provision of facilities for industry, with its investment powers ancillary to its other functions and its operations co-ordinated closely with the other private and public sector bodies which work in this field.
We were concerned also about the extent to which the previous Government had provided resources for the agency which the agency simply could not use, thereby pre-empting expenditure for which provision had to be made by the taxpayer from other worthwhile projects. In 1977–78, the agency underspent its budget by no less than 30 per cent. and in 1978–79, which, although I suppose it is not connected, was widely expected
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to be an election year, underspent its budget by a staggering 41 per cent. We were determined to put the agency's finances on a more realistic footing and, despite the expenditure cuts that we have had to make, it will still have significantly more to spend in real terms in the present financial year than it has ever succeeded in spending before.
That is a declaration of our confidence in those who work for the agency and the job that it can do for the economy. We have revised the agency's industrial investment guidelines to require greater private participation in agency investment and we are discussing with the agency new guidelines for the provision of sites and premises that will also encourage private participation. I am confident that, with these new and better defined priorities, the agency will have a greater prospect of contributing effectively to economic growth.
Two tasks of the agency that I regard as particularly important are the coordination of inward investment promotion and the encouragement of small firms. I support the comments made recently by the agency's chairman that it is no good complaining of foreign investment lost to Ireland and elsewhere. We must sell aggressively the broad range of advantages that Scotland has to offer. It is to the small firms sector in particular that we must look for the high growth companies of the future. The agency continues to provide advice, counselling and facilities for small firms, and financial backing, whether by way of loans or equity purchase, continues to be available for worthwhile, viable projects.
Within Scotland, too, the Highland and Islands require special and expert attention. We made clear before coming to office that we would continue to support the work of the HIDB. We see the board's programme of assistance for small businesses and enterprises as an important component of a policy to strengthen this area of the private sector. Soon after taking office, we increased the board's grant for the present financial year by £2·5 million to £17·3 million to enable it to draw out to the full the potential for private investment in its area. Provision for the board must take account of all public expenditure objectives. As regards the HIDB and the SDA, it remains the fact that no viable

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project has yet had to be turned down because of shortage of funds to back it. That is a satisfactory situation. I hope that it will continue.
The special employment measures of recent years are recognised as important and helpful, particularly for those young people who find themselves unable to get jobs. But we have had to make some changes. As the House knows, we have decided that the small firms employment subsidy, which is the least cost-effective way of producing additional jobs, should be discontinued and that the qualifying age for men under the job release scheme should revert to 64. But we have retained the most effective of the Manpower Services Commission's special employment measures and we are expanding the youth opportunities programme to provide additional work experience and training opportunities for the young unemployed.
Mr. Dick Douglas: When the Secretary of State for Employment discussed this issue in the House, he gave some global figures. Is a breakdown of these figures available for Scotland?
Mr. Younger: I note the hon. Gentleman's point. I shall try to get those figures for him. My hon. Friend may wish to cover the point. What is important is that the youth opportunities programme is being expanded under this Government.
In addition to the job release scheme that I have mentioned, there is the special temporary employment programme, the temporary short-time working compensation scheme, community industry, training in industry, the job introduction scheme and, of course, the youth opportunities programme that I have mentioned. Over 43,000 people in Scotland were participating in all these programmes in December 1979. I have no doubt that the programmes were a great help to them.
I have already referred to the situation that we faced on taking office regarding closures. My hon. Friend and I have taken the greatest trouble to do everything possible, in each example of a major closure, to find any way of continuing operations and protecting the firm or the jobs. We have had numerous consulta-
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tions. Between us, we have had over 50 meetings and consultations about various closures. I accept that it is the first duty of the Scottish Office and the Government generally to do anything within their power to assist a firm in trouble to weather the storm and to achieve a viable future, if at all possible. That was our approach to the problems of all these major closures.
In some cases, we have had a measure of success. We were actively involved in discussions—these have been mentioned in the press in recent days—leading to proposals for a joint venture involving Wiggins Teape and Consolidated Bathhurst Inc of Canada at the Fort William pulp mill. I am hopeful, too, that an agreement will shortly be finalised for the takeover of the Marathon yard at Clydebank by a French company which offers bright hopes for a prosperous future. There are Firm expansion projects which will do much to strengthen our industrial capacity and secure employment.
More recently, Caberboard Limited of Cowie announced a major new project of £6 million to establish a new line in medium density fibre board—a particularly welcome example of expansion in our wood industry. There is also major expansion on the way in electronics, to which I will refer, and we know of others that are being actively considered. Efforts to encourage investments are thoroughly worthwhile and will continue. There is a steady stream of inquiries, and my officials have been visiting the United States, in particular, to negotiate offers of financial incentives
Mr. Donald Dewar rose—
Mr. Younger: I must press on. I know that the hon. Gentleman's intervention will be brief if he says so, but there are other hon. Members who wish to speak.
In other cases that we inherited, less was possible. But we made considerable efforts to ease the effects of closure. In the case of Massey-Ferguson, we did everything possible in the early days to see what could be done, with the excellent co-operation of the work force, which has done a tremendous job for its factory and community. A new company has been established, Moorfield Manufacturing, with the assistance of Massey-

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Ferguson itself. In the case of Singers, my hon. Friend and I had a number of meetings with those concerned. There has been a major initiative through the working party at Clydebank. There will be many issues to follow up in order to help the community.
I should like to turn now to areas of some opportunity in the Scottish economy and areas which can benefit fully from some of the economic policies I have described. I have been pleased recently by CBI surveys indicating that industry regards export prospects in Scotland as generally stronger than in the United Kingdom as a whole. While unemployment is high, the number of notified vacancies—very much an understatement of the true position—is also high. We are giving our attention to ways of reducing the mismatch that these figures reveal—for example, through encouragement of liaison between industry and education, through improvements in the training system and through encouraging flexibility in the Labour Party—I mean the labour market. There is not much flexibility there, is there? That would be a real event. [An HON. MEMBER: "That is coming".] If it is coming later, that is indeed good news. It would be the best news of all.
We have in train a review of the Employment and Training Act, and the Manpower Services Commission is looking at vacancies that are hard to fill to see what can be done to help. A study is also taking place into the supply of electronics engineers and the difficulty experienced in recruiting them.
I should now like to refer to oil, petrochemicals and microelectronics, and to say more about small firms. Some 60,000 to 70,000 jobs have been created in Scotland as a result of North Sea activity. Oil exploration on the United Kingdom continental shelf had dropped to alarmingly low levels when we took office. We have taken decisive action to increase the pace of activity, including the ending of "farming in" rights for BNOC and our proposals for a seventh round of licensing. These measures are stimulating increased exploration and assuring the continued flow of our oil and the maintenance of many jobs dependent on it.
With the announcement before Christ-was of the orders of the Magnus and
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north-west Hutton fields—on which Highland Fabricators and McDermotts are to be congratulated—all five Scottish platform yards have work in hand. The nature of the industry makes peaks and troughs inevitable, but we are determined that the United Kingdom yards, and the United Kingdom industry generally, should continue to receive a full and fair opportunity to compete for work. I am confident that Scottish yards will respond to that.
In addition to the jobs created through the provision of capital equipment and a wide range of services to the oil industry, there is also the employment provided at the onshore facilities, such as those at Sullom Voe, Flotta and St. Fergus. There are also encouraging developments downstream. The Shell-Esso development at Moss Morran will provide employment for 3,500 at peak construction time and, in the long run, around 350 permanent jobs, with considerably more in prospect should further downstream developments follow.
The Government are determined that the nation should secure maximum benefit from North Sea resources, and one important strand in that is the potential for petrochemical development founding on the feedstocks which are available. Recognising this, we have already taken steps to restrict gas flaring, and last July my right hon. Friend the Secretary of State for Energy announced a study by Mobil and the British Gas Corporation into the prospects of a new gas-gathering line. This is not the moment to anticipate its possible outcome, but there is every chance that it will provide industry with valuable new opportunities. Scotland's geographical proximity to the oil and gas fields, together with the other advantages which we have to offer, places us in a strong position to benefit from such future expansion.
Companies that have established themselves in Scotland from abroad have done much to reinforce Scotland's claim to be a major centre of advanced technology and a supplier of advanced products throughout the world. There is a growing emphasis on microelectronics, the applications of which have a critical part to play in improving products, processes and systems throughout industry and which have the major potential for growth in the coming decade. The quest

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for investment from foreign microelectronic firms should not overshadow the need to encourage the expansion of firms already here.
The expansion plans announced by many of the microelectronics companies in Scotland, such as National Semiconductors, Motorola and Hewlett-Packard, to name but three, express a solid note of confidence in Scotland as a place in which to establish and grow, and an increasing commitment to research, design and development here. The Government will continue to do everything posible to encourage such growth, and to spread the use of microelectronics applications throughout industry. One way in which we hope to stimulate that is through a new microelectronics applications centre, which is at present the subject of a study commissioned by the SDA. However, the Government can do only so much. The main responsibility must lie with the industry. I was particularly encouraged, therefore, by the establishment of the Northern United Kingdom Circuit Group, which should do much to bring manufacturers of printed circuits and their users closer together.
Small firms are critical to industrial recovery. Recent research has endorsed the view that they have a significant role to play in the job-creation process but that the rate of creation has been lower here than in many of our competitor countries, such as the United States, Western Europe and Japan. We have already done much to implement the programme that we announced in our manifesto by reducing the administrative and legislative burdens on small firms and increasing incentives for entrepeneurs. We have reviewed employment legislation, and the Employment Protection Act is being amended to lengthen the qualifying period for unfair dismissals and to reduce the period of notice for small redundancies. The original provisions were a major discouragement to firms to take on new staff and increase the number of jobs.
We published a consultative document in September on company accounting and disclosure, proposing a much reduced amount of financial and accounting information that small firms need disclose. We introduced fiscal measures in the Budget designed to enable businesses to reward hard work,
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initiative and success. We are examining ways of increasing the availability of funds for small firms, following the Wilson committee report, and we are considering the scope for further fiscal measures that will offer the right sort of incentive and we are reviewing the capital taxation system as it impinges on small firms.
It is important to bear in mind that the Scottish economy depends not only on the big industrial centres, where many of the problems exist, but on rural areas. The rural economy is of great importance to large areas of Scotland.
Mr. Gregor MacKenzie: The Secretary of State has indicated that he is to stop the small firms employment subsidy, because it is not cost-effective, and that he is examining schemes that will assist small firms financially.
I have had representations, as, I am sure, have many of my hon. Friends, about financial assistance to small firms. Would it not have been better if the right hon. Gentleman had made an advance announcement about the financial help that he proposes to give? Will he make a further comment as quickly as possible about how he intends to give small firms a little cash, because that it is what they need most?
Mr. Younger: I appreciate what the right hon. Gentleman has said. We would have been more reluctant to withdraw the subsidy if we had not examined it and found that it did not do its job or give value for money. That is not a criticism of its introduction, but it was not a properly thought out scheme. It was not a bad idea to bring in the subsidy, but it does not meet the need for which it was intended. We are therefore looking at other methods to try to help small businesses. I accept that, as the right hon. Gentleman said, they need attention and assistance to enable them to expand.
Mr. Dewar: Will the right hon. Gentleman give way?
Mr. Younger: No. I must press on. The hon. Gentleman may think that I have something against him, but that is not so.
It is important for small firms in rural areas to get help, but it is also important that agriculture should be given assistance. Our proposals, and the assistance

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that we have been able to give agriculture, have been a tremendous help at a difficult time. In the past nine months we have devalued the green pound on three occasions and the farming industry has near parity with its competitors in the EEC.
The industry can look forward with confidence in the knowledge that the Government recognise the importance of a healthy, viable and prosperous farming sector. Other aspects of Government policy, such as easing restrictions on bus licensing, will be of benefit to the rural areas.
Of course there are problems in the great industrial centres in both shipbuilding and steel. After the tragedy of the long Hunterston dispute, which was the most senseless and self-defeating dispute that I can remember, we have the tragedy of the steel strike, and the most modern steel industry in Western Europe has been lying idle for much of the past year. I hope that the management and the unions will get together to solve the dispute with the greatest possible speed.
We have a difficult situation to deal with in shipbuilding, but the Government have made a clear statement and made funds available for a restructuring of the industry. There are encouraging signs that in a difficult situation all those concerned are doing all that they can to get the industry back on to a footing that it can cope with and at the right level for the demand that is available for it to satisfy.
I must draw my remarks to a close. If there are other matters that hon. Members wish to raise I am sure that they will be answered later by my hon. Friend the Under-Secretary. We are considering the Scottish economy at a time of great difficulties throughout Western Europe. The policies of the previous Government were given the maximum chance, for five years, to succeed. They had the full life of a Parliament and every resource that they could command, but, in spite of all the great words, the previous Government's handling of the Scottish economy was disappointing and disastrous.
When I left the Scottish Office at the beginning of 1974, the seasonally adusted unemployment figure in Scotland was 85,000—3.9 per cent. When I returned
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in May last year the unemployment rate was 165,900. It had doubled under the previous Government.
Mr. Dennis Canavan: We know what it is now.
Mr. Younger: The hon. Member is quite right. He is quoting a different figure but that figure is still lower than it was under the previous Government in January 1978. The hon. Gentleman should remember that.
In July 1979 there were no fewer than 24,737 school leavers on the unemployment register, against the highest total under the previous Conservative Government of 8,200. It is no exaggeration to say that by April 1979 everyone in industry was demoralised and overwhelmed by regulations and restrictions and so-called planning agreements, and the Government's only response was to pour in more and more public money which they could not afford and which almost broke the back of the Treasury.
During that time the Government ignored the advice from industry, chambers of commerce, the CBI, and from all the organs of economic commentary throughout the nation. The only objective of all this spending of public money was resistance to change.
The strategy now being adopted is to lift the burden of excessive public spending which has held back that productive industry upon which we all depend. Our policy is to encourage productive industry to expand and to do better in future. We propose to help every viable project with resources such as those of the SDA and to help those people affected by the rundown of old industries—the people who are least able to help themselves.
Our strategy is to concentrate regional policy on the areas which have the greatest need and which have the largest numbers of unemployed. Many Labour Members represent those areas, and I hope that they welcome our strategy. That strategy is to create real jobs wherever we can, not phoney jobs which are no good to anyone and which cost the public money we can ill afford.
If the hon. Gentlemen believe that that is merely what I want they should study the comments, articles and studies published throughout the media which deal

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with economic matters. They will find that this is exactly what industry wants. It is what the commentators want and it is what the vast majority of economic advice suggests. That is the strategy on which the Government are embarked, and if only we could get greater public acceptance of the need for change the Scottish economy would be greatly helped.
The greatest vice that we have had to deal with in recent years—much further back than the last five years—is resistance to change. In a changing world, when our customers and their needs are changing and where worldwide competition is definitely changing to our disadvantage, we must face up to change in Scotland. We must welcome change by making it an ally and not an enemy. If we can do that in the Scottish economy we shall be able to build upon the vast amounts of money that have been spent to assist recovery from our old industrial past. We shall be able to create new jobs that are productive and which will be good and worthwhile jobs. That is the Government's policy and we intend to achieve its objectives.
Mr. Deputy Speaker (Mr. Bernard Weatherill): Before I call the next speaker, may I say that I realise that this is an important Scottish debate and that, though interjections enliven a debate, no fewer than 29 right hon. and hon. Gentlemen have indicated that they wish to speak. I therefore appeal for brief contributions.
5.33 pm
Mr. Bruce Milan: I am glad that we are having this debate on the Scottish economy, and I am grateful to the Secretary of State for Scotland for providing the time for it.
That having been said, however, my congratulations to the right hon. Gentleman and, because there was not a single thing in his speech which gave any encouragement to the Scottish economy, to those at present unemployed or to those who are likely to become unemployed during the next few months.
The unemployment total is now above 200,000, and will inevitably increase. This debate takes place against the gloomiest economic background and the gloomiest prospect for Scotland that I ever remember since I came to the House. Everything done by the Government in the last nine
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months has made matters worse, and there is no indication that the Secretary of State has even an inkling of the disastrous effects of the Government's policies on Scotland and the even more disastrous effects that they will have if they continue along the same lines.
The right hon. Gentleman said that we should look at the United Kingdom economy as a whole. I am perfectly happy to set this debate against the general background of the United Kingdom economy, because, inevitably, the Scottish economy to a considerable extent depends for its success on what is happening in the United Kingdom as a whole.
Let us, therefore, look at the way in which the Government have handled the United Kingdom economy during the last nine months. The new monetarist and market economy policies are the basis of the Government's activities. How have they worked? Inflation at 18.4 per cent. is exactly twice as great as it was a year ago. That is the first result of the Government's policy. A disastrous Budget brought an increase in VAT and the Government have caused rent and rate increases—not just in the Lothian region but in the Borders and everywhere else—as a result of the RSG settlement. The Government have given deliberate instructions to the gas and electricity industries to put up prices by figures that go well beyond the current rate of inflation. However, they will not be well beyond the rate of inflation that we are likely to encounter in a few months.
Interest rates are at a record level and yet the Secretary of State for Scotland expects industry to invest when we have a minimum lending rate of 17 per cent. We cannot get investment under those circumstances. The right hon. Gentleman mentioned the CB1 expectations on exports. If he looks at the CBI survey for Scotland published in January, he will find that in every branch of economic activity the CBI outlook for Scotland is the gloomiest that we have seen as far back as I can remember. I do not believe that we have ever had a gloomier survey from the CBI in Scotland. That gloom is the result of the interest rates I have mentioned and the high rate of inflation.
Unemployment in Scotland is now over 200,000 and it will increase. Last month the figures rose in a single month by no

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less than 23,000 and the seasonally adjsted figures by nearly 6,000 in a single month.
The right hon. Gentleman inherited an unemployment situation that I freely admit—as I have always done—was far too serious. Nevertheless, in the final period of the last Labour Government we had, month by month, been edging the unemployment figures down and with that inheritance the figures during the first few months of this Government continued to decrease.
An inevitable swing has taken place because of Government policy. We saw the first impact of those policies in the January figures. The right hon. Gentleman is lucky that we have had this debate today, because when we see the unemployment figures for February—to be published in a week's time—I confidently predict that they will be considerably higher and more serious than even the January figures.
The number of unemployed school leavers has also risen, and all this takes place against a background of accelerating factory closures in Scotland. Closures have now become such a commonplace that they hardly make news any more. We now have the worst record of factory closures that I can remember.
In an answer given to my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg) concerning the Strathclyde region only, we were told that in December there were 5,345 redundancies. If one looks at the monthly figures for 1979 one can see an accelerating trend since May as a result of the Government's policies. As well as the 5,345 jobs lost in December, 3,937 have already been notified in Strathclyde. That notification was given towards the end of 1979 and indicated that those jobs would be lost in 1980. The situation will become worse.
The Government could at least use the instruments available to them to try to mitigate the effects of the closures and disastrous unemployment figures. However, in the current year the £500 million planned by the Labour Government for the Manpower Services Commission has been cut by £140 million, to £360 million. The chairman of the Manpower Services Commission, in evidence to a Select Committee, said that the Government cuts had
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reached such a level that the MSC would no longer be able to carry out its statutory obligations. Yet the Secretary of State pretends that he is in favour of mitigating the effects of unemployment in Scotland. The MSC's work is directed towards the development areas. A cut of £140 million in one year is bound to have substantial effects on Scotland's employment prospects.
One has only to think of the steel industry to understand the results of the Government's handling of the economy. The Government's policy is said to be one of non-intervention. In reality it is one of intervention in its crudest form, because of the financial guidelines that it imposes upon industry. The Secretary of State for Industry blames Sir Charles Villiers and Sir Charles blames the Secretary of State for Industry. Both men have culpably mishandled the dispute and have made it more difficult and bitter. It will have lasting effects on the steel industry, not least in Scotland. The new Employment Bill will embitter industrial relations even more.
The Government have failed in their incomes policy. According to figures published today, incomes increased by 19·6 per cent. in the past year. That is under a Government that believes in a free-for-all and a free market economy. The inflation rate is 18·4 per cent. We have debated cuts in local authority spending, cuts in education, and cuts in school meals, milk and transport. We have debated cuts in the housing programme and in the health services. The Under-Secretary of State assured us only the other day that we need not worry about the National Health Service because so long as we increased prescription charges it would be safeguarded. However, the number of hospital beds is being reduced and the children's hospital in Glasgow has to resort to raffles to raise money for essential services.
That is the background. The financial benefits from North Sea oil have been flowing in increasing quantities, and yet the Government's economic record is appalling. Let us not believe that we are in a temporary difficulty. Let us not believe that this is only the first step and that after the economy has gone down a little it will recover with a gigantic bound. That will not happen. All the

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forecasts, from Government and independent sources, are that the economic situation will become worse. The forecast is that industrial production will fall in the current year. The question is whether it will fall by 2 per cent. or 3 per cent., or more. Every indication is that inflation will become worse and that it will not stop before it reaches 20 per cent.—and it may go much higher than that.
On Monday, The Times gave us the Government's forecast for unemployment. The forecast is that in a year the number of unemployed will be more than 2 million. The last Government estimate was that unemployment would reach 1·6 million. That was serious enough. The figures are based on detailed, region-by-region forecasts. That means that there must be a Government forecast of unemployment in Scotland for January next year. It would be interesting to hear that figure from the Under-Secretary of State. Of course, he will not give us that figure. If we receive any information about anything from him it will be a precedent.
We can, however, work out the figures. Unemployment in the United Kingdom will be 24 per cent. in a year's time. At present 200,000 people are unemployed in Scotland. In a year unemployment in Scotland will total 250,000. Scotland suffers disproportionately and that must, therefore, be a minimum figure. Unless steps are taken soon to reverse Government policy we may be sure that unemployment in Scotland will total between 250,000 and 300,000. If the Secretary of State wants to deny that I give him the opportunity now. He knows that he cannot deny that figure. He knows that that is the prospect for January next year. The right hon. Gentleman can intervene to confirm or deny what I say. That rate of unemployment is inevitable, because of Government policy.
The engineering industry forecasts a fall in demand of no less than 20 per cent. It is a key industry in Scotland. The construction industry is experiencing its worst period since 1951. The indications are that the construction industry is on a downward course, which will mean the loss of thousands of jobs in Scotland.
We are told that the Government are looking for more cuts in public expenditure. We shall be told shortly where those cuts are to fall. Housing is most
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likely to be affected by the cuts, although the housing programme is at its lowest level for more than 20 years. Wherever the cuts take place they will lead to a loss of jobs in Scotland.
The present situation is a direct consequence of the Government's first Budget, which was based on the proposition that by their giving tax cuts to the rich the economy would take off and become prosperous. The irony is that the policy is so successful that we are told that there will be no more tax cuts in the next Budget. The Government have already shot their bolt. The tax cuts for the better off have, in real terms, benefitted only those with incomes of more than £15,000 a year. The tax cuts will not be repeated, but the penalties of increased VAT, increased inflation and public expenditure cuts, which have been borne by ordinary people in Scotland in the last nine months, will continue to be borne for a long time.
The other irony is that despite all their action, the Government have not the slightest idea what will happen to the PSBR in the current year. They do not know whether it will go up, down or sideways. They do not know whether it it good, bad or indifferent whether it goes up, down or sideways. In a nutshell, the Government's economic strategy has completely collapsed only nine months after they came to power.
We are told that there are divisions in the Cabinet and that there are some hawks and some doves. It would be interesting to know whether the Secretary of State is a hawk or a dove. To me he seems more like a lame duck. In this position we want Scotland protected and, indeed, expect Scotland to be protected.
In recent years every Government, even Tory Governments, have done as much as possible, in difficult economic circumstances, to maintain benefits and protect the most vulnerable areas of the country. That has not happened under this Government. Scotland is in a difficult economic position. The problems are serious. There will be a difficult period ahead. We expect some initiative from the Government for the protection of Scotland.
Let us consider the record. The Secretary of State always presents regional policy in an agreeable manner. When

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listening to him this afternoon one might have thought that regional assistance in Scotland had been increased by the Government. The reality is that four areas in Scotland have been upgraded, as was mentioned by the Secretary of State, but no fewer than 42 areas have been downgraded. It would have been nice if the Secretary of State had read out a list of the areas downgraded as well as a list of the areas upgraded.
The Government reduced the grants for building, plant and machinery from 20 per cent. to 15 per cent., which affected every development area. There was a deferment in the payment of regional aid, which cost Scottish industry £40 millon in the past year. The changes announced last July meant that regional aid was cut from £150 million to £105 million a year, which is a reduction of 30 per cent. It is no wonder that Scottish industry does not wish to invest.
Mr. Ian Lang: The right hon. Member obviously feels strongly about regional aid. Has he forgotten that in 1977 the previous Labour Administration, almost overnight, abolished the regional employment premium? That militated strongly against Scotland, which received almost 50 per cent. of the total. The effect was about £75 per employee in Scotland compared with £42 per employee in England. That led directly to a loss of 20,000 jobs.
Mr. Milian: The previous Tory Government announced that they would abolish the regional employment premium in 1974. It was not abolished, because a Labour Government were returned to office at the 1974 election. I hope that every hon. Member will be in favour of a strong regional policy.
The regional employment premium was replaced by other benefits to industry. The reductions in expenditure in the current year have not been replaced. They were not the only savings that were made at the expense of Scottish industry. The hon. Member for Galloway (Mr. Lang) should ask Scottish industrialists. what they think about the Government's action on regional policy.
The SDA budget has been reduced for the current year, and the Govern-
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ment have produced industrial guidelines that the Secretary of State has admitted are intended to make the industrial activities of the SDA an ancillary function, whereas they were previously the prime function of the SDA.
Mr. Younger indicated dissent.
Mr. Millan: That is true. The provision of factories, while important, could be done, and was being done, by other agencies. The industrial investment function of the SDA was its prime objective. The Secretary of State has cut the budget not only in the current year but in the next year.
I wish to draw the attention of the House to one interesting event. In an equivalent debate to this on 4 February, the Secretary of State for Wales announced that the WDA would receive an additional £48 million over the next two years to deal with the difficult economic and industrial circumstances in Wales. It would have been encouraging for Scotland if the Secretary of State had been able to announce this afternoon that additional money would be available to the SDA. The right hon. Gentleman has a record of unmitigated failure in these matters. On any issue that arises where Cabinet decisions are involved, the Secretary of State loses out. If an additional £48 million is to be provided for Wales, why is there not something additional for Scotland?
Mr. Younger: I would have thought that the right hon. Gentleman would know from his own intelligence that there is a vast problem of steel closures in Wales. I am glad that the Government have been able to provide money to help Wales.
I made it clear in my speech that the SDA had more money than it could spend. It will have more money to spend in real terms this year than it has ever had before.
Mr. Millan: That is an interesting answer. The right hon. Gentleman has confirmed what I said. Wales is to receive additional money because of its serious industrial problems. The right hon. Gentleman obviously does not think that Scotland has serious industrial problems, while the rest of us believe that Scotland has extremely serious industrial

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problems. If he were doing the job for Scotland that he ought to be doing he would have obtained additional money for the SDA. We have heard another confession of failure from the right hon. Gentleman.
What success has the right hon. Gentleman had on the question of small firms? I do not remember a speech of the right hon. Gentleman in which he has not said "If only every small firm in Scotland would engage one additional employee, the Scottish unemployment problem would be solved". That is about as sensible as saying "If every small firm in Scotland dismissed one employee, unemployment in Scotland would be doubled".
The small firms employment subsidy was directed specifically towards small firms taking on additional employees—something that the Secretary of State said he was anxious to encourage. The subsidy meant that for a small firm taking on additional employees there would be a payment for 26 weeks of £20 per week for each additional employee. One would have thought that that was exactly what the right hon. Gentleman wanted. How-every, the small firm subsidy has been abolished. The right hon. Gentleman had the impertinence to say that it was not a cost-effective scheme. What are the Government putting in its place? The answer is, absolutely nothing.
That is not the end of the story about the way in which the Government have treated industry in. Scotland. They say that they wish to encourage small firms. The encouragement in Scotland is the removal of the small firms employment subsidy. We all wish to encourage oil-related industry in Scotland. When the Government came to power they inherited from the outgoing Labour Government the interest relief grant scheme, which had been an important financial inducement to industry in Scotland. It enabled Scotland to build up the amount of oil-related employment to between 55,000 and 60,000 jobs. Some months ago the Government announced that because of EEC pressure they intended to abolish the scheme from 31 March 1980. When the House was in recess they announced that they were abolishing it retrospectively from July last.
The scheme has been abolished because the Government wished to save
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money and because there was pressure from the EEC. They are spineless in their dealings with the EEC. The French Government have not lifted the lamb ban, yet France was one of the countries agitating within the EEC for the abolition of the interest relief grant scheme, and the Government caved in. That scheme has been lost. It was an important scheme from the point of view of encouraging oil-related jobs in Scotland.
We had the fiasco of the Civil Service dispersal programme. It is now to produce only 1,400 Ministry of Defence jobs, but we are not even sure that we are to get them. If we do, it will be in 1986. In any case, long before that there will be Civil Service reductions in Scotland of more than 4,000. That will be several times more than the additional Civil Service jobs that we are to get under the Civil Service dispersal programme.
There was the Inmos project, which was started by the Labour Government. The understanding was that the first manufacturing part of the project was to be in a development area. The Government did not try to get the first part of that project sited in a development area: it went to Bristol. I mean no disrespect to Bristol, but that scheme should have gone to a development area. When I wrote to the Secretary of State and pointed out that there was an undertaking by the previous Labour Government that that scheme would go to a development area, I got back what I think the Prime Minister would call a "wet" letter saying that this was a matter for the management of Inmos, and that it had nothing to do with the Government.
These are important jobs in the microelectronics industry. The right hon. Gentleman mentioned this matter as being very important. Jobs that should have gone to Scotland or to another development area have gone to a non-development area. The right hon. Gentleman did not even put up a fight for them, and he wrote this extremely complacent and silly letter to me.
We have had that kind of response on numerous occasions. We had it in regard to industrial closures. The Secretary of State said that he was unhappy about the closures, that he was anxious to do everything possible—apart from anything positive—that they are terrible tragedies, and that he would do everything possible

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to get alternative jobs. The right hon. Gentleman this afternoon mentioned one or two instances where he has been able to step in and be helpful. Consider the examples that he gave. First, Marathon. Marathon would not have been there unless it had been rescued three times by the previous Labour Government—the last occasion being a month or so before the general election.
Caberboard, at Cowie, was rescued by the previous Labour Government. But the right hon. Gentleman has been able to come in with a secret press conference. A notice was issued to the press to the effect that if representatives would meet the Under-Secretary on a particular day he would have something of tremendous importance to tell them. It was so secret and important that he could not tell them in advance. It turned out to be Government money going into a project started by the Labour Government.
Mr. Canavan: Does my right hon. Friend agree that it was absolutely disgraceful that the Minister should use that press conference to launch an attack on the trade union movement and to claim that the existence of the factory at Cowie was a victory for the German company over the trade union movement? If it had not been for the tenacity of the trade union movement and the parliamentary pressure that my colleagues and I put on the previous Labour Minister of State at the Scottish Office, there would have been no capability for manufacturing chipboard at Cowie at all.
Mr. Millan: My hon. Friend is absolutely right. I remember the meetings that I had with him when the original difficulties arose at that factory.
On all these matters we have little sign of real initiative and enterprise by the Government. A working party has been established, and we welcome that. I suppose that that is better than no working party at all. My hon Friend the Member for Dunbartonshire, Central (Mr. McCartney) tells me that the Clydebank working party does not have an office there. Not one job at Singers has been replaced, despite the efforts of the working party. Indeed, no new jobs have been created to replace the lost jobs at Massey-Ferguson, in Kilmarnock, despite the efforts of trade unions and others.
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The moral is that we must fight for the retention of every job in Scotland. If we adopt the attitude that it does not matter if jobs go as long as we can get jobs to replace them, we shall be fooling and deluding ourselves. That in turn will lead to disillusionment among trade unions and others. Alternative jobs are difficult to obtain. If they can be obtained, they should be obtained whether or not we are losing jobs. Scotland is losing jobs at an extremely worrying rate. The Government make a fetish of nonintervention, although every industrialised country in the West—and Japan, and other countries—adopts an industrial interventionist policy. Without an interventionist policy there will be no hope for the United Kingdom, and there will certainly be no hope for Scotland.
During the election we forecast—and the Scottish electorate supported us—that the return of a Tory Government would mean industrial disaster for Scotland. The only respect in which we were not accurate at the election was that the disaster happened a good deal sooner than we expected last May.
We need a complete reversal of Government policy in the widest area of economic strategy, particularly in the industrial area. Unless we have that reversal of policy Scotland will go into an irreversible industrial decline. That will be the legacy left to Scotland by this disastrous Tory Government.
Several Hen. Members rose—
Mr. Speaker: Order. As the House saw, more than 30 right hon. and hon. Members hope to participate in a debate that will last about three hours before the closing speeches.
6.7 pm
Mr. J. Grimond: If we are to improve economic performance in Scotland and put a curb on inflation we must, as the Secretary of State said, reduce the non-productive use of resources, especially by public authorities.
I should like to make several points on that matter. First, it is reasonable to give local authorities more flexibility. However, it seems unreasonable to tell them that they cannot spend the money that they raise. Much local authority expenditure could be eliminated to the advantage

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of the community. But if a local authority is prepared to raise money on the rates and does not come to the taxpayer. I do not see why it should not be allowed to do so.
I hope that we shall have an assurance from the Government that they will not penalise authorities which have been economical in the past, but in view of the manner of the cuts they may end up by doing that.
I should also like an assurance that the Government will not give special grants for large unproductive capital projects, such as the building of offices. There are some signs that they are willing to do that. Services are being cut while offices and staff increase.
The cuts in general are not cuts but reductions in extra money provided by the Government. I was alarmed by one remark made by the Secretary of State, and I hope that in winding up the debate, the Minister will put it right. The right hon. Gentleman seemed critical of the Scottish Development Agency because it underspent. One of the most disastrous aspects of the grants system is that every authority believes that it must spend to the absolute maximum, whether or not it has any good projects. I hope that the Government will congratulate the SDA on not pouring out public money if it has no viable projects before it. In this regard, too, I hope that the Government are looking at the grants system, which is extremely wasteful.
The Secretary of State pointed out that 60,000 jobs had been created in Scotland through oil and oil-related industries. I hope that we shall be told whether these are jobs for Scotsmen. For example, at Sullom Voe, in my constituency, at least half the workers in oil-related jobs do not come from Scotland. Are these 60,000 jobs for Scotland or for Britain?
Incidentally, with regard to the future of the various grants that are being tailed off, I hope that the Government will find means of discriminating between regions. The regions with oil-related industries will require grants in four or five years, when the oil construction period is over, and possibly later when the oil itself is running down. I suspect that the grants will probably continue and then tail off, but in some regions that may be the wrong way round.
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If we are to have a reduction of Government assistance to some areas—I do not complain about that—it is all the more necessary that we should look at the services in those areas, particularly transport. High transport costs and the difficulties of moving goods are handicaps under which the Scottish economy labours. There is great scope for expanding train services throughout Scotland. I regret the closing of some of the services in the Borders and in the North-East of Scotland.
The Secretary of State mentioned the importance of tertiary industries, among which is tourism. I am not a wholehearted enthusiast for the indefinite extension of tourism. I sometimes feel that we need an anti-tourist board as well as a tourist board. However, it undoubtedly brings much money into many parts of Scotland, particularly the Highlands.
The railways north of Inverness are museum pieces. It is amusing to travel on them, but profoundly irritating. They are no better than they were 100 years ago. I am told—I hope that it is not true, and perhaps the right hon. Member for Western Isles (Mr. Stewart) will correct me—that at one point the crew have tea during the journey, leaving the train and going to a neighbouring farmhouse. I cannot swear to the truth of that, but sometimes one would think that it is so. The train stops not only at every station, but frequently between stations.
I should like sleepers to run north of Inverness. I am amazed at the time that journeys take. It still takes five or six hours to cover 120 miles. I am also amazed at the apparent lack of effort by the railways to gain more of the goods and livestock traffic. Because of the increasing cost of petrol, the railways have a great opportunity in the rural areas of Scotland. As the Secretary of State said, the rural economy is of prime importance to Scotland.
Mr. Robert Maclennan: As a fellow sufferer on the line about which the right hon. Member is talking, may I ask whether he acknowledges that when the matter is raised with the Government they treat it as a matter for the management of British Rail, and British Rail treats it as a matter of cash limits imposed by the Government? The

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latter seems to be the more plausible explanation.
Mr. Grimond: I am obliged to the expert on railways. Whoever is ultimately responsible, I feel that improvements could be made.
There has been a great deal of road and motorway building in the centre of Scotland, but it is still largely unjoined to the roads to the South. There are some gaps between the main motorways in England and those in Scotland.
In my view, the airways will price themselves out of ordinary business in Scotland. They will soon be used entirely by expense account travellers and public officials. Incidentally, I welcome the offer of a grant of £2·5 million for the Highlands and Islands airports, and I hope that the Government will say more about how it is to be divided up. It is a step in the right direction.
British Airways have made nine increases in fares to Orkney and Shetland in the last four or five years, ranging from 7½ per cent. to 15 per cent. That is far in excess of inflation. In spite of numerous courteous explanations from the nationalised organisations, I still think that their policies are wrong. For instance, British Airways have enormous traffic to Shetland in oil, but it is creamed off to charters. The scheduled services are not gaining the profits that could be made. The CAA says that it is charging the oil companies for the new terminal at Wilsness in Shetland but it should be making a large profit on the whole aerodrome at Sumburgh. British Airways should be making such a profit from its monopoly position that it could afford at least to hold the fares on scheduled services and to hold airport charges. The CAA proposals for increases in airport charges are astronomical. The CAA and British Airways are putting too much extra expense on the ordinary traveller. They should be making a profit out of the oil companies.
Scotland suffers from the same disease as the rest of Britain. State Socialism, with its enormous nationalised industries, has failed, not only because it is incompetent, but because it has made no difference to industrial relations. One of the promises of nationalisation was that it would improve industrial relations. It
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does not happen. Too many trade union leaders seem to spend their time disrupting production, instead of improving it. Sometimes the unions seem to be set on a course of mass suicide. That is not inevitable. It has been shown, not only by small firms, but by some large firms, that if a business is broken up into manageable units and there is contact with the labour force, extremely good working relations can be established.
There are at least three large international companies in Scotland which have good working relationships—Occidental Oil, IBM and ITT in the Borders—and which are bringing about the sort of change in the economy which the Scottish Office wishes to see. They work in small units, and they are careful to carry the labour force with them when they are introducing new techniques. Good relations with labour can be established in many ways. One way that is particularly appropriate to Scotland should be the encouragement of industrial co-operatives. I do not say that they will solve our troubles, but that is a good way of associating the workers in ownership and management of their business and giving them a real interest in it. After all, it is they who depend upon it for their livelihood.
A good deal of management is virtually a bureaucracy. It moves from place to place. It is not interested in the community. Co-operatives will not mean that workers will run the business or manage it, but they will have a say in appointing the management, and have continual interest in how it performs. Increasingly, workers are wanting to be treated more as owners than as mere hands. It would be sensible to make some parts of nationalised industries into co-operatives. It would be sensible to encourage workers to put redundancy payments into their own businesses. Some are willing to do that. It would be sensible to give MG cars, for instance, to the workers, and to give other parts of the nationalised industries back to the people who work in and depend upon them. Such a development would be peculiarly appropriate to Scotland, which has a long tradition of a more widespread democracy than England.
The group of co-operatives in Man-dragon, in Spain shows what can be done if the sort of patriotism that has erupted

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in Scotland during the last four or five years is harnessed not only to political but to industrial effort. Instead of seeing their savings siphoned off to Madrid, instead of seeing their business closed down by Madrid, the Basques have taken the matter into their own hands and have put their savings into their own businesses. They have 66 successful co-operatives, financed by their own bank, all of which are controlled by the workers. That is the sort of development that I should like to see.
The previous Government set up the Co-operative Development Agency. There is the Scottish Co-operative Committee, and I am chairman of an organisation called Job Ownership Limited—JOL. We all work to the same end. As we are in favour of co-operation, we co-operate together. But we need changes in taxation, more Government support and other changes in legislation.
I am not saying that that is the only way of running industry, but the appalling situation that exists in British industry, in which the trade unions and the management are at perpetual loggerheads, must be broken down. One way of doing that is to get the workers to put their energy and ability into making industry more efficient, instead of disrupting it.
I should have thought that my proposals would be in accord with Government policy. They would improve it. They would not run contrary to it. I do not think that the Government can be satisfied that they have got their finger on the real difficulty. It will not be cured by financial means. The trouble with the economy is political and industrial.
6.19 pm
Mr. Alex Pollock: It is timely to have this debate about 10 months after the Government came into office. We all recognise that the Government have major economic problems, and only a political simpleton would suggest that there are instant solutions to them. That is recognised by the country at large, and that is why there is still a tremendous ground swell of good faith among people in Scotland for the attempts that the Government are making—
Mr. Canavan: Where?
Mr. Pollock: In Moray and Nairn, and in many other parts of the country. It is important to remember that if we are to maintain that good will the people who are prepared to give us their backing must have a strong sense of reassurance about the future direction of the country. What concerns me, after these 10 months, is the slight hint of anxiety and worry on the part of certain people who are otherwise happy to back the Government but who are concerned about the implications of certain aspects of their policy. I should like to touch on one or two of those aspects.
The farming interests in Scotland are puzzled about why, with their production record, which is second to none, they are not doing as well as they should be. The fishing industry is in a parlous state. It is worried about how it will rescue itself and get back on fair and level terms. Perhaps more serious than those worries are those of people in rural areas about the future of the institutions that are essential for the existence of a healthy rural economy. I am referring not only to pure economics but to the ancillary opportunities that are necessary to keep people in the countryside.
Today we have seen a mass lobby by the sub-postmasters. They are not concerned only for their jobs and those of their employees. They recognise that the changes could have harsh consequences for the social fabric of small communities.
Another area of worry, upon which I shall dwell for a moment, centres on the future of health provision in the rural areas. My hon. Friend the Under-Secretary is well aware of the problems that are faced in the Grampian region. There is the prospect—I am happy to say that it remains only a prospect—that a number of small maternity units will be closed. This is not simply a question of cash. It has much wider ramifications. If there are to be such closures, many men who work in the distilleries and on the farms will find that their wives are not prepared to take the risk of remaining in isolated communities far from medical help.
I should like to give an incidence from my personal experience. In early December of last year my wife, who was expecting our second child, went into labour

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in the early hours of the morning. We had the choice of taking her from Forres to Raigmore hospital in Inverness or, if the labour was more rapid than we expected, to take her a quarter of a mile up the road to the cottage hospital. In the event we made it to Rakemoor and the child was delivered there, but if the delivery had been more rapid and sudden and the cottage hospital had been closed down my son could well have been born in a layby. We do not wish to lose that sort of facility in the rural areas, and therefore I sound a note of caution to the Government. They should have regard to the full implications, in social and democratic terms, of the closure of maternity units.
For the same reasons, we must be careful to maintain facilities for the mentally handicapped. Social cohesion applies not only to the mentally sound, but perhaps more especially to those with mental problems. Families in rural areas who have to contend with difficult weather conditions in winter would be most reluctant to face the prospect of being able to see their children in, say, Aberdeen only infrequently rather than being able to see them at locally-based centres.
There is a prospect that the west district of the Grampian health board will be dismantled under the restructuring programme. I assure the Government that the west district works well and that it has the confidence of local medical practitioners. It has a sound record of administration, and it has the co-operation of specialists and GPs alike. To put that at risk by an obsession with a policy of centralism would do more harm to medical provisions at local level.
The conclusion that I wish the House to draw from my remarks is that people in rural communities recognise that there are times when a price has to be paid for the provision of essential public services, but that they are not prepared to accept the removal of those facilities themselves. That is a cost that is much more expensive than pure economics. I hope that my hon. Friend the Under-Secretary will give us the necessary assurances that the Government do not intend to preside over the future depopulation of the rural areas and turn them into tourist traps. I hope that he
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will tell the House that the Government are committed to make sure that every effort will be made to retain the full provision of services that are needed to keep the rural areas healthy and viable.
6.26 pm
Mr. James Hamilton: I have heard many debates on the Scottish economy since I came to the House. I have heard many Secretaries of State opening such debates. I must honestly confess that the speech of the Secretary of State for Scotland tonight was the most depressing one that I have heard in all the years that I have been in the House of Commons. There seems to be no hope at all for Scotland.
Reference has been made to the Scottish unemployment figures. I should like to refer to the figures for Lanarkshire, with reference to a question that I recently put to the Under-Secretary of State for Scotland who has particular responsibility for industry. At 10 January, in Lanarkshire, 24,042 people were unemployed. That represents 13 per cent. of the insurable population in North Lanarkshire and 12·3 per cent. of the insurable population in South Lanarkshire. The tragic part of that is that 1,960 of those unemployed persons are school leavers. With the present Government's policies—if they have any policies—the outlook for school leavers is bleak. The Government have departed from the proposal, under the job creation scheme, of people retiring. They have increased the age from 62 to 64, which means that many young people will find it more difficult to find employment.
Reference was made to a forecast by my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan). The forecast predicted that by 1981, 2 million people will be unemployed in the United Kingdom. On the basis of past figures, we can assume that by 1981 about 300,000 or 350,000 people will be unemployed in Scotland. The Government have reduced grants to industry by £225 million. The reduction for Scotland is £45 million. In the past, Scotland has operated on the basis of receiving one-tenth of the grant allocation, yet the £45 million represents one-twentieth. That means that the Secretary of State for Scotland, at Cabinet level, has not been fighting for the interests of Scotland.

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That is to his eternal shame. He now has the opportunity to put forward the strongest possible case for the Scottish economy.
I know that we are in keen competition with Eire as far as jobs are concerned. I also know that the previous Labour Government had difficulties. When we speak of redundancies we do not refer to the now common policy of natural wastage. Virtually every day of the week redundancies are announced. Those redundancies are put down to natural wastage. Those jobs will never be redeemed or filled again.
I am particularly concerned about the construction industry. We are now clamouring for more houses and more schools. In my area and that of my right hon. Friend the Member for Lanarkshire, North (Mr. Smith), two major schools have been axed by a regional council simply because money has not been made available by the Treasury. That will not be of any educational advantage to our children. Nor will it help the construction industry.
My next remark might be taken as criticism of my trade union colleagues. During the past two or three years, many companies—particularly in the private sector—have inflated the redundancy payments that are permissible under Government schemes. Before I came to the House we fought for every possible job. However, those made redundant now receive tangible redundancy payments. The fight is therefore lost before we begin. I therefore say to my trade union colleagues that we shall live to regret this practice. It is not in the interests of jobs in Scotland.
We have not given sufficient attention to the distributive trades, many of which serve a useful purpose. They supply many jobs. The other week I was talking to a representative of one of the distributive trades in my constituency. I discovered that the rent for his premises had been increased by 134 per cent. I have re-feted to that for a good reason. The Government should recognise that the Scottish Development Agency is now examining the rents of those who have been in factories for between 20 and 25 years.
One industrialist told me that the figure that he has received will mean an increase of 600 per cent. in the rent now paid. That refers to one, of the large industries in Lanarkshire.
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If that trend is allowed to continue, many firms will move from larger factories into smaller factories. There will be a contraction in the work force. It will also cause great difficulty to the export drive. I hope that the Government will take cognisance of that. I hope that they will hold discussions with the Scottish Development Agency and that they will curtail these severe increases to the best of their ability.
During the past two or three weeks many of us have made references to the retraining of personnel. I visited a skill-centre. I recognise that that is not within the province of the Secretary of State for Scotland, but he should be interested. As I went round the skillcentre I noticed an area for training horizontal borers. Before embarking on that course one must be a tradesman. There is a shortage of horizontal borers in Lanarkshire. Many industrialists are allowed to sponsor individuals so that they may attend those courses. I am attempting to be constructive. I hope that the Government will give some attention to these issues when they are discussed at Cabinet level. We cannot afford to close skillcentres in any part of Scotland.
Mr. Ernie Ross: Will my hon. Friend also remind Conservative Members of the success rate of skill-centres? The skillcentre in Dundee has a success rate of 70 per cent. when placing individuals in jobs after training. This is a crucial area of concern.
Mr. Hamilton: That is the point that I have been making. Reference has also been made, quite correctly, to the steel strike. Lanarkshire and Ayrshire suffer tremendously from the dispute. Many of us have told the Prime Minister, the Secretary of State for Industry and the Secretary of State for Scotland—who is a member of the Cabinet—that unless there is Government intervention those men will not return to work. The sooner they get that into their brain boxes the better. The Government say that no more money is available. However, the TUC has done everything humanly possible. Jim Mortimer and his team have also done everything humanly possible. At the moment, ACAS has got them round the table. The Secretary of State for Industry must be seen to be active. The steel industry is one of the basic industries

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in Scotland. If we lose that industry, ad the others will fall by the wayside.
Steel closures have taken place throughout the United Kingdom. A tube section of that industry is in my constituency. Unless we get a multi-pass mill within the next five years we shall witness the demise of the tube-producing section in Scotland. The Government must pay attention to that. They tell us that £450 million has been set aside for the social consequences of redundancy and for future developments. The Secretary of State for Scotland seems to be deeply concerned about the Scottish economy and unemployment. I hope that he will make the necessary move within the Cabinet so that the BSC decides to spend that money.
It is not all a dismal story. Many of the companies in my area have success rates. The hon. Member for Edinburgh, North (Mr. Fletcher) went to America amidst a great deal of razzmatazz. He returned and told us that many jobs and companies would come from America. When the hon. Gentlman winds up the debate I want him to tell us how many companies and jobs are coming. During his visit he did a great disservice to the Scottish Development Agency. He played it down tremendously. As a result of this Government's policies the Scottish Development Agency is not given the recognition that it deserves.
I am aware that many of my colleagues wish to participate in the debate. I therefore ask the Minister to give us the answers that we seek. He should give them truthfully, for a change. If he is truthful with us—if that is humanly possible—he may get some co-operation from us at the end of the day.
6.39 pm
Mr. Michael Ancram: I enjoy listening to speeches from hon. Gentlemen who served in the previous Government. It is difficult to work out whether they speak with such seriousness because they do not remember what things were like when they were in Government or because they continually have nightmares when they do.
I hope that the hon. Member for Bothwell (Mr. Hamilton) will forgive me if I do not follow him. I wish to be brief and raise a specific issue that affects the pros-
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perity and job prospects of people in my constituency, the city of Edinburgh and the whole Lothian region—the rate increase of 43 per cent. announced by the Labour-controlled Lothian regional council yesterday. On any view, that increase is unjustifiable, damaging and irresponsible.
I have listened carefully to the arguments put forward to justify it. [Interruption.] I am sure that the hon. Member will be able to comment in winding up. I believe that when he knows the facts he will agree that the increase is unjustifiable, damaging and irresponsible.
Mr. Buchan: I shall not be able to comment in winding up. The hon. Gentleman is perpetuating the gross hypocrisy that we hear from the Government Front Bench. The Government impose cuts on local authorities. When those authorities seek to defend their communities, which necessitates increasing rates, the Government attack them. I am surprised that the hon. Gentleman copies that behaviour.
Mr. Ancram: The hon. Gentleman repeats the arguments put forward by Lothian Labour regional councillors yesterday. I do not find such arguments convincing.
Councillor Peter Wilson had the courage to resign, because he realised that the increases were unjustifiable. It is interesting to note that there are such people in the Labour Party in Edinburgh.
The increase in unjustifiable. I do not believe that Lothian region has made any attempt at economies. We hear talk of trying to avoid damaging cuts, but there appears to have been not attempt to cut out waste in the duplication of effort between region and district. There is no sign of attempts to cut unnecessary spending in Lothian region's own empire.
Last year Lothian region's staff establishment went up by 1,300, which was 200 more than the region's projected figure at the beginning of the year. In a year of growth that figure is substantial, but, at a time when other regional councils in Scotland are trying to make economies, it indicates that the region made no attempt to cut spending.
We should also consider unnecessary projects. I am accused of raising this topic all the time, but I shall raise it again. The region is spending £250,000

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on an escalator at Haymarket station at a time when there are far higher priorities. If the money is spent, it should be spent on projects with higher priorities.
Even the Labour-controlled council in Strathclyde has made efforts to economise. The Secretary of State will recognise those efforts.
What does Lothian regional council do? The hon. Member for Renfrewshire, West (Mr. Buchan) argued that the region is forced to put up rates because of Government policies. However, Lothian opts for new growth. It spends extra money at a time when other authorities are at least trying to make the economies that the Government seek.
The council is showing contempt of ratepayers' pockets. I do not believe that that will go unnoticed by the people in the city of Edinburgh and the Lothian region. The authority may feel that people in council estates will not notice, because they pay their rates and rents jointly. They will think that it is part of a rent rise. From letters that I have received over the past two weeks, I believe that the district elections in May will prove that wrong.
The increase is damaging. It will have a serious impact on job prospects in Edinburgh. The other day, the Edinburgh chamber of commerce predicted that, if the rate increases went ahead, 4,000 jobs would be lost within the city.
The right hon. Member for Glasgow, Craigton (Mr. Millan) mentioned special development area status. Lothian region is arguing, because of job difficulties, to retain its development area status. It now appears to be demonstrating a disregard for retaining jobs.
I am sure that hon. Gentlemen will will have read the report in The Scotsman that senior industrialists in the city of Edinburgh say that such rate increases will make them think seriously about their industries within the region.
It is often forgotten that it is not only the well-off who pay rates. The people hit hardest by rate increases will be those at the bottom of the scale, who have a full rate rebate but who will have to bear the increase. We hear much about Socialist compassion from the Opposition Benches. Where can that be seen here? The increase is irresponsible.
Mr. Gavin Strang: Does the hon. Gentleman accept that, without the increases, there would be substantial rises in bus fares, cuts in jobs for home helps, teachers and other workers, and cuts in services in the region? Will he face the fact that his Government's decision to downgrade Edinburgh's special development area status will do far more damage and make it virtually impossible to attract new investment in the years ahead?
Mr. Ancram: I have made it clear all along that I shall seek to ask the Government to reverse the decision on development area status. It is now far more difficult to argue that when Lothian region has shown that it has no interest in maintaining jobs.
It is fascinating that we never hear from the hon. Gentleman or from councillors in Edinburgh who are promoting the rate increases of intentions to cut back on administration, bureaucracy or waste. That is where savings can be made.
Mr. John Home Robertson: Will the hon. Gentleman give way?
Mr. Ancram: I shall not give way, as I do not wish to detain the House for long.
I believe that local government was given autonomy on the understanding that it would operate responsibly. We are seeing here a misuse of that autonomy, which has dangerous implications. It is a direct and apparently uncontrollable attack on the policies of an elected Government. It is an expensive political manoeuvre by the Labour group on Lothian regional council, with the ratepayers again footing the bill.
Mr. Robertson: Will the hon. Gentleman give way?
Mr. Ancram: I have given way to other hon. Gentlemen and I wish to continue.
All individual liberties in life are circumscribed within the bounds of responsibility. All autonomy given to local government must be on the same basis. Where irresponsibility rules and power runs amok, as appears to be the case in Lothian region, and where people can be hurt by the political whims of local

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government, without redress or control—[HON. GENTLEMEN: "Oh!"] Hon. Gentlemen may say "Oh!" but they should talk to the ratepayers.
The whole system requires to be looked at again. It is no philosophical argument. It is a real and immediate problem, which the Government cannot afford to overlook. I welcome the Secretary of State's response to the increase yesterday, but if his existing powers to take action are not sufficient he must seek new ones.
Mr. Robertson: Will the hon. Gentleman give way?
Mr. Ancram: If the prosperity and prospects of the people of Lothian region are not to be irreversibly damaged, the Secretary of State cannot afford to wait. He must act swiftly. I hope that the Minister will confirm that that can and will be done.
6.50 pm
Mr. Allen Adams: I listened with great interest to the Secretary of State's list of alleged economic successes in Scotland since he came to power. I think that we can deduce from the tenor of his argument that if a man opens his back kitchen on St. Kilda to produce milk bottle tops and employs a man and a dog, that will be regarded as a major economic success and a breakthrough for Scotland. Such were the trivia that the Secretary of State was speaking about, picking out minutiae in industrial expansion which have not meant anything in real terms for industrial expansion in Scotland.
One hesitates to use the word "capitalism" in this building in case the roof falls in and the clocks stop, although one might suppose that the clocks have already stopped for many Members on the Government Benches. I shall substitute the words "market forces", which seem to be more socially acceptable. The one thing that has failed Scotland has been market forces. The one significant factor that has consistently and persistently let Scotland down has been private enterprise. The biggest of these private enterprise companies have resisted most attempts by all Governments to push, to pull, to cajole or to direct them into Scotland. In fact, at the moment, most
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of them cannot get near enough to Brussels or to the cheap labour markets in Taiwan and Korea.
The decline that has occurred in the traditional private sector in Scotland—and we must be honest with ourselves—can to some extent be laid at the door of our fellow Scots—the people who owned the shipyards, the foundries, the engineering works and the mills, and who made a great deal of money from the sweat of our fathers' brows but never reinvested a penny of it. Today, many of our manufacturing concerns are operating antediluvian machinery in Dickensian buildings. Small wonder that they cannot compete, whilst their owners are still waving their Union Jacks, or their Saltires, or whatever it might be, and telling us that it is nothing to do with them. According to them it is the fault of the lazy workers, yet they are merrily investing their profits abroad in Japan, Korea and elsewhere. The manufacturing concerns in those countries then sell their products to us and put our workers out of a job.
I worked in the shipyards for a little while and I can remember cursing the Renfrew ferry at half-past seven o'clock on cold January mornings on my way to shipyards in which the Japanese, had they gone to work in them, would not have produced a canoe. The shipyards are a very good example, because their owners made a fortune in the post-war boom. After so much shipping had been sunk during the war, a great deal had to be put in its place. The owners made a fortune, but they never reinvested a penny in the shipyards, and whereas once we had 13 shipyards on the Clyde, we now have three. This is not the fault of the workers. It is another classic example of the failure of private enterprise to invest in the Scottish economy.
Another more recent example is that of Singer at Clydebank. No wonder it could not compete. The factory needed not a few million but perhaps £10 or £15 million invested in it to make it competitive.
The Government are saying that they believe in the dynamic effects of private enterprise. Could they spell out precisely to the Scottish people what they mean by the dynamic effects of private enterprise and of private capital? Can they

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point to one example of a major manufacturer coming to Scotland of his own free will, with neither State aid nor State support? Can they give me one example of private enterprise coming to the aid of Scotland in that way?
Mr. Iain Sproat: The hon. Gentleman says that free enterprise has failed Scotland. Is he not aware that the biggest success story in Scotland has been the provision of 60,000 jobs as a result of North Sea oil, and that 97 per cent. of the investment in North Sea oil comes from free enterprise? That is the classic example of free enterprise working in Scotland.
Mr. Adams: I think that the hon. Member should research the oil industry a little more, because if he does he will probably find that British Petroleum has played a significant part in what has happened and that many of the oil companies are making their present profits with State assistance.
Mr. Buchan: Does not my hon. Friend think that God also helped a little?
Mr. Adams: There is no doubt that private enterprise did not put the oil there in the first place. I agree with my hon. Friend that our present situation with regard to North Sea oil is due more to good luck than to guile.
Mr. Younger: If it had been left to God the oil would still be under the sea. Due to private enterprise it has been brought up and used.
Mr. Adams: The private enterprise that is producing the oil has not been averse to taking public money to help it to produce it. I think that I made that point when answering the hon. Member for Aberdeen, South (Mr. Sproat).
What we in Scotland need is not a reduction in regional grants but a major expansion of them. As I tried to illustrate, private industry responds to Scotland's needs only when it receives grants and direction from the State. We want more of that from this Government, not less.
Nor do we need the closure of training centres for our young people. Youth unemployment in Scotland is a national disgrace. What we should have seen from the Government is an expansion of the programme to help train young people
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for industry, rather than a diminution of that service. This is an absolute disgrace, for which the Scottish people will not forgive them.
We do not need a reduction in public expenditure in local government, which is now one of the major employers in Scotland. It provides many essential services for the sick and the elderly, and with a population which has a higher percentage of elderly people in it every year, we need major expansion of this work. One would have thought that the Government would learn a lesson from President Roosevelt, who saw that one of the ways out of the depression in America in the 1930s was to spend money in the public sector. One way of doing this would be to put more money into direct labour forces in local authorities. It cannot be argued that there is nothing to do in housing in Scotland. We still have one of the worst housing records in Europe, and by investing in that sector we would improve that record and at the same time alleviate the problem of unemployed building workers. It seems to me outrageous that whilst so many of our fellow Scots live in appalling housing conditions we have building workers on the dole.
The Government have not learnt many basic lessons from the past. They have not learnt that one of the ways out of economic recession is by investment in the public sector. They certainly have not learnt that private enterprise has failed Scotland miserably in the past and that the only way the Scottish economy will recover is by State aid, State support and State direction.
We should learn also from the Irish experience. The Government ought seriously to consider giving major tax concessions to industry willing to come to Scotland. There must be a major expansion of the new electronics industry. I do not accept that this industry has expanded to any extent in Scotland. I should like to see the Government becoming involved in the microprocessor industry in Scotland, although that might sound a little doctrinaire for them. However, I do not think that that kind of industry will come to Scotland of its own volition. It will have to be pushed, pulled and cajoled.
The basic feature of private enterprise is that it gravitates to where it can get

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raw materials more quickly and more cheaply, and to the major markets. Two examples are the South-East of England and the centre of Europe. Those are two natural gravitational pulls. The job of a responsible and reasonable Government is to counteract those pulls.
7 pm
Mr. Barry Henderson: I was astonished to hear some of the comments made by the hon. Member for Paisley (Mr. Adams). They represent such fundamentalist, old-fashioned and out-dated Socialism that even some of his hon. Friends would not want to go far along his route.
Mr. Canavan: We do not want capitalism.
Mr. Henderson: I am a modem style capitalist. I hope that the hon. Member for Paisley will forgive me if I do not take up directly his line of thought.
First, I shall make a few comments which I hope my hon. Friend the Under-Secretary of State will pick up when he replies. I shall refer to East Fife specifically before considering how the situation may be impacted by a number of national policies.
The strength of the economy in East Fife is the diversity of employment and the number of small businesses in the area. Many of them are owner-managed, and none has more than 500 employees on one site. The hon. Member for Berwick and East Lothian (Mr. Home Robertson), who seems to have joined the Tribune Group below the Gangway, extracted with great skill a fortnight ago at Scottish question time an answer from my hon. Friend that contained important figures that indicated that in his constituency unemployment has been reduced significantly since the Conservative Government came to power. I am happy to say that the same is true in my constituency. I suspect that that is so for similar reasons—namely, the effectiveness of small businesses and private enterprise working effectively even in difficult times.
Agriculture remains the backbone of the economy in East Fife. I hope that my right hon. Friend the Secretary of State will use all his considerable influence in the Cabinet to reduce the effect of capital taxes and to remove the threat
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to the family farm, which still remains following the economic measures of the Labour Government.
I am sure that my right hon. Friend will also bear in mind the considerable concern that exists within the fishing industry. I am sure that he has that in mind as he was visited recently by some of my fishing constituents. It is essentially a free enterprise and profit-sharing industry. It is a hazardous industry. There is no living in the industry unless fish are landed and sold. I know that my right hon. Friend is conscious of the deep crisis that has suddenly hit the industry. I hope that he will move with speed to make a positive response to the crisis that faces the industry.
My right hon. Friend mentioned the prospects of a major microelectronics application centre. I look forward to seeing that development in Scotland. I hope that my hon. Friend will be able to assure me that the important merits of Fife for the centre of such a development will be properly recognised. I note that the hon. Member for Fife, Central (Mr. Hamilton) is in the Chamber. The hon. Gentleman represents among other places Glenrothes new town, which has many of the facilities that a microelectronics centre will want to have around it. In East Fife we have St. Andrews university, a major centre of excellence. It is possible that there is nowhere in the world doing more advanced work on the materials on which chips are based.
Mr. Canavan: Fish and chips?
Mr. Henderson: I must tell the hon. Gentleman that the chairman of the Potato Marketing Board lives in my constituency. I was referring to microelectronic chips and microcircuits. As I have said, we have a centre of real excellence and expertise at St. Andrews. Across the bridge at Dundee there are considerable resources at the University, which would be helpful to the development of microelectronics in Scotland.
Glenrothes, St. Andrews and Dundee form a triangle that would provide an attractive home for the development to which my right hon. Friend referred. In addition, we must not lose sight of the environmental attractiveness of the area, which would attract the sort of person who might want to come from outside

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to contribute to the development. I hope that my right hon. and hon. Friends will ensure that the Fife area is carefully considered.
My hon. Friend the Under-Secretary of State will be aware that the regional development policy announced by the Government and the changes in development area status were not entirely welcomed in East Fife. However, I find the carping criticism of Labour Members intolerable. The fact is that the policy and the changes in status were good for Scotland as a whole. My constituency has not been helped, but I recognise that Scotland has benefited considerably from the changes in development status that were announced by my right hon. Friend.
We have received assurances from my right hon. Friend the Secretary of State for Industry as well as from my hon. Friend the Under-Secretary of State for Scotland that the Scottish Development Agency will not be prevented from doing its work within the East Fife constituency. I ask my hon. Friend to use his good offices to encourage the SDA, which currently has a commitment to provide advance factories at two sites in North-East Fife, to give an indication of the completion dates. One of them is at Cupar Road, Newburgh. It is time that the SDA indicated when it might be completed. The other factory is at Cupar itself. The site has only recently been acquired. In the light of the changes that are taking place, it is important for these advance factories to be completed as soon as possible so that the district has some positive industrial development to offer. We have the skills and the talents.
Mr. Gordon Wilson: And golf courses.
Mr. Henderson: Indeed. One becomes so accustomed to the excellence of these facilities that one sometimes forgets that others are not so aware of them.
I do not wish to give the impression that I am making carping criticism of the SDA. Last year I was impressed by the way in which it, together with the North-East Fife district council and private enterprise, co-operated to bring the Dreher factory to the station site at Anstruther. That was an excellent example of how an advance factory in the right place at the
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right time, without necessarily long-term scope for Government money being pumped into the project, could bring about a satisfactory development of employment opportunities.
It is slightly unfortunate that the SDA leaflet which was published in February 1980, which describes some of the developments that it has available, does not feature East Fife, despite the fact that work had started. That is another reason why I hope that my right hon. Friend will draw the importance of the Agency's developments to the attention of the Agency. I hope that he will take steps to allay the fear that North-East Fife is the forgotten child of the agency.
The service sector of industry is also extremely important in my constituency. It accounts for about half the source of all employment. A healthy economic climate is required in which that sector of industry can prosper. For that reason, I should like to touch on some of the national policy aspects.
The first aspect is education. I was glad to hear my right hon. Friend refer to improved communication between the education system and industry. At the moment there is little doubt that the education system, particularly the higher education system in Scotland, is, in many ways, antipathetic to business and extremely sceptical about the benefits of profitable business. Our young people are not encouraged to look for a career in business as an honourable, effective and worthwhile way of earning their living and play their part in the community.
The education system has not encouraged the development in Scotland of entrepreneurial talent. Too many of those who should be leading the drive for the establishment of new and small businesses are encouraged to go into either nonproductive sectors of the economy or into very large companies, which often results in those people having to leave Scotland to further their careers.
The next major area upon which I should like to touch is communications. I hope that my hon. Friend the Minister will be able to give us some indication of when we can expect to see a more rapid development of the East Fife regional road. I hope that he has noted the economic effects of the unfortunate way in which we in Fife seem to be

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enabling the nationalised bus group to earn a substantial profit when that is used either to subsidise the taxpayer or other loss-making enterprises in the public sector.
Another aspect to which I should like to draw the attention of my hon. Friend is contained in a letter that I have just received from the general manager of British Rail (Scottish region). This causes me concern. The letter was written in reply to representations I made to him on behalf of constituents and others about the poor timekeeping on the Aberdeen to London route that runs through East Fife.
Timekeeping on that route has been extremely bad. The general manager made no secret of the fact that he is also concerned about the poor timekeeping on this route. He assures me that he is taking steps to try to improve this. He also drew to my attention that:
"quality and reliability are very much influenced by the ageing diesel locomotive fleet, the Diesel Multiple Units and carriages. Mostly, they are in the 18 to 20-year-old bracket and, frankly, it is becoming increasingly difficult to maintain such equipment at the peak of efficiency on demanding schedules."
I notice that the Opposition are holding forth from a sedentary position. I hope that they will recall that that occurred during the last five years they were in Government and it is the kind of thing that has been allowed to continue.
The general manager continues:
"Indeed we know that an investment level some 30 per cent. higher than at present is needed just to replace outworn resources and we have repeatedly drawn this to the attention of successive Governments."
He goes on to say:
"I cannot disguise my concern about the future of the provincial and local commuter services which, in large part, form the 'social' railway dependent on the Public Service Obligation 'Contract Price' paid by the Government."
Those seem to me somewhat ominous words. It is clear that under the previous Administration, as with so many other aspects of the economy, there has been considerable neglect. The fact that they allowed the economy almost totally to stagnate for five years while they doubled public expenditure makes it more difficult for my right hon. Friend to do that which I am sure he would like to do. Nevertheless, I hope that my right hon. Friend will recognise
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the importance of communications to the Scottish economy.
My hon. Friend the Minister will be aware of the threatened and existing increases in air fares from Scottish airports. I am glad that the grandiose plans for a third London airport that have been sculling round for some time now have been scrapped in favour of the modest expansion of Stansted. However, I hope that my right hon. Friend, with his considerable knowledge of airports and the claims of Scotland's west coast international airport will ensure that everything possible is done to get the airlines themselves to disperse as far as is practicable from London direct services to North America and Europe. There is great scope for more of these services, not only from Scottish airports but also from other provincial airports in England.
It is also a cause for concern that the London-Scottish air fares seem to bear a heavy share of the burden of the costs of British Airways. I cannot remember having travelled on an empty shuttle for a long time. There is severe concern within the Scottish business community that the level of profit being made by British Airways out of the routes in and out of Scotland is unreasonable. That is disturbing, at a time when there are proposed increases in landing fees and security charges.
I should like some assurance that the security charges have been carefully checked. At times it seems that there are a lot of security people sculling around with nothing to do. As regards landing fees, I am told that the capital charges on new airport developments must be repaid over just seven years and that sale and lease-back arrangements are not allowed. I cannot imagine any other longterm capital building programe that is expected to show a return within seven years and I hope that my right hon. Friend will arrange to have that reviewed, if indeed what I have been told is correct.
One of the great characteristics of East Fife is that the population has very rarely gone on strike. The people earn their living by their own efforts, to a large degree. They work hard and they pay their taxes. As taxpayers they deeply resent the profligate use of their money in payments to those who ruin their own industries through

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actions that would never be contemplated by a significant part of the community in East Fife. I hope that the Government will continue to press for a reduction of State monopoly, for good housekeeping in the public sector and for the reduction of taxes that will give incentive to small businesses. In carrying out a vigorous programme of cutting public expenditure they will thereby help to cut the inflation rate and the interest rate that seriously affects small businesses.
I know that my right hon. Friend will seek to do all that he can to encourage small businesses. I hope that he will remember that it is no use offering complicated and subtle schemes to such people. The small business man has not the time or the resources to examine the small print. The message from small business men is "Keep it simple".
The most pressing need for small businessmen today is a reduction in the burdens placed upon them, rather than an increase in the amount of cash given to them. If the Government follow these lines they will secure more successful job prospects in Scotland generally, and in East Fife in particular, which are essential to maintain healthy and thriving communities.
I believe that the Government have started reversing the long-term trend of the previous Labour Government, who doubled unemployment in five years. We have seen the beginning of the long haul to recovery in the Scottish economy. I hope that the Government will pursue their efforts with great vigour.
7.21 pm
Mr. Gordon Wilson: If brevity is next to godliness, I am afraid that the hon. Member for Fife, East (Mr. Henderson) is destined for hell. However, I must say that we have all learned a lot about East Fife. I particularly welcome his remarks about Dundee being included in the "Golden Triangle" running from Glenrothes to St. Andrews to Dundee.
After listening to some of the speeches tonight one could be excused for not appreciating how bad things are in the Scottish economy. Unemployment is rising, output is stagnant and living standards are about to fall. If that happens the service industries will do badly during the coming year. The figure of 300,000
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unemployed, which has been mentioned and which has not been rebutted by the Secretary of State, would be a disaster of the greatest magnitude and it would take the Scottish economy a long time to recover.
In the 10 months that the Government have been in power they have pursued some distinctive if not eccentric economic policies. They have raised the monetary philosophy to the point of idolatry. However, the problems that they saw emerging and for which they have given the monetary prescription have so far shown no signs of being cured. It is hardly surprising to find that in the Cabinet there are murmurings from those people who believe that the solutions that the Government have been pursuing will not do much good to the economy, but will, in fact, harm it. If that is so, the Scottish economy will suffer severely.
If, on the other hand, the solutions are correct and growth begins, we can be sure that Scotland probably will be the last to benefit from such a recovery. In the meantime, the prescription will do untold harm by causing large numbers of job losses, and that is something that no Scottish Member of Parliament wants to see, whatever his political party.
Having listened to the Secretary of State, I am very much afraid that he does not have any specific solutions. I am also afraid that his influence over Scottish matters in the Cabinet seems to be minimal. He had made it his prime resposibility to look after employment and to deal with the crises that occur, yet we always seem to end up dealing with the Under-Secretary of State for Scotland. I wrote a long letter to the Secretary of State in November setting out some suggestions for the Scottish economy, and I got a long reply back from the Under-Secretary which virtually came to nothing when it was analysed and boiled down. In other words, the Government were not prepared to put forward any suggestions or proposals that might help a city such as Dundee, which has considerable problems at present. I hope that when the closing speeches are made the Government will put forward some practical and positive suggestions.
The Secretary of State's primary responsibility should be economic. Regional policy, however useful and valuable, is essentially a policy of applying sticking

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plaster to a gaping wound. It is far better to have a healthy economy, which leads to growth. There are many arguments about the way in which that could be achieved, but I am afraid that the Government's policy will not lead to a solution.
Over the past 10 years three Governments have been in power. There was a Conservative Government, who lasted from 1970 until February 1974. Then there was a Labour Government, who lasted almost five years, until May last year, and now we have a Conservative Government again. In that period, under all Governments, we lost 128,000 manufacturing jobs in Scotland. I accept that new jobs are being created in the service sector, but that is not good enough. Although jobs are created in the service sector, we want to maintain in the Scottish economy a strong manufacturing presence, particularly in relation to products that are novel and for which a good market may exist. We cannot live off the service sector entirely. I know that in recent years in all advanced Western countries there has been a move from the manufacturing to the service sector, but in Scotland we have suffered far more than other countries. If the decay in the manufacturing sector continues we will end up without the broad span of industry that is required for the future.
The Scottish people have been cruelly deceived. Promises have been made by both political parties, but at the end of the day jobs have still been lost. It is not surprising, therefore, that there has been emigration. The root of our problems in Scotland is that when economic circumstances are hard people emigrate, and those who emigrate are invariably those with skills. They take their skills with them, and this makes it more difficult to create new industries in Scotland.
The Government must have a much closer look at the training facilities. In the Dundee engineering and training unit that is attached to the engineering industry, the number of boys being recommended or sponsored by the Manpower Services Commission has dropped, and yet there are plenty of boys who would be very willing to take up positions of that kind. It is Government funding that seems to be the problem there. For the last 10 years we have had pretty well a
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whole generation of Scots who have been denied the right to secure employment and economic stability.
An article appeared in The Scotsman today pointing out that instead of fighting for their jobs people now seem to rush for their redundancy money. I take to heart that point, which was made some three speeches ago by the hon. Member for Bothwell (Mr. Hamilton). There seems to have been a devastating effect on industrial morale, as people are more interested in the benefits that come with redundancy, knowing full well—this is the tragedy—that there may not be an alternative job for them. These skills are being lost to Scotland, as we have chronic redundancy taking place. As long as that sort of thing goes on in places such as Dundee, it is more difficult to bring about any sort of recovery. That is why I appeal to the Secretary of State.
The problems of the Scottish economy are many. This depressing debate has been brought about by the increase in unemployment.
It is a challenging situation. While countries with natural resources seem to be benefiting most, we in Scotland do not seem to be benefiting from the strategic position that we occupy in geographical terms or from our natural resources in the farming and fishing industries and in energy. I do not intend going off on an oil tack. I wonder sometimes why Scotland, with substantial and varied kinds of energy, should not be able to attract certain kinds of industry. It is a question, in strategic terms, that the Government might wish to examine.
The outlook, therefore, is bleak. It is hardly surprising that Mr. Teddy Taylor should be rushing to join the emigration trail to the South. Perhaps the only industry that seems likely to benefit these days is the carpetbag industry.
I do not wish to exclude the Labour Party from criticism. It has to be placed on record that during Labour's term of office, unemployment doubled and prices doubled. In that period, the rich got richer and the poor got poorer. Hearing the Opposition criticism of the Chancellor of the Exchequer, I could not help recalling—although I am opposed to Government policies—the report of the Royal Commission on the distribution of income and wealth, published recently, which

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said that the rich got richer and the poor got poorer in the first two years of the last Labour Government. Between 1974 and 1976 the top 1 per cent. of the United Kingdom population saw their share of the nation's personnal wealth climb, from 22.5 per cent. in 1974 to 24.9 per cent. in 1976.
The report also stated that in the same period those at the bottom end of the scale suffered because their share of personel wealth declined. That is the record of the Labour Government. When the present Secretary of State is attacked by his predecessor, it should be remembered that this year something like £2,090 million, according to Treasury estimates, in oil taxation, oil royalties, petroleum revenue tax and corporation tax, linked with Scotland's major natural asset off our coasts, will be given to the Treasury at a time when the Secretary of State and his colleagues, supported by Conservative Members, intend to cut public expenditure in Scotland.
Mr. William Hamilton (Fife, Central): The hon. Gentleman put them there.
Mr. Wilson: We did not put them there. The hon. Member, who was antagonistic to the Scottish Assembly, has to bear responsibility for that. The record of his Government was a dirty one. The hon. Gentleman should be ashamed of that record. I would hesitate to be a member of a party with a record such as that of the former Labour Government. The hon. Gentleman and his colleagues consented to Scotland's oil resources being swallowed up by the Treasury instead of going into a special development fund, as the right hon. Member for Bristol, South-East (Mr. Benn), I believe, suggested at one stage.
If the Opposition fail to apply pressure for a share of oil revenues to come to Scotland they are letting down their constituents and condemning those constituencies to poorer educational facilities and the sacking of teachers. They are scared to claim Scotland's natural resources for the benefit of their own people. I would be ashamed to be a member of a political party that behaved in that way.
If any further criticism is required of the Labour Party, it can be found in an article by Professor Donald Mackay, published on 18 January 1979. It showed—
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and it has not been denied—that regional spending in Scotland had been reduced by 40 per cent., mainly through the sudden elimination of the regional employment premium. For a party that has always claimed to be in favour of investing State funds in the development of industry, that is nothing short of scandalous.
Our problems in Scotland are deep, hut, fundamentally, Scotland is a rich country. We must make sure that its resources are used for the benefit of its people and that its training facilities and apprenticeship systems are reviewed and renewed in order to get fresh skills on to the labour market. We have a tremendous job ahead.
I have no doubt that Scotland, in terms of people and assets, has the capability to forge a new life for itself in the 1980s and the 1990s. I am certain, however, that, following the experience of the last 10 years and longer, unless we achieve self-government Scotland will remain bottom of the industrial league.
7.35 pm
Mr. Ian Lang: It is a great pleasure to follow the Scottish National party spokesman. I say that, like many of my hon. Friends, with strong personal feelings, even though, because of the support that the SNP gave to the Labour party, we had to wait almost two years longer than we needed to have done to enjoy that privilege.
I find myself still reeling with astonishment at the sour and intemperate tone of the remarks of the right hon. Member for Glasgow, Craigton (Mr. Millan). If the right hon. Gentleman is at all economically literate—I give him credit by believing that he is—he must surely know that cause and effect in the management of national economies are almost always separated by many months. Thus, his strictures inescapably fall on his own conduct of Scottish affairs and not on those of my right hon. Friend.
Last week, the right hon. Member for Craigton said:
"If there is to be misery, it ought to be shared all round."—[Official Report, 1st Scottish Standing Committee, 12 February 1980, c. 228.]
thus encapsulating Socialist philosophy at the one point where it actually conjoins with the Labour Government's record of

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achievement over the last five years. Perhaps even that is to do the Opposition more than justice. The late and sadly lamented Patrick Hutber put the matter more accurately when he described Socialist equality as:
"that euphoric state where everyone has less than everyone else."
When it comes to spreading misery there are few to match the right hon. Member for Craigton, but his hon. Friends have echoed their miserable master's voice like a veritable Greek chorus of woe and incomprehension; and equality of misery was one thing that the right hon. Gentleman failed to achieve. Under Labour, we were all miserable but some were more miserable than others.
One of the miserable inequalities achieved by the previous Labour Government was the lamentable and inexorable trend whereby while productive tax-generating jobs in manufacturing industry vanished by the thousand, unproductive, bureaucratic, administrative jobs in the public sector, which consumed taxpayers' funds, proliferated. Fifty years ago only 7 per cent. of the work force was engaged in the public sector. Now that figure is nearer 30 per cent. In the past two years of supposed restraint by the previous Labour Government, the number of local government employees in Scotland rose from 245,000 to nearly 260,000 at a time when unemployment overall was scaling new heights.
I had occasion not long ago to make a telephone call to Strathclyde regional council. Finding the number in the telephone directory was the beginning of my problems. I found in the Glasgow directory alone for 1977 no fewer than 850 different lines and numbers connecting to that Council. One shudders to think what is the total number of lines now to that regional authority for the region as a whole.
Mr. Tam Dalyell: The hon. Gentleman is dealing with Civil Service jobs. Does he favour bringing Civil Service jobs to Scotland? If he goes to help the Conservative candidate in Southend, what will he say there about the dispersal of jobs to Scotland?
Mr. Lang: I favour the dispersal of Civil Service jobs to Scotland. I am en-
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couraged by the robust championship shown by my right hon. Friend the Sectary of State. The hon. Gentleman's question would be better directed to the leader of the Liberal Party, who should be asked whether he associates himself with the comments of his hon. Friend the member for Liverpool, Edge Hill (Mr. Alton) as reported in The Scotsman today.
The cost to the economy of increased local authority expenditure is staggering and overwhelming. When one looks at the figures for Strathclyde—
Mr. John Home Robertson rose—
Mr. Lang: In the interests of time, I cannot give way again. It is hardly surprising to learn that the figure of £444 million expenditure by Strathclyde regional council in the first year after reorganisation rose to £793 million last year.
Mr. Robertson: On that point—
Mr. Lang: My hon. Friend the member for Edinburgh, South (Mr. Ancram) has demonstrated the horrific expansion that has taken place in Lothian region, with the correspondingly frighteningly high anticipated increase in rates. Nothing could be more damaging to the recovery of the Scottish economy than the vicious and mindless rate increases being planned by Labour-controlled local authorities, literally driving businesses to the wall and employees on to the dole queue.
Mr. Robertson: Will the hon. Gentleman give way?
Mr. Lang: If Labour Members spent more time digesting my remarks and less time anticipating them they would find their intellects much better nourished.
My local regional council, Dumfries and Galloway, an excellent and efficient local authority, employs 34 fewer employees than it did at the time of regionalisation five years ago. But for the compulsory transfer of 46 staff by central Government on regionalisation, the total saving would have been 80. The costs of administration and management per head are well below the national average. Indeed, Dumfries and Galloway regional council has the lowest expenditure per

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head for 1979–80 of all the regional and island councils.
By adjusting the ratio of the needs and resources elements in the rate support grant, my right hon. Friend the Secretary of State has begun to do justice to such efficient authorities and I urge him to maintain his efforts in that direction.
I should like to draw attention to some rural problems that are no less acute for being less graphically visible than urban problems. Six jobs lost in a small community are as disastrous for that community and the surrounding area as 600 jobs lost in a larger community.
As my hon. Friend the Member for Moray and Nairn (Mr. Pollock) said so effectively, the whole rural way of life is in jeopardy. We still find there the self-reliance and sense of values to which the Conservative Party is attuned and we must not let them be undermined or lost. My right hon. Friend the Secretary of State has paid considerable tribute to the importance of small businesses and the farming communities in rural areas, so I shall not dwell on that.
Mr. George Foulkes: While the hon. Gentleman is on the subject of farming will he indicate how the farming community is managing with the 22½ per cent. interest rates that it is having to pay, how the fishermen in the South-West of Scotland are looking forward to their boa's being laid up for the next three weeks and whether the Secretary of State has given him any hope with regard to the A75? All those problems affect the hon. Gentleman's constituency.
Mr. Lang: My first instincts were right. I should not have given way to the hon. Gentleman. It is obvious that he was not listening to my speech, for he has not raised points relevant to it.
I was referring to the need to revive certain industries related to agriculture. I draw particular attention to the dry stone walling industry which is reviving in my constituency. It 'takes about one ton of stones to build one yard of dry stone walling, or dry stone dyking as it is sometimes called. When one has to strip down and rebuild a wall it involves moving two tons of stones per yard.
The problem is that young apprentices coming into the industry cannot build sufficient lengths of wall to earn a day's
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wage, and the self-employed dykers cannot afford to take on apprentices unless they have outside help. Because the industry is not connected with the production of food, no grant is available from the agriculture training board. Nor is finance available from the SDA, which is mainly concerned with manufacturing related industries. The industry, being composed of self-employed individuals, clearly cannot fund its own training scheme.
I urge Ministers to look at the problems of the industry and others like it to see whether a more imaginative and flexible approach can be found, through the various organs of Government, to help it.
I should like to mention finally tourism, which is an increasingly important industry throughout Scotland. My own constituency is much involved and I think that we have the only regional tourist association in Scotland.
Foreign tourists account for only about 8 per cent. of visitors to Scotland, but for about 32 per cent. of expenditure. Their importance on the tourist scene can be readily appreciated.
The personal assistant of the chief executive of the Dumfries and Galloway regional council visited America recently and was astonished to find how little was known about Scotland and how little information was available on Scottish tourism. Indeed, in the far West they thought that Galloway was in Ireland.
I am not criticising the British Tourist Authority, which does a fine job, but its duty is to attract visitors to Britain and it is hardly surprising that it tends to concentrate on attracting them to London where larger amounts of money can be spent and to which they can be more easily attracted.
The Scottish Tourist Board is not allowed directly to advertise abroad. I urge Ministers to reconsider that restriction, because it is not satisfactory that in order to be allowed foreign advertising the regions must get together to advertise collectively or join the Scottish Tourist Board in advertising abroad. The board should have its own powers.
I trust that the Government will pay due attention to the important rural

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economy in Scotland and ensure that when the recovery comes our rural areas, which play such an important part in Scottish life, are able to share in that recovery.
7.46 pm
Mr. Martin J. O'Neill: I should like to start with an apology, because in Committee I have been castigating the hon. Member for Fife, East (Mr. Henderson) for not speaking. I realise now that he was saving himself for the speech that he made earlier in this debate. If he is the face of modern capitalism I can see why we need to discuss the problems of the Scottish economy.
I wish to concentrate on the problem of unemployment. I hope that I shall be forgiven for not entering the pantomime exchanges that usually occur in such debates, with each side saying that its figures are better than those of the other side and when we are reduced to "Oh, yes they are" and "Oh, no they are not". I intend to look at the prospects for the Scottish economy in terms of unemployment.
I should like to draw the attention of the House to the report that appeared in the Fraser of Allander Institute bulletin last year which projected that there would be horrendous unemployment in Scotland by 1984. It predicted thousands more redundancies and many more in the dole queue. We have to look at what the Government intend to do about that and what Conservative-associated organisations think of the efforts of the Government to attack unemployment in Scotland effectively.
The present unemployment level of 176,000, seasonally adjusted from 203,000, is one which no one can accept. We are told that the number will start to fall in the next few months as the Government's policies begin to bear fruit, though, having listened to the Secretary of State's asinine platitudes, I can see nothing in the Government's policies to suggest that there will be any improvement.
The Fraser of Allander Institute started out with fairly conservative assumptions. For example, it assumed that it was likely that about 17,000 people a year would emigrate during the lifetime
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of the present Government. That is about 7,000 more than the Registrar-General's estimate, but the institute points out that it is likely that emigration will increase as the depression in the economy continues.
The report projects figures as far ahead as 1993. Over a five-year period it should be more accurate than some of the past projections.
The report shows that the Treasury forecasts that manufacturing industry will fall and that it is likely that there will be little job expansion in Scotland. It also argues that in the 1980s various changes in the birth rate will have resulted in an increase in the number of people looking for work, though it will start to level off by the latter part of the decade.
Its conclusions were clear. It said that between 1979 and 1984 registered unemployment in Scotland—unless action was taken—would rise by 50 per cent. It also said that the rise would be more marked among women than among men but that employment for women would be more steady. In manufacturing industry, where there would be a decline, employment for men would decrease.
The report made the point that, on the number of registered unemployed, the temporarily unemployed and the sick, some 358,000 people would be out of work in Scotland by 1984. These figures are depressing and worrying. However, a projection by the Cambridge Growth Project—which forecasts that by the year 2000 there could be 5,500,000 unemployed in the United Kingdom—would suggest that in Scotland something like 750,000 people would be out of work by the turn of the century.
While the long-term forecasts may be doubtful, against the background of potential unemployment of the order I have mentioned for Scotland in the mid-eighties we must listen to what the forecasters are saying. The CBI forecast in January pinpointed general uncertainties and said that those uncertainties were consistent with expectations of weaker demand and output, higher interest rates, continuing inflation and a strong exchange rate. That statement is tucked away in the CBI report, which has not received nearly so much attention as the noises made by the CBI last winter when the lorry drivers were on strike and when

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John Methven and Alan Devereaux said that the British economy was on the point of collapse.
We hear sometimes that trade unionists are not properly represented by their officials. If I were a businessman and people like Methven and Devereaux represented me, I would be most reluctant to pay my dues. They are failing to back the interests of British manufacturers.
Mr. Allan Stewart: The hon. Member seems to be making a personal attack on me.
Mr. O'Neill: I am willing to make a personal attack on the hon. Member for Renfrewshire, East (Mr. Stewart) but I think it would be inappropriate in this place. Last winter CBI officials were less moderate than they are now. A slavish defence of the Conservative Government has been put up by the CBI this year, but it has not defended the interests of British business men and has kept quiet about the problems facing the British economy. The CBI industrial forecasts for Scotland have been increasingly depressing since the hon. Member entered the House. Since July 1979 the level of disillusionment in business has been at its greatest since October 1975. That probably coincides with the arrival of the hon. Member back in Scotland. The Allander report in in January this year.
Mr. Stewart: Surely the hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) agrees that according to the most recent survey the key capital capacity utilisation figure has improved. Most economic commentators have always regarded that figure as one of the most important in the whole survey.
Mr. O'Neill: Other commentators on the British economy have been unanimously depressed by the figures. There is no way that Tory Members will convince the Opposition that British industry is on the verge of a boom and is about to expand.
We have had a Cook's tour through the constituencies of Scotland during the debate and I must plead guilty to going a little way along that road myself. In my own area we have seen the direct effects of Government policies recently.
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I draw attention to the Glynwed Company which operates in Falkirk. Glynwed is a holding company that has taken over many firms in Britain, some of them local institutions like those in Falkirk that produce Raeburn and Aga cookers. Those cookers are supplied to institutional catering establishments. When the firms were laying off 400 workers management was asked the reason. It was said that the reason was a fall in demand for their product as a result of cuts in public expenditure. Perhaps it is unfortunate that it did not foresee that situation when it spent £10,000 in support of the Tory general election campaign.
There is almost total indifference on the part of the Government to the plight of the foundry industry in central Scotland. It took the ingenuity and the drive of the central region authorities to hold a symposium last week at which the problems of the foundry industry were discussed.
Direct Government action could be taken and in a short time 2,000 to 3,000 jobs could be created in the whisky industry. If the Government were prepared to follow up the action of the previous Administration and do something positive about stopping the bulk of whisky exports there could be a massive improvement in the glass and bottling industry in the area. The right hon. Member for the Western Isles (Mr. Stewart) made the point that the previous Government did not arrest those exports. But the previous Government did work towards compelling the EEC to ensure that the bulk of whisky exports were reduced. This Government have taken no advantage of that effort, and the minimal amount of work required to create 2,000 jobs in central Scotland has been left undone because of the indifference or the indolence of Ministers at the Scottish Office.
The Secretary of State along with other hon. Members spent a morning at the Scottish Knitwear Association, at which a very' strong case was made not for the protection of the industry but for the positive assistance that it needs. Since that meeting we have heard nothing from the Scottish Office, from the Department of Industry or from the Department of Trade about giving positive assistance to the Scottish knitwear industry. In that industry more than 1,000 jobs have been lost in the last year.

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We would like the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, North (Mr. Fletcher) when he has finished answering the questions of the hon. Member for Fife, East to tell us that in the near future we will get a reduction in interest rates to allow businesses to borrow and so expand. We hope he will tell us that we will get investment in the mining industry which would help it to mine the tremendous coal reserves in Scotland with comparative ease and which would transform the economy of certain parts of Ayrshire and Central Scotland.
We would like to see commitment to planned school training and a commitment to ensure that the Manpower Services Commission gets the support that it deserves. We would like to see the SDA restored to the role of industrial banker rather than that of industrial landlord to which it has been relegated. To get the jobs that will prevent unemployment from reaching the figure of 250,000 to 300,000—as quoted by The Times—we will need Government intervention and investment.
We must ensure that local government services are not cut. A few months ago some of us had the privilege of listening to a senior civil servant in the Scottish Office who said that there was no correlation between extravagance and high expenditure in local authorities. The hon. Member for Edinburgh, South (Mr. Ancram) should understand that the allegations about the profligacy of local authorities such as Lothian are total nonsense. Such bodies provide services which the Government are unwilling to finance.
We have been told of complaints by local business men. We did not hear complaints last year when local business men received big tax handouts as a result of the Budget. We are interested to know whether the rate increases that firms must now pay are in excess of the tax handouts by the Chancellor.
We want the Government to be removed, but that is a forlorn hope. In the short term we must have action to ensure that unemployment in Scotland does not become worse. So far there are no suggestions that will improve the situation. It will not improve until the
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Secretary of State resigns and we have a chance for a fresh start.
Mr. Canavan: On a point of order Mr. Deputy Speaker. Since the debate is about the Scottish economy and there are twice as many Labour Members representing Scottish constituencies as there are Conservative Members, is it possible for you to bear that ratio in mind when calling hon. Members to speak?
Mr. Deputy Speaker (Mr. Bernard Weatherill): That can be borne in mind, but it is not the normal practice.
8.2 pm
Mr. John MacKay: I suggest that the hon. Member for West Stirlingshire (Mr. Canavan) sits and listens, as I had to when the Education (No. 2) Bill was in Committee. If he tempts me too much I may try to get my own back for the number of minutes that I had to listen to him.
The hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) quoted oft from the Fraser of Allander Institute reports. I do not wish to go far along that road with him, because I treat that institute in the same way as I treat The Scotsman—a side office of the SNP.
Mr. Donald Stewart: Is the hon. Member saying that these reports are not worth the paper on which they are written, although they are written by reputable academics?
Mr. MacKay: I did not say that. I said that I would not go too far with them because some of the reports are written by people who have close links with the SNP.
In April 1979 the president of the Fraser of Allander Institute described the Scottish economy as
"a sick man on drugs'".
He suggested that the cure was to reduce its dependence on those drugs gradually. That gradualistic approach towards the withdrawal of Government help to all and sundry is adopted by my right hon. Friends in the Government.
The report said that there was little doubt that the Scottish economy was weaker in April 1979 than it had been in

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1974. Before Opposition Members complain about the current levels of unemployment they should examine the figures and percentages. When the Labour Party took office, unemployment in Scotland was 95,600. By January 1978 it had risen to 203,000. That was an increase of 113 per cent. The hon. Member for Clackmannan and East Stirlingshire hopes that unemployment will not rise by 50 per cent. in the next five years. So do I. We hope also that we can do a great deal better than the Labour Government, which presided over an enormous unemployment increase. Scottish unemployment would be 374,000 if we did as well—or as badly—as they did when they were in office.
Mr. O'Neill: How long do we have to wait for the economic miracle?
Mr. MacKay: After five years of Labour Government we cannot expect economic miracles overnight. The hon. Member for Clackmannan and East Stirlingshire should know that, since he is an economist. It will be a long haul because the patient is very sick and will not recover overnight.
The Fraser of Allander Institute drew attention this year to the many disparate groups involved in industrial promotion in Scotland. I recommend to the Government a document issued by the Institute for the Study of Sparsely Populated Areas called "Concurrent Functions of Public Authorities in the Highland Region". The Highlands and Islands Development Board, the SDA, and the regional and local authorities compete to do the same job. We should simplify the system so that one person goes out to catch the industrialist with his rod and line, rather than have a whole batch of people who muddy the water.
All is not bleak. All is not black, although I am sure that the Opposition would like it to be so. The right hon. Member for Glasgow, Craigton (Mr. Millan) complained that South Wales was to receive £48 million extra. I am delighted that Scotland does not have the great problems experienced by Wales. I am glad that I can sit back and see the money going to South Wales. I should have expected Socialists to be prepared to see one part of our country which is in great need receiving particular help. Opposition Members seem to say that
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they wish Scotland was as badly off as South Wales so that it could receive the money instead.
In the last few months Chrysler and Talbot have proved that an industry with a bad reputation can, by its own efforts, improve its image, and after this morning's splendid news I hope that BL will be able to do the same. It is a tragedy that the steel industry seems determined to cut its own throat. We experienced the same thing last year at Hunterston. Much public money was invested, and yet it was unused for months on end.
Mr. Foulkes: Will the hon. Member give way?
Mr. MacKay: I shall not give way.
When I was travelling to London on the plane, I read the Glasgow Herald. It was worth reading, because for a change I read good news. It was headlined:
"Double shot in the arm for industry".
and said:
"The gloom surrounding Scotland's industrial future lightened yesterday with the announcement of a double helping of good news. John Brown Engineering Gas Turbines, Clydebank announced a £7.4 million contract as Rolls-Royce outlined a £50,000 campaign aimed at bringing another 300 skilled workers to the Scottish factories by the end of the year, making about 500 in two years."
Mr. Norman Hogg: Will the hon. Gentleman give way?
Mr. Foulkes: Will the hon. Gentleman give way?
Mr. MacKay: I shall give way in a moment to the hon. Member for Dunbartonshire, East (Mr. Hogg). It does not do anybody any good to continue to harp on the bad news and never mention the good.
Mr. Hogg: Is it not the case that the good news refers to two State enterprises? That proves the case for State enterprises.
Mr. MacKay: That is exactly my point. When there is good news, all that the Opposition can say is that it concerns a State enterprise. I suppose that I am expected to say that it is bad news, and that it is good news only if it concerns private enterprise. That proves that Opposition Members are more concerned

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with scoring political hits than with looking after the economy of Scotland.
I shall try not to go through the highways and byways of my constituency, but I wish to mention the economy of the Highlands and Islands. I reiterate the remarks of my right hon. Friend the Secretary of State that the Government have increased the amount of money available to the Highlands and Islands Development Board to spend in the Highlands area this year.
We welcome the announcement that the Scottish Office is to continue to give a grant to the Civil Aviation Authority to allow it to continue operating the airports. Indeed, the grant is to be increased by £1 million. I hope that those who did not believe the statement by my hon. Friend the Under-Secretary on 18 December, when he said categorically that the Government would not allow the Civil Aviation Authority to withdraw from the airports, will have the good grace to thank him for his announcement this week.
Mr. Foulkes rose—
Mr. MacKay: I shall not give way.
Mr. Foulkes: I am being discriminated against.
Mr. MacKay: I am indeed discriminating against the hon. Gentleman. He has only himself to blame.
The public and private enterprises in the timber industry form an important partnership to produce timber. We are delighted with two pieces of good news that we have heard recently. One concerns Caberboard at Cowie in Stirlingshire, and the other at Fort William, where Wiggins Teape and Consolidated Bathurst are going into partnership to open the pulp mill for new production. They will use many of the trees that we are growing at the expense of both taxpayers' money and private capital. Unfortunately, we shall always be dependent upon the import of trees and tree products, but we can, by our own efforts, help to lessen that dependence. I welcome the efforts of the Scottish Office and my hon. Friend the Under-Secretary. I thank him for his efforts to help those at Fort William to find alternative production for that factory.
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I do not wish to divert my remarks to agriculture, but I must say that my farmers, though they are not exactly pleased with the present position, are a good deal more pleased than they were a year ago after five years of Labour Government. I hope that my hon. Friend the Under-Secretary will kindly tell his right hon. and learned Friend the Chancellor of the Exchequer that family farmers in Scotland wish for some action on capital transfer tax so that their family businesses can continue on the basis on which agriculture has to depend, namely, one generation after another.
I am sorry that my right hon. Friend the Secretary of State is not in the Chamber, because I know that he and I, together with the hon. Member for South Ayrshire (Mr. Foulkes), share a common interest in the Clyde fishing industry. Much work has been carried out on conservation in the Clyde area. The fishermen have looked after their fishing very well indeed. I wish to underline that we must not allow fishermen—not only from Europe but from other parts of Britain—to interfere with the tightly conserved fishing that has been built up on the Clyde estuary.
As an aside, I wish to emphasise the need for a fish processing industry and for the continuation of a product. Fish farming could give the fish processing industry an all-the-year-round trade, in addition to the fish that are caught in the wild. The Givernment must consider ways in which to help that important industry, especially with legislation. Fish farmers produce something that is different from that caught in the wild. They are often restricted by rules and regulations which were designed for fish caught in the wild and not for fish that are farmed.
An important industry in Scotland, especially in the Highlands, is tourism. I know that some hon. Members are not keen on tourism, or service industries in general. There are Left-wing economists, such as Professor Kaldor, who appear to think that service industries are second-rate. The father of economists—I do not know whether he would be proud to be called that—Mr. Adam Smith, castigated services such as the tourist industry by saying that they were services
"which perish generally in the very instant of their performance, and do not fix or realise themselves in any vendable commodity".

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I hope that my right hon. and hon. Friends take a more sensible and realistic view of the importance of service industries, especially tourism. In Scotland in 1978, £523 million was spent in the tourist industry, and 13·2 million tourists holidayed in Scotland. My constituency accounts for 10 per cent. of the figures. Over the whole of Scotland tourism accounts for 100,000 jobs.
There are problems in the tourist industry, which I have mentioned already in relation to the report on duplicated functions, which the Government ought to consider. There are too many fingers in the tourist pie. Regional and district councils all want their empires. The HIDB has a good track record, and the rest of Scotland should note the way in which it has encouraged those in the industry to establish a tourist network.
This month the chairman of the Scottish Tourist Board, Mr. Robert MacLellan retires. This is a good opportunity for the Government to appoint a chairman who will build on the work that has been done in the past, and who will view the tourist industry through new eyes at an important time in its history.
When the Government appoint the new chairman, they should consider also the whole question of the relationship between the Scottish Tourist Board, the English Tourist Board, the Wales Tourist Board and the British Tourist Authority. There is no doubt that they could co-operate under the umbrella of the BTA to advertise the tourist wares of Britain, to the benefit of all parts of the country.
It should be remembered that the tourist industry plays an important part in the rural areas, where, without tourism, there would be little industry. Those who knock tourism should remember that it is important. It is important for those who work in the industrial and urban areas of the country to be able to spend some parts of the year in the beautiful countryside, where they can enjoy relaxation and pleasures and enjoy living with country people. It is important that the rural economy is maintained in a good condition so that the tourists from the cities can visit a living countryside, rather than a dead one.
8.19 pm
Mr. William McKelvey: I am glad to have the opportunity to
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speak in the debate. Like the hon. Member for Argyll (Mr. MacKay) I shall not go down the highways and byways of my constituency because we are discussing the Scottish economy.
I hope that I shall be forgiven if I mention that Kilmarnock, being in the so-called triangle of disaster, has had several heavy dunts recently, the most recent of which has been the complete disappearance of the Massey-Ferguson work force. The rundown of the work force has started, and 1,500 jobs will be lost within the next few months. That will put the Kilmarnock district figure up to 50 per cent. That is not only undesirably high, but absolutely intolerable.
I want to refer later to the effects of the multinationals—Massey-Ferguson, for example. I draw attention to the Scottish Economic Bulletin of August 1979 in which the Government's policy of propaganda was stated as follows:
"A marked switch in emphasis from taxes on income to taxes on spending should provide a substantial improvement in incentives to enterprise, innovation and efficient working."
I should like to know when that is to begin. We have been waiting for some time for these entrepreneurs to appear in Scotland. They are not appearing in the Kilmarnock district, although one type of entrepreneur has appeared. I should like to refer to an advertisement in the Kilmarnock Standard last week, just prior to 1,500 starting to leave their place of employment. Some had worked at Massey-Ferguson for 30 years. It is
"Alex Young's fantastically low-priced redundancy money special".
He is advertising motor cars. The advertisement suggests that a man should place a deposit now on the car of his choice and pay the rest when his redundancy money comes to him. This man is certainly innovative. I suppose that we could classify him as an entrepreneur. I should describe him not as galvanised or electrified, but as a brass-necked "redundavulture". We have such vultures hanging over Kilmarnock waiting to grab people's money. But they are very short-sighted. That redundancy money and Kilmarnock's economy will not last long. Indeed, before very long this particular firm may find that people in Kilmarnock have no further money to buy motor cars and accessories

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and Alex Young himself will be facing redundancy. It would be bad enough if he were advertising British cars, but I notice Japanese and other foreign cars in the advertisement. People are being encouraged to buy Japanese cars with British redundancy money and to put British Leyland workers out of work. So the circle goes on.
Scotland has always had a difficult unemployment situation. However, it has been sporadic, because there have been periods of recovery. This time the opposite is the case. We have a chronic, bitter joblessness which appears to have no limit. I think it was the chairman of the STUC who said "When in the name of God is it going to end?", because redundancy notices were appearing week after week.
Redundancies no longer make headline news. Redundancies of 1,500 are commonplace in Scotland and barely take up a two-inch paragraph in local newspapers. It has to be something sensational before it hits the headlines. The sacking of a convener or a commotion on a picket line apparently creates more interest.
A jobless figure of 200,000 has been mentioned. The latest figures, although not available for this month, will indicate well over 200,000 in Scotland. If hon. Members can visualise Hampden Park almost at capacity, the unemployment figure is twice that. For 1981, which is but a year away, the forecasts are in the region of 300,000. That will be a catastrophic waste of manpower.
I want to dwell quickly on the multinationals. They have not received much attention so far in the debate. A great deal of the Scottish economy now depends upon the whims of the multinationals. I have discussed with the Secretary of State and other Ministers the power that the multinationals wield over us. We have seen examples of it in the Ayrshire district. We have massive redundancies at Massey-Ferguson, Skefco and Monsanto. All those companies argued at the time that they were concerned not so much with the Scottish economy as the British economy.
We now find that Massey-Ferguson, the only producer of big combine harvesters in this country, has transferred to the French market. The latest word on the
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grapevine is that 200 workers are to be made redundant in Marquette and a further 400 in Beauvais in France. Massey-Ferguson, having transferred the work, is now starting to lay off in that area.
The capitalist crises of the Western World first affect Scotland, then British industry, and finally European industry. The multinationals must bear the responsibility because of the way that they have operated in these countries. They build up the work forces and then leave with no social responsibility.
The tragedy is that we welcome the multinationals. We must, because we are desperate for entrepreneurs. Our entrepreneurs are not putting money into Scotland—certainly not in the Kilmarnock area. I know business men in Kilmarnock who have invested in South Africa and Taiwan. The industries on which Scotland depends are being starved of the finance that they desperately require. It goes to Taiwan. People in the knitwear industry last week told Members of Parliament that a sweater bearing a Shetland wool label was arriving on the dockside from Taiwan priced at 95p. Scotland's knitwear industry cannot compete with such products. Until we restrict these imports and ensure that the money goes into the Scottish economy, not abroad, we shall not prosper.
We must bring about a change in the Scottish economy from the Friedmanite monetarist policies. It might be argued that the Tory Government have a mandate to impose such policies on the people of England, but they should not be imposed upon the people of Scotland, because they did not vote Tory. They voted Labour. Therefore, they should be given special consideration. It is not that I would keep that special consideration for Scotland. Being a good Socialist, I should like the same to apply to England. Nevertheless, as the English voted for a Tory Government, they should suffer the consequences. However, some credence should be given to the way that the Scottish electorate voted.
Mr. Allan Stewart: Therefore, the hon. Gentleman will presumably agree that the previous Labour Government—indeed, every Labour Government except possibly one in the last generation—had no mandate to rule England.
Mr. McKelvey: I thought that this was a debate on the Scottish economy. I was prepared to extend it to England. Of course, if that is the situation, we could develop the argument region by region. If so, the hon. Gentleman must agree that the northern parts of England would have to be lumped into Scotland. The North of England has loyally, consistently and persistently voted Labour. Therefore, what the hon. Gentleman said would be correct for the South of England, and it deserves what it gets. But, even those areas are now beginning to squeal. The point that I was trying to make was that we are on the extremity and that the problems of the Scottish economy have magnified. We are being centralised now not with the Midlands, but with the European concept.
If anyone can say that our arguments—I am anti-Common Market—have not borne fruit, I should like to meet him. In Scotland these days one can never find anyone who voted Tory, let alone anyone who voted for British membership of the Common Market.
The problem in introducing this English-type Tory philosophy in Scotland is that we are given the same type of propaganda: we should all be one big happy family. That is the Tory machine propaganda. Members of the family must work together, they must work in unison and they must all tighten their belts. We are told that there can be no increase in public expenditure and that the purse strings must be tightened. If we were the Waltons, we might work in that fashion. But we do not work in that kind of fashion as a family. When workers are being made redundant, and when they are being told to tighten their belts, those who have money are investing it for themselves, not for the rest of the family.
The family image in Scotland has evaporated almost overnight. It exists only amongst those in Scotland who were deluded into voting Tory, on the false promise that there would be a change in taxation which would solve all their economic ills. That will not solve our economic ills, either in Scotland or in Britain. There is only one way in which to solve those economic ills. I ask all voters in Scotland, particularly those who voted Labour, to write to all their counterparts in England on the next possible occasion, and try to get support for the
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Labour Party in the next election. That would be the first step in introducing sensible Socialist progressive policies to end our economic ills.
Secondly, to free us from Friedmanite monetarist policies, we should have a planned strategy on multinational companies. We realise that there will be difficulties, but we have lost thousands of jobs to Southern Ireland because that country was able to offer better inducements—in many cases to the tune of £4,000 per job. There should be an immediate programme on selective import controls. If there is not such a programme, there is no hope for either the British or the Scottish economy.
Thirdly, there should be a massive increase in public expenditure, and a reversal of the Tory cuts. That is the only way in which to stabilise the economy and to halt unemployment. If the Tories do not halt unemployment, I have no doubt as to what will happen at the next General Election.
8.33 pm
Mr. Allan Stewart: I shall not comment at any length on the speech of the hon. Member for Kilmarnock (Mr. McKelvey), except to say that I expect that a certain section of his speech will be quoted again and again by whoever is adopted as the SNP candidate for Kilmarnock.
I should like to start by saying what I intended to say in an intervention during the speech of the right hon. Member for Glasgow, Craigton (Mr. Millan), when he attacked the Government on the dispersal of Civil Service jobs. He has the most incredible brass neck to attack the Government on that issue. His Government were in power for five years, and they did not disperse a single job to Scotland. All that Scotland got from his Government were five years of hot air on the issue—not a single job.
I should like to comment on the way in which the right hon. Gentleman reacted to the intervention of my hon. Friend the Member for Galloway (Mr. Lang) about the termination of the regional employment premium. He seemed to be telling the House that the ending of REP was a great personal victory. We look forward to seeing a chapter in his memoirs—"My Cabinet Victory; the end of REP". That was a

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deplorable method of changing a regional policy.
I am not arguing whether REP should have been phased out, but it was not phased out. It was cut, in effect, retrospectively, without consultation and without warning. The right hon. Gentleman took £80 million out of Scottish industry overnight. That is the difference between the changes in policy of the present Government and the previous Government. I welcome the changes of the present Government and the way in which they are being phased over a sufficiently long period to allow industrialists to react and to adjust.
As for the references of the right hon. Member for Craigton to the industrial policies for Scotland and his constant reference to the need to beef up the SDA, we know what the Socialist plan for Scotland is. Scotland needs more Scofiscos—that is what it amounts to.
I welcome the changes that have been made to the guidelines of the SDA. If any company in the private sector had the record that the SDA has had with its subsidiaries—every one of which made a loss last year—the shareholders would be asking many questions about that company.
More generally, I should like to pick up the points made by my hon. Friend the Member for Argyll (Mr. MacKay).
Mr. Ernie Ross: Before the hon. Gentleman leaves that point, will he comment on the financial management of the Chrysler corporation before it was tossed in with Britain?
Mr. Stewart: I am not sure what the relevance of that point is. The Chrysler Corporation's jobs are still there and my hon. Friend the Member for Argyll has referred to the efforts that are being made in Linwood to recover from that difficult position. I pay tribute, as he paid tribute, to both the management and the employees at Linwood.
Mr. Harry Ewing rose—
Mr. Stewart: I shall not give way to the hon. Gentleman.
Mr. Ewing rose—
Mr. Deputy Speaker (Mr. Richard Crawshaw): Order. The hon. Gentleman does not appear to be giving way and the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) must resume his seat.
Mr. Ewing rose—
Mr. Stewart: I shall not give way to the hon. Gentleman. I have already given way to the hon. Member for Dundee, West (Mr. Ross) and there are many other hon. Members trying to speak in the debate.
My hon. Friend the Member for Argyll and the hon. Member for Kilmarnock referred to criticisms that have been made of the institutional structure in Scotland for attracting inward investment. That problem will be examined by the Select Committee and it would be out of order for me to refer to it. I hope that the Government will not make any decisions ahead of the report of the Select Committee. However, I am concerned to hear reports that the SDA will be opening offices here, there and everywhere. The Scottish Council did a tremendous job in attracting inward investment into Scotland without any overseas offices.
The question of the microelectronics industry is obviously one of considerable importance for Scotland. Today in Scotland there was an important conference on the industry and its applications. That conference was organised by the Scottish TUC, the CBI, SCOTBEC and SCOTEC. I believe that Opposition Members should pay more tribute to what is being done by both sides of industry in Scotland to try to meet Scotland's problems.
I should like to ask my hon. Friend the Under-Secretary some questions about the urban development corporations and the enterprise zones. I hope that he will be able to tell us where the Government stand on those matters, which have received an immense amount of publicity. In East Kilbride there is an excellent team on the urban development corporation, which has done a tremendous job. As a result of East Kilbride's reaching its target, that sort of effort will be available elsewhere. Many people of all political persuasions believe that my right hon. and learned Friend the Chancellor of the Exchequer put forward an excellent proposal when he made his speech in Glasgow about enterprise zones. Indeed, we

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have a temporary enterprise zone in Glasgow every weekend. It is called "The Barrows". If any hon. Member thinks that there is no enterprise left in Glasgow, he should get up early one Sunday morning and visit the Barrows. There is plenty of enterprise there. As I have said before, inside every moonlighter there is a small firm waiting to break out. There is plenty of enterprise in Glasgow and in the West of Scotland. The people need incentives in the form of lower taxation, less regulation and less restrictive planning procedure throughout Scotland. If we go down that path, jobs will come. No one pretends that that will happen overnight. However, if we free enterprise, provide incentives and reduce regulations, those jobs will come.
8.40 pm
Mr. Norman Hogg: When I began to prepare my remarks, I was filled with gloom. Every forecast and every economic projection for the Scottish economy in the near future and in the medium term, was gloomy. There seems to be little to be cheery about. I gained little encouragement from looking at any of the figures or projections. Indeed, all the economic forecasts agreed that there would be a recession. They all said that output would fall. They all thought that unemployment would rise and that living standards would at best stagnate. They all forecast that inflation would continue to rise for several months. The Treasury says that there will be a 2 per cent. contraction in the economy in 1980.
Against that background we can only conclude that the situation in Scotland is extremely worrying. So far, the Government's policy has achieved only a fall in output of 2 per cent. in the United Kingdom. That was the position at the end of 1979. Consumer spending in 1979 was down by 4 per cent. Retail sales were down by 6 per cent. I have listened to Conservative Members and they have tried to present this as a success story, as something to be pleased about. However, hon. Members are entitled to ask when Ministers expect to see a buoyant economy. They promised a buoyant economy during the election of May 1979.
We have been freed from the restrictions of high taxation. We have been freed also from the planning restrictions that the hon. Member for Renfrewshire,
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East (Mr. Stewart) mentioned. The hon. Gentleman made demands upon his Government. However, the Government claim to have met those demands in the Budget of last year. That claim was made in statement after statement on policy by senior members of the Cabinet. If we have been freed from the shackles that were imposed on the economy by the Labour Party, we must ask where that supposed success is. The success seems to have evaporated. Indeed, it never existed.
Mr. Ernie Ross: My hon. Friend mentioned the statement made by the hon. Member for Renfrewshire, East (Mr. Stewart). The hon. Gentleman indicated that the economy had expanded. He referred to the Barrows in Glasgow. However, 80 per cent. or 90 per cent. of the goods sold in the Barrows are imports. They in no way help the Scottish economy.
Mr. Hogg: I confess that I am a frequent visitor to the Barrows. My hon. Friend pronounces the word "Barrows" wrongly. However, he comes from Dundee and can be expected to get these things wrong. My hon. Friend is perfectly correct. The goods sold in the Barrows are all imports. I went to Petticoat Lane last Sunday afternoon, and that was a mistake as well.
I shall return to the serious point that I was endeavouring to make. There has been no rush to invest. We were promised that people would convert the money released from direct taxation to promoting growth. We were told time and time again by Conservative Members that it would produce investment. That has not happened. We were told that people would convert the opportunity given to work harder and earn more, produce more and unlock the forces of economic growth, into building a thriving economy. That has not happened. In winding up, the Minister must tell us what has happened and why the economic policies to which he and his colleagues subscribe have failed so miserably.
Mr. Foulkes: Will my hon. Friend give way?
Mr. Hogg: I shall give way to my hon. Friend because I should hate to discriminate against him.
Mr. Foulkes: I am glad that someone is willing to give way to me.
Will my hon. Friend confirm that the position is quite the reverse from that predicted by the Government? Instead of new enterprises opening up, in the past six months in Scotland 30 major and innumerable minor firms have closed.
Mr. Hogg: That is absolutely the case. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) can also relate problems in his constituency over closures. We have heard about Kilmarnock, so the problem is not limited to west central Scotland. It exists throughout Scotland. The Secretary of State presides over that scene, and the Minister will be faced with the task of explaining it away—I hope, in a short time. I shall move on, so that we can reach that exciting part of the evening's events.
The Government's record is deplorable. Unemployment in the United Kingdom stands at 5·9 per cent. and at 7·7 per cent. in Scotland. There are only 16,824 job vacancies in Scotland. One hon. Gentleman presented that fact as something to be pleased about. Inflation is running at 18·4 per cent., and much of that has been unleashed by this Government's measures. In an effort to maintain living standards, earnings are increasing, and that is making inflation worse. The Government plough on with their policy of cutting public expenditure, but it has already been shown to be a failed strategy.
There is a total lack of growth in private manufacturing. There is substantial evidence to suggest that for every job lost through public expenditure cuts a job is also lost in the private sector. Government Members should have regard to that when they go to their constituencies to argue the case for cutting public expenditure.
We are witnessing longer dole queues, less retail spending, less demand on manufacturing and, consequently, less investment. The Government are determined to cut the Civil Service and to make cuts in local goverment. They are cutting education and social work. On top of that, public service charges are being increased. The Government have increased gas prices by 30 per cent., and
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increased electricity prices and postal and telephone charges. We are expected to believe that that is a recipe for economic progress and growth.
The Government are oblivious to the needs of the economy, especially in regard to Scotland. In Scotland we must take positive steps to attract jobs. The Government offer doctrine and policy but no positive action. There is mounting public anxiety about the vacuum of lost jobs in our traditional industries and the apparent inability of the Government to secure new jobs in new industries.
I expect that all hon. Members saw the article in the Sunday Mail on 10 February, which illustrated that fact. The Sunday Mail did Scotland a service by drawing attention to the Irish success in attracting joss in the electronic industries, with 97 new firms last year and in electronics a total of 4,655 jobs. Perhaps when the Government spokesman comes to wind up, he will comment on what has happened in Ireland.
Without wishing to deal with what the Select Committee may find, I think it will be helpful to this House, in its future consideration of the Scottish economy, for it to be able to refer to the report of the Select Committee on inward investment. The Under-Secretary must turn his attention to the problems of inward investment and must explain why the strategy of this Government has failed. We want to know when and how the Government will achieve a growth in the economy. We are entitled to know their plans for reducing unemployment. We are entitled to know how they intend to expand the manufacturing sector and what positive steps they are taking to do so. We are entitled to demand that they call a halt to the cuts in public expenditure, because these are not in the interests of the well-being of the Scottish economy.
8.51 pm
Mr. David Myles: I shall be brief, and, I hope, constructive. After listening yesterday evening to tedious and unconstructive speeches, I had thought that I might be treated to something rather better today. I thought that at least the hon. Member for Dunbartonshire, East (Mr. Hogg) would plough a new furrow; instead he remained firmly fixed in the old one that every hon. Member

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on the Opposition Benches has turned over. Perhaps I can plough some new land and be constructive.
Because the majority of people in Scotland live in the central belt and are or have been engaged in the factory production type of industry, any debate on this subject is liable to concentrate on the problems of such people and to assume that any solution to the problems of the Scottish economy must be found here, ignoring the vast areas of Scotland that have not engaged in such industry. This is a well worn path, bestrewn with failures. In voting for a Conservative Government, the people in the North-East of Scotland expected that there would be a fresh approach. I am sure that in time there will be. Time is the important thing. Hon. Members on the Opposition Benches forget that they had five years in which to put the economy into the mess that we are trying to get it out of today.
By definition, regional development grants are selective on a geographical basis. I understand that if we stick to such regional grants it is quite logical to concentrate them, together with more aid, in the areas of highest unemployment. This is, however, far too broad a solution of our problems, with the increased mobility of labour that our new housing policy will make possible. Would it not be more sensible to give aid and encouragement to viable and worthwhile industries wherever they may be, and irrespective of size? I suggest that it must be better—I admit that administratively it is much more difficult—to get 1,000 small firms to employ one extra person than to initiate one doubtful enterprise with 1,000 employees.
I apologise to my right hon. Friend if he has said that in all the recent speeches that he has made on the Scottish economy. However, it shows that great minds think alike. Surely that approach would create more stability and insure us against sudden disastrous unemployment problems, such as those that we are now experiencing, as a result of the uninspired and—I put on my spectacles—myopic thinking of our predecessors.
The Government were elected on a platform of encouragement for small businesses. Let us honour our commitment. As my hon. Friend the Member for Moray and Nairn (Mr. Pollock) told us,
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we must support the sub-postmasters. Is that approach possible? I believe that it is.
I cannot complete my speech without mentioning farming. If every farm were to employ, on average, one more person—there is no doubt that they could do just that with advantage to production and efficiency—unemployment would be reduced by about one-sixth. That is worth thinking about. We want to support agriculture and make it expand. How many of us know of small business—for example, plumbers, electricians, painters, joiners—
Mr. Allan Stewart: Moonlighters?
Mr. Myles: My hon. Friend says "Moonlighters?" However, there are many such tradesmen running one-man businesses who are grossly overworked. They dare not take on outside labour, because of the enormous difficulties that may ensue. Can we not encourage the use of the many unused farm buildings in the countryside in Scotland to house small enterprising endeavours? I know of a thriving rubber stamp-making plant that is so housed, and it is most successful. Of course, there are many rubber stamps on the Opposition Benches. I urge my right hon. and hon. Friends to seize on this new strategy and to encourage increasing employment in areas of proven worth.
As I have already reported, Moray district is envisaging only a 1p in the pound rate increase. Another attractive home for small enterprising endeavours is the Banff and Buchan district, which is proposing a reduction in rates by 2p in the pound for the second year in succession. Who said that we forced local authorities to increase their rates? Surely authorities such as the two that I have cited are those in which we should be encouraging expansion and making even more attractive, rather than withdrawing such help and encouragement, to which they have become accustomed.
Lastly, I make a plea for the whisky industry. Perhaps it is a plea that should be directed to my right hon. and learned Friend the Chancellor of the Exchequer. The hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) told us, in his selfish way, that we had to stop exporting bulk whisky. If we do that we

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shall stop the production of whisky to a certain extent. Two massive maltings have just been erected in Banffshire and I do not want to see whisky production halted or cut down in that area.
Do not let us kill the goose that laid this lucrative liquid egg. If possible, let us encourage not only the distilling but also the storage and bottling of this valuable product in such suitable surroundings.
9 pm
Mr. Jim Craigen: I am glad that the sense of humour of Hamish Watt lives on. Listening to the Secretary of State for Scotland this afternoon I thought that he was even more relaxed than usual. Perhaps the news at the weekend that Teddy Taylor has possibly found a seat in the Home Counties helped. If he is successful, and the track record of the Scottish Office continues in its present form, it is possible that the Prime Minister will decide that the safest seat for a Tory Secretary of State for Scotland is in the South of England.
Yesterday the Department of Employment gave me figures showing that 63,000 redundancies have been notified to that Department since the general election, although 14,500 of them have been withdrawn. In other words, 920 establishments have been threatened with the prospect of redundancy or have closed since the general election. Bad as the unemployment figures are, I think that the Secretary of State must share the growing concern about youth unemployment and the rising number of young people who are out of work. The figures for those under 25 years of age show that youth unemployment is running at more than double the average for all age groups.
The problem is becoming much more acute for those who have been out of work for a long time. There is a part of my own area for which the planners have come up with figures showing that more than one-third of the male population and one-fifth of the female population has been out of work for one year.
I hope that the Minister will give a firm Government commitment to the Mary-hill corridor project. As he knows, this is a project which is shared between the constituencies of my hon. Friend the Member for Glasgow, Kelvingrove (Mr.
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Carmichael) and myself. One of the features that is now coming out in the local plans is the need to provide more jobs for this area. For years the planners argued that there were insufficient suitable industrial sites. They are now, hopefully, trying to make amends for past sins and attempting to increase the number of areas zoned for industrial development.
One point that keeps coming up time and again is the high percentage of unqualified, unskilled and unwanted labour within the community, which seems to make nonsense of the closure of the skillcentres on Clydeside. Two years ago I went to see the chairman of the Manpower Services Commission in Scotland and tried to convince him of the need for a skillcentre in Maryhill. I also saw my right hon. Friend the Member for Rutherglen (Mr. MacKenzie), the then Minister of State, Scottish Office. I must have put forward a good case, because I see that Rutherglen has been selected as the site for a relocated skillcentre in Clydeside. The fact remains that there is a considerable need for the improvement of retraining facilities in the area.
While I welcome the extent to which the Youth Opportunities Programme is to be expended, I believe that the Minister should realise that this scheme is not entirely elastic, and there are limitations to its expansion in the years ahead. In giving a commitment—as I hope the Minister will tonight—about the Maryhill corridor project, the Minister must realise that co-operation here between the Glasgow district council and the Strathclyde region already has the backing of the Scottsh Office because of work that was done when my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) and my hon. Friends the Members for Glasgow, Queen's Park (Mr. McElhone) and for Glasgow, Provan (Mr. Brown) were at the Scottish Office. They brought to fruition this much smaller and more manageable area than that in Gear.
One of the developments that I welcome is the introduction of small factory units. I hope that the Minister will be sympathetic to cases where the Scottish Development Agency is trying to introduce such units. Inevitably there are problems which arise over the higher costs of building these factories, but there is a considerable demand.

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While paying tribute to the SDA, which has done a reasonable amount of work in my area, especially on environmental improvements, I must point out that I had occasion to involve the agency in assisting a firm in my constituency that wanted to expand its present premises. One can imagine my concern when I heard recently that the SDA had mentioned the possibility of that company relocating at the Singer site. I do not send the SDA along to my constituency so it can persuade firms to leave. I send it along to help to encourage them in their plans for expansion.
I refer to the question of enterprise zones, which were mentioned by the hon. Member for Renfrewshire, East (Mr. Stewart). It does not really matter where these zones are located, but I hope that we will not see a game of musical chairs in West Central Scotland. If favourable conditions are created in one area of West Central Scotland, industry may be encouraged to move from present locations in other parts of west-central Scotland to that favoured area. That would cause a great deal of concern in this House.
The reason why the particular company got in touch with me, asking for SDA assistance, was that it found that Scottish banks were not interested in investing in manufacturing. I gather that some foreign banks are more interested and that they are prepared to put themselves out in a way that Scottish banks are not. We all know that technology has increasing access to capital, but in terms of employment prospects it is not labour-intensive. I believe that the problem will become more acute as pension and insurance funds become more centralised and lack of investment decisions has its impact in areas such as the West of Scotland.
I doubt whether the Minister has properly evaluated the impact of his current policy of selling council houses, which will have a considerable effect on money supply. If, as seems highly likely, the local authorities are unable to fill the gap, the banks, which are already under Government pressure, may be asked to step in.
I had wanted to make one or two points about microelectronics, but time does not permit.
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We have welcomed investment from the United States in west-central Scotland over the years. Now, it seems, we are looking to Japan. I hope that we can also import an idea that the Japanese practise in bringing together their hanks, Government, employers and trade unions in a co-operative effort to determine the areas that can be made winners for Japanese industry. There is, at the moment, a terrible fog over Government policy in trying to provide more jobs for west-central Scotland. It is a great pity that so much Government energy seems to be devoted towards disengagement at a time when the Government cannot afford to be operating in neutral gear.
9.11 pm
Mr. Harry Ewing (Stirling, Falkirk and Grangeinouth): One of the problems faced by the Opposition in this debate is that we have been anxious to criticise the Government for their economic, industrial and employment policies, while not wishing to give the impression that we ever expected that they would be capable of delivering more than they have delivered since 3 May. As my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) said in opening the debate for the Opposition, we always knew that the Secretary of State and his Under-Secretary, the hon. Member for Edinburgh. North (Mr. Fletcher), did not have the ability to run the Scottish economy and did not understand its basic problems. It is perhaps unfair to us to expect the Secretary of State and his hon. Friend, without that ability, to come to grips with the problems of the Scottish economy. In criticising the Government, I should not wish to give the impression that we expected any more from the Secretary of State or from his hon. Friend the Under-Secretary, but, as my right hon. Friend the Member for Craigton said, it is a tragedy that the disaster has taken place much sooner than we had expected.
Another tragedy of the debate has been the astonishing complacency and the almost cavalier attitude of Government Back Benchers to the economic problems of Scotland. It is as if those problems did not exist. The hon. Member for Edinburgh, North is now styled as "Minister for Industry" in the Department. I am sure that a great deal of expenditure was incurred in changing the letter headings.

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For every day, including Saturday and Sunday, that the Minister has been in charge of industry and employment in Scotland 138 people have lost their jobs. If that is a record of which the Minister wishes to be proud, I hope that he will justify it when he winds up the debate. It is an outrageous and disgraceful record for any Minister that 138 people—
The Under-Secretary of State for Scotland (Mr. Alexander Fletcher)rose—
Mr. Ewing: The Minister will get plenty of time to wind up the debate. I shall give way in a minute. It is a disgraceful record that for every day of his ministerial career so far 138 people should have lost their jobs.
Mr. Fletcher: I suppose that the hon. Gentleman is suggesting that I should be ashamed of the fact that the total is not nearly so big as that achieved by his party when in office.
Mr. Ewing: If I have learnt one thing since going into opposition, it is to anticipate the rather silly interventions of the hon. Gentleman. I have the figures. They were given by his right hon. Friend the Secretary of State on 17 July in the Scottish Grand Committee. When talking about the unemployment figures his right hon. Friend said:
"in other words, an additional 1,300 unemployed for every month".—[Official Report, Scottish Grand Committee, 17 July 1979; c. 12.]
The monthly figure for the Tory Government—the Secretary of State had better be quiet—since they came to power is over 4,000 a month. The Minister has the impertinence and the cheek to interrupt me and suggest that, somehow, our figures are worse than theirs. On the evidence of his right hon. Friend the Secretary of State on 17 July, the increase in unemployment under the Labour Government was 1,300 a month. The figure in last month's Department of Employment's statistical bulletin was 4,500. A total of 138 people have lost their jobs for every day that the Ministers have been in power. It is a disgrace, but it is no more than we have come to expect from the Government.
The Under-Secretary was on Radio Forth on the day before he went to America and he criticised Scottish workers, saying that we were our own
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worst enemies, were too strike prone and that industrial output was disgraceful. Those were the words of a Minister who was about to leave to sell Scotland to America. What an ambassador for Scotland! It is little wonder that the hon. Gentleman came back with no jobs—a promise made and a promise broken.
The hon. Gentleman told us that regional policy would be meaningful. He said in Committee on the Industry Bill that the most meaningful aspect of regional policy was the IDC policy and that it did not cost anything. The limits on the IDC policy are now so high as to be meaningless—another promise made, and another promise broken.
The Under-Secretary told us that the SDA would be able to play a more meaningful role in the Scottish economy and Scottish industry, but he proceeded to prescibe the limits under which the SDA could invest—another promise made, and another promise broken. The Under-Secretary has made and broken more promises than has George Best.
Mr. Bill Walker: I am interested in the hon. Gentleman's comments about promises, because I recollect that the Labour Party manifesto of 1974 said:
"The Labour Party does not promise anything in this Manifesto which cannot be achieved in Scotland in the next 5 years. The first and overriding priority facing Scotland in the next 5 years will be to create more and better jobs".
The Labour Government doubled unemployment. Is that keeping promises?
Mr. Ewing: I do not want to slap down the nice hon. Member for Perth and East Perthshire (Mr. Walker) in the same way as I slapped down the Under-Secretary. The Secretary of State admitted that there were more people in work when the Labour Government left power in 1979 than there were when he left the Scottish Office in 1974. Indeed, that confession was the only bright spot in the right hon. Gentleman's speech.
The continual bleating that when the Secretary of State left power in 1974 unemployment was only 86,000 is inaccurate.
Mr. Walker: Will the hon. Gentleman give way?
Mr. Ewing: No. I have already given the hon. Gentleman a lecture, and one lecture in an evening is enough for any hon. Member from Perth and East Perthshire to absorb.
When we came to power in February 1974 about 300,000 people in Scotland were on a three-day working week, we had come through a Christmas when there were no lights on the Christmas trees and when old folk were sitting in cold homes and dying of hypothermia. That was the situation that we inherited—not the record that the Secretary of State claims to have left behind him in 1974.
Mr. Younger: Will the hon. Gentleman give way?
Mr. Ewing: I shall give way to the Secretary of State provided he is prepared to admit that when we came to power in 1974 the whole of the Scottish economy was on a three-day working week.
Mr. Younger rose—
Mr. Ewing: Will the right hon. Gentleman admit that?
Mr. Younger: The description given by the hon. Member is accurate. There were fewer people out of work in 1974 than there were when he left office. That is the measure of the hon. Gentleman's achievement.
Mr. Ewing: I am grateful for the admission of the Secretary of State that there were 300,000 people on a three-day working week in Scotland in February 1974. I hope that we shall hear no more rubbish about the record of the right hon. Gentleman when he left the Scottish Office.
An impression has been given that the effects of the Government's regional policy, such as it is, will not be felt until August of this year. Every Minister in the Government knows that that is not true. The day on which the announcement was made that about 40 areas would be descheduled under the Government's proposal, companies decided to take their investment decisions against the background of that announcement. We have already seen the impact of the Government's decision in the Borders, and the problems cannot be brushed aside. A textile firm in the Borders has abandoned
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expansion because the area is to lose its regional development status. That will continue to happen throughout Scotland in the 42 areas that have been de-scheduled.
I hope that the Minister will not pretend that the decision to deschedule those areas will have no effect on industrial development. The decision will have a disastrous effect, and the tragedy of this debate is that the only people who are not worried about the Scottish economy are the Secretary of State and his hon. Friends. We know that all the commentators and economists in Scotland are desperately worried about the Scottish economy, and the investment intentions of Scottish companies—as published by the CBI—are very worrying. On average, well over 40 per cent. of companies in Scotland see a less bright future in the next four months than compared with the previous four months, and that pattern will be repeated.
The only new jobs that have been created by anyone loosely connected with the Government—and I mean loosely connected—have been created by the hon. Member for Aberdeen, South (Mr. Sproat). He has bulldozed his right hon. and hon. Friends into producing 1,000 snoopers to pry into social security cases. They are to be equipped with soft shoes and binoculars, and no doubt both of those items will be imported. They will not even have been manufactured in this country. The only new jobs that we shall see—not only in the Scottish economy but in that of the United Kingdom—are the 1,000 snoopers' jobs which the hon. Member for Aberdeen, South has succeeded in convincing his right hon. and hon. Friends should be created.
I have noticed that at regular intervals during the last few months Ministers from the Scottish Office have been attending the official openings of projects that were started under the Labour Government. I do not complain about that. When we came to power in 1974 we had the pleasure of attending the official openings of projects started by the Conservative Government. However, once the official openings have been exhausted, and if Ministers are invited to attend all the closures that will take place as a result of Government policy I can assure them that they will not have sufficient

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days or hours in the week to attend those closures.
I was astonished that the hon. Member for Renfrewshire, East (Mr. Stewart) showed such abysmal ignorance of his constituency. The Chrysler factory would no longer exist if we had left it to the Conservative Party. When the Labour Government mounted their rescue operation in the last Parliament, Conservative Members voted against it with one exception—the late revered Miss Harvie Anderson, who refused to vote with the Opposition. I doubt whether her successor would have had the good sense to do that. The same applies to shipbuilding. When we attracted the Polish shipbuilding order we were pilloried by the present Secretary of State and his hon. Friends.
The hon. Members for Moray and Nairn (Mr. Pollock), for Banff (Mr. Myles) and for Fife, East (Mr. Henderson) argue in favour of public expenditure cuts, provided that they do not take place in Moray and Nairn, Banff and Fife, East. They do not care what happens to the other 68 constituencies in Scotland. That is symptomatic of what is happening on the Tory Back Benches. Tory Members have cold feet when they see the impact of the Government's policies on their constituencies.
Mr. Henderson: I said that although the change in development area status had not been beneficial in East Fife, I recognised that it was a positive help to Scotland as a whole.
Mr. Ewing: We can place on record that the hon. Member for Fife, East believes that the change in development area status will be good for Scotland as a whole. In a year's time, when unemployment is over 250,000, I shall give the hon. Gentleman a good meal of his own words, and no doubt he will suffer from indigestion.
I was interested in the comments about St. Andrews university and it being a centre for electronics study. According to the Minister's press release, that university did not even take the trouble to submit proposals.
Reference has been made to the increase in funds for the Welsh Development Agency. Hon. Members have said
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that Wales has more serious industrial problems than Scotland. It is no part of our argument to say that Wales should not receive additional funds. We are delighted that the Principality is fortunate to be represented in the Cabinet by a Secretary of State who obviously has the interests of his country at heart.
That is more than we can say for the Secretary of State for Scotland. Unemployment in Scotland, on every count, is worse than it is in Wales. We shall not tolerate the Secretary of State telling us that the Welsh problem is worse. He either does not know what the problem is, or he does know and is hoping that no one finds out. The seasonally adjusted unemployment figure for Wales in January was 7·5 per cent. The Scottish equivalent figure was 7·7 per cent.—worse than the Welsh figure. The crude figure for Wales was 8·3 per cent. and for Scotland 8·9 per cent. I am not arguing that Wales should not receive the £48 million, but I am arguing that the Secretary of State for Scotland should have been aware of the serious nature of the problem in Scotland.
The right hon. Gentleman should have gone to the Cabinet and not only backed his right hon. Friend the Secretary of State for Wales but argued the Scottish case for an increase in the amount of money available to Scotland to deal with its problems, especially those in the West of Scotland, Clyde, parts of Glasgow, the Dundee area, and so on. From earlier remarks made by the Secretary of State, it is obvious that he did not know that the unemployment figures for Scotland were worse than those for Wales. It is an outrage that he did not know the true position in his own area.
It would be wrong of any Opposition speaker, when winding up a debate, not to try to help the Secretary of State. He does not have the ability to help himself. As well as suggesting that he should resign—I know that he will not do so—I wish to make a few other suggestions. I hope that he will argue in the Cabinet for the Scottish economy to be protected from the worst effects of the Government's policies.
Before I continue with my suggestions I wish to tell the hon. Member for Dundee, East (Mr. Wilson) that I heard half of his speech. I missed the half in

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which he attacked the Labour Party. The Tory Government is as much a creation of his party as it is of the voters south of Birmingham. It is the height of impertinence for him to pretend to the people of Scotland that he is not as much responsible for the Tory Government imposing their policies on Scotland as are the voters south of Birmingham.
I wish to continue with my assistance to the Secretary of State. He must return to his Cabinet colleagues and obtain a reversal of the decision on regional policy. The incident that I have mentioned about the Borders area is an example that will be repeated throughout Scotland. We cannot afford to have that happen. I hope that the Secretary of State will argue the case for the retention of the regional development areas as they are at present.
We are not arguing that regional policy should remain static. As regional policy becomes successful it demands change. We are arguing that, in a deteriorating situation—as is the case in the Scottish economy—the present protection for those areas should be retained. With the £225 million saving on regional policy, it is not insignificant that the Secretary of State gave up 20 per cent.—£45 million—to his Cabinet colleagues. That is an extraordinary percentage for a Secretary of State to give away.
Because most unemployment begins in the construction and building industries and works its way through various other industries, there is a great and urgent need for a building package to be released as soon as possible.
In case the Secretary of State thinks that that would involve new money, I must tell him that it would be a direct transfer of unemployment benefit into the economy in the form of a building package. There is a great need to modernise schools, to continue the hospital building programme, and to continue the thermal insulation programme.
I understand that the Government are considering ending the thermal insulation programme. I hope that that is only a nasty rumour and that it will not be confirmed. Half of the local authority houses in Scotland remain to be insulated. The British Gas Corporation, as a result of the price increases forced upon it by the Government, will make £600 million
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profit next year. A small part of that profit should be spent on thermal insulation. That will also protect jobs in the manufacture of thermal insulation material and in its installation. I hope that with the building package, with thermal insulation and with the regional policy, I have given the Minister sufficient to go back to his colleagues and argue that Scotland is a special case.
In case the Secretary of State thinks that it is only I who is arguing a special case for Scotland, I direct his attention to an article in the Sunday Mail by Teddy Taylor, who now works as a reporter for that newspaper. In his column on 9 December 1979, speaking about the appointment of the new chairman of the Scottish Development Agency, Robin Duthie, Teddy Taylor said:
"First, he must attract the new and growing industries to Scotland to take up the slack of the declining traditional firms.
Second, he must make sure that the factories and other facilities are available for home and overseas firms contemplating expansion.
And third, he must keep banging at the doors of Whitehall to remind them that Scotland has special problems of its own which call for special remedies."
I could not have put it better to the electors in Southend, East, and I hope that in quoting Teddy Taylor I have convinced the Secretary of State and his hon. Friend that there is a great need for the kind of measures for which even Teddy Taylor was calling no later than 19 December last year.
I turn to skillcentres. It is an absolute disgrace that the Government are running down training programmes. The Minister will no doubt tell us that Rolls-Royce is looking for 200 workers. Of course it is, but it cannot find them, because there are not sufficient trained personnel and the Government are cutting back on training programmes. The Minister seems determined to do as much damage as possible to the economy. Everything to which the right hon. Gentleman has turned his hand has gone sour. Even the team that he supports is to be relegated this year. He is probably the most unsuccessful Minister to walk through the doors not only of new St. Andrew's House, but of old St. Andrew's House.
I hope that the Secretary of State has got the message that we are all deeply

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and seriously concerned about the state of the Scottish economy and the way in which the Government are allowing it to drift. I urge my right hon. and hon. Friends, when it comes to showing our disapproval in the Division Lobby, to join me in voting against the Government.
9.38 pm
The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): Listening to that knock-about speech by the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing), I find it difficult to believe that he is seriously concerned about anything—certainly not the serious economic situation that the Government inherited from the previous Labour Government and about which he had remarkably little to say.
The hon. Gentleman made a number of points towards the end of his speech which he offered as free advice. I am old enough to know that one should not readily accept free advice.
The hon. Gentleman said that the Government should change their regional policy because of the disastrous effects that it would have on the Scottish economy. In evidence he produced a cutting from The Scotsman of Monday. In effect, the hon. Gentleman said that regional policy should be changed because of one unknown textile company in the Borders. We do not know what company it is. We believe that it is as much to do with market conditions in the textile industry throughout the United Kingdom that this investment may not be taking place as with any part of regional policy.
The hon. Gentleman referred to skill centres. The study that is taking place in Scotland and elsewhere in Britain by the Manpower Services Commission was instituted by the previous Labour Government, of whom the hon. Gentleman was a member. It is a matter not of reducing the number of places, but of looking at the distribution of skillcentres and seeing how to apply them better to the needs of various parts of the country. He produced the usual sort of Labour spending list, ignoring the fact that after five years of Labour government it is not simply a matter of the till being empty, but that Britain will have to borrow vast amounts for many years.
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In changes that we have made on regional policy, we have tried to direct the greatest amount of help to those areas where it is most needed. As a result, there are now more special development areas in Scotland than there were under the previous Government. The purpose of regional policy is to try to direct aid where it is most needed.
I refer to the opening speech of the right hon. Member for Glasgow, Craigton (Mr. Millan). I am glad that he accepted the need to put the debate in the context of the United Kingdom economy. That is obviously right. As my right hon. Friend the Secretary of State said in his opening speech, the record of the previous Labour Government speaks for itself. The position is serious, a point made by the hon. Member for Dunbartonshire, East (Mr. Hogg). It is not simply a matter of the last nine months of Conservative government. The position has been serious for the last nine years. Manufacturing output today is at the same level as it was in 1974, despite the fact that wages have more than doubled. That statement cannot be repeated too often. Since 1975, as the Secretary of State pointed out, exports of manufactured goods from the United Kingdom have risen in volume by 12 per cent., while imports of manufactured goods have risen by about 65 per cent. in the same period.
When Labour Members make speeches in the House—no doubt directed towards the press at home and their constituents —and produce a shopping list, they would he doing their constituents a better service if they were also to point out the seriousness of the economic position which faces every part of the United Kingdom. In Scotland, as Labour Members should know and should remember, unemployment almost doubled between 1974 and 1979. But the right hon. Member for Craigton is not all bad. He kindly contributed a caption summing up his term of office. In his own words, it was "A record of unmitigated failure".
The right hon. Member for Orkney and Shetland (Mr. Grimond) surprised me when he talked about jobs for Scotsmen in the oil industry. Obviously Scots have an advantage by being on the spot when the Manpower Services Commission advertises vacancies for all sorts of jobs throughout Scotland. Perhaps the right

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hon. Gentleman was thinking about the fact that there is a large immobile working population in Scotland. That is one of the challenges faced by the Government in trying to make dramatic changes in housing policy and giving people the opportunity to buy their council house as a means of encouraging labour mobility.
The right hon. Gentleman also referred to air services. I, too, find it difficult to understand why people who travel regularly by air should subsidise those who travel once a year. I am afraid that I cannot give him the answer to that question. It is a matter for another Minister.
Both he and my hon. Friend the Member for Argyll (Mr. MacKay) mentioned the Highlands and Islands airport. My right hon. Friend the Secretary of State announced a subsidy of £2.5 million to the Civil Aviation Authority in 1980–81, compared with the £1.5 million offered by the Department of Trade in 1979–80. That should enable the CAA to reduce at least some of its charges.
The hon. Member for Glasgow, Mary-hill (Mr. Craigen), my hon Friend the Member for Argyll, the hon. Member for Bothwell (Mr. Hamilton), and my hon. Friend the Member for Renfrewshire, East (Mr. Stewart) raised the question of inward investment. There are two main issues on the subject on which I should like to comment.
First, should we seek to compete for internationally mobile investment? This question is sometimes raised because of fears that Scotland will become a "branch factory" economy, overdependent on the changing strategies of multinational corporations. That was impled in the criticisms of the hon. Member for Kilmarnock (Mr. McKelvey).
The closures of Singer and Massey-Ferguson and other large corporations are used as evidence for that view. My reply to that is that Scotland has gained considerably from overseas investment, particularly over the past 30 years. Over a quarter of the 250,000 new jobs created in Scotland since 1950 have been in companies from overseas. These firms have brought with them to Scotland new and progressive management styles, modern products and processes, invariably good industrial relations and considerable
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benefits to the economy as a whole. In short, we cannot afford not to pursue every avenue open to us to secure new internationally mobile investment for Scotland.
Mr. Buchan: I wonder whether the Minister will comment on the comparative figures of the inflow and outflow of industrial investment in the United Kingdom.
Mr. Fletcher: I shall come to the more up-to-date position later in my remarks.
It is absurd to suggest, as has been said in a number of circles, that we in Scotland should choose between indigenous investment and investment from overseas. The fact is that we need both. They are perfectly compatible with each other and they are equally essential to the development and growth of the Scottish economy.
Mr. Millan: No, they are not.
Mr. Fletcher: I do not know how well the right hon. Gentleman reads the Scottish press, but if he reads it he will find comments about that. [Interruption.] I hope that Opposition Members will contain themselves for a moment.
The second question is whether the organisational arrangements that currently exist for promoting Scotland overseas and securing inward investment to Scotland are satisfactory.
The right hon. Member for Craigton is a great mutterer. He was not listening to much of the debate, or he would have known that several hon. Members raised these very questions. If he is not interested, perhaps he will keep quiet and let others listen.
Inward investment in Scotland is the responsibility of the Secretary of State. The Scottish Office negotiates the package of financial incentives appropriate to each case, and for the attraction and promotion of inward investment the statutory agencies working in this field—the SDA, the HIDB and the new towns—are also responsible to the Secretary of State. They work to guidelines that we have given them, and I am therefore satisfied, as is my right hon. Friend, that we have an effective and co-ordinated approach to inward investment.
The Scottish Office also maintains contact with the commercial departments

581
of the British consulates in the United States of America and elsewhere, and I am glad to put on record our appreciation of the considerable contribution that they continue to make to the Scottish economy.
The hon. Member for Dunbartonshire, East referred to the Irish Industrial Development Authority and to Ireland generally. As hon. Members will know, the Republic of Ireland has had considerable success in the attraction of industry from abroad. Much comment in Scotland has focused on the part played in this success by the Republic's Industrial Development Authority, as compared with the SDA. Such a comparison is completely misleading. It is claimed that the IDA combines the functions of the Department of Industry, the SEPD and the SDA, with the inference that, by comparison, our organisation is terribly cumbersome. However, the Scottish Office acts for the Department of Industry in Scotland and the SDA is responsible to the Secretary of State. Again, I am satisfied that we have a coordinated approach, under the control of the Secretary of State, which is working well and which is appropriate to Scottish conditions.
It is also quite illusory to suppose that the Irish success is simply—or perhaps principally—a matter of the structure and organisation of the IDA. The financial package on offer is likely to weigh more heavily with a potential investor. In this area, although financial assistance in Scotland is substantial, the combined financial and fiscal incentives offered by Ireland cannot be matched by Scotland. In the financial area Scotland is constrained by more rigorous EEC limits and, in the fiscal area, by policy considerations. I am surprised that the hon. Member for Stirling, Falkirk and Grangemouth did not know that. His party was in government long enough to have found such things out. Grants and tax relief are not everything.
It should not be forgotten that Scotland enjoys considerable advantages over Southern Ireland. It has a long tradition in the manufacturing industry and an excellent supply of skilled and adaptable labour. It has a highly developed education system, which has close links with industry. There are eight universities in
582
Scotland and many more technical colleges. That ensures a constant supply of highly qualified managers, engineers and technicians. We also have an established infrastructure, with good communications and transport facilities. These points usually rate just as highly with potential investors as does the whole question of financial incentives.
My hon. Friend the Member for Moray and Nairn (Mr. Pollock) and my hon. Friends the Members for Banff (Mr. Myles) and for Galloway (Mr. Lang) were right to mention the services and facilities in rural areas. In recent years we have learnt that big is not beautiful. A healthy rural economy can come only from a healthy British economy. This is the whole projection of Government policy. The hon. Member for Bothwell complained about reductions in regional development grants. He will know that Lanarkshire is still very much part of the special development area. The regional development grants in Lanarkshire are still at 22 per cent. They will continue at 22 per cent. under Government policy.
Mr. Robert Hughes: The Minister may recall that his right hon. Friend said that a special study would be made of the North-East of Scotland in relation to the oil economy. He may also know that a deputation covering every local authority from the Grampian area—and that includes many of his political friends—has argued that no changes should be made until the study has been completed. When will we get an answer to that question? Why can we not have one tonight?
Mr. Fletcher: The hon. Gentleman has not attended much of the debate. I should not have given way to him. However, the study of the impact of North sea oil on indigenous industries in areas such as Aberdeen is under way. It should be completed before 1982 and before changes in policy are finalised. That is the commitment that was made.
Mr. Bill Walker: I should like to take this opportunity to mention regional policy, because it is important to my constituency. [Interruption.] I hope that Opposition Members will listen. Perth has been downgraded. I approve of that. We do not have an unemployment problem in the city of Perth. I also approve

583
of the decision to upgrade Blairgowrie, where there is an enormous unemployment problem. The community cooperative in Blairgowrie is a splendid example of local people working together.
Mr. Fletcher: My hon. Friend has been very realistic in two respects. He has given a great deal of personal leadership to the community project in Blairgowrie. I certainly wish him well. I only wish that some of his realism in terms of regional policy would spread to Opposition Members. It would help their constituents, as well as those of everyone else.
My hon. Friend the Member for Edinburgh, South (Mr. Ancram) mentioned the increase—
Mr. Ewing: I am grateful to the Minister for giving way. I am anxious to appeal to him before he replies to his hon. Friend. He should not reply to the hon. Member for Edinburgh, South (Mr. Ancram), because he made his speech but did not have the courtesy to listen to any other speech. He has returned to the Chamber only for the winding-up speeches. In accordance with the appeal made by Mr. Speaker, I ask the Minister not to reply to his hon. Friend. If he does, he will encourage other hon. Members to act in a similar way.
Mr. Fletcher: I say to my hon. Friend the Member for Edinburgh, South (Mr. Ancram)—
Mr. Harry Ewing: On a point of order, Mr. Speaker. Only last week you explained to us the normal courtesies of the House, and asked hon. Members to acknowledge them. You said that, having caught your eye and made their speeches hon. Members should have the courtesy to listen to others. The hon. Member for Edinburgh, South did not do so.
I appeal to you, Mr. Speaker, to advise the Minister not to encourage the bad practice of hon. Members making speeches and then leaving the Chamber, yet still receiving a reply from the Minister.
Mr. Speaker: Order. It is not for me to advise the Minister of his reply. I shall say no more on the matter now.
Mr. Fletcher: The hon. Member for Stirling, Falkirk and Grangemouth is not
584
contributing to the debate. He is indulging in a time-wasting exercise.
My hon. Friend the Member for Edinburgh, South knows that the Secretary of State has outlined to Lothian region the steps that he may take to reduce its overall expenditure in view of the Labour group's refusal to restrict its spending within the ratepayers' means.
My hon. Friend the Member for Fife, East (Mr. Henderson) asked about the prospect of the microelectronics centre coming to Fife. The consultants engaged by the Scottish Development Agency—the Stamford Research Institute—are examining the facilities in all Scotland's main institutions in order to advise the Government on the best location. None of our universities is ruled out.
My hon. Friend also asked about an advance factory in Newburgh and Cupar. I shall ask the SDA to advise us on completion dates. I can tell my hon. Friend that work on the Thornton bypass begins next month.
Mr. Buchan: Will the hon. Gentleman give way?
Mr. Fletcher: My hon. Friends the Members for Galloway and Argyll raised the point—
Mr. Buchan: Will the hon. Gentleman give way?
Mr. Speaker: Order: We cannot have two hon. Members on their feet at the same time. The Minister is not giving way.
Mr. Fletcher: The Opposition ate tending to make a noise rather than a real contribution.
My hon. Friends raised the question of the British Tourist Board advertising on behalf of domestic tourist boards. The advantages clearly outweigh the disadvantages. I shall raise the matter with my noble Friend the Minister of State, and I am sure that he will give his view to my hon. Friends.
Mr. Buchan: Will the hon. Gentleman give way?
Mr. Fletcher: The hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) produced a list of spending demands in typical Labour style, without a single suggestion where the money

585
might come from. That is a simple but effective illustration of the bankruptcy of Labour policies.
Because of the behaviour of Labour Members, I am unable to reach many of the other points raised.
Mr. James Hamilton: The Minister has not covered my point.
Mr. Fletcher: The hon. Gentleman should rather complain to his hon. Friends.
Despite the heated exchanges, I believe that there is a considerable measure of agreement between the parties on regional policy. Agreement across the

Division No. 1921

AYES

[10 pm

Adams, Allen

Gilbert, Rt Hon Dr John

Maxton, John

Alton, David

Ginsburg, David

Millan, Rt Hon Bruce

Archer, Rt Hon Peler

Goldlng, John

Mitchell, Austin (Grimsby)

Ashton, Joe

Gourlay, Harry

Mitchell, R. C. (Soton, Itchen)

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

Grant, George (Morpeth)

Morris, Rt Hon Charles (Openshaw)

Bagier, Gordon A. T.

Grant, John (Islington C)

Morton, George

Beith, A. J.

Grimond, Rt Hon J.

Newens, Stanley

Benn, Rt Hon Anthony Wedgwood

Hamilton, James (Bothwell)

O'Neill, Martin

Bidwell, Sydney

Hamilton, W. W. (Central Fife)

Owen, Rt Hon Dr David

Booth, Rt Hon Albert

Hardy, Peter

Park, George

Bray, Dr Jeremy

Harrison, Rt Hon Walter

Parker, John

Brown, Hugh D. (Provan)

Hattersley, Rt Hon Roy

Pavltt, Laurie

Brown, Robert C. (Newcastle W)

Haynes, Frank

Penhaligon, David

Brown, Ronald W. (Hackney S)

Heffer, Eric S.

Race, Reg

Brown, Ron (Edinburgh, Leith)

Hogg, Norman (E Dunbartonshire)

Radice, Giles

Buchan, Norman

Holland, Stuart (L'beth, Vauxhall)

Roberts, Albert (Normanton)

Callaghan, Rt Hon J. (Cardiff SE)

Home Robertson, John

Roberts, Ernest (Hackney North)

Callaghan, Jim (Middleton & P)

Homewood, William

Robertson, George

Campbell, Ian

Howells, Geraint

Rodgers, Rt Hon William

Campbell-Savours, Dale

Huckfleld, Les

Rooker, J. W.

Canavan, Dennis

Hughes, Mark (Durham)

Roper, John

Cartwright, John

Hughes, Robert (Aberdeen North)

Ross, Ernest (Dundee West)

Clark, Dr David (South Shields)

Janner, Hon Greville

Ross, Stephen (Isle of Wight)

Cocks, Rt Hon Michael (Bristol S)

Jay, Rt Hon Douglas

Sandelson, Neville

Cook, Robin F.

John, Brynmor

Sever, John

Craigen, J. M. (Glasgow, Maryhill)

Jones, Rt Hon Alec (Rhondda)

Silkin, Rt Hon S. C. (Dulwich)

Cryer, Bob

Jones, Barry (East Flint)

Smith, Rt Hon J. (North Lanarkshire)

Cunningham, Dr John (Whitehaven)

Kilfedder, James A.

Snape, Peter

Dalyell, Tam

Lambie, David

Soley, Clive

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

Leadbitter, Ted

Spearing, Nigel

Deakins, Eric

Leighton, Ronald

Spriggs, Leslie

Dempsey, James

Lewis, Arthur (Newham North West)

Steel, Rt Hon David

Dewar, Donald

Lewis, Ron (Carlisle)

Stewart, Rt Hon Donald (W Isles)

Dormand, Jack

Litherland, Robert

Stoddart, David

Douglas, Dick

Lyons, Edward (Bradford West)

Stott, Roger

Douglas-Mann, Bruce

Mabon, Rt Hon Dr J. Dickson

Strang, Gavin

Dubs, Alfred

McCartney, Hugh

Straw, Jack

Dunnett, Jack

McDonald, Dr Oonagh

Taylor, Mrs Ann (Bolton West)

Dunwoody, Mrs Gwyneth

McElhone, Frank

Thomas, Dafydd (Merioneth)

Eadie, Alex

McGuire, Michael (Ince)

Thomas, Dr Roger (Carmarthen)

Eastham, Ken

McKay, Allen (Penistone)

Tinn, James

Edwards, Robert (Wolv SE)

McKelvey, William

Urwin, Rt Hon Tom

Ellis, Raymond (NE Derbyshire)

MacKenzie, Rt Hon Gregor

Wainwright, Edwin (Dearne Valley)

Ellis, Tom (Wrexham)

Maclennan, Robert

Wainwright, Richard (Colne Valley)

English, Michael

McMahon, Andrew

Walker, Rt Hon Harold (Doncaster)

Evans, loan (Aberdare)

McMillan, Tom (Glasgow, Central)

Watkins, David

Evans, John (Newton)

McNally, Thomas

Weetch, Ken

Ewing, Harry

McNamara, Kevin

Welsh, Michael

Fitch, Alan

Marks, Kenneth

White, Frank R. (Bury & Radcliffe)

Fletcher, Ted (Darlington)

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

While, James (Glasgow, pollok)

Foot, Rt Hon Michael

Marshall, Dr Edmund (Goole)

Willey, Rt Hon Frederick

Foulkes, George

Marshall, Jim (Leicester South)

Wilson, Gordon (Dundee East)

Garrett, W. E. (Wallsend)

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

Wilson, Rt Hon Sir Harold (Huyton)

George, Bruce

Mason, Rt Hon Roy

Winnick, David

Floor of the House would also be helpful in another area. Public acceptance by the Labour Party that Scotland would and could do more to help itself would be welcomed. If the Labour Party helped the Government to persuade the Scottish people to show the world that productivity and industrial relations can be better in Scotland than elsewhere and persuade miners and steel workers in Scotland to return to work, instead of manning the barricades in Sheffield and Sheerness, it would make a significant contribution to the Scottish economy.
Question put, That this House do now adjourn:—
The House divided: Ayes 165, Noes 210.

Woodall, Alec

TELLERS FOR THE AYES

Woolmer, Kenneth

Mr. Joseph Dean and

Young, Davld (Bolton East)

Mr. Ted Graham,

NOES

Aitken, Jonathan

Goodhew, Victor

Normanton, Tom

Alison, Michael

Gorst, John

Onslow, Cranley

Ancram, Michael

Gow, Ian

Osborn, John

Arnold, Tom

Grant, Anthony (Harrow C)

Page, John (Harrow, West)

Aspinwall, Jack

Gray, Hamish

Page, Rt Hon Sir R. Graham

Atkins, Rl Hon H. (Spelthorne)

Grieve, Percy

Page, Richard (SW Hertfordshire)

Atkins, Robert (Preston North)

Griffiths, Peter (Portsmouth N)

Parris, Matthew

Baker, Nicholas (North Dorset)

Grist, Ian

Patten, John (Oxford)

Banks, Robert

Gummer, John Selwyn

Pattie, Geoffrey

Beaumont-Dark, Anthony

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

Pawsey, James

Bell, Sir Ronald

Hamilton, Michael (Salisbury)

Pink, R. Bonner

Bendall, Vivian

Hampson, Dr Keith

Pollock, Alexander

Benyon, W. (Buckingham)

Hannam, John

Prentice, Rt Hon Reg

Berry, Hon Anthony

Haselhurst, Alan

Price, David (Eastleigh)

Bevan, David Gilroy

Hawkins, Paul

Pym, Rt Hon Francis

Biffen, Rt Hon John

Hawksley, Warren

Raison, Timothy

Blackburn, John

Heath, Rt Hon Edward

Rathbone, Tim

Blaker, Peter

Heddle, John

Renton, Tim

Body, Richard

Henderson, Barry

Rhodes James, Robert

Bonsor, Sir Nicholas

Hicks, Robert

Ridley, Hon Nicholas

Boscawen, Hon Robert

Hill, James

Rifkind, Malcolm

Bottomley, Peter (Woolwich West)

Hogg, Hon Douglas (Grantham)

Roberts, Wyn (Conway)

Boyson, Dr Rhodes

Holland, Philip (Carlton)

Rossi, Hugh

Braine, Sir Bernard

Hooson, Tom

Rost, Peter

Bright, Graham

Hurd, Hon Douglas

Royle, Sir Anthony

Brinton, Tim

Jessel, Toby

Sainsbury, Hon Timothy

Brocklebank-Fowler, Christopher

Jopling, Rt Hon Michael

St. John-Stevas, Rt Hon Norman

Brown, Michael (Brigg & Sc'thorpe)

Kaberry, Sir Donald

Shelton, William (Streatham)

Bruce-Gardyne, John

Kellett-Bowman, Mrs Elaine

Shepherd, Colin (Hereford)

Buchanan-Smith, Hon Alick

Kershaw, Anthony

Sims, Roger

Bulmer, Esmond

Kimball, Marcus

Speed, Keith

Butler, Hon Adam

King, Rt Hon Tom

Speller, Tony

Cadbury, Jocelyn

Knight, Mrs Jill

Spence, John

Carlisle, John (Luton West)

Knox, David

Spicer, Jim (West Dorset)

Carlisle, Kenneth (Lincoln)

Lang, Ian

Spicer, Michael (S Worcestershire)

Carlisle, Rt Hon Mark (Runcorn)

Lawrence, Ivan

Sproat, Iain

Channon, Paul

Lawson, Nigel

Stainton, Keith

Chapman, Sydney

Le Marchant, Spencer

Stanley, John

Churchill, W. S.

Lennox-Boyd, Hon Mark

Stewart, Ian (Hitchin)

Clark, Hon Alan (Plymouth, Sutton)

Lester, Jim (Beeston)

Stewart, John (East Renfrewshire)

Clark, Sir William (Croydon South)

Lloyd, Ian (Havant & Waterloo)

Stradling Thomas, J.

Clarke, Kenneth (Rushcliffe)

Lloyd, Peter (Fareham)

Tebbit, Norman

Clegg, Sir Walter

Luce, Richard

Thatcher, Rt Hon Mrs Margaret

Cockeram, Eric

Lyell, Nicholas

Thorne, Neil (Ilford South)

Colvin, Michael

Mactarlane, Neil

Thornton, Malcolm

Cope, John

MacGregor. John

Townend, John (Bridlington)

Cormack, Patrick

MacKay, John (Argyll)

Townsend, Cyril D. (Bexleyheath)

Corrie, John

McNair-Wilson, Michael (Newbury)

Trippier, David

Cranborne, Viscount

McQuarrie, Albert

Viggers, Peter

Critchley, Julian

Major, John

Waddington, David

Dean, Paul (North Somerset)

Marlow, Tony

Waldegrave, Hon William

Dorrell, Stephen

Mather, Carol

Walker, Rt Hon Peter (Worcester)

Douglas-Hamilton, Lord James

Maude, Rt Hon Angus

Walker, Bill (Perth & E Perthshire)

Dover, Denshore

Mawby, Ray

Walker-Smith, Rt Hon Sir Derek

Dunn, Robert (Dartlord)

Maxwell-Hyslop, Robin

Waller, Gary

Eden, Rt Hon Sir John

Mellor, David

Ward, John

Eggar, Timothy

Miller, Hal (Bromsgrove & Redditch)

Warren, Kenneth

Elliott, Sir William

Mills, Iain (Meriden)

Watson, John

Fairbairn, Nicholas

Mills, Peter (West Devon)

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

Fairgrieve, Russell

Mitchell, David (Basingstoke)

Wickenden, Keith

Faith, Mrs Sheila

Moate, Roger

Wiggin, Jerry

Fenner, Mrs Peggy

Montgomery, Fergus

Wilkinson, John

Fisher, Sir Nigel

Morrison, Hon Charles (Devizes)

Williams, Delwyn (Montgomery)

Fletcher, Alexander (Edinburgh N)

Morrison, Hon Peter (City of Chester)

Winterton, Nicholas

Fletcher-Cooke, Charles

Mudd, David

Wolfson, Mark

Fookes, Miss Janet

Murphy, Christopher

Young, Sir George (Acton)

Fraser, Peter (South Angus)

Myles, David

Younger, Rt Hon George

Fry, Peter

Neale, Gerrard

Galbraith, Hon T. G. D.

Needham, Richard

TELLERS FOR THE NOES:

Gardiner, George (Reigale)

Nelson, Anthony

Mr. John Wakeham and

Garel-Jones, Tristan

Neubert, Michael

Mr. Peter Brooke

Goodhart, Philip

Question accordingly negatived.

AGRICULTURE AND HORTICULTURE (CAPITAL GRANT SCHEMES)
10.10 pm
The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Jerry Wiggin): I beg to move,
That the Farm Capital Grant (Variation) Scheme 1980 (S.I., 1980, No. 103), a copy of which was laid before this House on 31 January, be approved.
I suggest, Mr. Speaker, that it might be for the convenience of the House if we took at the same time the Horticulture Capital Grant (Variation) Scheme 1980, which was also laid before the House on 31 January.
Mr. Speaker: Is it the will of the House that the two schemes be taken together? So be it.
Mr. Wiggin: Hon. Members will recall that when we took office last year we undertook both to reduce public expenditure and to find ways of cutting out inefficiency and waste in public business. As is known, the Prime Minister invited Sir Derek Rayner, in consultation with Ministers, to identify ways in which staffing and costs of administration could be reduced in their Departments. In the case of my Department a study of the capital grant schemes was undertaken and we have accepted in principle the recommendation that the existing grant schemes should be radically simplified and rationalised.
The main proposals include the abolition of prior approval, simpler tests of eligibility and new arrangements for claiming grant. Consultations on these proposals are currently in progress with the farmers' unions and other interested organisations, including those representing the staff concerned, who can offer advice on their practical application. When these consultations have been completed, a new scheme will be presented to Parliament before the House rises for the Summer Recess. This scheme will replace both the schemes being discussed tonight and the Farm and Horticulture Development Scheme, which implements EEC directives 72/159 and 73/268.
The report also suggested a rationalisation of the various rates of grant to be
590
paid under the schemes. This came on top of the speculation that has been evident in the farming press over the past few months about the way in which grant rates might be affected by the Government's determination to reduce public expenditure. My right hon. Friend decided that it was important for the industry to end this uncertainty and at the same time to take a step towards the rationalisation of grant rates recommended by Sir Derek Rayner. This is what the schemes before us do.
The schemes came into operation on 1 February 1980, the day after being laid before Parliament. This was considered necessary to avoid large numbers of preemptive applications being made, as happened on an earlier occasion when grant rates were varied after advance warning and about 100,000 extra applications came in during the last month before the grants went down. We were anxious to avoid a repetition, because it would have added to the cost to public funds and seriously disrupted the work of divisional offices, to the overall disadvantage of farmers. No discourtesy to the House was intended by this procedure and the continuance of the schemes is, of course, subject to their being approved this evening.
Let me now turn to the substance of the schemes. They make two main changes: they adjust certain grant rates and they introduce limits on grant-aidable investment.
Most grant rates have been increased. Under the Farm Capital Grant (Variation) Scheme, 18 rates go up and only six go down, while 11 remain the same. Under the Horticulture Capital Grant (Variation) Scheme, 15 grant rates remain the same and 15 go down. Under the Farm and Horticulture Development (Amendment) Regulations, 41 grant rates are increased, 22 are decreased, and 18 are unchanged.
What are the main changes? The basic rate of grant for buildings and works under the FCGS and the HCGS is now 22·5 per cent. Under the FHDS it will be 32·5 per cent. One effect of this will be to remove the previous discrimination against sheep housing, giving it a higher rate of grant. I am sure that this will be greatly welcomed by the industry, which has been pressing for this improvement for some time.

591
The rate of grant on water supplies and conservation has been increased to 22·5 per cent., which is in line with one of the recommendations of Sir Nigel Strutt and his committee in a recent report.
Assistance for dairy and cattle buildings is reduced to the 22·5 per cent. rate under the national scheme and 32·5 per cent. under the EEC scheme. They were given a higher rate in 1976 to encourage the better utilisation and conservation of grassland and economic milk production. We believe that in the present climate there is less justification for the advantage given in 1976, especially following three devaluations of the green pound and two increases in the milk price, which have benefited dairy farmers substantially.
It is for the same reasons that grants for dairy plant and equipment and equipment for the loading and unloading of silos, which were introduced in 1976, will no longer be available under the national schemes, though they will continue, at lower levels, under the FHDS.
We recognised that horticulture generally benefits less from price support arrangements than agriculture, so we have retained the grants on horticultural equipment at their present levels. Where grant on other forms of equipment has been reduced, it is worth remembering that this equipment benefits from the 100 per cent. write-off provisions in the year of purchase for income tax purposes. Farmers and growers outside the less-favoured areas will generally get 10 percentage points higher grants under the FHDS than under the FCGS. Inside the less-favoured areas they will enjoy a further five percentage points advantage on most items.
For field drainage we have not reduced grant to the basic rate for buildings and works because it would have reduced the amount of work undertaken to an unacceptable extent. Consequently, the lowland rate will be at 50 per cent. under the FHDS and 37·5 per cent. under the FCGS.
We are, of course, retaining the 70 per cent. grant for hill drainage in less-favoured areas. The 50 per cent. level of grant will also be retained on hill land improvements in recognition of the special natural handicaps with which they have to contend.
592
I should like to say a few words about the new limits. A substantial proportion of grant is going to a small number of applicants operating large enterprises. In the main, these applicants have benefited from the tax changes made by my right hon. and learned Friend the Chancellor of the Exchequer in his Budget, and so they will have a higher proportion of net income available for investment. We have therefore decided to impose a limit on the amount of investment that can qualify for grant.
Under the national schemes, the limit is 160,000 ECUs—about £100,000—on which grant may be paid in any six-year period. Under the EEC scheme—the FHDS—the limit is 220,000 ECUs, or about £136,000. We consider that this represents a reasonable level of investment for a family farm. There will be no retrospection. In applying the limits, no account will be taken of any expenditure on which grant has been claimed where the application for approval of that expenditure—whether under the national schemes or the FHDS—was received before 1 February 1980. These limits will apply in addition to the existing labour unit limit and applicants will no longer be eligible under the national schemes while they have a current development plan approved under the FHDS.
These limits will apply only to a relatively small number of big enterprises. Under the national schemes, only 1 in 100 applicants is likely to be affected over a six-year period. Under the FHDS we expect only about 20 per cent. of development plans to be affected, but two-thirds of the savings will come from only 5 per cent. of approved plans.
The limits and the changes in rates will produce important savings for the Exchequer, starting from about £4 million in 1980–81 and rising to an estimated £33 million in 1983–84. I emphasise, however, that these are straight-line projections. We shall keep a close watch on the trends in grant applications, the costs of which will depend on the use that farmers make of the schemes.
We have made these changes taking into consideration current events in farming and horticulture and the likely pattern of demand over the next few years. They are not immutable and, if

593
circumstances change, they may need further adjustment. We believe that the arrangements are in line with the present needs of the industry. They will ensure that the grant schemes will continue to make the important contribution to agriculture and horticulture that they have been making for over 20 years.
I commend the two statutory instruments to the House.
10.20 pm
Mr. Gavin Strang: In his opening remarks the Minister stated that these changes are a consequence of advice that the Government have received from Sir Derek Rayner. To the extent that they reflect increased efficiency and a reduction in administrative costs, the Opposition are able to support them. When I refer to a reduction in administrative costs, I mean that the administrative cost per £1,000 of grant paid is significantly reduced. I also assume that we shall not see a significant increase in the rate of abuse of the grant schemes as a consequence of these administrative savings. That would be counter-productive.
The Minister stated that 400 jobs will be saved as a consequence of these changes. I would be grateful if the hon. Gentleman would say whether these are the jobs of bureaucrats, if I can use that word. I do not use it in a derogatory sense. Are we talking about administrative staff who are based in Ministry offices, or does that figure include technical people, such as advisers, who go on to farms, especially where the horticultural development scheme is concerned? If that were the case, the Opposition would very much regret it.
From my experience in the Ministry, I know that agriculture is well served by its civil servants. I hope that the Parliamentary Secretary will assure us that we are not talking about redundancies there, either voluntary or compulsory, and that the savings will be achieved through natural wastage. At a time of high unemployment any other policy would be unacceptable.
The previous Labour Government laid great stress on the FHDS scheme. Although it was not supported by all sections of the agriculture industry, I believe that it was in the interests of
594
agriculture that the concentrated effort that the Agricultural Development and Advisory Service put into the scheme and the intensive attention received by many holdings that participated in a farm plan made a contribution to efficiency on those farms, which continued long after the end of the scheme.
What is the Government's attitude to the emphasis that we attached to the FHDS following a recommendation from the Public Accounts Committee? Our share of EEC expenditure on the FHDS was 9·8 per cent. in 1977, and it increased to 19·4 per cent. in 1978. That is a measure of the success that the ADAS achieved in increasing the take-up of the scheme, for which we receive EEC support.
I hope that the Parliamentary Secretary will be able to tell us whether the cuts involve a cutback in extension work or reflect a change in emphasis in relation to the importance of the FHDS compared with our domestic farm and horticultural grant schemes.
I turn to the grant changes announced by the Minister last month and elaborated on in detail, for which we are grateful, by the Parliamentary Secretary tonight.
It seems that there has been an attempt to dress up a significant cut in the level of aid for investment in agriculture as administrative streamlining. I recognise that the Government cannot give an accurate figure for the reduction in expenditure that will be achieved—it will depend on the level of applications for grants—but some estimates must have been made and I hope that the Parliamentary Secretary will tell us in more detail how much of the savings in public expenditure will come from cuts in manpower costs and how much will result from cuts in the level of support for farm investment.
Let us not be fooled by the Parliamentary Secretary's reference to the fact that more grants have been increased than have been decreased. He will be the first to acknowledge that that is not the important point and that what counts is the level of Government support for agricultural investment and how much less investment we shall get in this important and productive industry as a result of the changes.

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Given that the Government wanted to make the changes, they have not made a bad job of it, with one or two important exceptions. We support the reduction in the limit. We cannot justify the level of support given to the large investments made in the industry. The Northfield report suggested that the economies of scale did not go much beyond 300 acres. Once we reached 500 acres, we would be talking about a pretty small achievement in terms of economy of scale.
We would support the amalgamation of much smaller units, but if we really mean what we say when we talk about more farms being made available for people to farm and let we cannot at the same time say that we want more and more farms amalgamated into large units of thousands and thousands of acres operated by farm managers.
For that reason, among others, I welcome the change. I also welcome the extent to which the Government have protected the horticulture industry from the changes. They have even achieved some small increases in relation to the level of grant for horticulture. I also welcome the fact that the Government have looked favourably on the position of the hill farmers—those in the less-favoured areas—and I very much welcome the Government's announcement that they are to increase the rate of grant for sheep housing.
I hope that we will see—though it is taking rather a long time—a thriving lamb industry in due course and one in which we develop a significant and sustained trade in exports to the Continent.
I turn to the specific changes that I believe are reprehensible. First, I regret the cut in the level of support for drainage in marginal and lowland farms. Those who have had any involvement with agriculture have always taken the view that perhaps the most important and most basic investment to be made on the land is in drainage. For the Government to single out drainage for a sharp cut in support is, I believe, a mistake and is against the interests of our agriculture industry.
Secondly, I regret the reversal of the Labour Government's policy towards the dairy industry. Of course, we are opposed to the monstrous misuse of resources
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implicit in the surplus of milk in the European Community, but we have always argued that because of the relative efficiency of our industry it should be enabled to increase its share of the total Community production. Indeed, when we looked at the benefits to agriculture from selective expansion we found that the one commodity that emerged as the most cost-effective for expansion was milk. I remind hon. Members—though they do not like to be reminded—that we achieved our projections in relation to food and resources.
One of the great success stories is the dairy industry, where we have almost squeezed out the imports of butter from the Continent. We support New Zealand imports and we hope that the Government will continue to insist on those imports in the context of the EEC discussions taking place on that subject. The industry has significantly increased its share of British consumption of dairy products. The 1976 package announced by the Labour Government was deliberately geared to achieving that.
I think that it is regrettable, therefore, that there is now a clear reversal of that approach. We fought and fought against the EEC attempts to prevent us encouraging our own efficient dairy industry. Now the Government, in the words of the NFU, are capitulating, as it were, before the real arguments begin about the EEC's approach to this issue.
Mr. Geraint Howells: I am sure that the hon. Member for Edinburgh, East (Mr. Strang) is aware that we produce only 35 per cent. of the butter required by this country. There is, therefore, a great deal of room for expansion of home production, and it is up to us to give a lead to the dairy producers.
Mr. Strang: I would not wish to comment on the precise figure quoted by the hon. Member for Cardigan (Mr. Howells). I think that it is probably rising, but I certainly agree with him that there is scope for expansion.
This is the first opportunity that we have had to debate the effects on agriculture of the Government's expenditure cuts. I do not want to put the problem out of perspective. Compared with other savage expenditure cuts, the agriculture cuts are small beer. The expenditure cuts on rural bus fares and school milk

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are more important to the farming industry. Awesome consequences are implicit in the Government's disastrous economic policies. They are going further towards a tight money policy. I hope that they will not make the mistake of cutting the agricultural advisory service and research capability, which have played an important part in the successful and expanding industry.
The right hon. Member for Lowestoft (Mr. Prior) is remembered in the industry and in the Ministry for the enormous damage that he did to the agricultural advisory service. It took many years to recover. I hope that another Conservative Government will not undermine the agriculture industry while saying that they support it. We do not intend to vote against the proposals, but we hope that the Government will not repeat their past mistakes.
10.37 pm
Mr. Peter Mills: I welcome the opportunity to take part in the debate, because the grants are of immense importance to agriculture. Over the years they have served British agriculture well. Far more important, they have served the consumer well. Enormous quantities of food have been produced in Britain, and the amount is still rising.
I understand and approve of the reasons given for administration cuts and the savings that the Government are seeking to make. If the hon. Member for Edinburgh, East (Mr. Strang) were fair, he would accept that agriculture has come off lightly. At a time of crisis and difficulty, and when housekeeping has to be pruned, the Minister has helped to ensure that the cuts are minimal. In such a time of crisis each section of the community must suffer cuts. The agriculture industry should congratulate the Minister.
When there is a great surplus of milk, it is difficult to see how one can give large grants to increase milk production. One could debate that issue on its own. I understand why the Government have made a cut in that grant. I applaud the overall limit. It is wise. I applaud the Government for their decision on sheep housing. There is no doubt that many lambs can be saved by housing ewes. The profitability of sheep
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production depends on a high lambing rate. In present times, with the problems in the sheep industry, to make it possible to save lambs and increase profitability through better housing is a wise step forward. I am sure that that will be welcomed in the more remote and difficult climates.
Having welcomed the Government's proposals, I turn to some criticism of them, which is right and proper. While I applaud most of the new rates, I am unhappy that higher grants were not included for the marginal land areas. Before my hon. Friend the Minister shoots me down, let me say that I am asking not for a greater total sum but for an adjustment to ensure that the marginal lands can be improved.
We wish the marginal lands to receive the sort of grants received by the less-favoured areas. I am not talking about hill cow subsidies or sheep subsidies: I am talking about proper drainage, the renovation of grass, and fencing.
I am sure that my hon. Friend the Minister recognises, and that the House recognises, that if we want increased food production—we are producing about 70 per cent. of our primary needs—it must come from the poorer land. We need better drainage.
Mr. Paul Hawkins indicated dissent.
Mr. Mills: My hon. Friend the Member for Norfolk, South-West (Mr. Hawkins) represents a wealthy and prolific area. If we wish to increase production and help with the social and rural problems of the remote areas, it is important to consider the marginal land. It would benefit the nation and the balance of payments. That is why high grants are important for the better drainage of land and grass regeneration.
There are thousands of acres in Wales, the South-West of England and other areas that could be helped in that way. I hope that a little help and aid will be provided in the manner that I have suggested.
It is important that one puts ones money on a success story. British agriculture is a success story, unlike many other industries at present. The grants help to maintain that success story. In the next few years, through the world

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recession and all the problems that I am not allowed to discuss tonight, I ask the Government to put their money where there is success. That will increase production, to the benefit of the nation. That production will come from the marginal areas. The achievements through the grants over the years is an object lesson in how to encourage and promote agricultural production.
My hon. Friend the Minister can rest assured that I fully support the Government, but they must turn their attention to the marginal land.
10.44 pm
Mr. Stephen Ross: I shall confine my remarks to the horticulture grant scheme. I wish to query the need to include any grants at all, at this time, for glasshouse growers. By so doing, surely the Government are encouraging growers to invest further in an industry which, to my great regret and to the country's eternal shame, is facing imminent bankruptcy. After all, generous grants and subsidies in the 1960s enticed many horticulturists to my constituency and elsewhere in the South of England. Some of them are household names for quality. I mention only Stevens and Rockford. They invested huge sums in acres of glass. They now face almost total gloom.
Things were bad enough in 1974–75, when the first of the oil price rises hit us. Most of the growers, by changing crops—unfortunately, turning from growing lovely roses and carnations to the growing, and increasing too much the growing, of tomatoes in this country—shedding labour and changing to other heating methods than oil, for which they had been given grants, managed to survive.
The situation now is almost beyond contemplation. Oil prices have risen 24p in five months. Presumably, if the announcements by Shell and BP of a day or so ago are anything to go by, more increases are on the way.
The average price of oil to a horticulturist is 46½p a gallon. In some circumstances, according to the grade of oil, it can be 57p a gallon. The Dutch equivalent in gas terms is said to be 19p. In 1978 growers in my constituency received
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£440 per tonne for tomatoes. In 1979 the price was down to £383 per tonne. Goodness knows what it will be this year. The Dutch dump their surpluses in this country, much to our detriment.
Bank loans in Holland are available at 9½ per cent. or 10 per cent. In other parts of the EEC, I understand that they are even cheaper. In this country they are 20 per cent. and more. It is estimated that the Dutch grower has an advantage over the British grower of £10,000 per acre. A local grower told me recently that during the past 12 months his costs per acre had risen from £13,092 to £22,912. Growers will not survive for very long in such circumstances when returns are going down.
I put this question fairly and squarely to the Minister: do we want a glasshouse industry? I believe that we do. I want our growers to survive. If so, they should be allowed to compete on equal terms with our neighbours in the EEC. That means providing greater help than is available in these schemes. If the answer is "No", would it not be honest to say so without prevarication and not to offer grants but to substitute reasonable compensation to pull down what was erected with such confidence only a few years ago?
10.48 pm
Sir Graham Page: The House will have noticed that on the Order Paper there are little rubrics under both schemes stating that the Joint Committee on Statutory Instruments has reported them to the House. The Chairman of that Committee is in his place tonight and I am sure that he will support the comments that I want to make on this subject.
I wish to comment not on the merit but on the form of the schemes. The Farm Capital Grant (Variation) Scheme 1980 amends the 1973 scheme. It is the fifth complicated amendment. There are now five new schedules to the scheme and innumerable new paragraphs and subparagraphs. Obviously the scheme is ripe for consolidation and should have been consolidated to make it easy to understand.

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The Ministry's answer to the requests from the Joint Committee for consolidation was that it was not possible to consolidate with amendment because
"the shortness of the interval of time after the taking of decisions on the financial limits and before the making of an announcement made it necessary to keep the amending statutory instruments as simple as possible."
That is the most amazing saying of the week, if anybody thinks that the wording of this instrument is simple.
The only decision that had to be made was on the financial limits. That decision was made on 24 January and the scheme was laid on 30 January. All that was involved was the insertion of a figure in blanks in the scheme. Surely the Ministry knew what was going to be required. It was recommended by Sir Derek Rayner. I appreciate that that is not a popular name to mention in the House at the present time. However, the scheme could have been drafted long before January and the blanks could have been filled in. It could have been drafted as a consolidation measure.
The failure to consolidate it is blamed on lack of time, because the decision was made at a late date. The decision was only a matter of filling in blanks. It is wrong that Parliament has to accept what I would call—with all due deference to my hon. Friend the Parliamentary Secretary—a piece of second-rate draftsmanship by his Department. It is second-rate draftsmanship. The language in the new provision in paragraph 8 (3) is incredible. It is ungrammatical, unintelligible and extremely obscure. What is the Department's answer to that? The answer is that it did not have time to draft it properly. We should not be presented with a measure that the Department has not had time to draft.
The House, in dealing with primary legislation, spends a great deal of time on the Committee and Report stages of a Bill in trying to get it right. We do not have the opportunity to do that with secondary legislation. That is all the more reason why it should be meticulously drafted. In this case there is difficulty in understanding the drafting. That is bad. It is secondary legislation, but it need not be second-rate legislation. It is a pity that this measure is so badly drafted, because it has great merits.
10.52 pm
Mr. Bob Cryer: I certainly endorse the remarks of the right hon. Member for Crosby (Sir G. Page), although he will not expect me to support him on the merits of the measure, because I take exception to the variation of grants. I shall detain the House only briefly, because the right hon. Gentleman has put the case succinctly.
It is totally wrong for civil servants to attempt to convince a Select Committee that haste and shortage of time are justifiable reasons for bad draftsmanship. There is great confusion in the new subparagraph (3)( a)(iii) in paragraph 9.
The Committee pointed out in its memorandum to the Department that consolidation was a desirable aim. The Department said that it would bear that in mind. There is no reason why it could not have given a clear commitment to the Committee that on the next occasion it would consolidate.
This may be secondary legislation, but people use secondary legislation. It is as binding as primary legislation. It is important that legislation of this sort, which binds our citizens and which places restrictions and opportunities upon them, should be as clear and unambiguous as other legislation. The function of the Joint Committee on Statutory Instruments is to try to draw the attention of the House to difficulties and ambiguities that arise. We have drawn the attention of the House to those points. Hon. Members should realise that this legislation goes out in the name of Parliament, and it behoves all hon. Members to put pressure on Government Departments to ensure that the Committee works effectively by producing an effective response to the reasonable requests of the Select Committee which is working for the interests of citizenry as a whole.
10.54 pm
Mr. Marcus Kimball: In introducing the scheme, my hon. Friend the Parliamentary Secretary said that we are going on with the farm capital grant scheme and the farm and horticulture development scheme with the amended rates of grant from August, and that the Government would then come before the House and bring forward an entirely new scheme.

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I certainly do not agree with the praise heaped on the farm and horticulture development scheme by the hon. Member for Edinburgh, East (Mr. Strang). I hope that we shall have a new scheme arising out of the orders in August. However, certain matters should be borne in mind. The scheme has completely destroyed the market in second-hand farm machinery because of the artificial 15 per cent. grant given for buying new machinery. In exchange for a guidance premium of about £6,000 on a large scheme, the farmer ties himself up for six years. Even in the good land of Lincolnshire, people have come to me and said "We have to go to ADAS to complete our scheme. The chap who completed the scheme told us to shove every possible thing in that we might want to do, and now we cannot afford to carry it out and we want to amend the scheme." The documents that are necessary to amend the scheme are frightening.
I have never taken up a farm and horticulture development scheme because I have always felt that the farm capital grant scheme was, taken with the tax concessions—provided that one is making a profit on capital development—sufficient. Many people have rushed into the farm and horticulture development schemes and are regretting it.
One of the disasters of the countryside today is the money that has been wasted on capital grants, particularly on marginal land improvement. People have the carrot of the grant and are persuaded by estate agents—who are the biggest niggers in the woodpile—people selling fertilisers and so on to buy an estate for more than they can afford. Then, the estate agents get the commission when the estate is sold to somebody else and they go through the same racket all over again. The worst money that has been spent by the taxpayer in this area is on the improvement of marginal land. Marginal land is a long way above sea level, it is cold and it is in high rainfall areas. People believe that they will be able to turn beautiful heather into green grass. They will not, because they are not prepared to maintain it. They get the orginal grant, and six years later the land has all gone back to rushes and the chap is about to sell up to the Forestry Commission.
The best thing to do in many marginal areas is to leave the water on the land.
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There are many other assets apart from agricultural ones in such areas and the last thing that we want to do is to increase the run on marginal land. That is what has destroyed fishing and other amenities in the areas. I hope that, in the new scheme, the Minister will look carefully at the use of taxpayers' money. I believe that the grants in many of these marginal areas are distorting the areas to the disadvantage of the taxpayer.
10.57 pm
Mr. John Home Robertson: I am worried by some of the remarks made by the hon. Member for Gainsborough (Mr. Kimball). He appears to be suggesting that we should not be carrying out improvement schemes and that areas should return to moorland. Indeed, that will happen if we do not go ahead with the drainage of large areas of the country.
I would not normally be here at this time of night speaking on such schemes, but when I heard that the proposal arose from something that had been put forward by Sir Derek Rayner, and knowing his ideas about streamlining and his suggestions about rural sub-post offices, I felt that I should come along and at least listen to the debate.
In opening the debate, the Minister said that he had streamlining in mind and intended to make substantial savings. Indeed, he quoted substantial savings to the taxpayer, which must be a good thing. However, I am concerned that we are not just talking about administrative streamlining. Indeed, the Minister has brought with him no fewer than nine civil servants to back him up on the occasion of this debate. I suspect that it is perfectly obvious that all these cuts and substantial savings will be at the expense of giving practical advice to farmers and at the expense of investment.
My hon. Friend the Member for Edinburgh, East (Mr. Strang) was right to emphasise drainage. The Minister is a practical farmer. Indeed, I should have declared an interest, as I am also a practical farmer and I claim these grants from time to time. The Minister therefore knows as well as I that huge acreages were drained 100 to 200 years ago. Those drainage systems are collapsing and failing all over Britain. Anyone who has travelled up and down the country by

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train—as I do twice a week—will have seen the amount of high-quality arable farm land that has been standing under water for most of the winter. Our drainage schemes do not function as well as they should. The only way to overcome that problem is to redrain the land. The Minister knows that the capital costs—
Mr. Wm. Ross: The hon. Gentleman has missed one of the most important points relating to drainage 100 years ago. He has not pointed out that those drainage systems were built for horses. We are now a long way from cultivation by horses. That is one reason for the deterioration in drainage.
Mr. Robertson: I accept that point. However, that does not detract from the fact that many of our drainage systems fail as a result of the physical effects of machinery or from sheer old age. The Minister knows how much it costs to drain an acre of land these days. He knows also that costs are rising. In addition, interest rates on farm overdrafts have never been higher. It therefore stands to reason that the cut in the rate of grant for drainage will substantially slow down the rate of replacing old drainage systems. I hope that the Minister will reply to those points.
The Minister has told us about the new ceilings on the levels of investment qualifying for capital grant assistance. I agree with that principle. There is no point in backing up the most prosperous enterprises with taxpayers' money all the time. However, many major arterial drainage schemes involve large areas and, therefore, groups of farmers. They might exceed the ceilings mentioned. A great amount of investment may be involved, for example, in draining several square miles of land and deepening a main watercourse. Many of the schemes that now receive grant assistance might exceed the ceilings and thereby be inhibited. Perhaps the Minister will comment on that.
11.3 pm
Mr. Richard Body: I shall add yet another discordant note. I do so with some regret as I realise that the Government's intentions are an improvement on those of their predecessors.
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These measures are incomprehensible. I can only assume that they are part of the conspiracy to prevent peasants such as myself from being included in the scheme. If one is to get in on the act, one must be a substantial farmer. One must have an accountant and be on good terms with ADAS. One must be a different type of character from the man who needs Government aid.
It is most regrettable that, with every year that passes, thousands of small farmers and smallholdings disappear. In my constituency, in the fairly short time that I have represented it, not less than 3,000 small farms and smallholdings have gone out. Our structure of farming has changed considerably in the past 20 years.
Throughout most of the countryside, we see larger and larger farms. There are fewer and fewer opportunities for the small farmer, particularly if he happens to be a tenant, and, most of all, if he is the tenant of a poor landlord. We have fewer opportunities for the go-ahead farm worker to get a few acres of his own and establish himself. That is a sad fact, especially when we realise that so many of our most able and distinguished farmers today are the sons or grandsons of farm workers or small farmers.
The opportunities for the young man to enter farming become fewer and fewer with each year that passes. I am driven to the view—and perhaps one day my hon. Friend the Minister will agree—that the present system of grants, subsidies and tax allowances is actively working against the small farmer.
My hon. Friend the Member for Gainsborough (Mr. Kimball) touched upon the question of second-hand farm machines. All of us who are acquainted with agriculture know of their importance. I endorse every word that he said.
I speak with some feeling. If I may declare an interest, I have a holding that I let to a youngster who tried to get going with a limited amount of capital. He will now have to give it all up, because he cannot get going with the unfair corn-petition created by the present system—above all, by the system of tax allowance. I know that I shall be out of order if I say more about that. It is all part of the system of grants and subsidies that makes large farms still larger, makes it

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increasingly difficult for the small farmer to get going and makes it impossible for the youngster to get into agriculture.
It will weaken agriculture in the years to come. It may be all right for 10 or 15 years, but, if in future years agriculture is to be healthy, we need new blood. The system is acting against that. I greatly regret it.
We are making a grave mistake in continuing such schemes. Far be it from me to say that what goes on on the other side of the Channel is better. However, over there it is infinitely easier for a young man who wants to get into agriculture. He can get credit and establish himself. It is quite different over here. If we are to have a system of State-supported agriculture, I hope that the Government will look at schemes in Holland and France. They are much more advantageous for the young man and the small man and infinitely better for the future of agriculture.
11.8 pm
Mr. Wm. Ross: I did not intend to speak in the debate but am prompted to do so, having listened to what has been said. My farm will be affected. I declare an interest. I am a farmer, and one who has made himself popular with the Minister in the past fortnight. I have just applied for a drainage grant and my late application has saved the Minister £1,000. I do not doubt that there will be many other farmers in that position.
It may not be a serious financial matter for me, but it should concern hon. Members who are worried about farmers, and especially smaller farmers. Such a sum on a relatively small drainage scheme is a considerable amount from the net income of a small farmer.
I have recently read articles in the farming press regarding the matter. I am sure that the Minister is aware of the concern that is being expressed.
I intervened during the speech of the hon. Member for Berwick and East Lothian (Mr. Robertson) to draw attention, in a somewhat back-handed way, to the damage that has been done to the farming structure in many parts of the country by heavy machinery. The effect is increasing and must be stopped. That will cost an enormous amount of money.
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I, too, welcome the provision of sheep shelters, but I think it draws attention to another difficulty which is very largely peculiar to the farming industry, that of providing, sometimes at very high cost, machinery and facilities on the farm which have a very short period of use. The sums which must be expended on them are, therefore, far greater in relation to their use than would be the case in any other industry in this country, where a machine is usually installed and used almost continuously. A modern combine harvester, for example, can cost well over £30,000 and be used for six or eight weeks a year; the rest of the time it sits rusting in a corner of the farmyard, because if the farmer wants to put it under cover he has to put up a large building, worth several thousand pounds, to hold it. This aspect of farming is not understood outside the industry. It is a very serious aspect and one which the capital grants system has gone some way to meet in the past; it is now less and less successful in doing so. I hope that Governments of all parties will keep this in mind in the future.
Paragraph No. 8 of the schedule says:
"Provision or improvement of farm flood protection works; protection or improvement of river banks."
We all realise that most large watercourses and many small ones are protected by the Department of Agriculture; this is certainly so in Northern Ireland and I have no doubt that the same general situation exists over here. What I cannot understand in that particular paragraph, however, is the fact that in the more favoured areas the percentage grant is only half of what it is in the less favoured areas, because if there is a single case in all this schedule where the situation should be reversed, it is here. The further one goes downstream, the larger and more destructive it becomes. This is something that the Minister should re-examine.
The hon. Member for Gainsborough (Mr. Kimball) mentioned estate agents. I regret that he did not include bankers in his strictures, not because of their tightfistedness but rather because of their unfortunate open-handedness whenever farmers—very often neighbouring farmers —are going to bid for the same piece of property. I believe that the willingness of bankers over the last few years to provide very large sums of money will

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cost the farming community dear. It has already cost many individual farmers dear and may, indeed, drive them out of farming altogether before they are many years older.
11.14 pm
Mr. Cohn Shepherd: Whilst listening with great interest to the opening remarks of the hon. Member for Edinburgh, East (Mr. Strang), I could not help reflecting on the fact that, as an incoming Government, we were left with £3,000 million of expenditure committed but not funded. It is not surprising that this Administration have had to scratch around hard to find the ways and means of beginning to make ends meet. The fact that the cuts involved in this particular measure amount to a mere £4 million next year indicates a very successful degree of advocacy on the part of my hon. Friend the Minister and his team, to whom the industry has cause to be grateful at present. It is well recognised that pump-priming in agriculture has done well in the past. We should remember that when thinking of the future.
The package that we have before us makes clear that the Government have made the best of difficult circumstances. I am sure that the Government look forward to the time when they can be more helpful. A number of hon. Members have been destructively critical. It is easy to be critical. It is easier to be critical than constructive. I have observed that in reading the press and noting the comments by the industry.
However, I congratulate the Minister on what he has achieved. The basic decision to spread the available funds across the broadest base by placing a ceiling on investment limits is a correct one. I think that it will commend itself to my hon. Friend the Member for Holland with Boston (Mr. Body). It makes it possible for the resource to be spread across the widest possible base of applicants.
It is significant—it has been decried by some—that the Minister's decision has made it possible to increase more grant-aid rates than have been reduced. There is a fundamental restructuring of grant-aid rates which will be advantageous in the long run.
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I come from an area which is much dependent upon agriculture and horticulture activity. I welcome the steps that have been taken to protect grant rates in the less favoured areas and the higher grant rates for sheep housing. These measures are especially welcome to one Shepherd in particular. In view of the rough time that horticulture has been experiencing in my area, the retention of the level of grant aid on horticultural equipment will be well received. I noted with especial pleasure the enhancement of the orchard grubbing-up rates under both the Farm Capital Grant (Variation) Scheme and the Horticulture Capital Grant (Variation) Scheme.
The decision to reduce the lowland field drainage rates has inevitably attracted its share of criticism. It is probably the most heavily criticised feature of the package. It is an easy one to go for. It is easy to argue as well that as there are about 7 million acres of food-producing land still in need of drainage it is a false economy to choke off land drainage by reducing the amount of grant aid.
I wonder how the rate of investment in land drainage has progressed over the past few years. If there are 7 million acres still to be dealt with, what progress has been made over the past five or six years? Will that progress be adversely affected by a drop-off in the rate of grant aid? Are there other considerations that have led landowners not to invest in land drainage? Bearing in mind the time that land drainage grant aid has been available, there should be substantially less than 7 million acres yet to be drained.
I reinforce the comment of my hon. Friend the Member for Devon, West (Mr. Mills), who spoke of the need to sustain the rural balance and to recognise the contribution that marginal land can make. I am not in agreement with my hon. Friend the Member for Gainsborough (Mr. Kimball). I shall be delighted at a time of his convenience to take him to certain parts of my constituency which would benefit greatly from recognition of the status of marginal land, land which would be helped along by the sort of assistance that can be given to less favoured areas.
I am perturbed about the way in which the population is leaving the land and about the way in which the land is falling

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back because of its nature and geography. It can, as it has in the past, contribute to the structure of the countryside.
There is one area of grant aid about which I am confused. It does not appear in the comprehensive list of changes published by the Ministry. It relates to the poultry sector. In my constituency I have many poultry enterprises producing both eggs and broiler fowl. In the poultry sector itself there appears to be an element of confusion about whether it is considered to be agricultural or industrial. The fear is that poultry farmers will be forced to drift away from agriculture and be treated as an industry. I ask the Minister to tell us where the poultry sector fits into the grant structure.
The Government are on a hiding to nothing when they make changes aimed at speeding up and simplifying the procedures for obtaining grant aid. The changes made are to be welcomed. I do not doubt that a farmer embarking on a project of investment will take advice before irrevocably committing himself to heavy expenditure. The process of taking advice will be far quicker than the cumbersome process of submitting plans and awaiting approval against a climate of increasing costs. The opportunities available to the farming industry are widened.
Once again I reinforce the remarks made by my hon. Friend the Member for Devon, West. It is a good thing if the Government will back a good industry, and British agriculture has shown itself capable of responding to this backing. We are approaching 70 per cent. self-sufficiency. We can go a lot further, and we must bear that in mind at all times.
11.21 pm
Mr. Paul Hawkins: I entirely agree with the way in which my hon. Friend the Parliamentary Secretary has produced the grants. He has done the right thing with the exception possibly of drainage—though it is not an enormous cut.
I agree with the hon. Member for Iondonderry (Mr. Ross), who referred to grants for river banks on marginal land being at double the rate of those for land which is presumably good productive land. It seems senseless. It does not
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matter if washlands and old grasslands are flooded during the winter months, but it does matter if the banks alongside rich arable land are damaged. I hope that the Government will bear that in mind in future.
I totally disagree with the remarks made by the hon. Member for Edinburgh, East (Mr. Strang) about my right hon. Friend the Member for Lowestoft (Mr. Prior). I served with my right hon. Friend as his Whip and he was one of the best Ministers of Agriculture, Fisheries and Food this country has ever had. When he came to office he had to introduce, for the first time in the history of this country, a special review of agriculture. He was praised by all concerned with agriculture.
I want to say a word about what was said with such eloquence by my hon. Friend the Member for Holland with Boston (Mr. Body) regarding small farms. In my area I am losing farmer after farmer to big combines of merchant banks which run farms for merchant trusts. We want City money in agriculture— City money has always been involved in agriculture. But the amalgamation of farms and the buying of up to 60 or 70 acres means that some of the best fenland is being farmed by people who do not live in the area. Villages are dying, and we should look into this matter.
11.24 pm
Mr. Anthony Nelson: I wish to confine my brief remarks to the Horticulture Capital Grant (Variation) Scheme. The problem with Sir Derek Rayner's remit is that it is all very well in general but open to criticism in particular. To some extent I am no exception in this case because in my constituency I have a considerable horticulture industry, rather like the hon. Member for Isle of Wight (Mr. Ross).
As I understand it, this scheme varies the grant scheme of 1973 by reducing the amount of grant and reducing the total expenditure in the cases in which expenditure can be approved. From my hon. Friend the Minister's comments it would appear that 15 of the grants will remain the same but 15 will decrease. Thus, the position for horticulture will be rather the worse as a result of these statutory instruments.

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The horticulture industry in my constituency is concerned predominantly with the growing of tomatoes, lettuces and flowers, and very serious difficulties have been faced by independent growers and the tenants of the Land Settlement Association in recent years, mainly as a result of rising costs—particularly of oil, wages and interest—and the poor returns during the last year. This has been particularly so with tomatoes, where there were an over-supply and low prices caused by late ripening and increased competition.
The severe situation in the horticulture industry is quite clear from the "Agricultural Review" which was published recently and which states that the area devoted to horticultural crops in the country has reduced from 289,000 hectares in June 1978 to about 277,000 hectares now.
Unlike the hon. Member for Isle of Wight, I do not blame for the problems faced by our horticulture industry on the setting up of these grants in the first place. The industry's problems are a result of increases in costs and current difficulties rather than the existence of this grant scheme. In my view, the grant scheme has been an important source of assistance to those entering the industry or expanding their businesses.
Finally, I should like to put a couple of quick questions. Will my hon. Friend the Minister indicate, either in his winding-up speech or in a letter, the impact of the changes proposed in the Horticulture Capital Grant (Variation) Scheme on particular sectors of horticulture? Which sectors does he feel will suffer most, and which will fare best under the proposed changes?
Secondly, what will be the impact on some of the larger and more economic units which are very important employers of my constituents and which are very much the trend in areas such as mine where the horticulture industry thrives? Although some large growers have benefited from the Chancellor's Budget measures, many horticulture businesses are owned by companies whose position was not substantially changed by the Budget and will be adversely affected by these measures. With those limited reservations I nevertheless welcome the changes proposed and the streamlining of the
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administration, which, I hope, will improve some of the administrative delays experienced recently.
11.27 pm
Mrs. Elaine Kellett-Bowman: I could not disagree more strongly with my hon. Friend the Member for Gainsborough (Mr. Kimball). It is most certainly well worth while improving marginal land, as my hon. Friend the Member for Devon, West (Mr. Mills) said. If it reverts it is because he is under-stocked, and that is so because the income from the land is not sufficiently high.
The aspect that I wish to criticise most about this scheme is the reduction in the land drainage grant for the lower land. After all, as one marginal land farmer said to me the other day, "We have to take the blooming water from the hills and then we have our grants cut for doing so." It is these people on the in-between land—neither lowland nor the hill land—who have been greatly helped by the increase in the compensatory allowances. It is the men in between who are suffering now, and it is absolutely essential that they should have a scheme for marginal land and that the money they previously received should not be reduced.
11.29 pm
Mr. Nicholas Winterton: I shall be brief. I think that we have heard four very useful contributions to this short debate tonight. I refer particularly to that made by the hon. Member for Londonderry (Mr. Ross). I have had the pleasure of visiting his home and I know his farm very well. I think that it is rather sad that this order may well rob him of £1,000 which he might otherwise have received by way of grant aid. If there is any note that he can pass to me between now and the end of the debate which might rectify that situation, I hope he will do so, and I will try to ensure that he gets his just desserts.
I should also like to refer to the remarks that the hon. Gentleman made, taken up by hon. Friends on the Government side, about the grant aid for protection against flooding and erosion. The hon. Gentleman made an important point. I hope that my hon. Friend, in replying to the debate, will refer to that matter.

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The remarks of the hon. Member for Isle of Wight (Mr. Ross) were pertinent. We have to make a decision about whether there is a future for our horticulture. The industry is being severely undermined in practically every quarter. There is scarcely a commodity produced by the industry that is not likely to disappear unless the Government take positive action. The speech of the hon. Gentleman, fully supported by my hon. Friend the Member for Chichester (Mr. Nelson), merits more comment than my hon. Friend on the Government Front Bench accorded it in his opening remarks.
My hon. Friend the Member for Holland with Boston (Mr. Body) made a useful comment. As we have heard in the debate, the name of Sir Derek Rayner is not the most popular in the House at this time. I believe that if the Government pay attention to every recommendation made by that learned gentleman, our villages will empty and our countryside, as a living area, will disappear. I hope that my hon. Friend will tread carefully in seeking to implement any of the recommendations of that particular bureaucrat, whose understanding of the countryside appears to be very limited. I am referring not merely to the recommendations now before the House but also to those discussed yesterday relating to the importance of post offices.
I should also like to refer to the useful comments of my hon. Frend the Member for Devon, West (Mr. Mills). His reference to marginal land was pertinent. We produce only 70 per cent. of what could be produced. Our farming industry, by using and draining marginal land and being given every possible assistance, would be aiding this country, its people and its food requirements, and the industry itself. I hope that the Minister will pay full attention to the comments of my hon. Friend and give credit to the remarks of a farmer who has great experience in what is perhaps a marginal area of the United Kingdom.
11.32 pm
Mr. Wiggin: I think I should start by dispelling a misapprehension among some hon. Members. This is the first leg of a double. These measures refer specifically to changes in certain grant rates and introduce limits on grant-aidable invest-
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ment. It was essential to mention the Rayner exercise in my opening remarks. We shall be coming again to the House before the Summer Recess with a new scheme—I am not allowed to use the word "consolidated" as it is altogether new—which will take account of the representations that have been made on the Rayner proposals and take account of this debate and some of the criticisms directed at the Government.
The hon. Member for Edinburgh, East (Mr. Strang) asked about economies in relation to staff savings. These changes tonight will not achieve any staff savings. When the new scheme is introduced, it is estimated that up to 400 staff will be saved between 1980–81 and 1983–84. These will comprise 250 administrators and 150 professional ADAS officers. It is not possible to apportion the savings to individual measures or to say how any particular function will he affected since consultations on procedures under the new scheme have still to take place. We are hoping, however, that over the three-year period natural wastage will deal with the problem.
The hon. Gentleman also asked whether the figures for savings include manpower. They do not. As a rough guide, about half of the savings come from the new limits and the other half from adjusting the grant rates.
The hon. Members for Edinburgh, East and Berwick and East Lothian (Mr. Home Robertson) and my hon. Friends the Members for Hereford (Mr. Shepherd), Norfolk, South-West (Mr. Hawkins), Macclesfield (Mr. Winterton) and Lancaster (Mrs. Kellett-Bowman) all spoke about drainage. It is reasonable to say that that aspect of the alteration has attracted a certain amount of comment from the farming community, but it is worth remembering that we have retained the 70 per cent. rate of grant for the hills and have made only modest reductions in the lowland rates, from 60 per cent. to 50 per cent. in the EEC scheme and from 50 per cent. to 37½ per cent. in the national scheme.
The reductions were made in the interests of rationalisation, but we felt that it would be unacceptable to reduce the rates to the basic levels of 32½ per cent. and 22½ per cent. respectively, because it would probably have reduced the amount

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of work undertaken to a more serious and, in my view, unacceptable extent. The rates remain well above average and we believe that they are still sufficient, given the great advantages of drainage, to continue to encourage that important improvement.
It is also worth bearing in mind that drainage grants have been available to the farming community for many years and it is not unreasonable to assume that, given the length of time that they last, a good deal of worthwhile drainage has already been effected, though opinions on that may differ.
The higher rates of grant for dairy buildings and equipment were introduced in 1976 to promote the better use of grassland, but we consider that after three years the measures have had time to accomplish the desired improvement and in the present economic climate there is, as my hon. Friend the Member for Devon, West (Mr. Mills) and others mentioned, less justification for that advantage.
Dairy buildings have therefore been given the standard rate of grant that applies to buildings for other purposes. The standard rate has been increased from 20 per cent. to 22½ per cent. Dairy equipment has been excluded for the same reason.
I thank the hon. Member for Edinburgh, East for his general welcome. We appreciate that, but I dispute his comments on Government expenditure. At the time of the election, the previous Government's expenditure plans were unacceptable to the then Treasury and would certainly have had to be modified. The hon. Gentleman knows that if there is one overriding complaint in the farming community it is the effect of rising costs and inflation on incomes. It must remain the Government's prime objective to deal with that problem. The changes are the agriculture industry's small contribution.
My hon. Friend the Member for Devon, West welcomed the modesty of the cuts. I shall not over-emphasise that, for fear that my hon. Friend from the Treasury may be listening. We do not believe that the cuts will be damaging. They are skilfully applied to different aspects of the industry in a way that will do the least
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harm—and in some cases, such as sheep housing, considerable good.
A number of hon. Members have mentioned marginal land. The Government have declared their intention of defining marginal land under the EEC basis. It is a complicated subject and not wholly in order in this debate, but I intend to make a public statement in the not too distant future to expand on the Government's difficulties and hopes in the matter. I shall see that it is drawn to the attention of the hon. Member for Edinburgh, East.
On horticulture, I am deeply sympathetic to the problems of our growers faced with a relative difference in the natural resources available to them. The president of the National Farmers' Union is meeting my right hon. Friend the Minister on the subject within the next few days and my right hon. Friend the Secretary of State for Energy is to attend a conference of growers to talk about the problems.
The Government take the matter seriously. We have made clear that we shall listen to genuine complaints of unfair competition and we are naturally concerned to find out the facts, but it is not easy to find a practical solution to the problem.
I am contrite following the speeches of my right hon. Friend the Member for Crosby (Sir G. Page) and the hon. Member for Keighley (Mr. Cryer). We accept that it is difficult to understand the clause that we have included. It has not been drafted as well as it could be. We had to move quickly at a difficult time of the year and, therefore, although hon. Gentlemen did not accept the excuse, I can honestly say that it was genuine.
However, we believe that the point is still clear and that, no matter how hard it may be to understand, it will stand up in law. That, though, is not the point. We accept the criticism and the point will be dealt with in the new orders when they are laid in the summer. In view of the fact that it is temporary, I hope that hon. Gentlemen will accept that view from my Department.
I shall not get into the arguments deployed by my hon. Friend the Member for Gainsborough (Mr. Kimball), but I believe that if our grant had included the

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removal of barbed wire and the construction of wooden fences and a little for laying hedges he would have been more welcoming.
The hon. Member for Berwick and East Lothian asked about arterial drainage. The expenditure does not count in Scotland towards the investment limit and in England and Wales it is grant-aided under different legislation.
The hon. Member for Londonderry (Mr. Ross) is right. I am afraid. He may well find himself not able to claim quite so much grant under these orders which apply to Northern Ireland, but I shall not join in his debate about credit tonight.
It being one and a half hours after the commencement of proceedings on the motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted business).
Question agreed to.
Resolved,
That the Farm Capital Grant (Variation) Scheme 1980 (S.I., 1980, No. 103), a copy of which was laid before this House on 31 January, be approved.

AGRICULTURE AND HORTICULTURE (CAPITAL GRANT SCHEMES)

  HORTICULTURE
  Resolved,
  That the Horticulture Capital Grant (Variation) Scheme 1980 (S.I., 1980, No. 104), a copy of which was laid before this House on 31 January, be approved.—[Mr. Wiggin.]

CIVIL DEFENCE
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]
11.42 pm
Mr. Robert Banks: I am grateful for this opportunity to raise again that profoundly important part of our national defence, namely, civil defence for the home protection of our people.
I am also grateful to my right hon. Friend the Home Secretary for his interest in this subject. He has undertaken to see what improvements can be made, and I hope, therefore, that this debate will be helpful in its advice and that the search for improvements will lead to a fundamental change from the policy inherited from the Labour Government.
The wisdom of such a change and the desire to reactivate civil defence is, I
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believe, being expressed in the House. In 1968 civil defence was put into "care and maintenance" and the Civil Defence Corps was disbanded by the then Labour Government.
The world we live in today is very different—I regret to say—from the world situation 12 years ago. In the sixties we were able to rely on the tripwire strategy of a superior nuclear deterrent. Since that time the Soviet Union has substantially increased, and is continuing to increase at a higher rate than NATO, its military forces.
I remind the House of the cuts in our defence expenditure by the previous Labour Government and the dangers that they have brought. There is now an imbalance in conventional and theatre nuclear strength in favour of Warsaw Pact forces, and my right hon. Friend the Secretary of State for Defence has recognised and expressed concern about this situation.
Civil defence is part of a country's total defence. It is relevant to note the reports that Russia has a sophisticated civil defence organisation and shelter programme. I have here a book which is an English translation of the Russian handbook. Russian military expansion is now seen on an international scale, and unless it is matched by a NATO counterbalance of forces it will be used with further destabilising effects, bringing consequent risks to peace.
In essence, the present United Kingdom policy carried forward since the sixties provides a system for warning and monitoring nuclear fall-out with plans for an administrative governmental organisation run from 24 sub-regional headquarters. In the run-up to the attack phase, Cabinet Ministers would leave London and move to those headquarters.
Under this policy the public will be advised on what rudimentary steps to take for their own protection in their own homes and what stocks of food and materials to lay in for a two-week period. This advice will be promulgated by blanket coverage on television and radio and in the press, and the booklet "Protect and Survive" will be distributed to as many homes as possible. If the decision is taken in time, present plans allow 72 hours for all this to happen. I leave it to hon. Members to imagine the sort of

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picture that such mobilisation would create.
I do not believe that it is a viable option to expect families and old people to remain in high-rise blocks of flats in the East End, the centre of Leeds or anywhere else when they are in a nuclear alert phase. "Protect and Survive" has to rely on the simple expedient of advising its readers to live under the kitchen table or something similar, suitably protected by mattresses and anything else to hand.
There have been reports that the document may be released from the secrecy which has protected it from the public eye. I hope that that does not happen, because I believe that the demand is for a more realistic approach and for advice to be published on how people can make adequate protection now for themselves at home or at least have the necessary materials at hand to do to. Action is needed quickly. I see no reason why a charge should not be made for such a booklet. Greater attention would be paid to the booklet if a charge were made. It should be on sale in post offices, libraries and other places.
There is an urgent need to advise companies to site computer and communications equipment in basements or as far below ground as possible, and to explain how such areas can be adapted to staff shelters. Such advise should be self-financing.
The booklet "Nuclear Weapons", published in 1956 by the Home Office, is extremely good at presenting the effects of nuclear weapons and describing the protective factors of buildings. However, it is more a technical journal for the expert than for the general public.
The time has come for a new commitment to civil defence and to a shelter policy. I have no doubt that the Government will not be faint-hearted in that commitment. It is essential that the public have a clear idea of what is involved and advice on what they can do. To implement a new policy, we need to know what underground structures already exist and how they can be adapted to provide shelter from both nuclear and conventional attacks. Local authorities should therefore undertake surveys in their areas directed by their emergency offices. That will, of course, require per-
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sonnel, organisation and some finance. Manpower for the survey should be drawn from young, unemployed people, preferably under the aegis of the Manpower Services Commission. That would provide valuable and worthwhile experience for those young people.
Organisation and training could be strengthened with the help of volunteers. Some additional finance would inevitably fall on the 1980–81 budget. While the survey should be undertaken in stages, updating of communications and headquarters should preferably be undertaken as the areas are surveyed. Some of the costs could be met by increasing rentals for oil pipelines and storage facilities which are at present included in the present civil defence budget.
A policy to encourage people to keep higher levels of foodstocks in the home would reduce the needs and costs of national foodstocks. Could not some of the surplus EEC foodstocks, for instance, be brought here to offset our national stocks? At the same time, the EEC should be persuaded to adopt a civil defence strategy and a grant system. Machinery for co-ordinating the police, fire services, the military and the Departments at local government level should be reviewed. It would be a considerable advantage to appoint a civil defence commissioner in overall charge.
I have omitted much else that I should have liked to say. However, I know that some of my hon. Friends want to contribute to the debate. I have made suggestions which I hope will be regarded in the positive spirit in which they were made. I am most grateful to the Minister for coming to answer the debate. I am sure that he will be as anxious as I to ensure that we take the right action in time to save the millions of lives who will otherwise be at terrible risk.
11.50 pm
Mr. Archie Hamilton: The likelihood of there being a nuclear war increases each year. We know that the Soviet Union dominates the world. Recent experience in Afghanistan proves that. It is prepared to exploit any weakness that it may find. The future of Yugoslavia is in question, which brings the problems nearer to home.

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The advantage held by the Soviet Union is that it is on the attack while we are on the defensive. In a democracy it is harder to prepare for war. There is no doubt in my mind that the Soviet Union will use military means when it believes that that will achieve its aims at acceptable cost.
Britain is almost totally dependent on our nuclear deterrent. Unfortunately, our conventional forces are insignificant in comparison with the vast conventional forces of the Soviet bloc. Nuclear weapons will deter only if this country is prepared to use them. If the Soviet Union feels that we are not prepared to use them, the invasion of Britain may come into the category of an acceptable loss.
I believe that the Soviet Union is entitled to take the view that, as we have no civil defence worth speaking of, at the same time we have no wish to use our nuclear weapons and virtually no will to resist. Civil defence must be part of our overall defence strategy. As my hon. Friend the Member for Harrogate (Mr. Banks) has mentioned, it is part of the overall defence strategy of the Soviet Union.
A country that is prepared to protect its people from nuclear attack is more prepared to risk nuclear war. With civil defence increased dramatically in Britain, we would be immeasurably better defended.
11.52 pm
Mr. Robert Atkins: I congratulate my hon. Friend the Member for Harrogate (Mr. Banks) on drawing attention to his pertinent subject. It is one of the most important subjects to be considered by the country at the present time. I wish to draw the attention of the House to early-day motion No. 377, which has been signed by 101 of my right hon. and hon. Friends. That is an indication of the keen desire on the part of the Conservative Party to restore the position of civil defence to what it was prior to its abolition by a Labour Government. I am especially keen that attention should be paid to the restoration of civil defence. The motion calls upon the Government to reconstitute the civil defence or some such similar corps.
In the event of conflict, an organisation such as that can contribute a great deal both in morale and in the work that it
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can perform. For example, there is the decontamination of the water supplies. We have heard much, especially in an earlier Adjournment debate, about the threat of chemical warfare. Many people are not aware of what is required to decontaminate water supplies.
Equally, the guidance and support that can be given by a professionally trained corps, either in a voluntary capacity or controlled through local government or Whitehall, which is able to cope with the problems faced following a conflict would play a valuable part. It has done so in the past and it will do so in the future.
Whether that group of people comes under the Home Office budget or the Ministry of Defence budget is a matter that should be discussed further. As someone especially interested in defence, I think that it should come under the area of home defence, in the way that the defence of Britain should be considered by two Departments. Whether my hon. and learned Friend believes that it should be passed to the Ministry of Defence, or whether he believes that it can be coped with under his own Department, is a matter for discussion.
I find it especially worrying that the document presently in the hand of my hon. and learned Friend is not available to a wider public because a mere 5,000 copies were printed. It ought to be more widely available. I find it more than slightly frightening that Switzerland, whose representatives recently visited Britain, indicated tht its civil defence procedures were infinitely better than our own. They are masters of the neutral position. Defence of that country is dependent largely on the protection that it offers its citizens. It can stand up in a free world and maintain its neutrality.
Again, I congratulate my hon. Friend the Member for Harrogate on drawing this problem to the attention of the House. I hope that my hon. and learned Friend will give us an interesting and helpful reply which will give us faith in the defence of this realm through civil defence.
11.55 pm
The Minister of State, Home Office (Mr. Leon Brittan): The House will be grateful to my hon. Friend the Member for Harrogate (Mr. Banks) for raising this important matter and for stating his views with characteristic clarity. The

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House will also be grateful to my hon. Friends the Members for Epsom and Ewell (Mr. Hamilton) and for Preston, North (Mr. Atkins) for their contributions to the debate. I, too, am very glad to be given this opportunity to tell the House where the Government stand on this subject.
There can be no doubt whatsoever of the public interest in and concern about civil defence which has become apparent in the last few months. Hon. Members will be well aware of this concern from their own constituency correspondence. During the past seven weeks the Home Office has received over 200 letters from the general public on this subject. As my hon. Friend the Member for Epsom and Ewell pointed out, events in Afghanistan and Iran, among other places, have made it natural, and indeed inevitable, that concern about this matter should revive.
My right hon. Friend the Home Secretary has responded to this concern by speeding up the review of home defence arrangements—a review which he set in train before the current wave of concern and shortly after the Government took office. The outcome of that review will be made public in due course.
The review takes the present arrangements as its starting point. Under these arrangements the money available each year—some £22 million—is mainly concentrated in three areas: first, on maintaining the United Kingdom warning and monitoring organisation at a high level of efficiency and readiness; second, on maintaining a food stockpile; and, third, on grants to local authorities to help pay the cost of the emergency planning teams which are maintained by the county councils and the GLC to produce, in consultation with the district councils and other public bodies, the detailed plans required under the Civil Defence (Planning) Regulations 1974 in such important areas as emergency feeding and the care of the homeless. There is also expenditure on emergency communications networks and on small planning teams in certain Government Departments.
Starting with these arrangements, the review by this Government embraces the whole spectrum of home defence and involves virtually all Whitehall Departments. It starts by considering the threat and the assumptions we must make of
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probability of attack, the nature of this attack, and the likely warning period. It will cover the important question of information to the public, including arrangements for a wartime broadcasting service. It will cover the activities of the United Kingdom warning and monitoring organisation, as well as the machinery of government in time of war. It will cover the roles of the police, the fire service and the ambulance service. It will deal with the arrangements for maintaining essential food and water supplies. It will cover hospital services, essential industrial production, and coal, gas, oil and electricity supplies. It will cover inland transport and the use of shipping and aircraft for carrying essential supplies. It will cover the policy for providing shelter and the controversial question of encouraging people to stay put in the face of a threat of attack, and the alternative policies of evacuation and dispersal and the associated billeting and feeding arrangements.
Finally, and perhaps most important, it will cover the vital role I have already mentioned played by local authorities in planning and in co-ordinating local arrangements, including the identification of solid buildings suitable for use as public shelter and the use of volunteers in this context. I have listed all these matters, because I think it is necessary to give the House an idea of the ground that the review will cover and of the large range of interrelated subjects to which any discussion of home defence must address itself.
I confirm that the review takes account of the likelihood of conventional war—that is, the use of aircraft and missiles armed with non-nuclear devices against selected targets in this country—as well as the likelihood of all-out nuclear war.
It is important to consider the relationship between civil defence and military defence, as my hon. Friend the Member for Epsom and Ewell pointed out. Our central military strategy is to deter attack by an aggressor, and civil defence contributes to deterrence. Indeed, it is essential that our civil preparedness should be adequate if the credibility of our deterrent strategy is to be maintained. Our military preparedness and our civil preparedness are therefore closely related, and we must make sure that the balance between the two is sensible and realistic.

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But, of course, civil preparedness costs money, just as much as military preparedness. In recent years, the civil part of home defence expenditure has been running at the level of about £22 million a year. Up to 1968 the level in real terms was three times as high. In our review we ask the fundamental question of what is the right level of expenditure, both in absolute terms and in terms of what the country can afford now. That is a question which must be answered by anyone who advocates that more attention be paid to civil defence. Let there be no doubt about it—any significant enhancement of the state of our preparedness will cost money. The debate on this subject is not so much about what extra preparedness is needed as about whether the money can be found and, if so, at the expense of what other area of expenditure it is to be found.
I should like to pay tribute to my hon. Friend the Member for Harrogate on the substantial contribution which he and our former colleague Robin Hodgson made to the debate on these matters by the pamphlet called "Britain's Home Defence Gamble", which they produced in 1978. I was not then so concerned in these matters as I am now, and it fell to others to respond to that pamphlet. I have recently re-read it with interest, and I find myself in agreement with a good deal of it. One of its declared objects was to pierce the fog of ministerially imposed secrecy which the authors said had drifted over the subject. I am not, I hope, by nature particularly fog-bound, and I shall comment in a moment about dispersing the mist, if not actually lifting the veil.
The pamphlet talked of a lack of commitment to home defence, a lack of co-ordination between Government Departments and local organisations, a lack of achievement at district level, and a lack of equipment. Those are all matters to which we are paying attention in the review. The pamphlet also says that the Home Office has just under 400 civil servants engaged on home defence matters. The actual total is about 125, of whom 70 are at the Home Defence College, and 40 are in the United Kingdom warning and monitoring organisation.
A central feature of the public debate so far has been the attitude of the Government in making available to the public
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material about the protective measures which might be taken in the event of an attack. In particular, attention has been focused on the decision of the Home Office not to publish, in advance of an imminent attack, the pamphlet entitled "Protect and Survive". This is not a secret pamphlet, and there is no mystery about it. It has been available to all local authorities and chief police and fire officers and to those who have attended courses at the Home Defence College at Easingwold. It has been shown to interrested Members of Parliament and to journalists. It has not been published, for the simple reason that it was produced for distribution at a time of grave international crisis when war seemed imminent, and it was calculated that it would have the greatest impact if distributed then. Only just over 2,000 copies were printed, and most of these have been distributed as I have indicated. Only a few copies remain. As my hon. Friend the Member for Harrogate said, the pamphlet needs to be updated and revised in some respects. I shall take careful note of what my hon. Friend has said in this respect. Once this has been done, we propose to publish the pamphlet by placing it on sale at about the time when we announce the outcome of our review. We do not propose, for the reasons I have indicated, to distribute it automatically and across the board to every household, but it will be readily available on sale.
I have already mentioned the Home Defence College at Easingwold and I should like to pay tribute here to the work of the college, and in particular of its principal, Air Marshal Sir Leslie Mayor. It is he, perhaps more than any other, who has sought to ensure over the years that all those with civil defence responsibilities who wish to study the implications of these responsibilities can do so with proper detachment, with effective tutorial support, and without sensationalism. I know that my hon. Friend has personal knowledge of the college, and I feel sure he would wish to be associated with my tribute to the dedicated staff there. The Government's interest in and commitment to the work of the college has been shown by the visit late last year of my noble Friend Lord Belstead, the Under-Secretary.
I have also mentioned the key role of local authorities in planning and co-

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ordination on the ground. Since 1972 particularly, the Home Office has issued a series of circulars, in the emergency services series, embodying guidance to local authorities both on its own behalf for matters in the Home Office field and on behalf of other Government Departments. Copies of these circulars, as many Members know, are in the Library of the House. Here I should like to pay tribute also to the work of the emergency planning teams which have been set up by the Greater London Council and by county councils, with the task of co-ordinating the preparation and testing of comprehensive plans drawn up in conjunction with the emergency services—the police, fire and ambulance services and other public authorities. Many county emergency planning teams also make use of local volunteers, in some cases down to parish level. The Government accept that this is a field where more encouragement can and should be given.
Our review will pay particular attention to the scope for encouraging the greater use of volunteer effort at local level within the framework of district and county council planning. I know that some hon. Members favour the resurrection of the Civil Defence Corps or some such similar national body. The Government are not persuaded that this is necessarily the best way in which to harness volunteer effort. It would be expensive, it would involve a large administrative and bureaucratic organisation and we are not convinced that it would be an improvement on locally organised effort. But we believe that voluntary effort needs to be harnessed at the grass roots to make the maximum use of existing local voluntary groups.
We shall naturally want to consult local authorities and those concerned about their particular contribution in this field when the review has determined the overall policy and strategy, and we undertake to engage in such consultations.
I hope my hon. Friend and the House will feel that I have responded constructively to the points he and my other hon. Friends have made and the arguments that have been advanced. The subject is of the utmost importance, and
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the Government are treating it with the seriousness it deserves. We are proceeding with the review as rapidly as possible, and we shall need to consider its conclusions in the light of its public expenditure implications.
Mr. Banks: I am sure that the House welcomes the news that a fundamental far-reaching review is to be undertaken. Will my hon. and learned Friend give an indication as to how long he expects that review to take?
Mr. Brittan: That is the point that I was about to come to. My right hon. Friend hopes to announce the outcome soon after the House resumes after the Easter Recess.
Mr. Robin F. Cook: The Minister said at an early stage in his speech that he was reviewing the controversial stay-put strategy. Before he concludes his speech, will he give an indication as to whether the Administration are endorsing the stay-put strategy? We have read the document that he refers to, and we must accept that it refers entirely to protection against radiation and that there is little protection that could conceivably be given to urban populations against blast and fireball. The corollary of the stay-put strategy is that the population has no conceivable protection, however much the civil defence force is expanded.
Mr. Brittan: These are all matters that are being considered in the review. It is neither possible nor desirable to attempt to answer the hon. Gentleman's fundamental points now, even if we were able to. When the review is completed, we shall be in a position to do so. As I said, my right hon. Friend hopes to announce the outcome soon after the Easter Recess. I therefore hope that the House will appreciate that I shall take on board the points made so clearly by my hon. Friends and by the hon. Gentleman. I assure the House that all these points will be taken fully into account in the remaining stages of the review.
Question put and agreed to.
Adjourned accordingly at ten minutes past Twelve o'clock.

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

LORD HUNT OF TANWORTH
Sir John Joseph Benedict Hunt, Knight, GCB, having been created Baron Hunt of Tanworth, of Stratford-upon-Avon in the County of Warwickshire, for life—Was, in his robes, introduced between the Lord Greenhill and the Lord Charteris of Amisfield.
The Lord Trevethin and Oaksey—Took the Oath.

AIR FARES WITHIN THE EEC
2.47 p.m.
The Earl of KIMBERLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will now make a statement on progress in negotiations with Member States of the European Community to reduce air fares and increase competition within the Community.
Lord TREFGARNE: My Lords, I have nothing to add to the Answer I gave to my noble friend Lord Lucas of Chilworth on 4th February last.
The Earl of KIMBERLEY: My Lords, while thanking my noble friend for that Answer, may I ask whether he would agree that it would appear that some airlines appear to subsidise their less profitable routes by overcharging on their high density routes? Secondly, can he give some examples of where Her Majesty's Government have achieved considerable success, as he said on 4th February?
Lord TREFGARNE: My Lords, it is certainly the case that airlines earn more revenue on some routes than on others, and I suppose therefore, following from that, one would say that some routes subsidise others. As a result of Government policy in this area we have, for example, been able to hold the economy fares to Scandinavia, apart from some modest fuel-related increases; we have introduced some very low-priced economy fares on those routes; discussions are taking place with the Greek and Italian Governments on the same matter; and we have unilaterally contained fare increases to those countries. As a result of pressure by the Government on the Spanish aeronautical authorities, new excursion fares have been introduced for some Spanish destinations.

POST OFFICE EFFICIENCY AND POSTAL CHARGES
2.50 p.m.
Lord INGLEWOOD: 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 were satisfied that all modern equipment on Post Office premises, such as that for sorting different categories of mail, was being fully used and that there was no extravagant manning before they authorised the recent increases in postal charges.
Lord LYELL: My Lords, Her Majesty's Government believe that there is scope for considerable improvement in postal efficiency and productivity. Questions of manning levels and of the implementation of the mechanisation programme are operational matters for the Post Office Corporation. The Government have no formal powers to authorise or to decline to authorise increases in postal tariffs. The Government did however accept that the recent postal charges increases would be necessary if the postal business were to achieve its financial objectives.
Lord INGLEWOOD: My Lords, while thanking my noble friend for that reply, may I ask whether it means that at the

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end of the day the Post Office is entitled to charge what it likes, whether or not it is efficient in its working?
Lord LYELL: My Lords, to answer the latter part of my noble friend's question, the Post Office's main objective is to achieve increased efficiency and within those parameters the Post Office has the power to charge what it feels reasonable to achieve its financial and efficiency targets.
Lord DAVIES of LEEK: My Lords, is the Minister aware that if postal charges for letters go much higher there will be no need for scientific machines to sort them because there will be so few letters going through the post that some of us who were born in the mountains will have to relearn Indian smoke signals and yodelling?
Lord LYELL: My Lords, those of us in your Lordships' House who have been listening to the noble Lord, Lord Davies of Leek, have been observing these signals for many years. We have been attracted and charmed by them over the years. The Post Office is looking at all kinds of methods of improving its efficiency, but I think the House would not wish to go into the realms of all your Lordships' imagination.
Lord INGLEWOOD: My Lords, is my noble friend aware of a very bad case in Birmingham, about which previous Ministers have spoken in this House, in which expensive machinery stood idle for months, if not years, because of manning difficulties? Can my noble friend say whether it is still idle, or is it now working, because that is a notorious example?
Lord LYELL: My Lords, I have noticed that one branch sorting office has particular troubles with mechanisation as described by my noble friend, though I am not aware it is Birmingham. Perhaps I may be allowed to communicate with my noble friend by letter—dare I say by internal letter within your Lordships' House, which tends to be as efficient as the Post Office? I will endeavour to find out and inform my noble friend.
Lord WALLACE of COSLANY: My Lords, can the noble Lord state whether
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it would in the future be possible for Post Office charges to be investigated under the provisions of the Competition Bill?
Lord LYELL: My Lords, I can inquire about that, but I have no information about it at the moment. There are winged messengers behind me, but I would not rely upon them.
Baroness FAITHFULL: My Lords, may I ask the Minister why it is that in areas of unemployment there are vacancies in the Post Office service?
Lord LYELL: My Lords, I think this is a matter for the Post Office management in that it is seeking to attract labour where there are areas of labour shortages in the Post Office.
The Earl of LAUDERDALE: My Lords, is the noble Lord aware that the supplementary question from the Front Bench opposite represents a considerable feeling in this country that it might well be to our advantage to break the Post Office's monopoly?
Lord LYELL: My Lords, my right honourable friend in another place is considering this particular point, and is awaiting a report on the breaking of the Post Office's mail monopoly. I understand that my right honourable friend will be receiving a report in the very near future—and I am told that the indications are that it will be within the next three months.
Lord JACQUES: My Lords, is the noble Lord aware that the Post Office is not alone in the increase of service charges, and that it is due to the high content of labour in doing the work? I think an examination will show that in many cases other service charges have risen far more than those of the Post Office.
Lord LYELL: My Lords, the noble Lord is in part perfectly correct; in some cases the reply to his point is, yes, while in other instances what he suggests is not the case. The Post Office management is at all times attempting to maximise the use of its available finances, mechanised equipment, and indeed labour.

CALDER HALL NUCLEAR POWER STATION
2.54 p.m.
Lord HYLTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when they expect that the nuclear power station at Calder Hall, Cumbria, which was commissioned in 1956, will reach the end of its useful life, and what steps will then be taken to make it safe for the long period during which it will remain radioactive.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, assuming that Calder Hall continues to be an economic and reliable supplier of electricity, and its continued operation is approved by the Nuclear Installations Inspectorate, its operational life could extend beyond 1990. Decommissioning would begin with the removal of the nuclear fuel, which contains the highly radioactive fission products, for reprocessing. Surveillance and safety requirements for the remaining structures, containing only relatively small amounts of radioactivity, would then be minimal. How long it would be before these were removed would depend on the balance between removal costs (which will decline as the residual radioactivity decays) and the value of the site for other uses.
Lord HYLTON: My Lords, I am grateful to my noble friend for his reply. Is it not a fact that the designed life of these stations was at first taken to be 25 years? Can my noble friend say how it is possible to extend that life by a further nine years?
The Earl of GOWRIE: My Lords, the life and use of these installations is a subject for constant monitoring, and that is how it has been found possible to extend the life in this case.
Lord AVEBURY: My Lords, does not the information given by the noble Earl confirm that the CEGB and other authorities have in the past been conservative in the estimates that they have made of the potential life of nuclear power stations? If we are now talking about a period of
742
service of 34 years instead of, I think, 30 years which the CEGB used in its calculations, does this not have implications in regard to the ordering programme for stations planned by the CEGB, and should this not be much smaller as a result of the increased length of life?
The Earl of GOWRIE: My Lords, when dealing with the life of any installation it is of course difficult to be altogether precise, but the important point here is that, even after an installation has come to the end of its useful life, it is still subject to the monitoring process as the deradioactivisation takes place.
Lord HANKEY: My Lords, can the Government confirm that the cheapest source of electricity in this country at present comes from the nuclear power programme and the nuclear stations which are already installed? Is it not true that in Scotland the price of electricity went up less than it did in other parts of the United Kingdom because the electricity was produced at Dounreay by the fast reactor? Will the Government give consideration to taking an early decision about proceeding with a proper programme for nuclear fast breeder reactors?
The Earl of GOWRIE: My Lords, these points are under consideration as a matter of urgency by my right honourable friend the Secretary of State for Energy.

SUIT IMPORTS FROM ROMANIA
2.57 p.m.
Baroness HORNSBY-SMITH: 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 request the EEC Commission to operate the price clause in relation to men's polyester/viscose suits made in Romania and offered wholesale at £10 per suit which includes 17 per cent. duty, wholesaler's profit and delivery charges and means that these garments are being landed by the manufacturer at around £6, well below cost.
Lord TREFGARNE: My Lords, the Government asked the Commission to initiate consultations under the Price Clause of the Community's Agreement with Romania (under the Multifibre Arrangement) on 28th December, 1979.
Baroness HORNSBY-SMITH: My Lords, is the noble Lord aware that this will give some comfort to the firms? Is he also aware that an appalling number of suit manufacturing companies have already closed in this country? Can we be given some indication of how long these negotiations are likely to take and when we might have some resultant restriction on these grossly unfair imports?
Lord TREFGARNE: My Lords, I am aware of what my noble friend has said—that these imports have caused some difficulties. I cannot predict precisely how long the Commission's inquiries into this matter will take, but we have asked them to deal with it urgently.
Lord WELLS-PESTELL: My Lords, is the noble Lord the Minister aware that with the increasing price of suits, unless they come down in price, or unless we are allowed to import suits, many of us will be in danger of going about naked in the not too distant future?
Lord TREFGARNE: My Lords, I am aware of the price of suits, but all the same I am not sure whether your Lordships would be jumping to buy these suits which are imported at about £10 each.
Viscount ST. DAVIDS: My Lords, is the noble Lord aware that this highly uneconomic procedure on the part of Romania is caused by their frantically reaching out for Western currencies in an attempt to be less dependent on Russia?
Lord TREFGARNE: My Lords, I am afraid I cannot see into the mind of the Romanian Government in this matter, but what the noble Viscount says may well be right.
Lord WYNNE-JONES: My Lords, will the noble Lord confirm that, even if we find it difficult to wear suits in this House, we shall still be expected to wear ties?
Lord TREFGARNE: My Lords, I think that is a matter for my noble friend the Leader of the House.
Lord HALE: My Lords, is the noble Lord aware—I am sure he is—that when the multifibre agreement was negotiated it was made abundantly clear that provision was expected to be made, and that no one was putting a complete bar on the importation of lower-priced materials? But the case today, and the figures quoted today on the authority of the noble Baroness, are such as to spread alarm and despondency throughout the industry. Really it is getting an impossible situation, and it is one about which the Government ought to take strong action.
Lord TREFGARNE: My Lords, this is indeed a serious matter, but the action must be taken through the machinery of the European Community.
Lord LEATHERLAND: My Lords, would the noble Lord agree that there is an element of sex discrimination in this Question? For, whereas it criticises men for wearing imported suits, when a woman wears the latest Paris fashion it is looked upon as a very praiseworthy activity on her part.
Lord TREFGARNE: My Lords, I see no criticism in the Question.
Baroness HORNSBY-SMITH: My Lords, is the noble Lord aware that any lady buying Paris fashions will be paying very heavily for them? We are complaining about people here being put out of work because these goods are coming in way below the economic price.
Lord TREFGARNE: My Lords, I am sure my noble friend is right.

RHODESIAN ELECTIONS
3.4 p.m.
Lord GORONWY-ROBERTS: My Lords, I beg leave to ask Her Majesty's Government the Question of which I have given Private Notice. The Question is as follows:
"To ask Her Majesty's Government whether they will make a Statement on recent developments in the Rhodesian elections".
The SECRETARY of STATE for FOREIGN and COMMONWEALTH AFFAIRS (Lord Carrington): My Lords, the situation has not changed substantially since the Statement by my noble friend Lord Trefgarne on 13th February. Elections on the white voters' roll took place on 14th February. The Governor is continuing his consultations with party leaders with the aim of stemming political intimidation which is making it extremely difficult for the majority of parties to campaign in certain areas. Although there have been a disturbing number of violent incidents, the total number of casualties since cease-fire day is less than frequently occurred in a single week previously. Investigations are being pursued into a number of incidents, including the bombings in Salisbury on the night of 14th February.
My Lords, 540 volunteers from the police will travel to Salisbury this weekend to reinforce the supervision of polling stations. We are grateful for the splendid response from the volunteers, and are sure that their presence will make a material contribution to the prevention of intimidation at the polls.
Lord GORONWY-ROBERTS: My Lords, I thank the noble Lord for making that Statement to the House. May I ask him whether he is aware that we on this side of the House, and I am sure the entire House, strongly support the Governor in his efforts to prevent political intimidation in Rhodesia, and his action in consulting the party leaders in Rhodesia for that purpose? We feel that it is in the interests of the party leaders and the parties in Rhodesia that this should be done, and certainly in the interests of the Rhodesian people as a whole. We entirely agree that investigations into the identity of those responsible for actions of violence, particularly at this time, including the bombings in Salisbury on the night of 14th February, should be pursued with vigour. We also greatly appreciate the action of the 540 members of our own police force in volunteering for duty as polling station supervisors, but we still feel that it is even more necessary to strengthen the forces which will preserve order between now and polling day.
Lord CARRINGTON: My Lords, I am glad that the noble Lord said what he did
746
about intimidation. It seems to me that my noble friend Lord Soames, in a very difficult situation, is being very unfairly criticised. He is doing his level best to see that there are free and fair elections in Rhodesia, and it is certainly the intention of Her Majesty's Government here to give him all the aid that we possibly can.
Lord GLADWYN: My Lords, while, naturally, we would associate ourselves with what the Foreign Secretary has just said about the desirability of supporting Lord Soames in the action he has taken to cope with the dreadful situation with which he is confronted, we should like nevertheless to associate ourselves, broadly speaking, with what the noble Lord, Lord Goronwy-Roberts, has said. More especially, I should like to ask this question, if I may: if the inquiry into the recent incident when two members of the Rhodesian Army were apparently blown up opposite a church results in it being established that they were members of the Selons Scouts engaged in planting a bomb, what action will the Governor be expected to take?
Lord CARRINGTON: My Lords, this really is a matter for the Governor. When you ask somebody of the distinction of my noble friend to go to Rhodesia with the powers of a Governor to administer a country in the situation in which Rhodesia now finds itself, it really must be up to him to decide what to do.
Lord STEWART of FULHAM: My Lords, has the noble Lord noticed that some of those reports recently appearing in the media suggest very strongly that several of these acts of terrorism have been carried out by those who are called auxiliaries, or members of the security forces, and that they seem to be intended either to injure the supporters of Mr. Mugabe or to discredit him? Can the noble Lord comment on that aspect of the matter?
Lord CARRINGTON: My Lords, my noble friend Lord Soames has made a particular point of seeing that the auxiliaries are monitored, and he is satisfied that where they went wrong there has been punishment or dismissal. The fact of the matter is rather the reverse coin of what the noble Lord is saying. Most of the intimidation is coming from Zanla, from

747
Mr. Mugabe's forces, which have not assembled in the assembly areas. Of course, if they have not assembled in the assembly areas it is impossible to monitor them, and that, very largely, is where the intimidation is coming from, though all parties have in some cases been guilty.
Lord AVEBURY: My Lords, is the Foreign Secretary satisfied that the Governor has the resources to deal with the intimidation which undoubtedly exists, and to receive proper information about the nature and the scale of the intimidation, instead of having to depend on sources which may not be altogether unbiased? Has the Foreign Secretary noticed, for instance, that reports were received from certain areas of the country via the existing authorities that no meetings were able to take place except those of Mr. Mugabe's party, and yet when the journalists went to these regions to check it they found that meetings of other parties had taken place in a perfectly normal manner? Therefore, does this not indicate that the Governor is receiving false information from the people on the spot, and that he needs further backing from this country?
Lord CARRINGTON: No, my Lords. I think that my noble friend has the resources to find out what is happening in the country. The first question which the noble Lord asked me, which was whether my noble friend had the resources to deal with intimidation, is much more difficult to answer because it is extremely difficult to know what to do about intimidation. But I am absolutely satisfied that my noble friend has the information. What he is seeking to do, either by ordinance or by speaking to the leaders of the political parties before the election, which is now only a week ahead, is to achieve what he can within the limits of his power to do away with that intimidation.

OVERSEAS AID
3.8 p.m.
Lord CARRINGTON: My Lords, with your Lordships' permission, I should like to make a Statement on overseas aid.
Soon after assuming office the Government instituted a review of the policies
748
governing, the overseas aid programme. This review is now complete.
Our ability to support development overseas is dependent on the state of our own economy, and the need to strengthen it. Nevertheless, the Government will continue to provide aid to the developing countries on a substantial scale. Official aid continues to be an essential element in development, especially for the poorest countries. Within the limits of our resources we must seek to relieve poverty in the developing world, so as to create conditions for greater peace and stability; and to contribute to the growth of world trade, on which Britain so critically depends.
Trade is of the greatest importance for the developing countries. If the Free World were to slide towards protectionism we would all suffer, but the consequences for the developing countries would be particularly serious. We ourselves provide a substantial market for their products, and will encourage others to do the same.
Private investment can and should play a greater part in development, and we hope that the relaxation of exchange controls will further encourage British firms to invest overseas.
We believe that it is right at the present time to give greater weight in the allocation of our aid to political, industrial and commercial considerations alongside our basic developmental objectives.
We need to maintain the strength of our ties with the Commonwealth, to which the greater part of our bilateral aid now goes, and to fulfil our obligations to our remaining dependencies. We must also be able, when necessary, to offer help and encouragement to other friendly countries.
The greater part of our bilateral aid is tied to procurement in the United Kingdom and so provides valuable orders for British firms. I might add that our contributions to multilateral institutions also enable British firms to compete for very substantial business financed by them all over the world. We are examining means by which they might get a greater share of this business.
Since 1978 about 5 per cent. of the bilateral aid programme has been made

749
available from the Aid/Trade Provision for sound development projects (which are also of commercial and industrial importance for British firms) in developing countries to which we do not normally provide aid or where the planned allocation is already committed. In order to maintain the value of this provision in real terms its share of the bilateral aid programme will now be increased.
The unallocated margin in the aid programme will be increased so that we can respond more effectively to new developments where our political or commercial interests are involved.
Our commitments to international agencies and bodies will absorb a larger proportion of the aid programme over the next few years. As we need more room for manoeuvre in bilateral aid, we shall need to look critically at our expenditure on multilateral aid programmes.
Improved inter-departmental arrangements will ensure that all these considerations are brought together.
The administration of the aid programme is being examined in a thoroughgoing management review of the Overseas Development Administration to ensure that the programme continues to be managed effectively and economically.
Much can be done with our aid programme which is to the mutual advantage of the developing countries and ourselves and we shall therefore concentrate on using it in that way.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, the House will wish to thank the noble Lord for making that Statement. We welcome his statement that overseas aid continues to be an essential element in development, especially in the poorest countries. We also agree that if the Free World were to slide towards protectionism we should all suffer. The fact that he is proposing to give greater weight in allocation of our aid to political considerations gives rise to some anxiety, indeed great anxiety, on this side of the House. Does his Statement confirm what the Sunday Press foretold: that Her Majesty's Government proposed to link aid to British foreign policy objectives; that it might involve cutting one-third of the
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aid to the poorer countries like India and Bangladesh and increasing it to more affluent countries like Pakistan and Turkey and even Latin America?
We very much regret that the share of the bilateral aid programme will now be increased. From what the Statement goes on to say later, we gather that this is at the expense of the multilateral aid programme which has already been cut, in real terms, by 6 per cent. When he is taking his criticial look at our expenditure on multilateral aid, we hope that he will bear in mind the masterly analysis of the Brandt Report, Programme for Survival.
Taking the Statement as a whole, although it is phrased with the elegance and subtlety which we expect, and get, from the noble Lord, we are disturbed that, together with the miserly approach to the problem of overseas students fees in this country, this confirms our fears that the downgrading of the Overseas Development Ministry has altered the Government approach to aid. If the worst effects are not yet apparent, we feel sure that this Statement will give great apprehension to the outside world.
Lord GLADWYN: My Lords, we, too, should like to thank the noble Lord for making this Statement. It is difficult at first glance to grasp all the implications of this complicated subject, but am I right in thinking that the general aim is as follows: a larger proportion, perhaps a far larger proportion, of our aid is now to be devoted to tied aid directed towards the poorer members of the Commonwealth with greater provision than now exists for protecting and advancing not only our own commercial but also our own political interests?
If so, I should like to associate myself with the noble Baroness in asking what exactly is meant by "political interests"? Secondly, would the Government—because I am innocent on these matters—give me a major instance of a multilateral aid project, our contribution to which is now to be examined "critically" and, by inference, to be reduced? The third question is this. As a result of these new arrangements—and I do not know if this can be worked out at present—what is thought to be, after these arrangements come into force, the actual proportion of our GNP to be devoted henceforth to aid generally?

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Lastly, would the Goverment not agree that one of the most profitable forms of aid, particularly now, would lie in the grant of scholarships to students from the Commonwealth and elsewhere, especially to post-graduate students? Would that now be possible, so as to mitigate the extreme severity of the recent rises in the fees payable by overseas students? I think that at least the Government should consider this proposal seriously.
Lord CARRINGTON: My Lords, I am grateful, I think, to the noble Baroness for her gentle reproach—I should like to put it like that. I agree with her, and I think that the whole House would agree, that the more aid we can afford to give to those who are badly off through no fault of their own, we should give. We should all like to do that, and we should all like to see in present circumstances that we get something in return; because we have a considerable economic problem here at home. But the reality is that we must cut the money that we give to overseas countries according to the resources that we have. What we must do is to put our economy in order before we can increase our aid programme and before we can even keep to the sum of money which we spent the year before last. These are unpalatable facts but the fact remains that we simply cannot afford to pretend that at the moment we are a rich country. I do not think that there is anything incompatible in using aid to further your foreign policy. I happen to think that our foreign policy is a thoroughly good foreign policy, and it is in the interests of the peace of the world that our foreign policy is conducted. I believe that to tie our aid to those interests and to use it for developing countries in a way beneficial to them and to us is not discreditable but wholly sensible.
The noble Baroness asked me about the balance between bilateral and multilateral aid. The difficulty is that if you are reducing, as we have had to reduce, the aid programme, the multilateral aid is much more difficult to cut because you have a series of commitments over a number of years. Therefore, broadly speaking, it is the bilateral aid which suffers. Yet it is the bilateral aid in many ways which is the more useful for this country. What we are seeking to do, if we can, is to redress the balance. The sort
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of thing I had in mind, in answer to noble Lord, Lord Gladwyn, is that there are some contributions that we make to United Nations' funds which, I suspect, are now out of proportion to our gross national product as it is now compared with what it was when those figures were originally settled.
I will certainly agree with the noble Baroness. We have to take account of the Brandt Report and we shall study that with great care. The noble Lord, Lord Gladwyn, asked what percentage of our GNP is spent on aid. The last figures that we have are for 1978, and it was then 0·48 per cent. Both the previous Government and this Government are committed to get it up to 0·7 per cent., if they can. It is at the moment somewhere in the region of 0.48 per cent.
Lord GLADWYN: My Lords—
Lord CARRINGTON: May I just finish answering one of his questions before the noble Lord, Lord Gladwyn, has another go.
The noble Lord asked me about scholarships. A great many things are desirable in aid. We have to devise priorities which we believe to be right. There is no intention of cutting off aid to India at the expense of someone else. The two countries which the noble Baroness described as affluent—Turkey and Pakistan—are hardly in that category. There is no question of cutting off one at the expense of the other. What we have to do, I am afraid, is to spread the butter more thinly and spread it to our advantage as well as to the recipients' advantage.
Lord ALPORT: My Lords, may I ask whether, in the priorities which my noble friend will apply to the distribution of aid, he will bear very clearly in mind the importance to the developing countries of the training of their own nationals so that they can serve in those countries on their return? Although there are many demands for different forms of aid from those countries, the education and postgraduate education of overseas students in this country should take first place.
Lord CARRINGTON: Yes, my Lords, I will certainly bear in mind what my noble friend has said.
Lord ELWYN-JONES: My Lords, does the noble Lord's somewhat complex Statement—if I may say so—mean that there will be more aid or less aid? That did not emerge very clearly. If less, by what part of the proportion of the GNP will the reduction be?
Lord CARRINGTON: My Lords, the exact figures will be published in the White Paper in a few weeks' time. I would not care to anticipate it.
Lord HARMAR-NICHOLLS: My Lords, is my noble friend aware that people who live in the real world will approve his decision to take politics into account when distributing any limited aid that we may give? While the Brandt Report may be good bedside reading, it is full of clichés and much of the evidence seems to have been brought from a period in which the atmosphere was quite different from today's in terms of productivity. Let realism play a part at the end of the day, and in that way we may get the best results from everybody.
Lord CARRINGTON: My Lords, without casting any aspersions upon the authors of the Brandt Report or its contents, I am—not for the first time or the last time—grateful for my noble friend's intervention.
Lord DAVIES of LEEK: My Lords, in view of the importance of this Statement, will the noble Lord kindly tell us whether there will be an opportunity for at least a short debate on it, rather than that he should have the problem of answering off the cuff vital questions to which constructive answers (not that his answers are not constructive) are needed?
Lord CARRINGTON: My Lords, the noble Lord, I am sure, is in constant touch with the "usual channels". I am sure that will be possible.
Lord AVEBURY: My Lords, among the political considerations which the Foreign Secretary mentioned, will human rights be included? Also, will the noble Lord take into account the fact that some of the recipients of our aid at the moment—Pakistan and Ethiopia, to name a couple—are not by any means respectors of human rights, but are among the worst violators of the Universal Declaration of
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Human Rights? We are aiding these countries not only bilaterally but also through multilateral mechanisms, including that of the EEC. I have already drawn the noble Lord's attention to this.
Lord CARRINGTON: My Lords, human rights is one of the criteria which must be taken into account.
Lord CLEDWYN of PENRHOS: My Lords, does the noble Lord agree that those millions of people in the Third World who are living in circumstances of the grimmest poverty and disease are living in the real world?
Lord CARRINGTON: My Lords, I think that we all are.
Lord ORAM: My Lords, the noble Lord invited us to wait a week or two before we hear the real figures that will be announced. But are not my noble friends on the Front Bench and the noble Lord, Lord Gladwyn, perfectly correct in detecting a retrogressive attitude towards aid from Her Majesty's Government? Is it not utterly deplorable that we are hearing such a Statement in the week following the Brandt Report, which in perfectly justified tones of urgency called attention to the desperate future that awaits the world unless massive aid is transferred to the Third World? Is it not at least welcome that a leading Conservative such as Mr. Edward Heath—a signatory of the Brandt Report—is not blinkered in these matters, as Her Majesty's Government seem to be?
Lord CARRINGTON: My Lords, it cannot have escaped the noble Lord's attention—or, if it has, I am surprised—that Her Majesty's Government are trying to cut down on public expenditure. It is a well known fact, which I draw to the noble Lord's attention as a result of the tone of his question, that if you spend more money than you have you go bankrupt.
Lord MISHCON: My Lords, does the Secretary of State not agree that he might at least have disclosed an interest when indulging in his eulogy of our foreign policy? Does he not also agree that adding political strings to aid is not going to add to our standing, especially in the Third World?
Lord CARRINGTON: My Lords, I know of no other country which gives aid and which does not take political consequences into account.
Lord BALOGH: My Lords, does the noble Lord realise that a great deal of good will will be lost in the Third World by switching towards bilateral aid after the subordination of the Ministry of Overseas Development into a section of the Foreign Office?
Lord CARRINGTON: My Lords, I was not suggesting that we switched from multilateral into bilateral aid. I was trying to redress the balance. There are certain areas of multilateral aid where there is no question of our cutting—in particular, our commitment to the Lomé Convention. We have to keep a balance between bilateral and multilateral aid.
Lord CARADON: My Lords, I wonder whether the noble Lord realises the culmination of the various actions which have been taken in this respect in recent months? There is the consternation which has been caused throughout the Commonwealth, in particular, with regard to the attitude on fees for overseas students. There are the difficulties in which the students themselves are being put. This is followed by the drastic reduction in the British Council and its activities. Only last week I listened in another part of this building to the report of a reduction by half of the British contribution regarding world population activities. It seems to me that we are embarked—and I am sorry that it should be so with a Secretary of State whom we so much admire—on a policy of almost deliberately alienating world opinion and, in particular, Commonwealth opinion.
Lord CARRINGTON: My Lords, what we are embarked upon is a programme to put the economy of this country right. When we have put the economy of this country right, we shall then be able to afford to do all those things which the noble Lord and I agree are very desirable.
Lord BRUCE of DONINGTON: My Lords, in the course of his reply the noble Lord referred to the overriding necessity for reducing public expenditure. He will doubtless be aware that in some areas, particularly in regard to defence, there
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has been a very great increase in public expenditure. Will he bear in mind that a transfer of expenditure from defence to overseas aid might well in purely military terms be much more cost effective?
Lord CARRINGTON: My Lords, that is carrying the question rather wider than the Statement that I have made.

CYPRUS: POLITICAL AND ECONOMIC SITUATION
3.30 p.m.
Lord SPENS Lord SPENS rose to call attention to the political and economic situation in Cyprus and the special responsibility of Her Majesty's Government; and to move for Papers. The noble Lord said: I am delighted to sec that the noble Baroness, Lady Jeger, has put her name down on the speaker's list to make her maiden speech. She worried me a little bit this afternoon because I have only just now spotted her coming in: but we are all expecting an excellent speech from her on Cyprus because of her knowledge of the country and the fact that she served on a Select Committee in another place.
There are six interested parties in the Cyprus situation: the three guarantor powers, the two communities in Cyprus and the United Nations. I believe that some blame for the present situation must be attached to each of those parties. I blame Turkey for taking what I would describe as a sledgehammer to crack a nut with the amount of force that she used in 1974. I also blame Turkey for occupying a greater part of the island than she ought to have done. I blame Greece—not the Greece of today, but the Greece of the Colonels—for encouraging and actively helping Archbishop Makarios and later Sampson, to achieve enosis by force. I blame ourselves, our own country, for failing to keep our guarantee to give security to the island in 1974 and also for failing to keep our guarantee that the constitution of 1960 would be observed.
I blame the Turkish Cypriots of today for bringing in large numbers of mainland Turks to the island after 1974 and for allowing quite a number to settle there. I blame the Greek Cypriots of today for the atrocious behaviour they displayed towards Turkish Cypriots from

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1963 onwards, and for the continuing economic battle against the Turkish Cypriots today. Finally, as regards the United Nations, I blame the United Nations for failing to keep the peace after 1963 and for not giving adequate recognition now to the Turkish Cypriots. I believe that the actions and failures I have mentioned are between them the cause of today's impasse.
As regards the political situation today, there are 20,000 Turkish troops dividing the island, but they have given security to the Turkish Cypriots for the first time. The Greek Cypriots claim to be the Government of all Cyprus and are recognised as such by most countries. I think they want to see a unitary State or if they cannot get that, then a federal State, which is very centralised. Above all, they want freedom of movement to go into the whole of Cyprus and to be able to let their refugees return to their own homes in the North.
The Turkish Cypriots claim autonomy within their zone. They enjoy security for the first time and they have set up their own administration, a democratic one—I think there are at least five political parties involved—which they say could quite easily be made to fit into a loose confederation of the two zones. They have resettled some 78,000 Turkish refugees from the South in the homes vacated by the Greeks in the North and they are not now prepared to give up those homes to their former owners; but they will be quite prepared to pay compensation, provided that they in turn receive compensation for their property in the South. They are infuriated by Greek Cypriot efforts to internationalise the situation, such as the wanderings of President Kyprianou to Havana for a Third World summit and to New York for the United Nations General Assembly. He is coming here next week and visiting other countries in Western Europe. They think this is a breach of one of the 10 points that were agreed last May between President Kyprianou and Mr. Denktash. That point, if I may quote it, reads as follows:
"It was agreed to abstain from any action which might jeopardise the outcome of the talks, and special importance will be given to initial practical measures by both sides to promote goodwill, mutual confidence and a return to normal conditions,"
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They say that President Kyprianou is not doing that. They hold empty the huge complex of Varosha, to the South of Famagusta, which I believe could hold up to 30,000 in population. They hold it empty at the moment because they are worried about the security of Famagusta if they were to allow the Greeks to go back into it and, of course, they do not have enough people to populate it themselves. I think they are ready to talk to the Greek Cypriots, but only if they are treated as partners and not as subordinates of an all-Cyprus Government. The latest talks started in the middle of June last year and broke down after five days; now we have reached this impasse.
As regards the economic situation, Greek Cyprus is thriving, with a very high standard of living. There was an article on 15th June last year in the Guardian with the title: "Handouts widen gap between the rich and poor in Cyprus". That article said—and I have only the article's words for the truth of this—that the per capita income of Greek Cypriots is £13,500 sterling, as compared with a per capita income of £425 sterling for the Turkish Cypriots.
The Greek Cypriots are very good merchants and traders and very hardworking. They are also excellent at propaganda and they appear to be very excellent beggars because, for a population of just under half a million they obtained more than £22 million in aid last year from outside sources; and of course they control the Bank of Cyprus. The Turkish Cypriots are just getting by with large financial help from Turkey. I think about a third of their total budget comes from Turkey, and it comes in the form of Turkish lira, which at the moment is a rather soft currency. They are severely handicapped by the economic warfare that is carried out against them by the Greek Cypriots, particularly over transport, because the Greek Cypriots, as the Government of Cyprus, have declared the airport in the north of Cyprus and the seaports in the north of Cyprus to be illegal. With regard to the airport, I asked the noble Lord the Minister last Thursday a question in the airports policy debate. He did not answer it then, but he has told me that he will answer it today. The question that asked him was:

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" …is there any policy or any rule which prevents charter planes from flying direct from airports in this country into Northern Cyprus?" [Official Report, 14/2/80; col. 387.]
I know what the answer is, and it will be another example of the economic warfare carried out by the Greek Cypriots against the Turkish Cypriots.
The Turkish Cypriots are also handicapped by their lack of expertise and by a serious lack of middle management. Moreover, they have no control over foreign currency. They have no central hank and there is a very large black market in foreign currency. But they have security and I believe that that is the most important fact of their existence.
The special responsibilities of Her Majesty's Government arise from the fact that they are guarantors, with Greece and Turkey, of the independence of Cyprus and guarantors, also, of the 1960 constitution. When we had a debate on the gracious Speech last May, I asked the Government whether they would confirm that they still had that special responsibility and I received a reply from the Minister—not at the time, but by letter afterwards—saying that he confirmed that responsibility. We have two sovereign bases in Cyprus, both south of the dividing line, and those are treated at the moment as part of the United Kingdom.
Our association with the island goes back even further than our association with Rhodesia, because we leased the island from the Ottoman Turks in 1878, which was about 10 years before Cecil Rhodes was granted his charter for Rhodesia, and, despite our failings, there is still a great deal of goodwill towards us, certainly in the north of the island. I do not know about the south, because I have not been there. I am persona non grata in the south, because I have flown direct into the North and that is an illegal act.
I believe that Her Majesty's Government can put pressure on both sides. I believe that she can put pressure on the Greek Cypriots, either by offering some form of recognition of the Turkish Cypriots or by threatening to take away our recognition of the Greek Cypriots. It is more difficult to put pressure on the Turkish Cypriots and I think it would have to be done in concert with the United
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States or the EEC. But if we and they could guarantee the security of the Turkish Cypriots, then there might be a chance to get rid of the Turkish forces there.
Both sides, at the moment, are waiting for the other to move. They need a third party to bring them together. The United Nations has failed to do this, although the Secretary-General is still trying very hard. I believe that we, in our special position of third guarantor power, are the country which could bring these two communities together. The United Nations has also failed because it has allowed resolutions to be passed which have infuriated the Turkish Cypriots. I want to read to your Lordships paragraph 3 of the latest resolution, which was passed at the end of November last year. That states:
"Affirms the right of the Republic of Cyprus and its people to full and effective sovereignty and control over the entire territory of Cyprus and its natural and other resources".
That is perfectly all right. It then goes on:
"and calls upon all States to support and help the Government of Cyprus to exercise the above-mentioned rights."
It is that which upsets the Turkish Cypriots very seriously. They do not admit that the Greek Cypriot Government has any authority over the North of the island.
If I may quote once again,
" … the tone of last week's debate … in the United Nations … was one-sided and absurdly selective. Such polemics can only increase tension and make the implementation of the settlement more difficult." [Official Report, 6/2/80; col. 1344.]
That was said by our Foreign Secretary. Of course, it was not said about Cyprus, but it was said about Rhodesia and only a fortnight ago. But it is a similar situation.
To sum up, the sticking points to any agreement between the two communities are, first, the security of the Turkish Cypriots; secondly, the refusal of the Turkish Cypriots to give up their homes; thirdly, the problem of Varosha and the security involved in giving that up and, fourthly, the type of federal constitution. Those are the four sticking points. I want to point out, having illustrated to your Lordships the enormous economic disparity between the South and the North, that there is no incentive for the Greek Cypriots to reach any agreement. They are doing extraordinarily well as

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they are and why should they come to the conference table, where any agreement is likely to reduce what they have today?
I have one final point. I do not believe that the Turkish Cypriots will wait very much longer for a settlement to come about. There has already been a lot of public discussion of the possibility of declaring the North to be independent—a kind of UDI. It has happend during the last three months. I was out there in October and there was no discussion then, but almost as soon as I left the papers began to talk publicly about going it alone. I must also point out the strategic situation there. I do not want to go into detail, but we all know the strategic importance of Turkey, and the fact is that the Greek Cypriot Government have not shown very much enthusiasm for what is happening about Afghanistan. It was one of the few countries—18, I think—that abstained in that General Assembly vote, which has infuriated the Turkish Cypriots. They have also, since then, said that they will be sending a team of athletes to the Olympics.
That is the position. Something must be done about it and I think that we are the only country to do that. I believe that I am thought to be a bit, biased on behalf of the Turkish Cypriots, but I am quite certain that that bias will be corrected by the later speeches. I hope that out of this debate will come some indication from Her Majesty's Government that they are ready to take an initiative. I beg to move for Papers.
3.50 p.m.
Lord BANKS: My Lords, I am sure that the whole House will be grateful to the noble Lord, Lord Spens, for drawing our attention once again to this unresolved and unhappy situation in Cyprus, not least because it will enable us to have the opportunity to listen to the maiden speech of the noble Baroness, Lady Jeger.
At the beginning of his remarks the noble Lord, Lord Spens, distributed blame all round but towards the end of his remarks he did perhaps hint that there may have been a shade of bias towards the Turkish argument in the course of what he had to say. While I admire the sincerity with which he put his argument, nevertheless I feel compelled to take a more even-handed approach to
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the dispute between the communities in Cyprus.
In the last three and a half years we have had three debates on this subject—on 14th June 1976, on 8th March 1978 and as recently as 25th July 1979. I do not think that the basic situation has altered very considerably in that time. It has been clear in these debates that, as the noble Lord, Lord Goronwy-Roberts, said on one occasion, we are faced with nationalistic animosities. We know that atrocities have been committed by persons on both sides. We know that both sides have understandable fears. The 1960 settlement was based on three principles: first, that there should be no union with Greece; secondly, that there should be no partition of Cyprus; and thirdly that Cyprus should be united and independent.
While we could understand the Turkish grievances about the past, most of us could not accept as being consistent with those three principles the invasion in 1974 by the Turkish Army and the occupation of 40 per cent. of Cyprus by the Turkish Army on behalf of a Turkish population amounting to 18 per cent. of the population at that time. As the noble Lord, Lord Spens, said, Turks have been introduced from Turkey, so the Turkish population must have increased in the meantime. I wonder, therefore, whether the Government have any information as to the proportion of Turks now living in Cyprus.
There has been the virtual partition of the island into two separate zones. A solution has seemed to depend on an agreement between the two communities in the first instance: the withdrawal of foreign troops and a reconciliation between Greece and Turkey as a background pressure towards a solution. The longer the present situation obtains, the more difficult the finding of a solution becomes. I think that on that point I am in agreement with the noble Lord, Lord Spens.
We are familiar with the "stop-go" nature of the intercommunal talks. On 13th February 1977 guidelines were agreed between President Makarios and Mr. Denktash. They stipulated that Cyprus should be an independent, non-aligned, bicommunal, federal republic. But problems have arisen since that time over the definition of the word "bicommunal". First, there is the question of the area which each community is to occupy.

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The Greek Cypriots have suggested that the Turkish area should be 20 per cent. of the island, and as I understand it the Turks have stipulated for 32 per cent. Secondly, there is the problem as to whether the Government should be federal or confederal—in effect, whether it should be one country with a certain amount of intermingling between the communities, with free movement throughout the island, with one economy, though with regional government in the different zones, or whether there should be two régimes, two economies, virtually two countries, but linked together by a federation, or confederation, or whatever you like to call it, with minimal powers. Whatever the powers of the government of Cyprus should be, I am quite certain that free movement is essential and that the concept of one economy is essential.
Then there has been the question of the representation in any federal Government of the different communities. As I understand it, the Turks have been pressing for parity, and the Greeks, on the grounds of the population balance, have been resisting it. On 18th and 19th May of last year the leaders of the communities agreed on 10 points, which included the demilitarisation of Cyprus. I do not quite know whether they felt that the British bases would figure in that—whether they left that issue outside the demilitarisation, or whether they were hoping to bring the British bases into that as well.
The agreement also included non-alignment; that was again confirmed. And it re-emphasised that there should be no union with any other country and no partition of the island. The talks were to be continuing and sustained but, as the noble Lord, Lord Spens, has told us, they were adjourned some five days later. We understand that they are likely to get under way again, and that is good news, but I hope that work has been done, through the agency of the United Nations, to develop an interpretation of the concept of the word "bicommunal" so that when the meeting starts again the two parties will be nearer to agreement than when they were broken off.
In this context, it is perhaps useful to recall the plan which was put forward in November 1978 by the United States Government—a plan for a federation in
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Cyprus, a plan which they put forward as a framework for discussion between the two communities. This was to provide for two constituent regions, one predominantly Greek and one predominantly Turkish but neither to be exclusively of their particular community. The Turks were to make significant geographical concessions to the Greeks. The federal Government, in this plan put forward by the United States Government, were to have responsibility for foreign affairs, defence, currency and central banking, inter-regional and foreign trade, communications, federal finance. Customs, immigration and emigration, and civil aviation.
There was to be a bicameral legislature, with the upper house to be divided equally in representation between the two communities, and the lower house to be divided on a population basis between the two communities. The approval of both houses was to be required for any legislation, and the upper house could be overruled by the lower house by a two-thirds majority, provided that 38 per cent. of each of the communities' members in the lower house were present and voting. Then there was to be regional government in the zones. The President and Vice-President, one Greek and one Turk, as was the position at one time and which ought to be the position under the present constitution, would jointly select the Council of Ministers. No community would have less than 30 per cent. of the membership of the Council of Ministers, and the President and Vice-President would exercise a joint veto over legislation.
It seems to me that some such solution is desirable, though no doubt with stronger safegurds than I have suggested there for the minority, particularly on constitutional issues and perhaps on certain other key issues as well. But, of course, no amount of constitution-making can produce a solution if there is not the will to make it work and if there is not the readiness on both sides for a certain degree of give and take. In the background, again there is the importance of an understanding between Greece and Turkey. Greece will be entering the EEC on 1st January of next year, in recent weeks the Turkish Government having expressed their desire eventually to become a member of the EEC.

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The noble Lord, Lord Spens, has referred to the strategic position, and there is the strategic position of Turkey on the exposed NATO flank and suffering from grave economic problems at the present time. It is clear that the West generally—not only this country, although this country, one would hope, might play a prominent part—the EEC in particular, and the Commonwealth also, have important roles to play in seeking to bring Greek and Turk together and in seeking the support of Greece and Turkey to bring Greek Cypriot and Turkish Cypriot together.
4.1 p.m.
Baroness JEGER: My Lords, I ask the indulgence of your Lordships as I speak here for the first time. It is over 25 years since I made my maiden speech in another place but I must confess that today I feel rather more apprehensive than I did then.
We must all be grateful to the noble Lord, Lord Spens, for this opportunity to discuss Cyprus; but I must confess that as I read and re-read all the speeches and questions in both Houses I find a sadness of repetition from a succession of Ministers. Resolutions of the United Nations are acknowledged, support for the United Nations in setting up intercommunal talks is pledged time after time, but real progress seems there none. Nearly six years after the invasion the cement is setting round the feet of the negotiators and there is developing among all the people of the island a cynicism about the international community and about the authority of the United Nations. Sadly, I find a growing feeling about the total meaninglessness of Commonwealth membership, which must especially concern your Lordships. Many Cypriots feel that they live in an orphan island, stranded in an endless nightmare. Of their three guarantors, Greece turned fascist and the Colonels tried to murder President Makarios; the Turks invaded and the United Kingdom did nothing.
About one-third of the people are still refugees. There is no fate more hitter than to be a refugee in one's own country. I have messages of misery from Turkish Cypriots transplanted to the North who are as unhappy as the Greeks forced to the South. Many of these people are peas-
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ants and there is no bereavement so grievous as a peasant's loss of the land of his fathers. One hears on both sides of the line the oldest cry in the world, "I want to go home".
Of course both communities recount old scores—they can go back, if necessary, to the Ottoman invasion of 1571, and even before then. But their only future is in living together; and we have to ask, how then can we all get our feet out of the cement? President Kyprianou is coming here later this month; the United Nations resolution of 20th November last has requested a report on the next intercommunal talks to be made by 30th March of this year. I believe there are several reasons why the next round of talks could possibly achieve some progress, and I am sure that Her Majesty's Government will contribute as far as possible.
The new talks will take place in a different context from before. First, there is the increased danger of the situation in the Middle East caused mainly by the Soviet invasion of Afghanistan. This gives an urgency to any explosive point in the area. Cypriots have asked me why the world seems to care so much more about the Soviet invasion of Afghanistan and so little about the Turkish invasion of Cyprus. Of course they know that the answer lies in the logistics of Western defence policies and of great power politics, but this only increases their despair and cynicism.
I believe that the first necessity in the coming talks is to recognise that previous communal talks have not in truth been genuinely intercommunal talks. The heart of this dispute is no longer between the two communities in Cyprus but between Turkey and the legitimate Government of the Republic of Cyprus. There is ample evidence that Athens does not lean and intrude on the decisions of Mr. Kyprianou in the way that Ankara dominates Mr. Denktash. Mr. Denktash cannot send the Turkish soldiers home; Mr. Denktash cannot stop the importation of Turkish nationals into the North of Cyprus—both matters of essential policy which are settled in Ankara, not at intercommunal talks; and there are many other examples. Therefore I hope Her Majesty's Government will use their influence to support the holding of genuinely intercommunal talks so that

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the people who live in the island can work things out for themselves. Previous discussions have dragged on about bizonal or bi-regional arrangements, and to what extent there should be central federal government with strong or limited powers. This must be for the Cypriot people to decide.
There are some forms of federation which could amount to de facto partition. If there were to be no freedom of movement, if there were to be separate armies, separate currencies, visas, separate treaty-making powers, that would be partition in practice. My Lords, we are talking about a little island half the size of Wales. What is the sense in cutting it in half?
The next Cyprus talks will take place against a background of Turkish demands for military and economic help from the West. The two questions cannot be separated. Of course Turkey is right to ask for help from her friends, but I believe that the taxpayers of the countries who will pay for that help are entitled to ask why, if Turkey is so worried about Soviet invasion, she does not start by withdrawing some soldiers, about 25,000, say, from Cyprus.
There is another new dimension. The next talks will take place in the context of Turkey's anxiety to become a full member of the EEC. I trust that common membership of the EEC will build bridges between all these countries. If the EEC is to have any credible political aspect and if the word "Community" is to mean anything, it must expect from all its members a respect for the territorial integrity of each of the others. I hope the London dicussions will take the matter forward and I hope, too, that the Government here will give every possible assistance to President Kyprianou.
I must remind your Lordships that President Kyprianou is a democratically elected President and he will have to face the hustings again. If his moderate Government is undermined by failure I foresee two possible results, neither of them welcome to us. People will turn either to the strong, well-organised communist party of AKEL or to the extreme right, to the embittered survivors of Eoka B, who are recruiting dangerously and whose main propaganda is that after
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all these years the ways of peace are not working.
Meanwhile, on a practical level in Cyprus I see some movement. For instance, whatever the politicians say, there has long had to be co-operation in divided Nicosia over the realities of the water and the sewerage services. The trade unions are increasing their contacts quietly on the basis of the common interests of the workers of both communities. Often practicalities can be more emollient than politics, and on a practical basis it is nonsense for this island to bifurcate itself. About half of Nicosia's water comes from Turkish-held Morphou. Nearly all of Turkish-held Famagusta's water comes from Greek-held Larnaka. There is no future in fragmentation, and if the politicians do not see this the ordinary people do, as they need to trade wheat from the central plain, citrus fruits from the North-West, tobacco from the North-East, grapes from the South-West and shoes and shirts from the factories of the South.
On 14th January President Kyprianou offered immediate payment of old-age pensions to eligible Turkish Cypriots from the Social Insurance Fund, the employment of Turkish Cypriots in the construction industry, and the availability to Turkish students of places in the various institutions of higher education. I do not yet know the response, but I am sure this is the way forward. It has nothing to do with Athens, Ankara, London or Washington. Left to themselves the communities could work out some way of rubbing along together, as they have done for centuries, short of loving but also short of fighting.
My Lords, let me finish with a personal recollection of my first visit to Cyprus. I went there after the terrible Paphos earthquake in 1953. Visiting that shattered town, where the hospital was competely destroyed, the sick and the wounded being looked after in tents, hot in summer, cold in winter, in terrible conditions, I remember the splendid matron as she came in, with mud on her shoes from going from tent to tent in the rain, and her eyes were very tired: I said to her: "Just as a matter of interest, what staff do you have here? Are they Turks or Greeks?" She said "Why do you ask? What does it matter? I am a Turk, the sisters are Greek, the anaesthetist is Greek,

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the surgeon is a Turk, I think the cook is an Armenian. Does it matter?". My Lords, I want to go to that lovely tormented island again, and if I ask the same question I hope someone will give me the same answer, "Why do you ask? What does it matter?"
4.12 p.m.
Lord NEWALL: My Lords, it gives me enormous pleasure to be able to follow the noble Baroness, Lady Jeger, and to compliment and congratulate her on her maiden speech. She has shown a knowledge of the subject, and her moving choice of words is as apt as the quality of her writing, which many of your Lordships will have read. Her breadth of interest, which includes work on councils and in many Government Ministries, will undoubtedly give us a new Member who can hardly fail to add substantially to the expertise which is already here in strength. No doubt as chairman of the Labour Party she will have her hands very full of other matters; nevertheless we hope to hear her on many future occasions.
My Lords, we are very grateful to the noble Lord, Lord Spens, who brought out a great many points, especially one with which I very much agree, the anomalies of United Nations resolutions. The noble Lord, Lord Banks, mentioned the fact that we have had four debates in as many years. I would say one thing: what better reason for a further debate if nothing has happened after all this time? Perhaps we can persuade a Minister or two to listen more carefully.
This subject has been raised many times. There is in both Houses, not only a lot of interest but great concern at the lack of initiative by successive British Governments, an initiative which we agreed to take many years ago with the responsibility we assumed as a guarantor power, a guarantor of peace-keeping and security for all Cypriots, majorities and minorities. This seems to be the crux of the whole problem. I think that most right-minded Cypriots, however fervently they may take sides, know in their hearts that some new lead is required, that something new has got to happen before long, and this country is possibly the best suited, the best able, and the most trusted by most Cypriots.
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Her Majesty's Government, often in the past, and possibly today, have said that outside help is unacceptable except from the United Nations itself. Surely much more could be done to prepare the ground for the United Nations negotiators. I believe I am right in saying that no Foreign Office Minister has visited Cyprus since the general election. There have been promises to go. There have been many problems in Rhodesia and Afghanistan and in other parts of the world which have undoubtedly been very important, but I do not think it is good enough for nobody to go to this island, which has had so much trouble for so long.
Some people say, "Why bother with Cyprus?". But, surely, apart from our duty, which is specially set out in guaranteeing the constitution, we are building up other problems for the future. Children have had six solid years, starting at whatever age you like, learning only their own language, and possibly English if they are lucky. What do they know about the island of Cyprus as a whole? They only know a divided island. They are learning also to hate the people on the other side, whichever side they are on; it is bound to happen, and they are going to grow up with the wrong ideas.
The sovereign bases have been touched on already. They are vital to this country, they are vital to NATO, especially in view of all the recent developments that have been happening around the world. The Cypriots in some parts of the island are already making noises about getting back some of this land. The longer the dispute goes on between the two sides the greater will become the need for more land for the Cypriots to continue the expansion, which the South at least is managing to do extremely well.
Thirdly, I turn to the stability of NATO itself, which is somewhat bound up in the EEC in some ways. Both the Greek and Turkish Governments are having great difficulty (which is an understatement) in keeping down inflation. Surely no easy agreement will be possible until their antagonism over Cyprus is brought to a halt by a settlement in the island of Cyprus. Those of us who have been lucky enough to spend some time in both halves of the island—I sympathise with the noble Lord, Lord Spens—see the island tearing itself apart day by day, month by month, year

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by year. The situation is not stagnating; it is getting deeper and deeper into the bog. Both sides are set in their ways and getting more so. Some of the mud-slinging that goes on between the two sides is quite infantile sometimes. Many people are suffering hardships. There is a feeling of being let down by Britain, and this is a very strong feeling from some of the people. Apologies for lack of action by this country do little to alleviate the sense of shame of any Englishman who talks to Cypriots, particularly in that country. I believe that this country has a duty to keep its word, and action is long overdue.
Perhaps action can be taken in several ways. We could actively discuss with both sides in Cyprus trying to reduce differences with a view to helping the United Nations in its active role, which may lead to talks soon, and we hope it will. We could possibly actively encourage charities and explain to them how they can help some of the more deprived and alleviate some of the hardships on both sides of the island. We could actively encourage both sides to put up suitable projects for the £7 1/2 aid million offered by us, and still not taken up, since 1978. Perhaps also we could influence the two sides to take up the 30 million or so European units of account which have been offered and have not been taken up since, I believe, 1973.
My Lords, I am fully aware that the Government must tread delicately in the minefield of international agreements in which we have recognised a Government of Cyprus. There are problems with stamps, problems with flights, problems with ships. But everyone knows that the Government of Cyprus, as it is known by the world, can only control a portion of the Cypriot nation. Mistakes have occurred on both sides, but the biggest mistake to my mind has been the lack of action by this country, the failure to keep our word and to be a guardian to the Cypriot people. If action is not taken very soon the situation could easily become much worse and reach a point of no return. With renewed initiatives of some strong nature perhaps some decent headway could be made. If then the two sides still fail to agree, maybe a time limit could be set before some more effective action is taken to make a solution more desirable and imperative to both sides.
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With the proven skill and ability in diplomacy of the noble Lord the Foreign Secretary, I can only ask that he should take urgent steps to remedy the situation, started and agreed to by a Conservative Government, and now a stain on the good name of our nation in upholding our solemn obligations.
4.21 p.m.
The Countess of LOUDOUN: My Lords, efforts to find a peaceful solution to the problem of Cyprus are still being pursued, and I should like to think that there was a slight glimmer of light in the darkness. Therefore, I hope that nothing we say in this debate will help to extinguish that glimmer.
It is now five and a half years since one-third of the people of Cyprus were uprooted from their homes and—as the noble Baroness, Lady Jeger said in her fine maiden speech—were turned into refugees in their own country. Of those 200,000 refugees there are over 70,000 children, many of them still living in primitive camps. To replace the tents, which are by now worn out, timber and chipboard huts are being erected. Apart from being more economical, those huts also constitute an improvement in the living conditions of the displaced persons who have already spent three rough winters under canvas.
The Government are doing their best to provide accommodation and help for those refugees, but the size of the operation is enormous. A group of brothers and sisters of eight to 10 children is not unusual and for those children the situation worsens continously as time only makes their position as refugees permanent. The bitterness of the parents, which for many has turned into apathy or despair, must reflect on the children.
Apart from the physical hardships involved, the greatest hardship today is the climate of uncertainty which prevails, and that applies to both sides. For the Greek Cypriots there is the uncertainty as to whether they will ever again see their homes, their land and the businesses which were built up by them over the years. There is the uncertainty as to the whereabouts of missing members of their families. Are they alive or dead? Great efforts are being made to trace the thousands of missing persons, but these

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are hampered by the unwillingness of Turkey to co-operate.
However, the Turkish Cypriots, too, are suffering. They have the worry as to whether the owners of the land on which they have settled will return and dispossess them. But, not all Turkish Cypriots are genuine. I have seen the figure of 50,000 Turks quoted as being the number from the mainland who have settled in Cyprus and are posing as Turkish Cypriots. That in no way improves the position of the real Turkish Cypriots who are now discriminated against in favour of an alien people with whom they have little affinity. The people of Cyprus are, by nature, a happy, friendly and hardworking race with a strong bond within families. They have suffered enough. I certainly wish them well in their efforts to bring peace and prosperity to their island.
4.25 p.m.
Lord CARADON: My Lords, I think that it might be said at this stage in the debate that we are fortunate to have been able to listen to the remarkable speeches that have been made to us today. I would refer first to the very moving maiden speech by the noble Baroness, Lady Jeger. I am sure that it is a happiness to all of us that, in our rather dry male discussions, we should have strong feelings put forward by the ladies. I think that the speeches made by both the noble Baronesses who have addressed us today conveyed to us the almost passionate feeling that many of us have when we think of the hardships and the sufferings of the people of Cyprus on both sides of the line.
We think today of the future rather than the past. It is a little difficult for me to remember that it was nearly 40 years ago that I first acted as Governor of Cyprus. It is worth remembering those days—it is almost impossible to remember them now—because then the enemy was in Rhodes, Crete and the Greek Islands, and we were in many ways the front line at that time. But, while the world was at war, Cyprus was in peace. The two or three years that I spent in Cyprus at that time were some of the most productive and constructive that I had known for many years.
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In the Executive Council there was a distinguished Greek and a distinguished Turk. They worked together day by day in full understanding and friendship In the English School there were Turks and Greeks together. In all the departments of Government there were Turks and Greeks and when I say, "Turks and Greeks" I mean Cypriots, but I pay attention to their basic allegiance which is certainly a factor that we must remember. Even in the military units we had Greeks and Turks working together serving both at home and overseas.
Subsequently, when I returned almost 20 years later to be Governor again, in days of violence, revolt, bitterness and animosity, it was a great comfort and consolation to line, and a source of confidence for the future, that I had seen Cyprus when there was peace, friendship and understanding between the two communities. Today, in view of all that has happened, if I remember the days of the Second World War in Cyprus, I have confidence that it is possible for Greek Cypriots and Turkish Cypriots to work together in understanding and full co-operation.
It is unwise to devote too much time to recollection but I also recall that, in 1960—and I remember the scene—I, on behalf of the British Government, a Conservative Government, I think, at that time, signed the Treaty of Guarantee. Your Lordships can imagine that, having had that honour and obligation, I remember it frequently when I study the unhappy situation which now exists in the island. I remember the wording of the Treaty of Guarantee. We are all familiar with it, but it may be just as well to remind ourselves of it once again. It said:
"Greece, Turkey and the United Kingdom likewise undertake to prohibit, so far as concerns them, any activity aimed at promoting, directly or indirectly, either union of Cyprus with any other State or partition of the Island".
It went on:
"In so far as common or concerted action may not prove possible, each of the three guaranteeing Powers reserves the right to take action with the sole aim of re-establishing the state of affairs created by the present Treaty".
So, having been given the privilege of signing the treaty it is, to me, a matter—as was said just now by a noble Lord on the other side of the House—of the greatest shame (yes, shame!) that we should have

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failed to carry out our clear obligation. Most of all, I felt that feeling of shame after the crazy act of violence which took place in 1974, when they surrounded what used to be my Government House and pumped their heavy guns into the presidential palace, seeking to kill the President. As noble Lords will remember, he escaped. I do not know the full story; we shall not know it until the documents are subsequently released but, possibly under American pressure and in spite of the obligation of our clear treaty, a deliberate decision was taken to do nothing. We would not even call on the Security Council of the United Nations. Nothing was done at that time. That stands to our discredit and our shame. It makes it all the more necessary that we should now consider what this country can do at this important stage when we drift into a situation which, at the present rate, can only become worse.
So I turn from the past to think about the future. Do we know the objectives? Yes, I think we do know what they are. One or two steps have already been taken. There was the step taken by Archbishop Makarios and Mr. Denktash when they clearly set out three or four purposes which were agreed on both sides. Admittedly, they did not state details; they did not create a constitution; but they set out a purpose. Again, there were the 10 points agreed upon by Mr. Denktash and Mr. Kyprianou. That set of 10 points, it is true, was not the final answer, but they were agreed. I return to those 10 points. It may be as well to repeat the main purpose:
"The independence, sovereignty, territorial integrity and non-alignment of the Republic should be adequately guaranteed against union in whole or in part with any other country and against any form of partition or secession''.
That was the agreed purpose. Therefore, we know the aim. I should also like to quote the very important reference in that document to Varosha:
"Priority will be given to reaching agreement on the resettlement of Varosha under United Nations auspices."
Instead of being a terrible hostage of years of animosity, I sometimes think that Varosha can perhaps be the gateway to peace. There is no reason why Varosha should stay abandoned in waste, as it is at present, when it could very largely
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provide an answer to the refugee problem about which we all feel so intensely.
Where do we go from here? The Secretary-General has done his best, but he has no power except what he is given by the Security Council or its members. He has reported four, five or six times that there is no agreement. Are we to go through that process again? Are we merely to say, "Leave it to him", when we know that that will produce no result? It has not produced a result so far. Having read the statements made by both sides in Cyprus, it seems that there is no indication that either side will abandon its position. Therefore, I believe that there has been one sad neglect on the part of the Turkish Government and the Turkish Community. I say this to them, with the greatest respect. When there is a dispute of this depth and feeling in different parts of the world—for example, in Israel or in Africa—nearly always there has to be an independent initiative, something has had to be proposed which neither side could propose itself but which in the end both sides can accept.
I understand the feelings about internationalisation very well. It is said that they turn their faces against internationalisation, but that is not my impression. When I talk to Mr. Denktash —as I do when I go to Cyprus—about the feelings of those who are genuine friends of Cyprus, who love the island and who like both communities, I get the impression that they do not want to refuse to accept the help, the advice and the guidance of people who wish to see an answer. We know roughly what the answer must be. Most certainly there must be provision for the Turkish community to be safe, secure and confident. That must be provided in their area. We know the difficulties of forming a federal constitution; I have had some experience of it myself in Nigeria and elsewhere. The most difficult thing in the world is to create a federal constitution and prior to it one must create a genuine will on both sides to make it work.
return to the point that there must be some intervention. It is not sufficient to be told from the opposite side of the House that we simply have to wait for the next meeting with the Secretary-General. That is not enough. If any country is to

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take an initiative, I believe that it should be our country, with its special obligation. We have bases and troops on the island. We play a prominent and principal role in the United Nations peace-keeping force there. We have the obligation of association with the island for almost a century. We have leadership in the Economic Community, the commonwealth and the United Nations. I do not believe that we would favour one side or the other. I believe that, working with the Secretary-General, we should and must be able to end a shameful situation.
I am watching the clock because I know that time is restricted. Perhaps noble Lords will permit me to take up a minute or two to recall one other incident which may have some bearing on what we are talking about this afternoon. Many years ago in the United Nations two resolutions were placed before the General Assembly. One was backed by the Greek Government and one was backed by the British Government at that time. Our representative was Sir Pierson Dixon, the British Ambassador to the United Nations. He left his office at 99 Park Avenue to go to the General Assembly and to certain victory. He had worked for weeks and knew that an overwhelming victory in the General Assembly awaited him on his arrival at the United Nations building. I was in Nicosia at the time and late that night he sent me a telegram telling me what had happened on that momentous day.
Apparently as he went to the United Nations he said to himself, "What we want today is not a victory, but a success." The phrase "not a victory, but a success" stuck in his mind. When he arrived at the United Nations he (lid not go straight into the great Assembly, with all the votes that he had been promised; he went to an upper room and asked the Foreign Ministers of Greece and Turkey to come and see him. Zorlu of Turkey came to see him first and he said, "At this last moment, why should we not try to take one step towards a settlement instead of scoring victories over each other in the vote?" Mr. Zorlu said, "It is no good talking to me now; we have to go down to the Assembly; they are waiting to vote now. Anyhow, it is no good taking to the Greeks, they know that they are going to lose
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and they are in the frame of mind of Greek tragedy. You will get no sense from them." Sir Pierson asked where Mr. Averoff, the Foreign Minister of Greece was, and why he had not come, and was told that he had gone to meet the Queen of Greece that day. He managed to get him on the telephone and asked him to come down. He said that he would come as quickly as possible. The three men together in the upper room, with the angry Assembly waiting below, talked on the basis of searching not for a victors' but for a success. At the end of half an hour Mr. Zorlu shook hands with Mr. Averoff and each pledged his personal honour to work as rapidly as possible for a final settlement in Cyprus. It was too late to get anything typed; they scribbled out a new resolution which did not mean very much, except that neither side was scoring a victory over the other.
The problem remained of who would propose the resolution, because the rule of the Assembly is that the sponsor of one resolution cannot sponsor another. They went through the long list of sponsors. Was there anyone missing? It seemed that Mexico was missing. They then had to get hold of the Mexican Ambassador, so they put out a call for him on the loudspeakers. He hurried from his place in the General Assembly. Would he move a resolution on Cyprus? He said he would like to know what it was. They quickly explained it to him, and he understood and then agreed. Then, to the astonishment of the Assembly, the Foreign Ministers of Greece and Turkey and the Ambassadors of Mexico and the United Kingdom entered the Assembly together. Then, having obtained the special permission of the President, the Ambassador of Mexico rises to propose a resolution they have never heard of, when every delegate in that great hall has promised his vote to his own country and to many others. Then, to their amazement the Mexican resolution is supported by the Foreign Ministers of both Greece and Turkey and the Ambassador of the United Kingdom. In a spirit of astonishment it passed unanimously that day. In three months Mr. Zorlu and Mr. Averoff kept their word. In three months we had a settlement in Cyprus. It was a joy to work through that final year with Greeks and

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Turks working again in full agreement and understanding in that same executive council to produce the independent Republic of Cyprus.
It may be worth remembering the story because I believe at this time, when I speak to the Greeks or Turks, I feel that there is a willingness, if it can be done with honour and with the full recognition of the needs of both sides, and an eagerness and longing to end the dispute which was, in the first place, unnecessary and which has done such terrible damage. I come back time and again to the feeling that, of all the countries in the world who could not only contribute to that but could make a decisive contribution, ours is the country.
4.42 p.m.
Lord MAYBRAY-KING: My Lords, it is a privilege to follow the noble Lord, Lord Caradon, as it is to pay tribute to him for his life service to Cyprus and to so many other countries in the Commonwealth. I am grateful to the noble Lord, Lord Spens, for introducing this debate, although he would not expect me to agree with every word he said. I am delighted to congratulate my dear friend the noble Baroness, Lady Jeger, on her moving and excellent maiden speech.
Cyprus is an independent sovereign State—recognised as such by practically the whole of the world. Yet part of Cyprus tonight—and that the naturally richest part of Cyprus—is occupied by foreign troops, by Turkish troops, and has been so ever since some five and a half years ago. It was then that a pro-Greek fanatic, Colonel Sampson, tried to murder Archbishop Makarios as part of the movement to make Cyprus part of Greece—the movement called "Enosis"; a movement which Makarios had left.
In my latest of many visits to Cyprus I had the privilege of meeting with President Kyprianou and the leader of the Turkish Cypriots, Mr. Denktash. Both received me courteously and both spoke to me frankly. I found that still in the minds of some of the leaders of the Turkish Cypriots there lingers the old idea that the Greek Cypriots want enosis with Greece. From my many contacts with Greek Cypriots and Greek leaders in Athens I know that the suspicion, if
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natural in view of what happened in history, is unfounded. Enosis had really died a natural death under the enlightened leadership of Archbishop Makarios. Any suspicion should have vanished with the overthrow of the Greek Colonels and with the overthrow of Sampson by Greek Cypriots who are now members of the Cyprus parliamentary Government.
No serious politician in Cyprus or in Athens has any desire for anything but the independence of Cyprus: independent of Greece and independent of Turkey. I believe that it ought to be possible for the three guarantor nations, Greece, Turkey and ourselves, to hammer out a solution which would end for all time the present unhappy state of affairs in that beautiful island. I hope that my noble friend, if I may so call him, the Foreign Secretary, who is winning golden opinions for what he is doing in his office, among his many duties will take under his wing the problem of making an initiative some day, and very soon, and call together the co-chairmen.
For years now 200,000 Greek Cypriots have been dispossessed of their land and their homes. The Greek Cypriot Government has done miracles in housing most of them and in finding work for most of the refugees, those who are able bodied. But I also saw former Turkish Cypriot villages, in the Greek Cypriot part of the island, empty. I forget the exact number, but some 50,000 Turkish Cypriots were turned out of their own homes in the Greek part of the island. The return of all dispossessed Greek and Turkish Cypriots would be a great achievement indeed for the happiness of the island.
There is still the problem of the missing persons—Cypriots of both kinds who were missing after the civil war and who have never yet been accounted for. I spoke of this at length in an earlier Cyprus debate, and I spoke to both leaders on my last visit to the island. This human problem is still unresolved. On my return to Britain I received a letter from a number of Britons in Cyprus. They were men and women who had settled for their retiring years in a part of Cyprus which is now taken over by the Turks. They were seeking compensation from Mr. Denktash, and had not yet received anything like adequate compensation. I took up this matter with Her Majesty's Government, and I hope we may hear

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at the end of this debate how far we have gone in the claims of the dispossessed British citizens in Cyprus deprived of their homes by the Turks.
As one who has many Cypriot friends who have lost everything in that island, I am always deeply moved when I consider the lot of the island, which could easily be so happy, as the noble Lord, Lord Caradon, told us in the early part of his magnificent speech. In the international setting Cyprus has an important role to play. We want Greece in the European Community, and are glad that she is coming in. We want her in NATO too. We are glad to have Turkey in NATO, and we want them in the European Community.
At the present moment we are trying to strengthen an alliance of the democracies of the world in face of grave dangers. Greece and Turkey face the same dangers that we do. If the co-chairmen would get together and exercise a little pressure on the Cypriot leaders, recommence the communal talks, start compromising—and Varosha, the part of Famagusta, is a possible first step towards compromise—it would be good for the Free World and it would be more than good for Greece.
At the recent annual meeting of the Pan-Cypriot Refugee Committee they passed a resolution. I want to read just two sentences from it:
"The sixth Pan-Cypriot Refugee Congress extends to our Turkish compatriots feelings of friendship and sincere wishes to build jointly a new Cyprus—peaceful, happy and thriving—where all communities will enjoy an equally high standard of living and where reciprocal trust will bring security and co-operation."
I am sure that that is in the minds of all of us in this debate.
4.50 p.m.
Lord BROCKWAY: My Lords, I join with others in thanking the noble Lord, Lord Spens, for initiating this debate, and I wish very deeply to congratulate my noble friend Lady Jeger on her maiden speech, which was so sincere and combined with such knowledge. I knew she was going to make a splendid speech and she did not disappoint those of us who have known her for many years.
I have found this debate unique in one respect; I have not taken part in a debate in which there has been expressed more
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deep feeling than we have heard today, a feeling which is on both sides of the House and a feeling which was certainly illustrated in the speech of the noble Lord, Lord Newall. Combined with that deep feeling has been some quite extraordinary knowledge; indeed, nearly every noble Lord has spoken from experience of Cyprus. I was moved most by the description which my noble friend Lord Caradon gave of co-operation between Turkish Cypriots and Greek Cypriots in the councils and committees of the Government when he was governor there. I did not have that privilege, but I had the privilege of going to Cyprus and mixing with the ordinary people in the villages. He described cooperation at the top; I saw it at the bottom.
At that time in the villages of Cyprus there was not the least antagonism between the Turkish and Greek Cypriots. I have described in this House before how, under the trees at mid-day, they could be seen taking the shade together, with Turkish and Greek families and children playing together. Not only that; one could witness the gossiping of both in the streets, the going to the same shops, the young lads, both Turks and Greeks, kicking a ball around. There was no antagonism between them at that time and the fact that there was no antagonism in the past gives reason to believe there may be co-operation in the future.
It is five-and-a-half years since the Turkish invasion took place. Maybe I have youthful impatience, but I have impatience with the fact that so much time has passed without a settlement being reached. The last talks were in July. At the end of the talks it was said they were breaking up for a few days' recess. They have not met since. However, now we are hoping they will meet very soon, and I ask Her Majesty's Government what they will be proposing when the new talks which Dr. Waldheim is calling take place. I believe our whole concentration should be on seeking a solution through those talks.
There is more than one ground for optimism. President Kyprianou has been showing extraordinary friendship towards the Turkish Cypriots by his recent proposals for the employment of Turkish Cypriots in Government enterprises, extending old age pensions to them, expanding the opportunities for Turkish Cypriots in

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higher education, his urging that there should be co-operation between many of the Turkish and Cypriot organisations, and his endeavouring to recreate the co-operation which previously existed.
I had hoped when we last discussed this subject that agreement was near about Varosha, the new suburb of Famagusta, but I have been a little disappointed recently. The fact that the Turkish authorities there have insisted on the hotels being re-opened under Turkish administration, and threatening that they will re-open them themselves unless the proprietors did so, has created a bad atmosphere. I am glad that the Governments of Britain, the United States and West Germany have warned of the dangers of that course and I hope that that warning will lead to a reconsideration of the approach to that problem.
What is the difference between the attitude of the Turkish Cypriots and the Greek Cypriots to the future of their island? It can be defined as a difference between confederation and federation: the Turkish Cypriots desiring that there should be two separate States but associated in confederation; the Greek Cypriots insisting that while there shall be greater autonomy in the two provinces, in the island there must be a central Government with authority for foreign affairs, defence, but also for the common economy.
I heard my noble friend Lord Caradon say that when these issues are discussed it is very difficult to reach a solution unless there is a will to bring about a solution. Honestly, if one examines the situation one sees that the differences between confederation and federation are not such that if one has the will one cannot find a solution to them. I take some consolation from the recent statement by the Turkish Foreign Minister, Mr. Erkmen, on this subject. He said:
"There was sound logic at the root of Mr. Denktash's call for independence",
but,
"we are holding him back at this stage."
I believe that the situation in South-East Europe, in Greece, Turkey, and Cyprus, in regard to relations with Europe is such that a new opportunity now arises to try to find a solution to these problems.
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I want to draw to a conclusion with a reference which may seem more controversial. The West seeks Cyprus as a site for NATO, as a geographical instrument for NATO. The majority of the people of Cyprus want that country to remain neutral and unaligned, and we must be very careful indeed as we approach that problem. The United Nations has recently carried a resolution for the withdrawal of all foreign troops from Cyprus, including the British troops which are at their bases, and, because that point was included, the West at the United Nations voted against the resolution. I nevertheless say this: As we approach this problem we must understand the right of the people of Cyprus to their own self-determination in these matters. They are fearful that the British bases may be used for purposes which would destroy their non-alignment. The United States used them for military aircraft flown to the Middle East. We used them for the attack on the Suez Canal; and Cyprus inevitably becomes involved because there are bases on their territory. I think that we must recognise their deep feelings on this matter.
I conclude by quoting what President Kyprianou has said on this subject:
"When the question of wider disarmament comes up for discussion, then certainly we would like to see Cyprus demilitarised in a peaceful Mediterranean.
"We want Cyprus to cease to be the centre or cause of friction and become a bridge for peace, happiness, tranquility and co-operation between the three surrounding continents."
I should like to see our country and our Government supporting the aims of President Kyprianou as expressed in those words.
5.4 p.m.
Lord ENERGLYN: My Lords, in expressing my thanks to the noble Lord. Lord Spens, for bringing this subject before your Lordships this afternoon, I should like to say that I came with a prepared speech, which I have now abandoned because of what I have heard from various Members of your Lordships' House. What rings so clearly in my mind was graphically expressed by the noble Baroness in her splendid maiden speech: these peoople who live on an island half the size of Wales just want to go home, stay at home, and live and work in peace. To me as a scientist that

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message has come out clear and simple. It was a great privilege to hear the noble Lord, Lord Caradon, with his vast and deep experience of this island, appealing for what I as a scientist would call a catalyst—a catalyst in the real sense of the word—to bring together these people who really want to agree, hut do not know quite how to do it.
The other fact that has emerged for me is that there is too wide a gap between the rich and the poor in Cyprus; and there is too much free money (as it were) available to those who use their wits and not their hearts, as was brought out in the splendid speech of the noble Lord, Lord Newall. Therefore I should like to suggest to your Lordships that the catalytic agent in this picture might well he to take advantage of the really singular—and I mean singular—mineral resources on the island of Cyprus, It is an island in the Medierranean that is geologically unique; and because of this I should like to put before your Lordships several facts.
One of the facts is that in this mass of land thrust above the waters of the Mediterranean there is a whole mass of mineral veins of incredible richness, but not one of these ore bodies has been processed on the island. All the ores dug out of Cyprus have been exported in a raw state. If we could introduce into Cyprus the value-added character which one associates with the smelting and the processing of these ores, it would uplift the economy of the country. It would provide a variety of work for the country, and the Cypriots would work—as the noble Lord, Lord Caradon, had proved—happily together in all kinds of enterprises, and would not have to seek financial aid from the outside world.
It would take too long to recite the numerous deposits which could be exploited in this way, and I shall mention only two or three. One is asbestos. Not a single ton of asbestos is processed out of that fabulous deposit on the island; it is all exported. Imagine, my Lords, the value-added returns which would come from the processing of asbestos on the island. The island also exports between 33,000 and 35,000 tons of chrome, and this chrome is of special value, but not one gramme of it is extracted on the island. Likewise Cyprus exports about the same quantity of copper, and it is a very special
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copper ore, which is processed in Spain and elsewhere. Not one ton of it is processed in Cyprus.
In other words, what I am really saying is that if the Cypriots could introduce into their country the value-added characteristics of their valuable resources, they would have a financial stability which would enable them to live in peace and resist any outside intrusion from anybody. In order to do this they will need to have at their disposal a considerable quantity of electrical energy for the electrolysis of the metals, the conversion of smelters, the development of desalination plants, etcetera. This is where Cyprus is really a geological jewel in the Mediterranean. It is the product of earth pressures, unique in the Mediterranean, which have lifted pillar lavas from the junction between the solid and the molten parts of the earth's interior. Consequently, it is geologically a "hot-spot"; and we have only to look round the Mediterranean to see Stromboli, Etna and Vesuvius to be convinced.
I am therefore quite seriously suggesting that the catalyst which the noble Lord, Lord Caradon, has been asking for would be to use the money which the noble Lord, Lord Newall, has so graphically brought out, unused, into the light of day for developing, with British know-how (and I emphasise "British" know-how, because we have got it), a geothermal power station which could provide eternal energy for the island of Cyprus. A board could be set up, carefully selected, involving the Greeks, the Turks and everybody else in Cyprus, to develop a power station which would provide for Cyprus a new picture of the parental attitude of Britain to the welfare of that island. We love it; we want it; we want to keep it as it is, as the noble Baroness has said, and let the Cypriots go home and live in peace, and work and play in happiness.
5.11 p.m.
Lord HYLTON: My Lords, when we debated this subject last July Her Majesty's Government had been in office for only two months. Now some nine months have gone by, and I think we are entitled to ask them what they are doing and how they are facing their responsibilities. I should like to raise three points, of which I have given notice to my noble friend. For the last 5½ years young Greek and Turkish

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Cypriots have been growing up in isolation from each other. They have been separate at school and they are separate in higher and further education—for which, incidentally, most of them are obliged to go overseas. I know there is some English language teaching in both zones, but there is little or no chance for Greeks and Turks to communicate in their formative years, when they are perhaps at their most sociable and most experimental. I very much hope that the offer by President Kyprianou, which was mentioned by the noble Baroness, Lady Jeger, will be taken up because if it is not taken up and if this separation continues, there is the greatest possible danger that the cynicism which she mentioned will become deeply implanted in the young.
It is for these reasons that I come back again to the question of a university for Cyprus. When I mentioned this idea in your Lordships' House last July, the noble Lord, Lord Goronwy-Roberts, said it was an attractive suggestion. My noble friend Lord Trefgarne said at column 2025:
"We would be prepared to consider the possibility of British assistance for the establishment of a university in Cyprus and I would certainly hope that such a university would benefit both Cypriot communities". [Official Report, 25/7/79.]
My Lords, what progress has there been since then? Have Her Majesty's Government communicated their willingness to Cypriots and to the allies of Cyprus? Might there not also be scope, perhaps, for transferring some university teaching in relation to overseas students from Britain to Cyprus? In examining the benefits that might flow from a common but neutral university in Cyprus, where English was the main language of instruction, it may be helpful to make some comparison with Northern Ireland. There, as we know, the schools are rigidly divided on community and religious lines, but at least Queen's University, Belfast, Rupert Stanley College and Belfast Polytechnic are fully integrated, to the very great benefit of Ulster. If we cannot immediately obtain a university for Cyprus, could we not at least try to achieve a college of advanced technology, or perhaps a polytechnic?
My second point concerns health. I have been informed that plans were ready and agreed in 1974 for a cancer hospital,
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or at least a cancer unit in an existing hospital. This would have served the whole island. Then came the unfortunate coup and the invasion, and nothing resulted from those plans. Are Her Majesty's Government aware of this situation, and what are they doing about it? Will they, as I hope they will, rally to so humane a cause on the understanding that, of course, the cancer unit must serve the whole island?
My final point concerns compensation. My noble friend Lord Trefgarne said in our last debate:
"…we hope that progress can soon be made both with the evaluation and payment of claims by British nationals". [Col. 2026.]
What has happened since then? Has anyone been paid anything after 51/2 years? The question of compensation, however, goes rather wider and deeper than that. There are Greeks and Turks in Cyprus who deserve compensation every bit as much as British citizens. I will not weary your Lordships by repeating the details which I gave in July. I just ask: Has any progress been made on these aspects of compensation? If the answer is, "None", surely this reinforces my previous suggestion for an impartial international assessment body. Will Her Majesty's Government test out this suggestion instead of merely pouring cold water on it? I fear that many basic local interest groups do not much desire a solution. In this situation, what can we do to work towards a change of heart?
I have made three suggestions for institutional co-operation. Do Her Majesty's Government reject them? If so, what better ideas have the Government to put forward? I have already said, in an Irish context, that we need a coming together of minds and hearts of people—Greek and Turkish Cypriots, British, Greeks and Turks. We need someone to give a lead in practising the politics of forgiveness. This, I am quite sure, is the key to unlocking the future in the island of Cyprus.
5.18 p.m.
Lord GORONWY-ROBERTS: My Lords, I am mindful of the fact that the rules of debate require that I should be as brief as possible to enable the noble Lord to speak during a given time and to

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sit down at an appropriate time, much as we would otherwise regret his having to do so. The House is truly grateful to the noble Lord, Lord Spens, for having given it the opportunity to discuss this very important and very sensitive question; and I myself am glad to follow the noble Lord, Lord Hylton, who in a very short time made three extremely important points, with the first two of which I hasten to say once more I am in very considerable sympathy. I think that to introduce certain communal institutions, such as a university and hospitalisation of the kind he mentioned, would go very far indeed to knit together the needs, and therefore the efforts of the two communities on the island. I hope the Government will give thought to his suggestions, as I believe we did when he first raised the question in this house when I was Minister.
My Lords, the maintaining of the independence and integrity of Cyprus is not only important to Cyprus itself and all its people; it is also of extreme relevance to the defence and survival of the Free World. So we must not apologise for discussing Cyprus in much larger contexts, particularly after recent events in the Near and Middle East have brought the importance of Cyprus and of nearby countries into even keener focus than they were before. Certainly good relations between Greece and Turkey, as well as between Greek Cypriots and Turkish Cypriots, are essential to the cohesion of the Western Alliance. Everything that has been said in this debate, including what was said by the noble Lord, Lord Spens, has been in support of promoting good relations between the two communities on the island and also between the two countries, Greece and Turkey which, naturally, have an immediate interest in the future of the island. Both Greece and Turkey have a long-standing tradition of friendship with this country. They are both members of NATO—in varying degrees, if I may put it like that—they are both prospective members of the European Community, Greece imminently so, and Turkey prospectively so; and we would welcome the adhesion of both to the European Community to strengthen the Community politically and economically.
It is therefore of the utmost importance that we in the Western world, as well as our friends in Cyprus itself, should consider
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the future of that island in this wider context. The basic accord of Greece and Turkey, apart from being essential to the restoration of normal political progress in Cyprus, is also immediately essential to the restoration of stability in a wider area. Therefore, it is cheering news that certain difficulties between Turkey, for instance, and the United States have been resolved and that the Western Alliance and its members are taking a constructive view of the needs as well as the prospects of our two friends in the Eastern Mediterranean. So that I am not without hope that there may be rapidly approaching, not just in Cyprus, but surrounding Cyprus, the political conditions, the imperative conditions, the conditions of compulsion by extraneous forces, which may lead to meaningful discussions and durable solutions.
The central difficulty, as has been described clearly by more than one speaker, is the present division of the island marked by the presence of Turkish forces in the north; and, naturally, Greek Cypriots regard this as an impediment to the consolidation of the island as a whole, while Turkish sympathisers in the island and outside ascribe the present situation to a number of causes, some of them deepseated, in the past, but particularly traceable to the Sampson attempt at a coup in 1974; so that the argument is evenly balanced, as it always is when there is a clash of nationalistic interests and sympathies. One feels attracted to the suggestion of my noble friend, Lord Caradon that possibly an independent lead, an independent initiative, might well be taken which will take the matter out of the immediacy of the antagonisms and suspicions that have ruled on the island so far. I am sure that the Government will take a very good look at his suggestion that such an independent initiative might well be taken by this country through the United Nations. He speaks with authority and experience and he would not make this suggestion today, I know, without having thought carefully about it for a considerable time.
For the moment, we must pin our hopes on the inter-communal talks which have recently re-activated under the aegis of the United Nations and we must not despair that something will come of them. Here, practical suggestions such as those we have heard from the noble Lord,

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Lord Hylton, are helpful. Where talks of this nature flag or halt because neither side is prepared to make a concession in case they weaken their own position, then something on which both sides can immediately agree, something like a joint institutional movement forward, may unlock the position. However, there must be a basis for any solution by conference, whether by the iniative of this country or by a corporate initiative such as that of the United Nations.
It occurs to many of us that the fundamental, two-fold basis clearly is, on the one hand, that the Greek community in Cyprus and outside should abandon all intention of seeking enosis. We heard my noble friend Lord Maybray-King testify to his immediate knowledge of the feelings on the island. My information and the result of my talks with many on the island and in London is that he is quite right. The Greek Government and the vast majority of Greek Cypriots on the island and outside have totally abandoned this as a practical solution. This was kept alive by the facist régime of the Colonels, and Sampson was the demented child of that dictatorship. The Greeks are, above all, at once practical and democratic; and we have in Greece today an enlightened government to which we look for attitudes which will reassure the entire population of Cyprus as to the way in which Greece and the Greek Cypriots regard the future of the island. That is the concession, if it is a concession, because it is, I believe, a permanent attitude on the Greek side.
On the other hand, the Greek community on the island and outside needs to be assured that it is not the intention of Turkey permanently to annex northern Cyprus, or indeed, to perpetuate indefinitely its present division. That is the balance of attitudes between Greeks and Turks on the island and outside which is essential to moving forward to the kind of solution which my noble friend Lord Caradon put forward. He suggested this with some courage, because anybody who suggests a federal solution almost immediately calls upon himself denunciation and even derision. I never know why this is so, because federation has succeeded in as many parts of the world as it has failed in. He has experience of the diffi-
792
culties of federation and of its successes, so that what he had to say is real evidence.
There are various gradations of federalism. The line to be drawn is between any form of federalism and confederalism. Most of us would agree that confederalism is out in Cyprus, but there is certainly room for an effective form of federalism within a united, independent, sovereign Republic of Cyprus. We have heard from this side of the House suggestions as to how that federalism should be constituted. That is a matter for negotiation. So long as we work to a Republic of Cyprus which is united, independent and sovereign, with a single sovereign government but within which state there is agreed appropriate and ample freedom to develop by the two main communities concerned, we may hope to make progress.
I repeat that federalism in one form or another has as many successes—probably more—to its credit than failures. One thinks of the great Dominions of Canada and Australia—of the United States itself—of the Federal Republic of Germany and of the Indian union. That it failed in Central Africa and one or two other parts of the world is not evidence against its success in so many parts of the world. It may be the wave of the future that the implacable nationalisms of our time should find their proper expression not within the old-fashioned nation-state but within the new enlightened aggregation of communities within federations.
5.32 p.m.
Lord TREFGARNE: My Lords, may I first say how much I enjoyed and appreciated the very remarkable maiden speech of the noble Baroness, Lady Jeger? We do not often hear maiden speeches like that—or any other speeches for that matter— and I think that the noble Baroness is a very fine addition to your Lordships' House. I hope that we shall hear her again soon and often.
Your Lordships last debated this topic in July 1979. Since then there have been but few new developments. The second half of the year was dominated—as are the second halves of so many years—by the annual recourse to the United Nations General Assembly. We doubt whether the resolutions that emerge from New

793
York on this subject are worth the price that is paid in suspension of the intercommunal dialogue, as each year the parties to this question turn their eyes and ears westwards hoping for new enlightenment which does not come.
Along with virtually all our Western partners, we abstained on the resolution as a whole and voted against parts of it. But, in the New Year, the dust of the debate began to settle and the United Nations Secretariat once again resumed the search for a formula that would enable the inter-communal talks to be reconvened, and to consider substantive issues. There are encouraging signs that they have made some progress; and we wish them well. But it is they, the United Nations, who have been given the mandate by the international community to carry on this task. To those who wish Her Majesty's Government to launch some new initiative over Cyprus, I can only repeat, as I said last July, that we did not believe either back-seat driving or a new initiative by us now would do any practical good. Those most concerned are not asking us to do this either. Although of course we acknowledge that we have a special responsibility arising from the 1960 treaties, this does not mean that we have the practical power to bring about change in the situation by unilateral action. On the substance of the issue we have made our contribution in the form of the paper presented in 1978 along with the Canadians and the Americans; and that paper remains on the table for the parties to use as they choose.
On procedure, we support Dr. Wald-heim's initiative. He and the parties know that we and our partners are ready to use our influence to help in any way that they would find useful. Indeed, in the process of discussion with the governments and parties concerned, we constantly use our influence to promote better understanding and to move the situation forward. But a settlement cannot be imposed on the people of Cyprus from outside. Their leaders must accept the main responsibility for negotiating a settlement among themselves; and they must take the political risks by making the necessary concessions. Otherwise, there will be no settlement.
These, then, are the Government's views on the Cyprus question. My right honourable friend the Prime Minister
794
looks forward to her discussions with President Kyprianou when he comes to London next week.
But if on the main political issue the opportunities and the problems are much as they were when we last debated Cyprus, there are other areas where things have moved on. Economically, the South continues to make remarkable progress while the North, though clearly affected by the economic crisis in Turkey, shows no signs whatever of the economic collapse which some have predicted for it in recent years.
May I now deal with as many of the points as I can which have been raised in the debate. The noble Lord, Lord May-bray-King, and others, dealt particularly and at some length with the consultations with the guarantor powers and initiative by them. They were particularly asking—as was the noble Lord, Lord Caradon—that we should take our own initiative. I referred to that just now. I can say that we maintain close and regular contact with the Governments of Greece and Turkey about this problem. We have made it clear that we look to them to use their influence with the parties to encourage a constructive attitude towards the inter-communal talks which I have mentioned. It would be a mistake, as I said earlier, to engage in any initiative that would cut across United Nations' efforts, especially at the time when the parties are close to a resumption of talks.
The noble Lord, Lord Spens, referred to our position at the United Nations. I have already touched upon that. The noble Lords, Lord Spens, and Lord Brockway referred to the position of Varosha. The Government have no information to confirm reports that the status quo in Varosha is to be altered. We have made it clear to those concerned, in response to the rumours that we have heard, that action which could harm United Nation's efforts to reconvene the inter-communal negotiations should be avoided. I believe that they have reacted to what we said.
Both my noble friend Lord Newall and the noble Lord, Lord Brockway, referred to sovereign bases. There is no present intention to give up any part of these bases. Nor is there any question of our having failed to meet our obligations over

795
them. The bases are in fact sovereign territory. They are not rented and the aid promised under the 1960 agreement, which the noble Lord, Lord Caradon, will recall, was given. Apart from substantial contributions to refugee relief and to United Nations' Cyprus Force and Services expenditure in Cyprus, a £7½ million offer was made in 1978, as my noble friend Lord Newall reminded us. On the question of aid generally, the Government have stipulated that aid provided to Cyprus should benefit both communities. Similar conditions attach to financial aid from the European Community. A fair share of the British Government's technical information programme in Cyprus is used to assist the Turkish Cypriot community.
The noble Countess, Lady Loudoun, the noble Lord, Lord Maybray-King, and at least one other noble Lord, referred to missing persons. We greatly regret the lack of progress towards the solution of this essentially humanitarian problem. We believe that all concerned should co-operate with the United Nations to resolve it, and we are hoping that they will before long do that.
Compensation claims were also raised by several speakers. The Turkish Cypriots have now approved some 140 ex gratia awards to British subjects, as recommended by their Claims Commission, and payment of the awards has now begun. Discussions are taking place with the competent authorities about the effect on claims payments of the recent devaluation of the Turkish lira, which we hope can be resolved before long.
The noble Lord, Lord Hylton, also asked me about the possibility of a university for Cyprus. I am sorry to say that I have nothing further to add to what I said to him some months ago on that subject. We are certainly prepared to consider the possibility of the establishment of a university there, but it has to be done with the agreement of the parties in Cyprus, which so far has not been forthcoming. As for the provision of a cancer unit or hospital, we are always ready to discuss any requests that are put to us by the Cyprus authorities, but my noble friend will be aware that funds for aid of this kind are very limited.
796
The noble Lord, Lord Spens, raised a point during the debate on airports policy last week concerning air transport from the United Kingdom to Northern Cyprus, which I considered it more appropriate to answer in the course of today's debate. The position is that the Cyprus Government have declared that they do not consider Ercan Airport to be an approved airport under Cyprus legislation, nor a designated customs airport in accordance with the relevant provisions of the Chicago Convention of 1944. Since Her Majesty's Government recognise only one government in Cyprus—that of the Republic of Cyprus under President Kyprianou—we are obliged to prohibit both private and scheduled flights between that airport and the United Kingdom. As the Government have often said in the past with reference to complaints of hardship affecting the Greek Cypriot side, this is the kind of question which is most likely to be resolved in the context of an overall settlement in Cyprus.
The noble Lord, Lord Banks, gave certain figures of the percentages of territory demanded by each side. I must say that the figures he produced are not ones that are available to us and I think they must be regarded as speculative. As for the speech of the noble Lord, Lord Caradon, I felt that was a most enlightened and helpful contribution to our debate and I hope the noble Lord will allow me to study what he said with considerable care and in the full knowledge of his considerable experience in this matter.
However, the sky is not wholly black. Apart from the disappointing matters which I have described, there has been some useful progress in relations with the European Community. That was a matter which was referred to by the noble Lord, Lord Goronwy-Roberts. Her Majesty's Government have been very active in support of the Cyprus Government's efforts to move the island's relationship with the Community forward towards stage two of the full customs union envisaged in the association agreement. We are glad that an extension to the existing arrangements has now been signed, thus enabling negotiations on stage two to take place later this year. We shall be doing our best to ensure that the momentum is maintained, and we shall naturally also wish to ensure that the benefits

797
deriving from relationships with the EEC are available to both communities in Cyprus.
May I conclude by saying that, of course, we regret that the Cyprus issue remains unresolved after so long, but we are convinced that attempts to impose a settlement from outside would be deeply resented and, in the end, counter-productive. Cyprus is an independent republic, and we believe that the right way forward is for the people themselves to seek to resolve their differences by consultation and negotiation, assisted and supported by the international community. We shall continue to play a prominent role.
5.45 p.m.
Lord SPENS: My Lords, I believe I could spend another 15 minutes in summing up, but if I were to do that I fear this debate would end on a note of discord. There is one point I want to clarify before beginning my summing up, and that is the apparently generous offer of President Kyprianou over pensions. That must be put into perspective, and the perspective is this. The Greek Cypriot Government have paid no pensions to Turkish Cypriots since 1963, although they took over the National Insurance and Social Security Fund covering all of Cyprus in 1960. Moreover, they are continuing to be sent the national insurance contributions from Turkish Cypriots who are working in the British sovereign bases. Those contributions are now going direct to the Government of Cyprus, because the Government of Cyprus is the only Government which is recognised by Her Majesty's Government. Therefore, although President Kyprianou's offer obviously is a good start, it is nothing like the generous offer that it appeared to be.
I believe we have had a magnificent debate this afternoon and it has been very greatly enhanced by a marvellous maiden speech from the noble Baroness. She showed her very intimate knowledge of the island, and I know that in the future she is going to be a most useful adviser to us on Cyprus matters. Then we had a speech from the noble Lord, Lord Caradon, spoken with all the authority of the last Governor of Cyprus and a signatory to the Treaty of Guarantee. That was absolutely superb, and I noticed that he spoke without using a note: he spoke
798
right from the heart. Another speech which was made by someone who spoke without using a note came from my noble friend Lord Energlyn. He made the very interesting suggestion that the geology of Cyprus, being unique, might be used as a catalyst for bringing the two communities together. I believe that is something that should be pursued.
I am disappointed in the answer that was given by the noble Lord the Minister. I am afraid I expected it, but he must expect me and, I think, other speakers who have taken part in this debate to continue to press Her Majesty' Government to do something. I hope that our pressure will enable them to do something fairly quickly because, as others have said, it is now five and a half years since July 1974 and that small country ought to be brought together. It needs a catalyst: whether it is geological or whatever, it needs to be done by a third party. With those remarks, I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

MARITIME POLICY
5.50 p.m.
Lord KENNET Lord KENNET rose to call attention to the arrangements for co-ordinating the responsibilities of Ministers and their departments so that this country may have an effective maritime policy, and for keeping this policy up to date in a changing world; and to move for Papers. The noble Lord said: My Lords, four years ago, almost to the day, this House held a debate on sea-use planning, on a Motion of the late Lord Henley, which was opened by my noble friend Lady White in his absence. I was very sorry to miss it; I was ill on that day. The reply from the Government of the time was given very positively by my noble friend Lady Birk from the Department of the Environment—a department which is, of course, more obviously and immediately concerned with the matter than the department of the Lord Advocate.
At that time, there were some 21 departments of State with a finger in the maritime pie, or a toe in the water, but I do not think that the Lord Advocate's office was on the list at all. So although I,

799
like all Members of the House, am naturally delighted to see the Lord Advocate and to learn that he is going to wind up this debate, I hope that, among the subjects he will touch on, is precisely this subject of —why him? For our delight can only be tempered by a certain provisional puzzlement, which I am confident will be removed later in the debate.
At the time of our last debate, both in this country and elsewhere, the realisation had been growing that our whole relationship with the sea—economic, defence, environmental—was changing, as a result of the vast political and technological developments of recent years. The freedom of the seas was evidently on the way out. In some fields, it was already gone. Great new industries were developing, oil and gas in particular. Perhaps seabed milling vs as to come. Old industries found themselves in a new context: fishing—the freezer trawlers and factory ships, the ability of the new fishing fleets to wipe out whole stocks; shipping—new shipping nations with new interests, the vast transport of oil, the container revolution, sand and gravel dredging—the ever-increasing need for aggregate on land; waste disposal—more and nastier things poured into the sea and lost in it; and, among and through all these, the armed forces and the civil power developing new roles and new capabilities.
Such was the complex scene at the time; and also, of course, new national interests and old national interests in a new context. The sum of these had to be that our people, now and in the future, should benefit from all the possible forms of maritime activity and exploitation. Gradually, the need for the machinery of government to reflect these new developments was recognised. It was not enough merely to endow existing interested departments with more powers. It was already clear that some interests, protected each by one department, were regularly losing out; some were regularly reaping benefits at the expense of others, and other interests, again, even seemed entirely to disappear between all the stools. At the same time, overall national interests and the overall development of maritime affairs worldwide was no one's business, and the basic assumption continued unquestioned that Britain's interests lay, as they had
800
for 300 years, in the greatest possible freedom of the seas, despite the accumulating evidence to the contrary.
The riches of the Continental Shelf are—we were already then glad—ours. We are now deeply concerned to maintain that the fish are—if not exactly ours—at least no one else's. When a liquid natural gas carrier blows up in the Dover Straits, or when not only whales and crabs but also people start dying from poisons dumped or lost overboard, we shall certainly increase the control of traffic around our coasts further than we have, and we shall be in no doubt of our right to do so.
Four months after our last debate, the Prime Minister of the day announced a new structure of Government for dealing with these matters. The relevant passage of his announcement read as follows. He said [Official Report, Commons, 8/6/76; col. 614.]:
"I have asked my right honourable friend the Lord Privy Seal to co-ordinate policy in matters conected with the law of the sea, the use of the sea and of the sea bed, as well as continuing to perform the role of co-ordinating the measures necessary for the protection of our offshore and other maritime interests,"
which had already been announced by the Labour Prime Minister in 1974.
That was merely the first step taken by the British Government to adapt its machinery to what every maritime power was experiencing. The Lord Privy Seal's infrastructure, at the time it was set up under my noble friend Lord Peart—of whose absence today we are very sorry to learn—was probably insufficient. He had no scientific adviser and, I believe, little, it- any, full-time staff. But it was a beginning of that positive co-ordination which, I think I am right in saying, all speakers called for in our 1976 debate.
The Motion that we are debating today I tabled when I found out that, instead of building on that entirely necessary new start in 1976, the present Government had demolished it. They have abolished the Lord Privy Seal's oversight role and given what is called the "lead" to the Department of Trade, a department very intimately linked with one of the oldest seagoing industries—namely, shipping; one, moreover, which is having a very hard time in adapting to new circumstances.
From the answer I received to my question, it was not clear whether the Secretary of State for Trade was to become the lead Minister in—and here I quote from the Prime Minister's announcement of 1976—co-ordinating…the protection of our offshore …interests". The Lord Privy Seal had been the co-ordinating Minister as regards the protection of offshore interests. So my question is: Is he now the lead Minister on fishery protection and on oil and gas installation protection? It will be interesting to learn the answer to that. Perhaps the Lord Advocate will be able to tell us something of the Government's general thinking in taking this step. The action has certainly astonished most of those people who are concerned to see the whole great complex of British maritime interests develop and expand.
I said earlier that some of the interests had over the years lost out. The principal one was perhaps fishing. Two of our chief national distresses of recent years have derived from insufficient thought, within government, about fishing. The first was the sequence of cod wars with Iceland. The scientific evidence was there that North Atlantic cod was over-fished and that the over-fishing had to stop if cod was to survive. But this scientific evidence stayed under wraps somewhere in the Ministry of Agriculture, Fisheries and Food, while the Foreign Office was sounding off—correctly enough, of course—about our rights in international law. But if I may coin a phrase, de legibus non curart natura.
Equally, there was the failure of Mr. Heath's Government in the first place, and of Mr. Wilson's in the second, to understand that the importance of fishing would lead to our present terribly damaging battles over the common fisheries policy in the EEC. Mr. Heath swept the fisheries question under the carpet when we joined in 1972, and the consequences have been the usual ones of that action.
One industry which has reaped benefits at others' expense is the oil industry. It is the Secretary of State for Energy who takes decisions about the North Sea and North Sea oilfields. The Ministry of Agriculture, Fisheries and Food and DAFS, the fishery departments, are consulted, but the fishing industry is very much the poor relation, despite the fact that fish,
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properly managed, are a permanent and renewable resource and that oil and gas are not.
Another industry which has, in fact, maintained benefits at others' expense is our poor dispirited shipping industry. It was once our pride. It produced an enormous sum of invisible exports, but in 1978—I do not have the figures for 1979—there was a deficit of £300 million on the shipping account. We are now the world's fourth fleet. We were the first only 14 years ago. Our shipowners have been selling ships at the bottom of the market and seeing them change hands at twice the price a few months later. The industry is unprofitable and fighting new political developments all the way.
Despite the ever-increasing damage that their cargoes can do, and do do, the ship-owner's liability against risk—liability for harm caused by accidents—continues to be strictly limited in domestic and international law. It is proportionate to his vessel's tonnage, not to the damage it can cause. It is far too often the tax-payer or the ratepayer who has to pay up for marine pollution. Moreover, in salvage cases, the Lloyd's Form, with its no cure, no pay, ignores altogether the whole pollution aspect. Again, shipowners regularly insure against fines for pollution, which of course is illegal in ordinary life.
Given the risks now being taken at sea, including our own coastal waters and the hazardous cargoes concerned, sometimes I wonder whether Ministers are personally aware that the liability is not related to the damage which can be done but to the size of the ship carrying the cargo. Also, I suspect that these de facto subsidies to bad shipowners flying flags of convenience, avoiding taxation and labour and safety regulations, are not in the interests of our own shipping industry. I find the Department of Trade's devotion to the flag of convenience system puzzling. That their lower costs appeal to charterers is quite understandable, but why should we applaud or even agree when our own major oil companies charter substandard ships from flag of convenience countries? It is true that their own record as shipowners is good—that is, if you leave aside the odd mistake like the "Amoco Cadiz". Generally it is true that it is good. What is

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not good is the record of the ships which they charter.
In any case, is the Department of Trade really the right department to judge impartially in these matters between the shipping industry's interest and the general interest when the dangers from liquefied gases and from chemical cargoes are such as to make the "Amoco Cadiz" affair look like a picnic? In comparison with them, oil is positively pleasant. The Pollution Control Unit in the Department of Trade, commonly known as Admiral Stacey's unit, are doing sterling work, but for an LNG accident, or for one involving chemicals, they are completely unequipped. Many local authorities would like to see marine pollution control at the Department of the Environment rather than at the Department of Trade. This has already happened on the nuclear front, when environmental control moved from the Department of Energy to the Department of the Environment. Why should there not be a similar move for general marine pollution?
Let me end by listing a few interests and issues which fall between ministerial stools. Funding the Hydrographer is one. Perhaps the Lord Advocate has good news for us and can tell us that the Department of Trade has at long last accepted that the cost of the Hydrographer's non-defence work should fall to its responsibility, as was advocated by the Trade and Industry Sub-Committee of the Expenditure Committee in the House of Commons the year before last, and as is obviously the right solution. Then, again, it is perfectly crazy that 70 per cent. of our Continental Shelf and 70 per cent. of our designated shipping lanes should still not be surveyed to modern standards. This cannot be justified. With the increasing draughts of tankers and the increasing numbers of hazardous cargoes, accurate charts are by no means a luxury which can be left to fall between bureaucratic stools.
Other navigational aids are equally essential. The Hydrographer's storm warning service, which gives the invaluable negative surge warning, is only one of them. This is the opposite of the kind of surge which we fear might flood London, when there is a sudden lowering of the water level, so that the super tanker,
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creeping up through shallow seas, must be forewarned that there is four feet less than the minimum mark on the chart. All these things must go on being funded by Government.
I hope that the noble Lord will also be able to tell us something of the Government's intentions towards the research they are now funding at the National Maritime Institute and at the Warren Springs Laboratory, the first on traffic and the second on oil pollution. In each case, the private sector is not very likely to fund the continuation of this work. It has to be accepted as a Government responsibility. Perhaps we can hear also why the Government have decided to halve the existing oil pollution team at Warren Springs and to divert the very same funds elsewhere. There will be no reduction in Government expenditure, so far as I can make out. Why do that? Why halve the team and disperse the funds? It would be interesting to know whether the Department of Trade and the Department of the Environment who are most directly concerned were consulted by the Department of Industry—God knows how they come into it!—before they halved this team. On the National Maritime Institute, can the Lord Advocate say anything to us about the continuation of that remarkable work which is known in shorthand as the "six year movie"? At the National Maritime Institute they have a series of photographs, taken at intervals throughout the day and the night over the last six years, which show a complete pattern of ship movements in the Channel. That is in the process of analysis to see what can be learned from it. Will this work continue and who will fund it if the Government do not? We know that it is the Government's intention to cut the National Maritime Institute adrift, let it float and hope that someone will pick up the tabs.
Answers to Questions I have tabled on the Channel traffic scheme show that 40 per cent. of the vessels thought to be carrying hazardous cargoes of one kind and another still do not report in. They show that every week at least one oil or gas carrier still disobeys the traffic rules and that they are almost certainly not disciplined by their flag States. It is very much the Government's job to ensure that in these affairs the national interest is not neglected for the shipowners'. Are the

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Government moving as fast as they can towards port-state jurisdiction? That is the point here.
Shipbuilding is another age-old industry which is suffering from inadequacies of all kinds. We know what they are; yet do the shipbuilding and the shipping industries truly search out together new opportunities in the new circumstances? Why is it that only one of the four multipurpose service vessels used in the North Sea oilfields is British built? The others are Finnish and Japanese built. Why is it that Antwerp Bulk Cargoes can undercut our shipping lines by the simple device of having combined bulk and container carriers, whereas the law of the Medes and the Persians in British shipping and shipbuilding appears to be that you have on the one hand a bulk carrier and on the other hand a container carrier. If you combine them, you can, for obvious reasons, cut rates on both. Why is it left to Antwerp firms to do this?
My impression also is that when once again we can increase trade with the Soviet Union and when we are exporting equipment, as we must, for the oil and gas developments in the Soviet and Canadian parts of the Arctic, there will be no suitable British ships in which to carry our exports. Vessels capable of using the new northern route to the Far East as a whole—where are they? Arc we building them? Are we planning to build them? And what about the long vexed question of patrol boats for offshore policing—what one can in shorthand call the offshore kit—that is, that mix of research vessels, aircraft, equipment, communications, expertise and training which could be sold as a package to States going out to the 200 mile zone for the exploitation, administration and policing of that zone? This is another example of those opportunities in the Third World which have, to use an admirable phrase of the Foreign Secretary in a recent debate, been allowed to "wither by default". It has been nobody's business to scan for opportunities opening for us in these new developments.
When are we going to declare a 12-mile territorial sea? On environmental grounds it is urgent, as anybody observing events off Sullom Voe in the last few weeks will agree. "Bad" tankers are now said to be taking the northern route to avoid
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the Channel, where there actually is a traffic scheme, although it is still not stiff enough.
I know that other speakers will elaborate, for instance, on the local authorities' distress over pollution clean-up claims which are either not met at all or met only years after an incident and without interest paid; and over the lack of consultation when Government policy is being formed. I wish here only to endorse their complaints as being fully justified. The magic circle of those who are consulted before international negotiations is still far too small.
What should we do in general? I think that the synergies and interferences arising within the present uncontrolled policy mass may be extremely dangerous, and that the matter is urgent. It needs two things. It needs, first, research. And here, out of many possibilities, I commend the proposal for a North Sea forum in which the bodies concerned—governmental,academic and commercial—from all the countries round the North Sea come together for the co-ordination of research, including policy research but not, of course, including any policy recommendations, and jointly to ventilate and to publish the research results. This was called for by a conference in The Hague last October which I had the honour to chair: all the people who would be needed for such an operation were strongly in favour of it. I am reminded of the recent excellent opening speech in another debate in this House, by the noble Lord, Lord Buxton. The North Sea is a vulnerable pond. All the countries round it arc parliamentary democracies and we all have a common interest. The matter is quite urgent. What are we waiting for?
The second great point is how Government policy is made. It is a curious fact that Professor Donald Watt of the London School of Economics—certainly a leading authority on these matters—recently attempted to obtain research funds simply to gather and compare information about the system of maritime policy formulation in other countries which would be of interest to us. He could not get the funds. We cannot even find the money to look at what other countries are doing in this field.
We do know something about France: they have a publicly known and identified

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Cabinet committee set up by law and under the chairmanship of the Prime Minister to deal with maritime affairs. This Committee—and this is a striking point for us—is chaired when the Prime Minister is absent, not by the Minister of Trade, or Industry, or Transport but by the Minister for the Environment. It is supported by an interdepartmental staff of 15-20 people and a large advisory council, and a central place in the structure is given to an organ called CNEXO, that is the National Centre for Exploitation of the Oceans. Moreover what they call les choses de la mer has been adopted as one of the so-called "Great programmes for the future of France": the others being nuclear energy, space and telemetries.
I know that we do not do things that way and I know it is also claimed that the French system, which was set up only 18 months ago, in the wake of the "Amoco Cadiz" disaster, is not working very well. We need not be impressed by such claims. Of course it would not be working well yet and even if it never does, we still need not be impressed. The point is that it is a major and visible pledge of the intention of the French State to make sense of this vast, confusing and taxing area. We in this country must develop the same intention, otherwise our opportunities there, too, will "wither by default."
How? I wonder whether the Government would like to consider the following suggestion. We have a great many Royal Commissions now, perhaps too many and perhaps some of them last longer than they need. They are looked upon by Governments as a kind of discreet reinforcement of a right idea, whatever that may be. But in the heyday of the Royal Commission, in the Victorian age, it was not so. In those days the very greatest questions of State and society were remitted to Royal Commissions for analysis and recommendation—the future of India, the condition of the working classes, and so on. Perhaps this should now be done once again in regard to the sea.
If the idea were to find favour with the Government the terms of reference would need most careful consideration. But I hope they will reflect the need for this country once again to become conscious—I would say even consciously conscious—
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of the old fact that we are an island and of the new fact that with every year that passes, the welfare and indeed the survival of mankind depends proportionately more and more upon the rational use of the sea. I beg to move for Papers.
6.15 p.m.
Baroness BIRK: My Lords, I am grateful to my noble friend Lord Kennet for introducing this debate this evening. He put a number of questions to the noble and learned Lord the Lord Advocate which will save me repeating some of them. The question as to why he is doing it himself I will leave him to answer although I suspect it is his interest in trade. At the time when I replied for the Government to the debate to which my noble friend referred, in February 1976, I would very much have welcomed a Lord Advocate to take the task off me, but once I got steeped in the subject I found it so fascinating and so urgent that not only was I glad to have the opportunity to do it but I agree with my noble friend that the environmental side and the part played by the Department of the Environment should not only be kept as it is but in fact should be increased.
The sea, of course, has a marvellous, deeply emotional effect on many of us. It inspires music, it inspires poetry, prose, painting, sculpture: yet it can be a destructive as well as a benevolent force. This again came through very clearly in the debate in February 1976 which ranged as widely as I am sure will the debate this evening.
The problem is complex and I will not pretend to be able to go into all the areas concerned. In any case it would not give anybody else except the Lord Advocate a chance to speak, if I were to do so. I see it as having roughly two policy dimensions—national and international. Being an island, we have sea all around us, of course, therefore shipping, fishing and the gathering of oil, gas and minerals all add to our standard of life, while many of their side effects detract from it. Without being chauvinistic, we certainly have a greater interest in the sea with all its "goodies" and "baddies" than many other countries, and a great number of differences of opinion. I am afraid that if today one were to stop anyone in the street and ask for an immediate reaction as to what the sea

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round our coast conjures up for them the answer would be "oil pollution".
Since 1975, pollution has been on the increase, although the 1978 figures appear to show some improvement. Nevertheless, oil pollution round our coasts has become an unfortunate and familiar way of life which affects its quality gravely. As my noble friend pointed out, for local authorities the effects can be financially heavy as well as socially deleterious and the local authority associations are pressing for the reimbursement of the cleaning-up costs to be much more prompt. I was fascinated and alarmed by the examples provided by the Association of County Councils and the other authorities, which indicate the heavy financial losses caused to county councils and district councils in separate incidents.
For example, in May 1978 the wreck of the "Eleni V" resulted in costs to the Suffolk County Council of over half a million pounds. Those costs have not yet been recovered, and moreover—and this is the important point for local authorities—the interest has continued to accumulate at the rate of £147.11 a day. Then in 1975 another incident involved H.M.S. "Achilles" and resulted in a claim by Kent County Council of over £32,000. This was settled only after three years, with a loss to the Council of £13,800 in interest. Again in May 1977 an incident involving the "Petros Hajikriakos" led to a final claim of over £71,000. No settlement has yet been made and again interest charges are already in the region of £22,600. Finally, Devon County Council are awaiting compensation for the grounding of a ship in September 1978. So far their claim has been acknowledged but no cash has been received.
Then we all saw on television last week the "Athena B", having been washed up on Brighton beach, causing a great deal of interest and amusement to a great many people. She then set off and has again been washed up somewhere else. That interest and amusement was at a cost of between a quarter and a half million pounds. Therefore, it is not surprising that all the local authority associations in England and the Convention of Scottish Local Authorities are pressing for a European fund to be paid for by the oil industry or its insurers. It would have two purposes; first, to reimburse costs of
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spills from unidentified sources, and, secondly, to make interim payments to authorites waiting for delayed settlements from identified pollution. This would avoid the necessity for rate-borne interest payments for money borrowed to finance the clean-up. This is even more urgent today when rates are rising and we are having public expenditure cuts made on local authorities.
But oil pollution is only one example of where there are conflicts of interest between localities on the one hand and central and local government on the other. if we carry all of this into the international field, it is little wonder that sea policy moves very sluggishly. In the debate in 1976 noble Lords in all parts of the House recognised the need for co-ordination, and suggestions were made for either a new Ministry, agency, or, as the noble Lord, Lord Campbell of Croy, suggested, a senior Minister with special assignment to direct and co-ordinate, and he thought perhaps this could be done by the Chancellor of the Duchy of Lancaster. I hope he is not going to suggest today that it is to be done by the Chancellor of the Duchy of Lancaster.
Lord CAMPBELL of CROY: My Lords, if the noble Baroness would allow me to intervene, of course the Chancellor of the Duchy of Lancaster at that time was the noble Lord, Lord Lever, and he was in a position to do this.
Baroness BIRK: My Lords, I was quite aware of that. The noble Lord has just spoiled a very good joke. I was going to say that the present Chancellor of the Duchy of Lancaster has enough on his plate with the arts and the leadership of the House. I know the noble Lord was referring to Lord Lever. In reply to that debate what I said was:
"Whether there be an agency or a Minister, and my personal inclination is towards a Minister who would have some political clout in this field, if it is to be a viable starter the area of co-ordination must be precisely defined and positively integrated into the Government's structure. One does not want a gimmicky appointment or somebody there with a title with no power or influence to do an effective job. The Government recognise the need to co-ordinate discussions and decisions in relation to the different uses of the sea, and in cases of potential conflict to consider carefully which areas should be used for which purpose"—[Official Report, 18/2/76; col. 560.]
Then in June, as my noble friend recalled, the Prime Minister announced that he

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had asked the Lord Privy Seal to perform the role of co-ordination. I like to feel that this was a cause and effect situation. It certainly made excellent sense.
The committee, until it dispapeared under the aegis of the new Government, prepared its negotiating stance for international conferences and for the Conference on the Law of the Sea. I think my noble friend rather underestimated the staff that it had. I understand from my noble friend Lord Peart, that it had a good staff, including a very distinguished civil servant from the Cabinet Office; the committee consisted of officials and of Ministers of State and a Parliamentary Under-Secretary from the Foreign Office. I understand it was meeting regularly about every two months. One of its briefs concerned the disparity between the rich and the poor countries—because there are rich and poor countries as far as sea resources are concerned as well as land. It was still in its early days, but it would appear that there were the makings of the sort of thing that we have now seen in relation to the Brandt Commission as far as land is concerned, in the developed and underdeveloped areas.
There is so much to do on the scientific and technological side, where co-ordination is very important, that it would seem to me that we must speak with one voice, not 25. My noble friend said 21, but I made it 25 different departments and organisations responsible. Otherwise, we are in danger of making the same mistakes at sea as we made on land from the time of the Industrial Revolution, in the absence of land use planning, which permitted dereliction and, later on, the horrors of more modern development. The second Industrial Revolution must be based on the sea. Its industrial and economic potential is enormous, the mineral wealth great.
I should like to ask the noble Lord the Lord Advocate what the Department of Industry is doing about manganese modules; how much help is given to rock conservation. The Department of Trade, in the report of their working party brought out in 1978, referring to prevention, which is so important when it comes to pollution, says:
"Most preventive measures require international as well as national action. These
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problems call for sustained action over a wide front rather than a single initiative."
That was against the background and in the context of co-ordination. At the latest meeting of the Committee of IMCO in October 1979 the United Kingdom delegation was the only one among the EEC delegations which was composed solely of Department of Trade officials. Since the IMCO meetings are held in London, I wonder whether the Minister can tell me why this is so, when Environment and so many other Ministries have an interest. There are also other similar examples. There are endless Law of the Sea Conferences, but, as my noble friend said, we have not yet got a 12-mile territorial limit. I think we ought to have port State jurisdiction rather than flag State jurisdiction, which would mean that we would catch the pollution dilinquents and also interfere less with shipping.
Finally, my noble friend suggested a Royal Commission. I think that should be given consideration. I would also like the Government to consider the possibility of setting up a Select Committee of this House to look into the whole question, so that if they recommend, as I hope they will at the end of the day, some form of co-ordination machinery, it will be something not so easily swept away as has happened this time. I know Governments of both parties are notorious for not looking far enough ahead. But we have not got all the time in the world when we are talking about the sea, and we must make sure that we do not waste the time that we have.
6.29 p.m.
Lord BEAUMONT of WHITLEY: My Lords, I too should like to thank the noble Lord, Lord Kennet, for initiating this extremely important debate. It is true that we have discussed this subject two or three times over the last few years, but each time we discuss it it seems to me that it deals with topics which are becoming more and more important. We have at least three of the major interests of the immediate future for this country involved in maritime matters. Fish is an extremely important part of the diet of a great many countries of the world, and as the numbers in the world become greater and as the amount of food becomes less per person, as unfortunately it shows signs of doing, the conservation and the

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encouragement of fisheries will be one of the most important matters with which people have to deal. Already we are seeing the troubles which can come from not looking after your fisheries well enough.
There will be not only the problems of dealing with the conservation of the major fisheries of the seas of the world, but we shall reach a position where we shall be going in for fish-farming not only in ponds on land but, as our ancestors often did, in the areas immediately around the coast. Therefore, a great deal of our food and the future food of the world is involved when we talk about the future of the sea. Moreover, a very great many of the world's resources in terms of mining are also involved.
Already we are mining the North Sea extremely intensively for oil. It used to be said, "How could we be hungry and cold in this country—a country surrounded by fish and built upon coal?" However, we are now surrounded by fish and oil. The conservation and management of that oil is tremendously important. So far it can be said that the countries bordering the North Sea have not done at all badly. Britain, and Norway in particular, and the other countries involved, have not made too big a hash of what was a tremendously new venture. However, it is a matter of diminishing resources and of very important supplies of energy in a world in which energy is in short supply; and again it is a matter to which we should be turning our fullest attention.
However, of course, it is not just a question of oil. Indeed, manganese nodules have been mentioned. Undoubtedly, there are immense riches to be harnessed from the seabed in various parts of the world which will become more available as our techniques and technology improve, as they undoubtedly will. So, we have two great resources which we need to husband. At the same time we have the problem as regards the sea of the enormous pollution which is engulfing so many of the world's seas. We have always thought that the oceans were one great sewer into which we could tip all our detritus without danger of anything coming back to us. Now we are realising, with the killing of various inland seas—and the Mediterranean is well into the process of being killed as a sea—that we
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cannot go on causing this amount of damage. Even our North Sea is beginning to show signs of pollution of one type or another. The evidence that was put forward at the extremely interesting Conference on the North Sea which was held in Holland and at which the noble Lord, Lord Kennet, as he said, took the chair, was horrifying as regards some of the prospects which are creeping up on us.
There are three areas—food, mineral resources and pollution—which need very strong action on the part of Government—not just Government, but Governments. We shall not be able to help deal with these resources and problems in the seas of the world, or even in our own North Sea, without a very great deal of co-ordination and co-operation between the countries concerned. We must govern the seas and police the seas. Both of those matters are essential. We are lucky that, in the North Sea, we have an area which ought to be manageable. It ought to be manageable because, as has been said, on its borders are the countries of the EEC and also of Scandinavia, which have a long tradition of co-operation, democratic government and of being very reasonable when it comes to discussing international matters. That surely is an area in which we can make one great step forward towards an internationalism which is necessary for these purposes and in itself.
It is because I think that there is this strong necessity for pressing forward as much as possible with international negotiations that I shall stick my neck out this evening and say that I think that there ought to be a Ministry for Maritime Affairs. I know that that is inviting people to declare that I am foolish and to say that, wherever there is a problem someone always produces the quick answer of setting up a new Ministry, but that does not solve anything. I can only say that I can put my hand on my heart and say that, on the whole, I do not accept that particular solution to most problems. I have been, and I am, deeply interested in education and children. But I have never fallen for the idea that there should be a Minister for Children.
However, I think that we should examine the prospects of a Minister for Maritime Affairs, as indeed was suggested by Elizabeth Young in the valuable Fabian

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pamphlet which came out not very long ago. I repeat that the reason why we should do that is because I believe we must push forward the area of international negotiation on all these matters, and we shall not be seen to be doing our best until we have a Minister—indeed, I go further and say a Minister of Cabinet rank—representing this country and taking the initiative in making the moves on these matters. This is a most important area. I have repeated already the areas which seem to me to be so important that we must not neglect them in the way that we have neglected them over the past few years.
As regards the question of more food, more minerals and of stopping pollution, we must be seen to take the initiative. That is something that Britain can do, but it is not something that Britain can do by itself. It is something to which Britain can give a lead and which Britain can help push. I think that we ought to do it, and I direct your Lordships' attention and the Government's attention to the fact that maybe the time has come to consider very seriously the creation of a Ministry for Maritime Affairs.
6.39 p.m.
Lord RITCHIE-CALDER: My Lords, I am very glad and grateful that the noble Lord, Lord Kennet, has introduced this subject once again. As he pointed out, it is almost four years to the day—indeed, I think it was yesterday—since we had an effective debate on this subject. It was introduced on that occasion by the noble Baroness, Lady White, in the absence of the noble Lord, Lord Henley. Since then, as has been pointed out—and I measure my words carefully—we have had at least a symbolic bracketing of the departments under the noble Lord the Lord Privy Seal. I am sure that they did quite a lot of the work, but it was not very evident in the displayed activities of the separate departments, which they did not rule or direct. I find it very disturbing that now, in the absence of that bracket, or "committee" as I would call it, we are now seeing quite clearly that the lead in this matter is being taken by the Department of Trade.
I have a great deal of sympathy for the idea of the noble Lord, Lord Beaumont of Whitley, and indeed of my noble friend
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Lord Kennet, of a Minister of Maritime Affairs, if only to keep such matters out of the hands of the departments. In this case there must be a manifest conflict of interest. The Department of Trade is, in fact, the Ministry of Shipping, and its clients, manifestly and considerably, are the shipping people themselves. I am the chairman of the Advisory Committee on Oil Pollution of the Sea, and when we have had to discuss these matters we have been discussing with the shipping element of the Department of Trade. Occasionally we have had a shotgun wedding and have managed to get two or three departments together. But the noble Lord is right when he says that we are negotiating with the Department of Trade. I do not say that meaning any disrespect at all; but I insist that there is a genuine conflict of interest here.
Today there is a great deal more to the uses of the sea than the traffic on the surface. We are no longer even a dominant shipping nation; nor are we a naval or mercantile nation. We no longer rule the waves. But what distresses me—and I am sure that it distresses everyone who is taking part in this debate—is the way in which we have abdicated our role as great traditional sea people. We have neglected the very influential role that we can play. We can take initiatives and, above all, we can set examples.
In all these debates, and in discussions outside this House, we run into the point that the Government can always say that we have the international maritime organisation, IMCO; that we are waiting for IMCO or that we are doing this or that within IMCO. I am a great admirer of IMCO and a great advocate of everything that IMCO is trying to do. I have great respect for the people in IMCO who are trying to do those things. However, as an ex-professor of international relations I personally believe entirely in relying on international agreements. We talk about the "Seven Seas", but there is only one ocean, the hydrosphere which covers seven-tenths of the planet Earth. Therefore, it is proper and absolutely essential that we proceed through international agreements and on a global scale.
However, there is a very serious factor here. It takes roughly three years to prepare for a diplomatic conference which adopts the conventions in IMCO, another

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five years for the convention to be ratified and enter into force, and a few more years before it is implemented in or through national law. For two years the IMCO Legal Committee has been preparing a convention on liability and compensation for chemical pollution. It is sitting today—I know because I have spoken to the secretary—and it will continue sitting. This convention is to be discussed at a diplomatic conference in 1982, to come into force in about 1987.
This delay means that the kind of incident about which we have read recently in the papers, where the chemical containers from a ship have been scattered along our coastline, will be multiplied. I love the word "incident". These incidents are death-dealing, and on a larger scale that one could have resulted in disaster. We are looking for the answers. We are looking in the proper way for a proper instrument. At the same time we should—indeed, we must—be taking account of our own position, not in defiance of international law but in the implementation of what is demonstrably the sound principles which have been arrived at either by the IMCO processes or as a result of what we can learn from the United Nations' Law of the Sea Conference.
However, those who are at the receiving end of marine pollution—the local government authorities, the tourist industry and the fishing industry—are the victims of the law's delays. My noble friend Lady Birk has mentioned the very substantial complaints which the Association of County Councils and the Association of District Councils have made about the long delays during which the ratepayer is subsidising the cost of the mopping-up operation, often without a settlement in sight or sure of a guarantee that there will be one—because the sources of many of these incidents cannot be identified. It is highly undesirable and highly objectionable that the local authorities and the ratepayers—the victims—should have to pay for these mistakes, which are no fault of theirs. I hope that we all accept—I am not sure we all do—the fact that the polluter must pay. I also believe that it is the function of Government to recover the loss and make sure that the polluter pays. There should be what the Americans call—and I do not know whether we do
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this—a "no fault" insurance, under which the victim is taken care of while the insurance companies, or in this case the Government, try to recover.
Local authorities are in a state of very great distress; their responsibilities have multiplied. They foresee, and I certainly foresee with a nightmare clarity, what is liable to happen at any moment in very many different ways. The county councils are also looking with apprehension at what may happen. In its evidence to the Royal Commission the Association of County Councils discusses what my noble friend is trying to resolve; that is, the divided responsibilities between Government departments, particularly between the Department of Trade and the Department of the Environment, which, of course, is the overseeing department of the local authorities.
While acknowledging that in recent incidents the arrangements between the Department of Trade and the local authorities have been generally "flexible and efficient", the association points out that the department is responsible for oil pollution clearance up to one mile from the shore, and that is where they turn round and go back. There is no legislative provision for the inshore belt, which local authorities are expected to supervise. As their submission says:
"There is little point in the Department of Trade ceasing to be involved when a slick is, say, 100 yards from the shore."
They just turn away and leave it. They strongly argue that the Department of the Environment should take a more active role, both in the United Kingdom and internationally.
The other point they stress, and which has already been pointed out, is that in international conferences we are principally represented by the Department of Trade. This is what the Association of County Councils says:
"Although the Department"—
that is, the Department of the Environ-ment—
"is invited to be represented at the IMCO (The Inter-Governmental Maritime Consultative Organisation) Marine Environment Protection Committee meetings, the UK delegations consist mainly of Department of Trade officials, who represent shipping rather than environmental interests. The Department of the Environment also shows little interest in the meetings of the Legal Committee of IMCO which discuss, for example, compensation for oil pollution damage".

819
There is then a reference to the latest meeting of the Legal Committee. The representation on the Legal Committee sitting at the moment is in fact entirely DOT officials.
On the contrary, the other delegations are led by officials from mainly the Ministry of Justice. I might even suggest to my noble friend Lord Kennet that that might be a justification for having the Lord Advocate here. This is the situation in which we are completely under-represented on what I regard as the genuine issues here. The issues are not just the concern of the shipping industry. It is not just the concern of the tanker owners and so forth, even when we are in fact at the moment getting a great deal of co-operation from both.
Of course, in these discussions and in the international conferences it is right and proper that commercial interests, the shippers, the oil companies and the insurance companies, should be consulted. Indeed, they are in fact embodied considerably in the delegation themselves. But it surely is also right and proper for those who have a right to protection that they should have some say in the nature of the protection and whether it is adequate. It has now become—and I speak from a good deal of experience of international conferences—a matter of comment at international conferences that, as the Association of County Councils pointed out, while other delegations are led and staffed by jurists representing the common weal—from the Ministries of Justice or External Affairs, or from the environment—the British rely on the Department of Trade with its emphasis on commercial interests.
We very much need at the level of government an interdepartmental instrument for the proper planning of sea uses to give us, as the Motion today says, an effective maritime policy and for keeping this policy up to date in a changing world. This is the only way we can avoid "government by catastrophe". I have used that phrase before in this House, and I cannot repeat it often enough. We wait for some disaster to happen and then we improvise; with a lot of headlines, a lot of reassuring noises, we then begin to do something about it. It is true we now have Admiral Stacey's
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unit in being to deal expeditiously and, one hopes, effectively with events at sea. I am very much reassured on events at sea so far as that kind of incident is concerned, but we need some sort of effective civil defence, as it were, to deal with the effects ashore.
Every time a disaster happens we find that the lessons of previous disasters have often been forgotten and mistakes are repeated, or we discover the extent of our ignorance which proper research should have remedied. That was notoriously true in the case of the "Eleni V". Your Lordships will recall it was discovered that the dispersants and other measures could not cope with heavy fuel oil. They had not really an insight into the nature of it. The biggest traffic in oil round our coasts is in heavy oil. It happened again in the case of the "Esso Berenicia". In the"Eleni V" the Department of Trade mounted a lavish operation, with ineffective equipment and futile dispersants. I should like to hear from the Lord Advocate whether the Government are going to be able to recover compensation for that expenditure for that expensive exercise, because I gather they are not likely to.
The merchant ships, including tankers which carry the bulk of the oil, and the carriers of toxic freights and liquid natural gas, the naval ships, fishing craft, and pleasure craft, share the seas now with oil rigs and mining vessels dredging for aggregate or manganese nodules. All have their own kind of hazards, and not only our shores and our immediate offshores but also what has been called "the common heritage of mankind", the ocean and the sea bottom (a very desirable piece of real estate nowadays) are now dangerously at risk. Remember this is the last resource of mankind. It is not just a case of fouling it up, as the noble Lord, Lord Beaumont, pointed out, with all kinds of pollution; it is a case of life at sea, including the plankton and the photosynthetic process, being at risk. I would remind your Lordships that it is that photosynthetic process over the oceans—over seven-tenths of our globe—which liberates the oxygen in the air we breathe, and on which all life on earth depends. We have tended to think of the oceans as so vast that it is impossible to damage them, but as a life support system it is very

821
fragile. It is a web of life, and it can be irreparably damaged.
It was that genuine concern, and a concern about the exploitation of the ocean floor, that gave urgency to the United Nations Third Law of the Sea Conference. Now I am sorry to say "urgency" has become a horse-laugh. It is still dragging on, and the national measures of self-protection are being deferred until the Convention can be achieved, and I do not see it being achieved even this year. This goes back a long time now. When I realised the implications of the economic wealth in the form of ore or in the form of manganese nodules paving vast areas of the ocean floor, and realised the hazards—not just the opportunity—which reckless exploitation would entail politically as well as ecologically, I agitated to have Britain take the lead. I saw 14 years ago how ill-equipped we were, and I got into the discussions. I was not in this House at that time, but I got into discussions in both Houses and in Government departments, because I realised to my horror how ill-equipped in experience or in imagination the government departments were to deal with this. It really was alarming. It was then that we should have begun to create the framework of an effective maritime policy.
My noble friend Lord Caradon who, as Minister at the United Nations took an active and laudable part in the setting up of the United Nations Seabed Committee, may recall that I wrote to him at that time saying that this was Britain's tryst with destiny, and how it could be in true internationalism the sublimation of our great history and tradition as a sea-going nation which had acquired a sea-knit empire. We could have inspired the world. I think we still can.
6.59 p.m.
Lord CAMPBELL of CROY: My Lords, I should like to thank the noble Lord, Lord Kennet, for raising this subject this evening. We are indebted to him. I took part in the debate on 18th February 1976, which unfortunately he could not move because of his illness, but I am glad that he is here today. I am also glad to follow the noble Lord, Lord Ritchie-Calder. He and I work together on the Advisory Committee on Oil Pollution of the Sea.
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He indeed pointed out that so much of what we have discussed so far in this debate affects the law, and is being discussed at the United Nations Law of the Sea Conference. So it is no surprise at all to me that the Lord Advocate should reply to this debate. After all he is one of the Government law officers, and it is quite appropriate that he should be a Scottish one because after all most of the matters we have been discussing—such as oil and fish—arise in the waters around Scotland, where, so far as United Kingdom jurisdiction applies, it is Scots law. I may say to my noble and learned friend, in case he should have been at all discouraged by some of the comments made about this and as he was not in your Lordships' House in the last Parliament, that another Scottish law officer, the noble and learned Lord, Lord McCluskey, was on a number of occasions asked to deal from the Front Bench with some very unusual subjects. This, when he was not engaged with the Scotland Bill, he did—as anyone who knows the noble and learned Lord, Lord McCluskey, will appreciate—willingly and very well.
Both the noble Lords, Lord Kennet and Lord Ritchie-Calder, drew attention to a subject which has always been important to our country; it has now been made even more complicated by new functions and duties which have fallen on the Government. We are still a leading maritime nation. The shipping industry has been mentioned, and I would point out that we are still a leader in the world of shipping. Taking into account registered tonnage, and our standing and authority in the world, and not counting flags of convenience, the United Kingdom and Japan are the leading shipping nations in the world.
In this debate we must ask: Has the British machinery for co-ordination been adjusted and strengthened to operate adequately in view of the very recent increase in the United Kingdom's responsibilities, particularly round our own shores? The significant events have been very recent, and I will mention three briefly: first, oil and gas; secondly, navigation; and thirdly, fisheries. As regards oil, five years ago not a drop of oil had yet started to flow from the British sector of the North Sea. Now, large quantities of oil are flowing through terminals in both Orkney and Shetland, there is a network of pipelines

823
to the coasts and there is some tanker loading at sea taking place at the oilfields.
On navigation, it is only in the last few years that giant ships, both tankers and bulk carriers, have been passing round our coasts in their present numbers. They increase the risks of accidents and pollution because charts of our continental shelf had not previously had to cater for draughts of such magnitude. There has naturally therefore been pressure from noble Lords, including me, for acceleration of work towards the necessary completion of hydrographic surveys.
My third point is fisheries. Besides the expansion of the sea area to be controlled, measures have been necessary to preserve fish stocks, and this has required much closer policing than ever before. The new common fisheries policy for the EEC is being negotiated and that is vital for the United Kingdom. I wish our negotiators all success and I would ask them to bear in mind the imminent joining of the Community by Spain, a large fishing nation. But, both now and after agreement, we do and shall need an effective system of control.
The position was clear in 1972, when we were negotiating to join the EEC, that the forthcoming move—it was obvious then; it was already being discussed—to a 200-mile fisheries limit was going to cause renegotiation of the EEC fishery policy anyway; it was bound to come and therefore there had to be a 10-year standstill. I would add that in my view, besides the total allowable catches on which the fishing nations in North-East Europe are now operating, we should go in for the licensing of individual vessels, both as regards time and place. That is really the only effective way of monitoring fishing operations. All the fishing nations concerned moved from a mere 12 miles to the 200-mile limit at the same time, at the beginning of 1977, and the noble Lord, Lord Peart, and I, from opposing Front Benches, at the end of 1976 helped to get the Fisheries Act through in time, before the end of 1976. That had been agreed at the Law of the Sea Conference by all the nations concerned, but it has now been carried out and is therefore de facto international law.
If anyone is puzzled about the cod wars that took place and the position of
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Iceland in the light of that, I must point out that what Iceland was trying to do was to get unilateral advantages without the disadvantages by trying to move to 200 miles some years before international agreement, before the fishing nations themselves had had time to make preparations and move together. Looked at another way, it was as if the Icelandic runner in the Olympic marathon was giving himself a start of 24 hours over the other runners in that race.
As a result of such recent developments, the United Kingdom now has a vast area of sea round its coasts in which to monitor and control activities. This will continue whatever is finally decided at the United Nations Conference on the Law of the Sea or in the negotiations for a new EEC fishery policy. Most of the task is being carried out by the RAF in their Nimrod aircraft, which I would describe as flying electronic workshops with highly sophisticated detection equipment, and by Naval vessels below. The Navy divide their work with the Scottish Office fishery protection vessels. I must point out that three of the four squadrons of Nimrods are stationed at Kinloss, near my home in northern Scotland, again because much of the work they have to do is in the seas round Scotland.
Besides the principal function of defence, there are four important British interests to be protected and different departments are involved; on fisheries, the Scottish Office and the Ministry of Agriculture are mainly concerned: on offshore oil and gas, the Department of Energy is mainly concerned; as regards safe navigation, the Department of Trade is the regulator; and regarding the prevention of pollution, the Department of Trade, the Scottish Office and the Department of the Environment are principally involved, the last two also having the interests of coastal local authorities to protect. The noble Baroness, Lady Birk, spoke about the Department of the Environment, at which she was a Minister, but I must point out that of course the Department of the Environment does not in these duties extend at all into Scotland; it is the Scottish Office which carries out all the duties there, and this only makes our problem worse because it shows the division among even more departments.

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Under the "tapestry surveillance system, as it is known, I understand that the RAF and Navy include in their duties the policing of fisheries and the monitoring of oil pollution, and that is to be welcomed. I also understand that it is now possible to make an arrest from the air; for example, that it is possible technically to arrest an offending fishing boat, and I would ask my noble and learned friend if he can tell us more about that and whether that is now the case and that it is not necessary to have to follow up with a surface vessel and, if necessary, a boarding party.
As a country we cannot afford duplication of effort. Moreover, every ounce of effort must be effective. But much can be achieved by the deterrent effect of making it widely known that airborne detecting apparatus is constantly in use. I draw a parallel with what is done on the roads in this country; the notice "Police radar in use" slows down many a driver who is exceeding the speed limit. A similar policy could be helpful at sea. Any irresponsible skipper of a tanker who is contemplating illegally releasing some oily ballast should in future be tortured by the anxiety that he may be being watched both by day and by night. Above all, we must make certain that there is never another "Torrey Canyon". The Secretaries of State for Defence and Trade are probably the most involved, but several other departments are involved too. Co-ordination should not only be quick and effective; it should, I submit, also be seen to be being carried out successfully.
I am going to make a suggestion—and am not suggesting a new Minister, or a new Quango. Because of the new functions of supervision which have become necessary very recently over the seas adjacent to our shores, new Government machinery has, I believe, become necessary for co-ordination. We may hear this evening what has already been done by the Government. My own suggestion, made respectfully, is that this function of co-ordination should be taken out of the Cabinet Committee and the departmental committee system and given to a National Maritime Council. The Government departments mainly concerned would he members, with Ministers attending on some occasions and officials on others, as appropriate. The chair should not be
826
taken by a departmental Minister. The subject is so important that the chairman should be a senior Minister without a department, perhaps the Lord President of the Council. Indeed, the Prime Minister might on occasions preside.
The Cabinet Committee system is of course confidential, and is continually changing—it is a matter for the Prime Minister of the day—and that is in order to protect Cabinet collective responsibility. But in this field everybody knows the departments which are involved and it is a matter of co-ordination, not of policy making. Outside bodies could be invited to attend certain meetings so that the council would function on the same lines as the National Economic Development Council. For example, representatives of the General Council of British Shipping, the fishing industry, the United Kingdom Offshore Operators' Association—the gas and oil industries—and Trinity House could attend on suitable occasions.
This is building on a previous suggestion of mine, to which the noble Baroness, Lady Birk, referred. I then suggested the Chancellor of the Duchy because he was not only the appropriate Minister, as I thought, in that Cabinet four years ago, but he was indeed, as Mr. Harold Lever, at that moment involved in North Sea operations. He had been given the special task by the Prime Minister of the day of negotiating with the oil companies.
So much of what we are discussing is related to defence that I do not think it would be appropriate to appoint another special Minister, nor do I think it would be appropriate for the Minister of Defence to have to take over all these other duties. It may be argued that co-ordination is already being adequately achieved and that adjustments are being made. Well, I should be glad if that is happening. I am certainly not suggesting additional bureaucracy; rather that the co-ordination that is essential should be on a visible, nationwide basis.
If anyone claims that arrangements have been working perfectly, I must dissent. One fairly recent example was the collision in fog of the small tanker, the "Eleni V", and the subsequent oil pollution. A mass of detergent was pumped from special vessels with considerable effort and at considerable expense, but as

827
it was a heavy oil there was no effect at all on it. In fact the only effect was a damaging one, because the detergent itself is toxic. In that instance it clearly took days for the information about the kind of oil that was on board the vessel to reach the authorities concerned, when it should have taken only minutes. That is one example, and I could give others. We must ensure that there is better coordination, and that it can be seen.
I hope that there are improvements with Admiral Stacey's new marine pollution control unit within the Department of Trade. But can the Government be completely satisfied with the present situation? I offer my suggestion as a student of methods and machinery of Government. We have newly-found resources in the seabed. We have also important maritime interests around our coasts to protect. Surely we must have the most efficient and up-to-date system to conserve our renewable resources, besides enforcing the necessary measures for restraint and safety, and for the protection of all these interests.
As a country what we can afford is limited. What the United Kingdom can and should do, however, is to ensure that all the methods of surveillance available, and potential responses to incidents, are co-ordinated to the highest standard of speed and efficiency. Clear and visible success in this will in itself be a cogent deterrent against offences and carelessness.
7.15 p.m.
Lord CARADON: My Lords, when it was suggested to me a little time ago that I might take part in this debate I was very doubtful whether I was competent to do so, and I was not sure what the range of our discussions would cover. However, I wish to speak very briefly on one subject which seems to me to be of maximum importance. I realise that it is only part of the very wide spectrum of subjects which have been discussed this evening, but it is the one in which I personally have been interested and concerned for a decade or more.
I remember the time in the United Nations when, shortly before the General Assembly started for that particular year, the Ambassador of a small country came to us and said that he had a new subject
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for the General Assembly. His proposal was greeted with universal irritation since we had been to great trouble in the General Committee to settle the whole programme for the year, and now this little country came forward with a suggestion which meant that we must give our minds to a new subject. What was it that Malta wanted to raise which must hold up the work of the world? Ambassador Pardo of Malta came forward and said that he wished to raise the subject of the deep seabed. What could that have to do with Malta? What did they want to say about it? Ambassador Pardo said that he understood that the riches of the deep seabed, so far undiscovered, unexploited, might one day be discovered to be equal in value even to the mineral deposits of the dry land.
It was all very well as a hypothetical idea, but what did he want to say about it? He said that he wanted the international community to declare at that time that this, the greatest unexploited asset of the world, should not be made to make the rich countries richer, should not be merely an advantage to those who already had the advantages of high technology and economic capacity. But this, the remaining asset of the world, should be declared now to be the asset of all mankind.
Well, in a few speeches perhaps Ambassador Pardo could be persuaded off the idea, or bought off it. But Ambassador Pardo was not prepared to give way, and through the sittings of the General Assembly we had to come back to the subject every now and then, and towards the end of the time we realised that we would have to vote on it. I do not forget the day—it may be well to remember it tonight—when the vote took place. A gasp went up that evening; when was it?—12 or 13 years ago; I am not sure. Ambassador Pardo's Motion that the riches of the deep seabed should be the common heritage of all mankind was passed that night by 99 votes to nil.
I think that all of us present felt that we had seen something which might be of great consequence to the world, which might make all the difference possibly to the prevailing problems of the rich and the poor. Here was a great asset which should not be turned to the profit and advantage of a few, but should be kept and preserved for the benefit of everyone.

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What has happened since? It is a sad story. First, there was an international conference called in Venezuela. Then the international conference met subsequently in Vienna. Then it met in Geneva. Years went by. It met in New York. It is to meet again—I have forgotten the date. The arguments go forward. Now there are all sorts of other things: freedom of passage, fisheries, the law of the sea. These are subjects which are to be considered at international conferences for a long time to come. Meanwhile, the grabbing goes on: the new colonisation of the sea.
We sometimes congratulate ourselves that we have finished with the colonisation of the land, but now every country with an aspect of the sea grabs the maximum, up to 200 miles—yes, and beyond if possible—led, I believe, by the United States and supported, I believe, by ourselves. It is now proposed that beyond the 200 miles it should not be a matter for international control but should be a matter for the company and the country which has the capacity to make the exploitation. I believe that is an American proposal with, so far as I know, the United Kingdom taking a passive position in this matter.
Surely, it is a great conception that the riches of the deep sea should be for the benefit of all mankind. Why should it be thrown away? Why should the idea of establishing an international authority to license and develop this remaining asset be neglected? It seems to me that, with all the other matters that have to be considered in the very comprehensive and able speech of the noble Lord, Lord Kennet, it would be a good thing to stop and think whether it is right that this country, which has a tradition in matters of the sea—and we have been reminded of it often enough tonight—should be content to see this asset thrown away. We cannot tell exactly what it amounts to, but we know that up to 200 miles there is now a determination by many countries to grab all they can as if it were their own. So I think that maybe the subject to be discussed should take into account the possibility that the idea which emerged from a small country a long time ago should become a matter of concern in which this country might well take the lead.
7.22 p.m.
Viscount AMORY: My Lords, the noble Lord, Lord Kennet, has this evening introduced a subject of wide scope and great importance. When I saw the name of the noble Lord, Lord Caradon, on the list of speakers I wondered whether he was going to talk to us about the danger to the beaches of Cornwall through pollution. They have fine beaches in Cornwall—and that is a very generous and broad-minded statement for me, a Devonian, to make.
Lord CARADON: My Lords, I especially appreciate, if I may say so, that from a mere Devonian that reference to Cornwall should be so generous!
Viscount AMORY: My Lords, they are second in beauty only to the beaches of Devon. Let me give another example of my broad-mindedness and generosity this evening by saying that I have not the smallest objection to the Minister who is going to comment on this debate from the Front Bench being a distingushed legal luminary from Scotland. I wish to offer only a few observations on one aspect of this problem, and that concerns the responsibility for dealing with pollution from the sea which falls on coastal county councils and district councils. The noble Baroness, Lady Birk, has already referred to this, and the noble Lord, Lord Ritchie-Calder, has, too, and that means that I can be even more brief than I had intended.
Those councils, I understand, are convinced that the existing laws, conventions and working arrangements between central Government and local authorities are in urgent need of being brought up to date in the light of the experience gained from various disasters in recent years. The views of local authorities are fully set out, as has been mentioned, in the memorandum of evidence submitted by the Association of County Councils to the Royal Commission on Environmental Pollution. I will therefore not attempt to describe, or even to summarise, the many important issues contained in this memorandum. It calls for action, as has been asked for by several noble Lords, both at the international and at the national level, to clarify and to enforce the existing responsibilities and to make action more effective. The theme of this memorandum is notably free, I think, from theoretical concepts.

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It emphasises throughout the need for practical co-operation and flexible arrangement; it acknowledges that much pragmatic co-operation already takes place in emergencies, but that the totality is inadequate to deal with the scale of the consequences of major disasters today; that the existing procedures are sometimes too slow and responsibilities are not by any means always clearly defined; and notably, as has already been mentioned, that the arrangements for compensation are quite inadequate in practice, whatever they may be or ought to be in theory.
I gather that the central Government are considered to be responsible for dealing with pollution at sea to within a mile of the shore while counties are mainly responsible for pollution below low water level and district councils above that level, though surprisingly there is no statutory obligation on them to do so. In practice, co-operation between all three is essential in all but quite minor disasters. Local councils believe that the only just principle is that the full cost—I repeat, the full cost—of pollution disasters at sea should fall on the polluters (the noble Lord, Lord Ritchie-Calder, quite rightly stressed that) and not on the innocent ratepayers of coastal areas. One trouble is that the polluter cannot at present always be identified, and in such cases some kind of fund, international or national, may be the answer; but in existing circumstances, even when the polluter is identified, obtaining compensation seems to be a frustrating and long-drawn-out business, sometimes taking several years, during which, as I think the noble Lord, Lord Ritchie-Calder, said, local authorities are seriously out of pocket; and the noble Baroness, Lady Birk, has quoted some examples.
Another complication is that during an incident local authorities may have to deal with two government departments, the Department of Trade and the Department of the Environment, both of which have important interests in this field. I should like to say that obviously the Department of the Environment has, and must have, important interests, and it is perhaps an illustration of one of the inadequacies that that department keeps only one stockpile of emergency equipment at present, I understand, and that at Bristol. But more effective international co-operation
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is absolutely essential, and local authorities, I gather, are not satisfied that Her Majesty's Government are at present pressing for this with sufficient energy. A European fund, for example, to which potential polluters should contribute, would seem to be a sensible and useful plan; and much more vigorous enforcement of existing controls are clearly called for.
In these few remarks I have confined myself to the effects of marine pollution on shore and on the fisheries and the amenities in the coastal areas affected; but the prevention of accidents at sea is of crucial importance. In the past a collision at sea has often been thought of as affecting two parties only, the two ships concerned; but, now, with chemicals and oil there is a third party, the central and local governments of the coastal areas affected by it.
I feel there is an argument for saying that more energy should be displayed in ensuring internationally that the existing laws are adequate and enforced. I do not agree with the proposal made by, I think, the noble Lord, Lord Beaumont of Whitley, who said that he was sticking his neck out in proposing it, and by the noble Lord, Lord Ritchie-Calder, that there should be an additional department. It is always tempting to think that by doing that one will simplify proceedings. The other departments have a natural interest in these problems. But to do so (and I think my noble friend Lord Campbell of Croy would agree) would add one more link in the chain and perhaps make the result exactly the opposite of the intention of this proposal.
The general impression one gets is that in respect of coastal damage from oil and chemicals, local authorities generally are trying to do their best but could be much more effectively supported by central Government. I am grateful to the noble Lord, Lord Kennet, for giving me the opportunity to say these few words and I hope that my noble friend the Lord Advocate will make it clear in reply that he agrees that there are important issues here which are not at present solved and that the improvements in arrangements for combined action and, particularly, in the matter of obtaining payment of compensation if possible have become urgent, and that these problems will receive the Government's attention.
7.33 p.m.
Lord FERRIER: My Lords, when the noble Lord, Lord Kennet, asked me to take part in this debate I said that I would not put my name down but was so interested that I would listen to the debate, and, if time permitted, as it now does, I would make such contribution as I could, based on my experience as a one-time yachtsman, a shipping agent in the East, a trustee of the Port of Bombay and a traveller in the old days of passenger liners. As a result, I have been fascinated by what has gone on. I feel like a seagull flying along over the stern of a ship in the saloon of which a large meal had been eaten, and that there were various crusts falling overboard on which I could swoop and then make my own contribution to the whole thing.
I will dodge about a bit. I went to see the Viking Exhibition this morning at the British Museum. I found there a queue for 300 yards which had started at 8.30 this morning. Yesterday they had had to close the gates at 3 o'clock in the afternoon, otherwise there would not have been time for people to see the exhibition. That confirms what the noble Lord, Lord Ritchie-Calder, said, that we are a nation who at heart are interested in the sea. We must be; it is bred in us. Consequently, we are grateful to the noble Lord, Lord Kennet, for having put forward this debate at this time.
I have one or two small additions which I think are worth making. I cannot help agreeing with the noble Lord, Lord Beaumont of Whitley, that it is time to set up a Ministry of Maritime Affairs. As my noble friend Lord Campbell of Croy said, there are emergencies nowadays which call for prompt action. If one wants prompt action, one must have one central authority who is authorised to move promptly.
I do not envy the noble and learned Lord the Lord Advocate in replying to this debate with these 101 different ideas coming from different directions. One problem which I feel ought to be tackled is the extraordinary case—and noble Lords will correct me if I am wrong—when recently, out of our pockets, we subsidised the shipbuilding of some vessels for Poland. They have now been supplied to them at very favourable rates, thanks to the subsidy from our revenues, and
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will now be plying the oceans in competition with our own mercantile marine. Whether or not that is the case remains to be seen.
Talking of the mercantile marine, one point that I had expected my noble friend Lord Campbell of Croy to mention was the problem of coastal shipping. I was concerned with coastal shipping in the Indian Ocean. At the moment, I am in a way also so concerned because I happen to know the great pressure now being put on the cost of living in the Scottish islands due to the high freight rate on ferry services. This is a problem which is not purely a commercial one. It is an environmental one and a social one; because if something cannot be done to reduce freight rates for coastal shipping in the Western Islands of Scotland the depopulation of the islands will continue and a very reasonable source of agricultural products may deteriorate as a result.
I am sorry that my noble friend Lord Glasgow has not been able to speak. I expected that he would have been able to put in a word which I am now going to put in. Another item in which a Minister of Marine Affairs would be concerned is the Royal Naval Reserve, and of ensuring the wellbeing of the splendid body of men who ply the seas. Fortunately, I have had recent contacts with members of the Master Mariners' Association. In terms of our naval history, it is important that the Royal Naval Reserve should be fostered and that someone should be able, from the Government point of view, to be in contact with the Navy, linking the Navy with the mercantile marine.
My Lords, that is the last crust on which I propose to swoop and pick out of the water. In conclusion, may I repeat what I have said before: that if speed is the essence of dealing with some of the disasters that the noble Lord, Lord Ritchie-Calder, spoke of, the co-ordination for which the noble Lord, Lord Kennet, and all other speakers have pressed must be centred in one authority.
7.40 p.m.
The LORD ADVOCATE (Lord Mackay of Clashfern): My Lords, I am sure that we are all very deeply indebted to the noble Lord, Lord Kennet, for

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initiating this debate on what I think we are all agreed is a vitally important subject. The noble Lord was good enough to indicate to me some time ago some of the principal topics on which he would address the House, but he did not indicate that the first would be why I was replying to the debate. The simple answer is that this debate would normally have fallen to my noble friend Lord Trefgarne but that he was doing so many other things that it was right that he should be relieved. Noble Lords may know that one of the interesting aspects of the Lord Advocate's position is that he is an ex-officio member of the Northern Lighthouse Board, which is the general lighthouse authority for Scotland and the Isle of Man. The Lord Advocate is also responsible for enforcing the law of Scotland and, I suppose like most people in such a position, is not averse to an extension of the area of his jurisdiction. It is obvious that legal matters often come into the discussions that we have had, and the law officers of the Crown, including the Lord Advocate, are consulted from time to time in such matters.
It is also fair to say, as my noble friend Lord Campbell of Croy pointed out, that these are matters which very much affect the people of Scotland. Before I came to my present position, in private practice, as a member of the Scots Bar, I had quite a lot of occasion to become involved in legal problems arising from oil exploration and its resulting marine activity off the Scottish shores.
In any event, the subject is an important one and I am glad to have the opportunity of speaking about it. I think that everyone has recognised the importance of co-ordination in this field. The Government are no exception to this. The present Government have recognised the importance of co-ordination and have sought to deal with the matter in the way announced in the reply that my noble friend Lord Trefgarne gave to the noble Lord, Lord Kennet, on 20th November last. The arrangement is that the Department of Trade has the lead role in co-ordinating policy on marine matters. Other departments which have responsibilities in these areas—for example, the Foreign and Commonwealth Office, which provides the lead and legal expertise on negotiations at the
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United Nations Law of the Sea Conference—retain their responsibility. Similarly, the Department of Energy, the Ministry of Agriculture, the Scottish Office, the Welsh Office, and so on, retain their primary responsibilities. But there is a need for co-ordination, and that co-ordination has been placed as a responsibility on the Secretary of State for Trade. He is responsible for taking the lead where necessary in co-ordinating Government policy.
A great deal of work has already been done by officials in identifying the relevant responsibilities of departments, and a guide was prepared and published in 1977 by the Interdepartmental Committee on Marine Safety itself under the chairmanship of the Department of Trade and an important part of the structure for co-ordination. This arrangement, as has been pointed out, differs from that of the previous Administration, under which the Lord Privy Seal (then the noble Lord, Lord Peart) was responsible for co-ordination centrally. He had no marine responsibilities apart from that. May I pause to say that I am sorry that the noble Lord is not able to be with us this evening. We hope that he will soon be back in his place—but that is with no disrespect to the charming noble Baroness who took his place on this occasion.
We take the view that where there is need for co-ordination it is better to build on the wide marine interests that the Department of Trade has traditionally had, with the Secretary of State for Trade in the lead. It has been suggested that this involves a conflict of interest, because the Secretary of State for Trade is primarily concerned with shipping. In my submission to your Lordships that is not so. This is a type of difficulty which the Department of Trade have had to cope with for a long time because, although it has shipping interests, it also has marine interests. For example, the Secretary of State for Trade is the Minister responsible for standards of safety in relation to the construction of ships. He is the Minister responsible in overall position in relation to the general lighthouse authorities. He is the Minister who has responsibility for search and rescue operations of a civilian kind, and so on.
The policy which has led to this is that utilisation of existing services, existing

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resources, in this department is the foundation upon which co-ordination should be built. We believe that the current arrangements are sensible and that they are working reasonably satisfactorily. Of course everything can be improved, and we are doing our best to work towards every improvement that can be made. The various matters which have been mentioned in the course of this debate this evening will certainly be considered in seeking to achieve that goal.
It has been suggested by the noble Lord, Lord Beaumont of Whitley—supported by others—that the correct approach is really the opposite one; setting up a new department, creating a new organisation altogether, in a Ministry for Marine Affairs. That would mean, in our view, breaking the existing important functional linkages in the wide range of departments whose responsibilities have significant marine aspects. An example is the formulation of energy or defence policies as a whole, because energy involves use of the sea and use of the land and of course supply of people on the land. Defence policies involve use of the sea, the use of the land and the use of the air. So if one went for a Minister of Maritime Affairs, one would need to have co-ordination in these areas. So it is really a question of administrative convenience how one approaches this. My right honourable friend the Prime Minister, who is responsible for the allocation of ministerial responsibilities, takes the view that the benefits of retaining the existing linkages within the departments concerned outweighs any advantages to be gained from creating a new department concerned solely with marine affairs, and that it is better to use the existing structures and build upon them a structure of co-ordination under the energetic lead of the Secretary of State for Trade.
I shall certainly draw the attention of my colleagues to the suggestions which have been made this evening that there should be a Royal Commission on the Sea, a national Maritime Council and a North Sea forum. But I must say that the Government already have the benefit of the best possible advice from many interested parties, including noble Lords in this House. I should like particularly to mention in this connection the noble Lord, Lord Kennet, and Elizabeth Young for the work that they do in this area.
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If I may, I shall turn briefly to some of the more detailed points that have been raised: first, with regard to the question of pollution and the "polluter pays" principle, like the noble Lord, Lord Caradon, we take the view that it is very important in this area to have regard to the international dimension. As he pointed out, the suggestion from Malta was to look at this in a broad way, not let everyone look only to his own interest and try to grab what he could while the opportunity offered. Therefore we remained committed to international solutions on problems of this kind, as our predecessors in government have been so committed. Oil pollution liability and compensation are by their very nature international problems and can only be satisfactorily dealt with by international agreement.
Under the 1969 Civil Liability Convention, the tanker owner is made strictly liable for pollution damage, including prevention and clean-up costs; so it is a "no fault" regime once one establishes the identity of the polluters, subject to some defences with which I need not detain your Lordships. It is right to point out that, in relation to an unidentified source of pollution, a "no fault" regime is not much good, because it is essential to identify the polluter before the "no fault" liablity can attach to him. The Government are pressing forward as fast as is possible in the international field in an endeavour to improve on this position. A possible new convention on liablity and compensation for damage arising from the carriage of hazardous and noxious chemicals by sea is currently under consideration. Indeed, the Legal Committee is debating it at this very moment, as the noble Lord, Lord Ritchie-Calder, pointed out. The committee is working to the target of a diplomatic conference in 1982. There are difficult questions involved and progress—so long as it is progress—is very welcome. In the nature of matters, if one is going to get agreement from so many people, progress cannot be very fast.
So far as the perhaps more fundamental question of preventing pollution is concerned, the Government are also pressing ahead in the international field and are endeavouring to arrange for adequate standards for shipping and, of course, adequate enforcement procedures. In this connection some reference was made

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to flags of convenience. It is not clear to us that it has been demonstrated that flags of convenience are yet at the stage where they should be outlawed. In particular, we think it is unjustified to assert that United Kingdom oil companies have a policy of chartering substandard "flag of convenience" ships, since all ships using United Kingdom ports are subject to the same safety standards, whatever their origin.
Some comment has been made on the nature of the representation sent, for example, to the IMCO Legal Committee. The position is that while the Department of Trade takes the lead, policies are agreed beforehand—indeed, that is the whole object of having collaboration between departments—with the other departments such as the Department of the Environment, and the co-ordinated policy results are put forward on behalf of the Government as a whole to the conferences or committees in question.
It was suggested by the noble Baroness, Lady Birk, that we should move towards port State jurisdiction as against flag State jurisdiction. This again is a matter that requires to proceed by international agreement if it is to be effective. The general view is that the flag State is in the best position to enforce standards when a ship is registered, and to continue to do so over time on a sustained and consistent basis, because there are obvious difficulties from the point of view of the port State in enforcing its standards.
Perhaps this is the moment to refer to arrest by aeroplane, to which my noble friend Lord Campbell of Croy referred. We think that international matters move slowly, but in the Convention on the High Seas of 1958, printed in Cmnd. 1929, it is provided that—
"hot pursuit may be exercised only by warships or military aircraft, or other ships or aircraft on government service specially authorised to that effect. … The aircraft giving the order to stop must itself actively pursue the ship until a ship or aircraft of the coastal State, summoned by the aircraft, arrives to take over the pursuit, unless the aircraft is itself able to arrest the ship."
Even then, they contemplated the possibility of this happening.
The situation with regard to local authorities and delay in the recovery of costs has been mentioned. It is true
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that there are difficulties here. I referred to the Civil Liability Convention, which provides a basis for legal liability, but unfortunately, in this area as in other areas, it is not always a quick matter to enforce one's rights. So far as interest is concerned, the Government and local authorities have included interest in their recent compensation claims.
With regard to the "Eleni V", I would mention two points. First, it was said that heavy oils represent the bulk of the oil carried round our coast. My information is that heavy oil represents a fairly small part, and not the bulk, of oil carried round our coast. It is also a fact that the Department of Trade has claimed all the costs it incurred in mounting the "Eleni V" operation, and so far there has been no adjudication on the claim. I would remind your Lordships of the very successful co-ordination arrangement made by the Department of Trade under Admiral Stacey, and a tribute has been paid to that operation already.
Manganese modules have been referred to and, of course, the Department of Industry has a great interest in that matter. This is amost important subject, and when the Law of the Sea Conference resumes next month it will be pursued on behalf of the United Kingdom. The United Kingdom is working as hard as it can towards a solution in this matter which will be fair to all interests, including our own.
I think all of us are agreed on the need for co-ordination. Many of your Lordships have advocated that we should lead the world. My right honourable friend the Secretary of State for Trade has been appointed to lead us, and I hope the House will wish him well in this task, and that under his inspired leadership we shall indeed lead the world.
7.55 p.m.
Lord KENNET: My Lords, the House will be grateful to the noble and learned Lord the Lord Advocate for stepping into the breach and giving us the information that he has. He has defended the recent step taken by the Government, which I have argued is a retrograde one. Of the eight speakers in this debate, excluding the noble and learned Lord as the Government spokesman, all but one have addressed themselves to the machinery of government. Of those seven, every one

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has called for a change, usually of a more or less dramatic nature, ranging from the proposal advanced by the noble Baroness, Lady Birk, and myself for a Royal Commission to investigate the matter to a governmental maritime council proposed by the noble Lord, Lord Campbell of Croy and the most extreme change of all for a Minister for Maritime Affairs as was proposed by the noble Lord, Lord Beaumont.
I do not want to go into the respective merits, but I would point out that here are these seven people, many of them with decades of experience in these agonising matters, who are unanimous in believing that the recent step taken by the Government is not sufficient, that the status quo is not defensible and that there must be action. I would say no more than that, except, if I may, to doubt that the Government can really be so sure that they are doing the right thing, because I believe that if they were sure they would have announced the fact rather than leaving it to be fished out by an Opposition Back-Bencher in a Question for Written Answer.
Lord FERRIER: My Lords, before the noble Lord sits down, may I, like a seagull, make one more swoop? I may say that I could not go and stand in a queue at the Vikings exhibition. Is it possible that the usual channels might lay on a House of Lord's party for the Vikings, as they did for Tutankhamen?
Lord KENNET: My Lords, I am grateful to the noble Lord for that intervention. I think it is an excellent idea and perhaps we could resume discussion of these important matters in more informal surroundings, standing around the rings and hairpins of our ancestors. I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

WALES: SOCIAL AND ECONOMIC POLICY
7.58 p.m.
Lord BROOKS of TREMORFA Lord BROOKS of TREMORFA rose to ask Her Majesty's Government what policies they are pursuing to alleviate the social and economic problems of Wales particularly in view of the proposed
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cut-backs in the steel industry. The noble Lord said: My Lords, I am grateful for this opportunity to air some of the social and economic problems facing the Welsh people, and I am grateful to those noble friends of mine who have indicated that they are going to take part in the proceedings. I am particularly honoured that the noble Lord, Lord Hooson, should be making his maiden speech this evening. He has a long and distinguished record of service to the Principality, and I am particularly pleased that he is speaking. I am also pleased that the noble Lord, Lord Harris of High Cross, will also be taking part in the debate. I had occasion to write to him last week and say that I had read his speech of last Wednesday with great interest and, as a South Welshman, I found myself in disagreement with much of it. I informed him that I intended to make a reference or two to what he had to say.
On the 14th February, there was a debate in another place on Welsh affairs. This, I am told, was the first occasion on which a Labour Opposition had called a three-line Whip on such a debate. That is a measure of the concern felt by Opposition Members in another place over the rapidly deteriorating position in Wales, particularly in view of the matters current in the steel industry. I listened to much of that debate and read the report of the whole of it, and it was a very depressing debate. I am bound to say that the Government spokeman seemed indifferent to the scale and the nature of the problems facing Wales.
What has happened since May last year? We all know about the cuts in public expenditure. We know of the hardship facing local authorities. We know that high interest rates and high mortgage rates will affect the whole country. But the cumulative effect of these policies on regions such as Wales will be disastrous. It is almost impossible to exaggerate the scale of the disaster which could hit Wales, if the proposed loss of jobs in steel and coal goes ahead.
In the steel industry, 6,800 jobs at Port Talbot and 4,500 jobs at Llanwern will be lost from August if the BSC's plan to reduce production to a total of 2·
8 million tonnes per year from the two works goes ahead. These jobs will be additional to the 7,500 jobs to be lost

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following the end of steelmaking at Shotton. It is likely that there will be a further 1,500 job losses at all steel plants if the BSC succeeds in linking any pay settlement to a further demanning exercise. The coal industry will lose approximately eight pits and 7,500 jobs, as a direct result of the reduced output in the steel industry. If the BSC goes ahead with its plans to increase imports of coking coal, then a further 11 pits and 7,500 jobs would be at risk.
If the steel and coal industries, which between them provide 15 per cent. of all male employment in Wales, suffer cuts of this size, then there will be a substantial effect on jobs in other industries and services. From railways and road haulage, which in South Wales depend for so much of their business on the movement of coal and steel, through firms supplying equipment and services to pits and steelworks, to the newsagents, the corner shops and the cafés which depend for their very survival on trade from miners and steelworkers, the effect will be felt throughout the whole of South Wales. The loss of one outside job for every two jobs lost in coal and steel would represent a further 16,000 to 18,000 jobs, or a total of jobs lost in excess of 50,000 in Wales. Unemployment in Wales in recent years has been in the 80,000 to 90,000 range, and job losses on this scale would mean an increase to over 130,000, or 13 per cent. of the insured population.
The effects of this tragedy would not be confined to Wales. In recent years, there has been much talk of "de-industrialisation" in Britain as so many industries contract and decline in the face of imports. If Llanwern and Port Talbot close, representing one-third of Britain's modernised steel-making capacity, it will be a critical step in the destruction of British industry across the board. Such a development would put at risk the already fragile prospects of Leyland, which would be at the mercy of foreign steel suppliers for both price and certainty of supply; and the collapse of Leyland, with job losses running well into six figures, could be the death-knell for a very wide range of the British engineering industry.
At this time of crisis for Wales, the policies of the Government are designed to make the problems worse. Government
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public expenditure cuts were responsible for the rigid break-even date imposed upon the Steel Corporation, which has led to the panic cuts put forward by the BSC. The steel strike over pay was also a response to this rigid cash limit, which led to a zero pay offer and a threat of 50,000 redundancies being made to a workforce which has accepted all pay policies and has negotiated a loss of over 30,000 jobs in six years. While Government spending cuts led to the rigid break-even date, Government monetary policy, involving 17 per cent. interest rates and an over-valued pound, has hit steel demand at home and caused the BSC to give up voluntarily 2 million tonnes a year of export business.
The Government's refusal to provide a small tapering subsidy of £20 million over four years, to help the Coal Board compete with heavily subsidised foreign coking coal, is inexplicable. Pits cannot be mothballed. When a pit closes, the coal is lost for ever. In an era of energy shortages, it is criminal to sacrifice millions of tonnes of coal on the altar of free market monetary dogmatism.
The Government are now having second thoughts over the down-grading of many parts of Wales for regional aid. But even if development and special development area status is restored to areas such as Port Talbot, the value of regional policy is severely reduced if the Government persist in their refusal to follow a policy of steering firms to the assisted areas through a vigorous IDC policy. The extra £48 million of Government help channelled through the WDA must be seen in the context of cuts in the WDA budget, which have already brought new land reclamation schemes—vital to creating industrial sites in so many of our valley communities—to a halt. How much of the £48 million will simply be used to restore cuts in the WDA budget?
I can hardly be described as the original European man. I opposed our entry into the EEC. It seemed to me that the Treaty of Rome would lead to an inward-looking Community, and I was never convinced of the so-called economic benefits that would accrue to this country, were our membership to be confirmed. However, we are now fully-fledged members of the EEC, which adds, of course, a different dimension to the problems facing

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Wales. I am involved in visits to Brussels in order to obtain EEC help from the social and other funds, but what has been happening under this Government? There was an announcement in December that the BSC is to set up a new subsidiary called BSC Holdings, which will include most of the profitable parts of the Corporation. This is a further threat to jobs in Wales. The tinplate works of BSC-Trestre, Velindre and Ebbw Vale—are to be removed from the control of the Welsh Division and will come into BSC Holdings. This will hit the financial results of the Welsh Division, which will offer a potential threat to the role of Port Talbot and Llanwern as suppliers of coil for tinplate, and will create a new possibility of tinplate investment being sited outside Wales. Further, it is clear that one role of BSC Holdings is to create a structure through which sales of profitable BSC assets to the private sector will become much more straightforward.
The BSC cutbacks have come as a surprise to the European Community. EEC proposals to cut back steel capacity in the nine Member States—known as the Davignon plan—will involve a reduction of 6 million tonnes of capacity in the whole of the EEC over a three-year period. The BSC proposals involve a reduction of 6 million tonnes in a mere seven months in the United Kingdom alone, thus removing all pressure on the other eight EEC countries to make any cutbacks.
The Government appear to have little interest in using the EEC to obtain the maximum help to cushion the blow of any rundown. A proposed new scheme put forward by the Commission to finance redundancies in steel, and potentially worth £70 million to the United Kingdom, was vetoed by the United Kingdom among others in the Council of Ministers.
The Government have not shown particular enthusiasm in seeking maximum help from existing EEC schemes. In January, Social Affairs Commissioner Vredeling charged the United Kingdom Government with failing to inform him of the scale of the problem now facing the United Kingdom. The Government denied the charge. It turned out that the full extent of their representations until then had been a letter sent before Christmas by a relatively junior official in the Department of Industry to an official in
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the Social Affairs Department of the Commission, stating that there would be a number of redundancies in the United Kingdom steel industry in the near future. Top level pressure and any real assessment of the scale of the problem had been entirely absent. The dogmatism of the Government, in addition to attempting to destroy our industries, is also blocking the fullest use of available assistance from the EEC to help cushion the effects of that policy.
I referred earlier to a speech made by the noble Lord, Lord Harris of High Cross, in the debate on economic affairs that we had about a week ago. I want to refer specifically to two matters in his speech. One of these completely puzzles me. As far as the other is concerned, I, as an A-Level economist—and that is becoming more and more popular—think, with respect, that I may be able to educate a very distinguished economist. The noble Lord said in his speech:
"We need more mobility, both occupational and geographical. I believe that reform of the trade unions will help a little"—
but this is the point I want to emphasise:
"as will the sale of council houses".
The very reverse will occur. If persons in areas like South Wales where mass redundancies take place own their homes, that is a reason for them to stay put. They have a stake there. They did not have that in the 1930s; they were able to put their possessions into a suitcase and take off. The other point to which the noble Lord, Lord Harris, should address himself is this: if there is a mass sale of council houses in South Wales and these mass redundancies follow, who is going to buy them? There will be nobody there to buy them. There will be no market for these houses. I think that the noble Lord might have hesitated a little before he introduced dogma of that kind into his speech.
The noble Lord also had this to say:
"Secondly, let the Government remove the incubus of the so-called ' employment protection ' measures from all new jobs created by private enterprise in places such as South Wales which are most likely to be affected by the growing redundancies and unemployment in steel, cars, shipbuilding and the rest".—[Official Report, 13/2/80; col. 250.]
There has been an enormous injection of public expenditure in the communications

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field. South Wales has benefited greatly from this. We have the M.4 and other roads which have helped to open up industrial areas in South Wales and we have, I am told, the fastest train service in the world. I thought the idea of all this public investment was to bring industry to areas like Wales. What is going to happen to all that expenditure if the kind of philosophy propounded by the noble Lord should take place?
I am sure that the noble Lord saw the first instalment of the Friedmanite lectures on television last Sunday night. Anybody who was not absolutely appalled by the arguments being put forward by Professor Friedman can have no concept of the social consequences of such an economic theory. The Friedmanite vision of heaven is a world of ill-ventilated sweat shops manned by non-union labour and surrounded by a permanent way of street market traders. That is what came over in that film and I am bound to say, having watched it, that I really did think for one moment that Professor Friedman is "having us all on".
The Secretary of State for Industry was recently in the North of England and I am told by a Member of the other place that he said to a group of people up there, "It is up to you". In the 'thirties, a man named Walter Runciman went to Jarrow and he said, "Your destiny is in your own hands". It is no wonder that echoes of the 'thirties are constantly coming back to us. It is no wonder that there is so much unrest in the regions, unrest in South Wales.
Aneurin Bevan once said that Britain is an island built on coal and surrounded by fish. Well, the coal is still there. I understand that the fish are rather more sparse than they used to be, but if Bevan were alive today and were to be told that Britain had indigenous energy reserves of coal which will last us 300 years, natural gas from the North Sea and North Sea oil, he would wonder what on earth the country is coming to. We are the only country in the Western world which has this wonderful opportunity, the very lifeblood of a modern industrialised society under us and around us—and we panic.
The present generation is not going to be like Aneurin Bevan's generation. He
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often used to remind us of the conditions of the workers and their families in the interwar years. But they were largely apathetic and somewhat deferential. The threat to the social fabric of Britain is not an external threat. It comes from within. It comes from a Government which simply does not understand the complexity and the dangers inherent in a modern industrial society. Last Sunday, the Sunday Times had a leader which was headed: "How to avoid the Third World War"—a far cry, noble Lords might think, from the problems of Wales; but in fact Wales is mentioned in the leading article, so I will bring it in aid. The leading article dealt with the paperback, North-South, a Programme for Survival. This is the Brandt Report to the United Nations. In the depths of the leader it says:
"What is more eccentric, one might wonder, than having a steelworks in Llanwern lie [idle] while India laments a steel shortage?"
It also says at the head of the page:
"The cost of a tank would buy 1,000 classrooms; a fighter would pay for 40,000 village pharmacies. Half a day's military spending could eradicate malaria, which threatens a billion people. The North has a quarter of the world's people, 80 per cent. of its income, and 90 per cent. of its manufacturing capacity. It consumes 85 per cent. of world oil production".
The heading of those quotes is, "The lunacies of Planet Earth It is said that the gods make mad those whom they intend to destroy. Before this Government destroy us, I urge that they step back from the brink and bring some sanity into their policies.
8.18 p.m.
Lord HOOSON: My Lords, I owe the House an apology. I failed to attend here in time to hear the opening remarks of the noble Lord who has just sat down. I apologise for that. I must admit that I am unused to a House which has the singular merit of a winding-up speech in a previous debate taking only two or three minutes.
I have been reflecting this evening back to 18 years or so ago when I made my maiden speech in another place: whether I felt more nervous this evening than then. I came to the conclusion that I felt more nervous this evening than then. Whether it was the bracing atmosphere of the other House and the intense kindliness

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and friendliness of this House which has created this feeling in me, I do not know.
I have received much advice on the nature of a maiden speech. It has been suggested to me that, above all, the merit is to be brief. The second merit suggested is that I should be non-controversial; but siren voices, I must admit largely with a Welsh lilt, have told me, "Take all the time in the world, boy". Others have suggested that there is no reason why I should not be controversial. In fact, I am assured by the scholars in this place that within its annals lie precedents for all kinds of maiden speeches.
I should like to congratulate the noble Lord, Lord Brooks of Tremorfa, for introducing this subject at a very important time. I should say here that I was born and brought up in rural Wales and that I represented a rural constituency, so I was not immediately connected with the industrial scene. However, my profession certainly took me into the industrial areas of Wales throughout my professional life, and I have just returned from a six weeks' stint in my profession at Cardiff. One would be insensitive indeed not to sense the feeling of anxiety and even despair that is prevalent at the present time.
I think one cannot understand the nature of the problem as it faces the Principality without appreciating the history of the matter: how in fact, in a few generations in the 19th century during the Industrial Revolution, Wales was transformed from a rural society, largely Welsh-speaking, to an industrial society with all kinds of social and cultural consequences of that epic change—an epic change which I think in literature has been insufficiently chronicled. What did it lead to? It led to a period of prosperity, and a distinguished Welsh economist estimated at the close of the 19th century that the Welsh miner, badly paid though he appeared to be, and appears to have been in retrospect, nevertheless was the highest paid industrial worker in Europe. Up to the end of the First World War in relative terms Wales—and certainly industrial Wales—was relatively prosperous.
It was against this backgournd that there came the traumatic events of the 'twenties and the 'thirties which were shattering to Wales. There was disillusion with the system. People lost their belief in the ability of the capitalist system or free
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enterprise—call it what you will—to solve the ills, and people became addicted to other systems. If we look statistically at the situation, over half a million young people left Wales during that 20-year period to find work elsewhere because there simply was no work.
I think it would be as well for the Government, and indeed for the House, to reflect on the nature of unemployment. It has never happened to me, save that I lost my seat in the other place and I had that kind of feeling of being rejected. But one can understand the head of a family trying to explain to his family why he is rejected, why his skills are not wanted; why he does not go out, as other people, to work; there is no employment for him. It is a traumatic experience, and when that experience is conditioned by an upbringing where parents are constantly referring to the 'twenties and the 'thirties, and where the prospects look so bleak, one can perhaps understand why people in Wales have reacted as they have done to the present situation.
That is the background. It is perfectly understandable, though not, I think, excusable, why the people of Wales largely place their hopes for a different system on the panacea of nationalisation. Without going into it at length—and I remember the only time I was nearly howled down in another place was when I spoke for my party against the nationalisation of steel—I think the nationalisation of steel and the way it was done was a gargantuan mistake from the Welsh point of view. There is no getting away from this in fact, that one of the options revealed to the unions by the British Steel Corporation was either that Llanwern or Port Talbot should become a mausoleum. Each of them represents an investment of hundreds of millions of pounds of public money, and if one of them were to become a mausoleum, and certainly on the other options many of their buildings will become so, they will be mausoleums in memory of what?—remote control, bad judgment, prodigal spending, everything unrelated to economic reality.
I do not want to follow that train of thought, save that I think the country suffered, understandably perhaps from the Welsh point of view, because of its experiences in the 'twenties and 'thirties,

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from a theoretical approach, and we are in great danger of suffering from the other side of the theoretical approach at the present time. The unknown author of an article the other day in the Observer referred to A-level economics when he suggested that in fact the Secretary of State for Industry went to achieve martyrdom in south Wales. He is much more likely to have achieved it last Saturday at Twickenham, though we can leave that aside for the moment.
I think there is great danger of the Government taking a theoretical approach to what is an enormous economic human social problem in South Wales. The noble Lord, Lord Brooks of Tremorfa, has already given the statistics and described the huge economic problem facing the Principality. Fifteen per cent. of the male working population in Wales is engaged in either the steel or the coal industries. It is a huge proportion. We may be too dependent on basic industries, but what is the responsibility of the Government? The Government surely have an enormous responsibility to the country to ensure that basic industries are in good heart. The British Steel Corporation has been so wrong in the past in its projects. How do we know that it is right now? I think it is extremely unlikely that it is.
A very pertinent question was asked by the right honourable Member for Ebbw Vale, as to how we were going to fight the Third World War, if it came. Would it be with battleships made of plastic? That was referring to one aspect of the importance of one industry; but there are many other things to which it can be referred. There is a heavy burden of responsibility on the Government to investigate more closely the British Steel Corporation's projections into the future.
Secondly, surely the Government should understand the problem in such a way that their right hand at least knows what their left hand is doing. It was announced by the Secretary of State for Wales the other day that £48 million was to be provided additionally, as I understood it, to the funds already available. I know there is a doubt as to whether this is additional money, but let us assume that it is correct. That follows closely on
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his announcement that £35 million has been cut off regional aid for Wales; and that was only announced a few months ago, so the Government do not seem to have worked out their strategy for dealing, with this situation.
When it is suggested that there should be alternative employment, let us take a realistic view. In the steel industry alone in South Wales 11,000 people have been made redundant; and when one considers all the dependent employments, even in the service industries that are funded, as it were, by the basic employment, building advance factories will not cure this enormous problem. The problem is not only there but in the Shotton Steel Works in North Wales. How will it affect mid-Wales, which so far has been able to attract industries because there was not the alternative magnet of the industrial areas?
The outlook for Wales is bleak indeed, and the only way forward is for the Government to take a much more realistic view of this. I am one of the greatest critics of the Steel Corporation. I think it was a highly bureaucratic body. The whole country went mad in the way they viewed the enormous investments in the steel industries. I lived not so far away from the Shotton Steel Works when I was a youngster; there was a very good labour force there, and if the steel making had been modernised, even in a modest way, that would have been a successful and viable works because, quite apart from anything else, it has a superb industrial relations record.
If I were to select the greatest single mistake in the steel industry in Wales I would say it was the setting up of Llanwern, with the consequent harm that it did to Ebbw Vale and other places. But that is water under the bridge now. I think the Government should consider much more massive investment in Wales, on a scale they had not thought necessary until now. Far from there being less public expenditure, there must be more, and much more public investment.
I am no theoretician about this; I think it is necessary to preserve the economic and social fabric of a country. You cannot do it by adherence, as it were, to economic yardsticks alone. In fact the article in the Observer last Sunday, which I have previously adverted to, seemed to

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me to suggest that the author at least realised the danger of simply doing this. I think he said the posture was more appropriate to a Marxist than a Conservative, and I think that is right; I think it is a Marxist belief that economic considerations alone or economic theory shall be enthroned higher than anything else.
The Government should also think of the desirability of introducing into the steel industry, and possibly the coal industry, earlier retirement, at 60, so that the benefits of pensions and so on are given at an earlier age than at the present time. I do not see why in our country at the present time such innovations should not be introduced industry by industry if necessary, if we cannot afford to spread them to the whole community at one and the same time. But, above all, I think, and hope, that when the noble Lord speaks from the Government Bench in explanation of their policies to relieve the situation which arises in Wales, the Government will approach the problems with commonsense rather than with theoretical considerations in mind; will realise that there is a huge problem there, the scale of which does not appear to have dawned on them so far. Above all, I hope their attitude is charged with compassion.
8.32 p.m.
The PRINCIPAL DEPUTY CHAIRMAN of COMMITTEES (Baroness WHITE): My Lords, I have the very great pleasure of congratulating the noble Lord, Lord Hooson, on what was difficult to recognise as a maiden speech. Those who have had experience in another place perhaps have a little less to fear in this place, although this place is a very different one, as possibly the noble Lord has already realised. I live in the same county as he does. I was one of his constituents for a number of years—disenfranchised, of course, which perhaps was just as well for him! But we share a common concern for Wales as a whole, with a special concern for that beautiful part of mid-Wales in which we have the good fortune to find ourselves. I am sure that on occasion we shall hear further from the noble Lord about some of the problems of mid-Wales.
Tonight, however, in what is meant to be a relatively short debate on an Un-starred Question, we are very grateful indeed to my noble friend Lord Brooks
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of Tremorfa for bringing to your Lordships' House a situation which all of us, whatever part of Wales we come from, feel very deeply about. For those of us of my generation it naturally brings back—it is inevitable that it should bring back—recollections of the nineteen-twenties and nineteen-thirties. As a young woman my first job was with the then Ministry of Labour, as it was called, to go round the valleys; I also went to some of the other depressed areas in England, in the North-West and the North-East and Lancashire. They were renamed; it was thought that "depressed areas" was indeed unattractive, so they became "special areas", but that did not cure their ills. I would ask those Members of your Lordships' House who do not have the memories that some of us have to use a little more imagination. For example, I felt almost a physical pain when I read a remark in The Times newspaper on Monday, in an article by a very experienced and very skilled journalist, David Wood. He used the phrase that they, the Government, were expected"to use our money, the taxpayers' money, to pay blackmail to played-out regions." I am quite sure that South Wales would have been fairly near the top of his list.
A noble Lord: Like Aberfan.
Baroness WHITE: It shows a complete lack of imaginative understanding of what remarks of that kind mean to those of us who know. I hold no brief for people who throw eggs and tomatoes when a Minister of the Crown visits the area, but I can understand why, because it was symbolic of something which appeared to be—I am sure it was not in fact—a kind of dehydrated indifference to what we had all experienced, either directly or because of the family emotions and traditions that are passed on from one generation to another.
Therefore, I hope very much that we shall be able to look as rationally as we can at the situation, realising, however, that it is not just a matter of whether you pay blackmail to a played-out area, but that you are concerned with the whole social fabric of an area which, after all, lost, as we have already been reminded, so many of its best and most enterprising people.
This afternoon I looked very briefly at a book of my late father's which included

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a bitterly satirical article, which was published anonymously at that time in 1935, called What's wrong with South Wales, in which he made a suggestion which, ironically, is now becoming a reality, that some of the valleys might be used as an open-air industrial archaeological museum and that we should keep a few winding machines and cages and one or two of the pits and it could become a tourist attraction. The National Museum of Wales is now turning the great pit of Blaenavon into exactly that.
I myself was for many years the representative of the constituency in East Flintshire in which the Shotton Steelworks are situated, and for the last months I have been feeling very deeply the fears, the apprehensions, of the people there on Deeside. It may be that it would have been better if the change there had not been so long delayed. It has now come perhaps at a worse time than if it had been faced squarely a few years ago. But Deeside is basically a very good area indeed, a very attractive area for industry. Communications are not perfect but they are very much improved from what they were. There are some very good sites there. But what matters most of all is that you have absolutely first-class people there with a very good record. I would hope very much indeed that everything possible will be done to make certain that the skills and experience of the steelworkers of Deeside will not be wasted.
If I may speak for a moment of the other area which is very much in our minds and in the mind of the noble Lord who asked this Unstarred Question—South Wales—here I have to declare a kind of interest because, as many of your Lordships know, I am chairman of the Land Authority for Wales. I am not speaking, of course, for the Land Authority, but I am drawing on my experience in that position. I can say quite firmly that although we certainly have very great anxieties—we must have—I do not believe things are anything like as bad as they have been painted in some of the media. The "Panorama" programme for example, showed the most dismal areas of South Wales. They just went round quite deliberately picking out the most unattractive areas they could possibly photograph. If they had come to us, or if they had gone to our colleagues in the Welsh Development Agency, we
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could have shown them very much better pictures. That type of image of South Wales—which again is another facet of the same attitude as that of David Woods in the article in The Times—is something which we resent.
I am speaking from not sentiment but from experience. We have some quite excellent sites in South Wales. On two conditions, which I wish to emphasise in a moment, we have had no difficulties in disposing of them, although it takes time to find the right persons. We have just exchanged contracts on an excellent site not many miles from Cardiff, for some three-quarters of a million pounds, which I am sure we shall be able to market very successfully for industrial purposes.
I ask the Government very seriously to consider whether putting so much money into advance factories is necessarily the right policy. Certainly one needs some advance factories, and certainly one needs some starter factories. Some can be very modest, as the noble Lord, Lord Brooks of Tremorfa, knows. For example, on the East Moors abandoned steel site in Cardiff we have been able to keep some buildings which will provide good opportunities for people starting out for the first time on businesses of their own. There are other situations in which advance factories undoubtedly have their value.
But I believe that if we are looking for substantial investment we are likely to have greater stability and greater permanency if people put some of their own money into the building. It is very attractive to be offered one or two years' rent free or a reduced rent; it sometimes pays off, but not always. However, if you can offer a first-class site to a firm or to an enterprise which has its own resources, you are more likely to have a more prosperous and permanent future than you sometimes have with those who come in with minimal resources but who are attracted by the various buildings that you are putting on offer.
However, the sine qua non to attract any people of real substance to an area like South Wales are two: communications and drains. Those are, as I have said from our practical experience, the two things that matter. One can be held up very seriously indeed if the particular area which one is trying to develop and

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sell to an enterprise that is worth attracting, is not in the drainage programme for the Welsh Water Authority with whom we have most excellent relationships.
I can disclose that on one of the very best sites that we have been dealing with in South Wales over the last two or three years we have had to spend something of the order of £300,000 on a temporary sewerage arrangement which is really a waste of money. If there had been adequate forward planning as regards that location this expenditure could have been avoided. We would not have had to provide a private enterprise sewerage system in order to keep to the timescale of the people who were coming in.
But, even more important—I think the most important element in the situation—is, of course, communications. There is no doubt whatever that South Wales is a different place since the M.4 came into use. It is not completed yet, but it is sufficiently so to be a very obvious and specific element in the sitution. Similarly, in North Wales, when communications are not yet so far advanced, if we are to have even some public investment in the area, then I would ask the Government to put everything they have into communications and into basic infrastructure, such as the drainage services that I have mentioned.
I do not believe that the balance of investment is necessarily quite right at present. To put up buildings is all very well, but unless one has the type of communications that first-class firms are attracted by, one will not get those firms. There is a situation in Cardiff, for example, where we have been extremely disappointed to learn that a particular link road which would improve the situation for the East Moors site is not regarded as a first priority for investment. That is a great error of judgment.
Although I do not want to weary the House with other detailed comments, I hope that this matter will be looked at quite clearly. If we have the right site properly prepared, the right infrastructure and the right communications, it is quite possible to market that site for the kind of industry which we would all wish to have. So I hope that Her Majesty's Government will pay very close attention to the way in which they use such resources as they are prepared to give us.
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We must help ourselves. We shall not help ourselves if we are regarded as a played-out region from which people, if they have any ambitions at all, will escape as quickly as possible. That is the fate which we have suffered once. We must never suffer it again.
8.47 p.m.
Lord HARRIS of HIGH CROSS: My Lords, I am personally grateful to the noble Lord, Lord Brooks of Tremorfa, for his courtesy in serving notice of his intended chastisement, and I was glad at any rate that we share the doubts or disillusion about the EEC, which I personally have always strongly opposed. However, I must say that I am fairly unrepentant in my approach to domestic economic problems because my view is that the noble Lord played down long-term deep-seated problems by reference to short-term and rather superficial symptoms.
I would rather build on the historical illusions of the noble Lord, Lord Hooson, in his most eloquent maiden speech. After all, the grievous problems that confront Wales and other areas did not start with the last election. We have had lectures from time to time from the noble Lord, Lord Kaldor, and others, pointing out that Britain's great staple industries have been declining for perhaps 100 years. But certainly the most rapid relative decline has been in the last couple of decades when Britain's average real income per head has fallen from sixth to sixteenth in the league table of Western developed economies listed by the OECD.
I want to put to the House that the root cause of the British disease has been a persistent failure to make the best use of human resources in the light of changing technical opportunities. There are many reasons that we can all offer for that failure, but I shall suggest that one of the most fundamental has been a natural human conservative resistance to change. However radical our ideas may be on many other issues, most of us cling to familiar arrangements and routines rather than risk disturbances and untried experiments which threaten destruction to our working methods and our way of life and so on.
Lord BROOKS of TREMORFA: My Lords, I ask the noble Lord to give way on that point. Would be not agree that,

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in the light of the acceptance by tens of thousands of South Wales miners of the closing of their pits, and the acceptance by many thousands of steel workers in South Wales of the closing of their obsolescent steel mills, they did not indicate a conservatism or a refusal to accept change?
Lord HARRIS of HIGH CROSS: My Lords, I am coming to the point that much of the dramatic and disturbing running down of industries is the result of the failure of past policies which, in my view, we may be in danger of maintaining beyond their usefulness. It was the noble Baroness, Lady White, who reminded us that this whole problem goes right back into our history. In the 1920s the talk was of the "depressed areas". In the 1930s they became the "special areas". In the 1950s we had many bewildering changes, movements towards what were called "development places" and "development districts". By 1966 we had "development areas" covering half the country and a distinction was made between "special" and "intermediate" areas.
For all of these over this period of 50 years there has been a whole range of Government policies, including policies of all the parties—Conservative, the national Government before the war and Labour and Conservative Governments since the war—escalating from quite modest beginnings of Government contracts and cheap loans, going on to the setting up of trading estates and factories, the granting of payments for removal, the holding back of developing areas through IDCs, all kinds of wage subsidies like SET, regional employment premiums; investment subsidies like free depreciation of machinery; initial allowances on buildings, temporary employment subsidies and the rest.
Where has all this got us? The persistence of decline over the whole of this period suggests that the spending of thousands of millions of pounds in these ways has, at any rate, to some extent been misdirected. To go on calling for more Government expenditure seems to me to do more credit to your hearts than to your heads. It is like a third, fourth or fifth marriage—a triumph of hope over experience.
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In medicine we use drugs to anaesthetise the patients while change, and if necessary surgery, may be conducted. But if we use drugs so that they become a crutch and they perpetuate the weakness and frailty of the patient, then we are doing the patient no good turn. I believe that no longer can we evade a fundamental choice. It is a choice that was summed up almost half a century ago in a book I recommend to the noble Lord, Lord Brooks of Tremorfa, by Professor A. G. B. Fisher called, The Clash of Progress and Security. It seems to me that it is the clash that we are now seeing in the conflict between what I believe is a radical approach by a Conservative Government against a conservative nostalgia of the Labour Party, and I am afraid also of the trade unions. Fifty years ago Professor Fisher pointed out, with great prescience, that the single-minded pursuit of security at the expense of progress would threaten to sacrifice both progress and security. The simple explanation in ordinary, everyday economic terms is that progress, on which security ultimately depends, requires the continuous, continuing reallocation of labour and capital to new forms of employment and industry.
Lord DAVIES of LEEK: And new markets, my Lords.
Lord HARRIS of HIGH CROSS: And new markets. One of the merits, for all their shortcomings, of competitive markets is that they exert a continual, gradual, persistent pressure to shift resources from old and declining employments into new and expanding employments. It seems to me that it is by obstructing market forces that we have delayed change and then caused a massive aggravation and intensification of the problem. I am ready to admit that change creates worrying social problems, but my argument is that they are best dealt with by social policies directed to income support in transitional unemployment, which would be made shorter by retraining, removal grants and all that. What we should see is that we cannot secure lasting security by trying to run great industries, like the steel industry, as appendages of the Welfare State.
I am afraid that my next stricture will be ill-received because as a young man born of a working-class family, with a

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father an active member of the Transport and General Workers' Union, I have observed that the resistance to change, which is perfectly natural in all of us, has been institutionalised by trade unions, everywhere trade unions have operated—unintentionally often—to hold back the growth in output per worker. The result has been that while our real wages have declined to about half those in many European countries, even so our labour costs per unit of output are still so high that we lose markets and jobs to foreign competition.
Lord BROOKS of TREMORFA: My Lords, not in Hong Kong.
Lord HARRIS of HIGH CROSS: The noble Lord mentioned Hong Kong in relation to Professor Milton Friedman. I daresay that everyone in this House was brought up to mock Hong Kong as a source of unfair competition to British industry because the natives were fed on a handful of rice. It is now a matter of speculation in what year in the 1980s Hong Kong will overtake Britain in terms of average real income per head. That has all been achieved by trade unions and Government intervention.
The Government cannot solve all our problems, at any rate at once. I believe that they must persevere in reducing the monetary excess; in reducing where they can taxation and, with it, inflation. They, therefore, have no alternative but to contain the expenditures on subsidies for these great industries. My proposal, to which the noble Lord took exception, is that Ministers should now see how far they can go towards reversing the decline in South Wales and other afflicted areas by reducing the artificial costs of employing people in new jobs. They should move towards a fashionable idea, the creation of free zones of new enterprise and growth. It seems to me that however well-intentioned past measures have been—including employment protection and, I am afraid, rent controls, development planning and even minimum wages and union restrictions—they can often be seen to operate as either a tax on employment or as a brake on the mobility to new jobs. I am arguing that the Government should now exempt firms creating new jobs from the many burdens of bureaucratic control that hamper economic progress
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in these areas and keep wage costs above the value of marketable output. I propose it as an experiment in particular areas. It is an experiment from which we might learn valuable lessons.
The most urgent lesson for my money is that by giving a higher priority to economic progress, we might best advance the true security of employment; for security of employment is everywhere in the long-run based on producing the changing goods and services which customers, at home or abroad, want and for which they are prepared to pay no more than a fair market price.
8.58 p.m.
Lord DAVIES of LEEK: My Lords, although I must pay respect to the scholarship of the noble Lord, Lord Harris of High Cross—it would not be in my nature to try to pretend that there was not quite a mass of common sense in some of the things he says—I must now proceed to put another point of view. If the noble Lord were a trained economist and was trained to bring to economics an accurate science, it would be an impossibility, because people are so ingenious that there is always foolhardiness. With people one cannot bring, for instance, the differential calculus to prove the Phillips curve; the hypothesis of the Phillips curve in economics is nothing more than the elementary statement that if you increase wages, there is a likelihood of inflation. There would be, without the trade union movement and other balances. All the beautiful calculus that is used to prove that we must get new enterprises depends on what the devil you will do with what the enterprise produces if nobody will buy the product. That is logic. In chemistry I can put a catalyst with various elements and can mathematically, and through physics and chemistry, tell what the end product will be and even whether it possesses toxicity, or whether it is benign; and every time I shall be right. The same thing can be done with a differential equation. But professors of economics have been apt—and I have been around a long time now—to try to apply these things to beautiful books and marvellous thinking. The cellular thinking of these people is not to be ignored. It is magnificent. But I have seen 76 years of existence, and I have on my study shelves the May Report, and I

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have brought it here. I have read through the minutes of evidence. God save us! Some economists in America were blaming the crisis in the 1930s on sunspots, and they believed it just as the noble Lord who has just spoken believed in every word he said.
There is not time to get going a lovely philosophical discussion on these two points of view, but let us take marketing of houses. Heavens above! I remember the terrible explosion on 13th October 1913 at Senghenydd when 416 miners were killed. Some of my family were in the pit. Not long after when the depression came, in streets called Park Terrace and Station Road you could buy a house for £25. I would have made a lot of money if I had bought a dozen of them and kept them empty until the rearmament. I have put forward a Davies axiom, which somebody will destroy one day: the acquisitive system of society—quoting dear old Tawney—cannot produce full employment as it now works unless it has had war or is preparing for war.
This seems a long way from South Wales, but it is dealing with a truism underneath the squalor of the modern crises: this poor old country of ours, while we were rearming and fought alone for a time without Russia or America, spent all its treasure and we are still in pawn—we have not yet paid for the Battle of Waterloo. We have discovered the power of the tomb over the living. There are no pockets in a shroud, but the rates of interest go on forever for those who have dropped dead if they have money in the bank. These are the logical realities of the world we live in.
I do not want to get into the national debt tonight, or we shall be here until one in the morning. But if we try to explain away the national debt we find we shall never pay it. If tomorrow by black magic a war broke out, where would the money come from? How would it be paid? We throw the burden of our wars on to the unborn. You reach a point where everybody now born is thousands of pounds in debt before he draws one drop of his mother's blood. This is the illusion of the capitalist system of society, which is ending itself all over the world.
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Do not think only of South Wales, which has its problems. The United States, Germany, the whole of Europe have problems, and the Common Market, which is in such a twist with its bureaucracy, is neither a Parliament nor a Market at the present moment. I shall not go any more into Friedman's monetarism but I will say that there is not much point at this late hour in reiterating all the facts of what has taken place in South Wales and is taking place in Wales and in the steel industry. I will take pity on the House. I will not quote the Western Mail, despite its excellent article on the steel position. The steelworkers are not all that at fault. By the way, I beg the noble Lord's pardon, I did not even pay a compliment to that splendid maiden speech. I have done it en passant.
All fault was not with the steelworkers. We have an inept Steel Board. Its attitude is pompous, stuffy, and pretentious. It did not get down to brass tacks. The Steel Board is a modern industrial yo-yo going up and down. How do you explain its contract to buy limestone just after it had spent millions of pounds to set up Port Talbot? A few months later you find that it has made a I5-year contract to buy limestone for £300,000 a year which is—this magic modern expression which the professor and I would agree about—index-linked. The money that we pay for this limestone is index linked, like pensions and other things. That means that you pay for the next 15 years for limestone you cannot use, but you have made a contract to buy it. This is the yo-yoism of the kind of people who want shifting. Do not blame just the steelworkers for this.
May I come back to South Wales after that little bit of philosophical diversion? Before the ink was dry they were already talking, as you have already been told, of finishing the steelworks. This is a tragedy. But it is not just that, it is the whole of Wales that is being looked at in the round. Although we managed to lose the match through ruffianism at "Twickers a few days ago—
Lord BROOKS of TREMORFA: We were provoked.
Lord DAVIES of LEEK: Well, we should not have been provoked. I do

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not approve of that. What I should say is that Wales has paid its price, and when it is sometimes accused I always remember World War I, when we had to stop the colliers not only in Wales but in England from signing up for the army because they wanted sappers, but we had to have people to cut coal. As I said a few weeks ago, there was great pompous talk about battleships and going to war like a nation of gladiators. I think it was reiterated by the economist and some others here. You cannot go to war with plastic battleships. How can you have a war when you have no aluminium and no steel? Let us talk a little more like doves for a few more years, and then if you want a battle do not count me in it. I am in the wrong age group anyway.
So I come to my last point, much to the joy of the Front Bench who I can see shrugging. I have been speaking for only nine minutes so far and it would be quite easy to do another nine. I want to make a plea, as somebody who comes from colliers and farmers. While we are talking about the South, remember that the spin-off from the poverty and desolation of the South hits the hitherto prosperous places.
I was interested to read in the Sunday Express that farmers in Wales are trying to urge the Government to give loans to encourage more young farmers to go in for farming. This after it has been shown by a Common Market survey that 45 per cent. of British farmers are over the age of 55. There must be a diversion in order to stimulate hill farming and agricultural work generally in Wales. I pay tribute to Aberystwyth University for the agricultural and other research which has done much for the agricultural prosperity of Wales.
In this connection, I am sure that some noble Lords would be surprised if they went upstairs and looked at the maps of land utilisation in Wales. I never knew—I admit that I should have been aware of this—that it is thought that the ordinary ferns on the Welsh and British hills may cause cancer of the stomach. As those of us who have lived in the marginal lands and areas where hill farming is done know, the ferns are poisonous when eaten by cattle. A great project to regain much of that land for real food production could result in a first-class asset for the nation. And if we are talking about making our- 866
selves strong, there is no point in talking about silly things like producing rubber suits to protect people against radioactivity. Far better to get our steel industry to turn out ships and the necessities, if we want to be warriors, than to let the whole business decline.
At school I took geography at an intermediate stage, but I admit that at that time we did not refer to the Celtic Sea. I should like to know what encouragement is being given to the maritime areas of West Wales for oil reserch. Is the project, to use a colloquialism, a dead duck, or is there reality and hope in this expensive business of searching for new energy sources, including oil, in that sea? As much as I am tempted to speak longer, 12 minutes for any speaker at this time of night is enough. I regret that, and I regret that, in deciding not to speak longer, I shall deny the House a lot of interesting philosophical information. Having said that, I will sit down.
9.10 p.m.
Lord MAELOR: My Lords, I am one of the last two speakers on the list: I am glad the House has acted scripturally because we learn in scripture that the best is always the last. I wish at the outset to compliment the noble Lord, Lord Hooson, on his maiden speech—and a fine speech it was! I wish also to thank the noble Lord, Lord Brooks of Tremorfa, for arranging this debate. Wales deserves a debate of its own, for the Welsh people are a separate nation within the United Kingdom; we have our own country and traditions, we have our own way of life and our own language—the oldest language in Europe—and to my way of thinking it is the language of heaven.
I am tempted to repeat a true story which I have related to your Lordships before. When I visited Palestine I had occasion one evening to sit on a chair on the shores of the Dead Sea. An Arab came up to me and pointed to a high mountain across the water. "That," he said, "is Mount Nebo. It was from the top of that mountain that Moses ascended to heaven." I thereupon jumped to my feet and sang a Welsh hymn relating to Mount Nebo, and I will sing it for your Lordships:
"Adenydd colomen pe cawn
Ehedwn a charrydrwn ymhell;
I gopa bryn Nebo mi awn,

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I olwq ardalodd sydd well;
A'm golwq tu arale i'r dwr,
Mi dreiliwn fy nyddiau i ben,
Mewn hireath am weled y Gwr
Fu farw dan hoelion ar bren."
Lord DAVIES of LEEK: You better tell them what that means.
Lord MAELOR: When I sat down the Arab came up to me and said, "What language is that?" "Oh," I said, "that is the language that Moses learnt after he ascended to Heaven."
I do not want to appear facetious for I am a very sad man tonight—a very sad man. I feel sad because of the hopeless economic situation of Wales. It is in a worse economic plight than it has ever been in in all its history. That is no exaggeration, but a true statement of the state of events. Its two main industries—steel and coal—are being destroyed, with agriculture in the rural areas following in their wake. I believe that the BSC's proposals for Port Talbot and Llanwern are catastrophic.
The halving of the output of Llanwern and Margam will cost not just 11,000 jobs in the steel industry, but also the closure of 11 pits and the redundancy of 7,500 coal workers. I firmly believe that the management of the British steel industry should all retire—all of them! They are mismanaging the industry, and are purely political in their outlook. Yes, they are acting politically; and the Prime Minister's Statement in the other place yesterday confirmed this.
Think of this, for instance, my Lords. In 1977 the BSC chairman gave a categorical pledge to the work-force at Shotton that he would give no consideration for five years to the proposal to close. Why did he change his mind so suddenly? It was the Tory Government who changed his mind for him. I cannot forgive the Labour Government for having appointed this man and his colleagues. We are now paying the price.
It seems to me true too that Sir Keith Joseph, the Secretary of State for Industry, does not appreciate the terrible economic plight which is facing Wales. This is what the leading article in the Western Mail had to say the other day.
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"Sir Keith gave no sign that he understood the harsh realities facing Wales. Or, if he did understand, he was not able to come up with any imaginative lead to providing a solution. Sir Keith"—
continued the article—
"made a great deal of the Government's commitment to plough an extra £48 million into the Welsh Development Agency to build advance factories".
This idea of getting advance factories to solve our problems rather frightens me. We have scores of them in Wales—and very many of them are empty. They are unoccupied for the simple reason that employers cannot be persuaded to leave more prosperous areas in order to fill them. Even when they are occupied they never employ a large number of people. Let us take Ebbw Vale as an example. Of the 5,000 redundant steel workers there only a third have been engaged in advance factories in the area.
I said at the beginning of my speech that I am a sad person. I feel sad for the simple reason that for the rest of this century, at least, South Wales will be a land of unemployment. It will truly be an industrial desert. At least 20 pits will be closed, half of them as a consequence of the closures proposed in Wales by the Government and the BSC. Those pits alone will swell the number of unemployed by 15,000. The BSC complains that the cost of Welsh coal is too high. There is a strong case for an independent audit of the comparative cost and savings of using Welsh coal as opposed to imported coking coal. If European competitors can subsidise coking coal as Belgium does at £24 per tonne, France at £14 a tonne, and Germany at £11 a tonne, what excuse can there be for the Government to refuse to subsidise our coal industry? It is simply economic madness to close these pits. It would mean the loss for ever of the much needed energy resources of the future.
I happen to be a North Walean, so quite naturally I should like to deal briefly with the economic situation in North Wales. Here, again, the situation is as bleak as that in South Wales. Let me give your Lordships the callous instance of employment irresponsibility in the case of the Bernard Wardle factory in Caernarvon, as it was stated in another place by the MP for Caernarvon. Over the last two and a half years there has

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been virtually no reduction in the market demand for its product, and last year this factory made a profit of over £600,000. It has now decided to go elsewhere. What a damning manifestation of capitalism is such a decision! My Lords, 322 people will be put out of a job; and the irony of it all is that the firm has told the workers that if they want a job they might be able to transfer to a factory which they have bought, these 18 months, somewhere in Lancashire. So the only remedy proposed is depopulation. Poor Wales!
Let us consider Shotton and the steel works. It has been decided to close these works, which will mean the loss of 6,000 direct jobs plus 3,000 indirect jobs. The social consequences for the Deeside will be devastating. What has become of the BSC chairman's statement in 1977 that Shotton steel will be required for many years to come? How are the Government, in the midst of an economic recession, to deliver 9,000 new jobs to Shotton? It is calculated that many men and women in that area will be doomed to a decade on the dole; and these faithful workers have never been known to strike. This thickly-populated area will be an area of gloom.
The same is true in relation to our farmers in the rural areas of North Wales. They are beaten by the Common Market. We were informed on TV last Friday evening that French farmers are demanding a 6 per cent. increase in the price of products. Farmers in the Common Market, with the exception of British farmers, are paid to over-produce and to stock. Butter is over-produced, stocked and then sold cheaply to Russia. Three hundred thousand pounds were sent to Russia recently. Italian farmers have tomato subsidies, and the other night on television we saw a picture of them burying half the crop in the ground. This has a great bearing on the plight of many of our Welsh farmers today; and, added to this, is the rise in the cost of school meals for their school-children and the increase in transport fares to convey them to school.
Let us face the alarming fact that from now on Wales is going to be an industrial cemetery. I am not exaggerating. We do not realise the facts unless we believe that. It is going to be an industrial
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cemetery. Let the Government arrange another Referendum—I make that plea. The verdict next time will be different from the last. Let us have a Welsh Assembly, where our own representatives can discuss our peculiar problems and propose to the Government our own solutions. Cymru am byth!
9.20 p.m.
Lord CLEDWYN of PENRHOS: My Lords, I know that I speak for the whole House when I say that we are grateful to my noble friend Lord Brooks of Tremorfa for initiating this debate and for his excellent opening speech. His long experience of public life in South Wales qualifies him to speak with great authority on Welsh problems, and the Government will do well to heed the powerful arguments which he has advanced this evening. It is sometimes said that politicians are prone to exaggeration. There is perhaps some truth in this from time to time but my noble friend Lord Brooks of Tremorfa did not exaggerate in his speech today. He described the scene starkly, as it is; he described the fears and apprehensions of the people of Wales; and he spoke the truth. We are all grateful to him. I should like also to congratulate the noble Lord, Lord Hooson, on his maiden speech. He and I are very old friends. He made a characteristically well-informed speech and the House will look forward to hearing a great deal from him again. There is no greater expert, certainly, on the problems of rural mid-Wales, than the noble Lord, Lord Hooson.
For nearly 30 years I have taken part in more debates on Welsh affairs than I care to remember. In that time, I have praised, defended and criticised Governments, and for a time I bore the responsibilities of the Welsh Office myself. But in all that time I have not known so gloomy a scene in Wales or so forbidding a prospect. We have heard powerful speeches from several of my noble friends, fortified and inspired by the well-known Welsh hymn which was sung by my noble friend Lord Maelor, who, I thought, was in excellent voice, as befits a native of the famous mining village of Rhosllannerchrugog, which has one of the finest male voice choirs in the world. I am sure that we are grateful to my noble friend Lord Maelor who must surely go into the Guinness Book of Records as a result of

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his effort this evening in being the only one to have sung a hymn, in Welsh or otherwise, in either of the two Houses of Parliament. As I say, in all the time that I have been participating with my noble friends in Welsh affairs, this is probably the most depressing. As my noble friend Lady White said (and she has apologised because she had to leave to 20 to Brussels on the business of this House) we remember the inter-war years and we do not want to see a return to those wretched times.
The Government have two themes which they repeat on these occasions in reply to criticisms. First, they say that the economic situation is grave and therefore calls for extreme measures. They then go on to say that unemployment did rise under the last Labour Government. Of course, no one can dispute the gravity of the economic situation. It is the Government's response to the economic situation which is causing concern—even among some of the Government's closest supporters, as I shall hope to show in due course. Nor can it be denied that unemployment increased under the last Labour Government. It was a unpleasant fact. But the levels of unemployment which we now face in the United Kingdom in general, and in Wales in particular, are of such a magnitude and their repercussions can be so widespread that they create problems of a quite different dimension. This is why I believe the debate to be justified this evening.
The future of entire communities could be threatened as a direct result of Government action or inaction. And they are communities—if I may say so to the noble Lord, Lord Harris of High Cross, to whose speech we all listened with interest and respect—which were created 150 years ago, during the Industrial Revolution. They are communities of people who were exploited in one way or another for over a century through no fault of their own. They are communities which are now in danger of being broken up and we see no prospect that the kind of free enterprise which he so much believes in and praises can resolve their problems. That very free enterprise was given the opportunity in the inter-war period and it was a complete failure. So the noble Lord, whom we respect as a man of integrity, must do a hit better than he did
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in his speech this evening. The future of these communities are at risk.
The consequences of steel closures at Shotton, Llanwern and Port Talbot, and the ensuing pit closures to which my noble friends have referred will tend to overshadow the serious unemployment difficulties which exist in other parts of Wales. I said that the Welsh problem was of a different dimension. That is because the Welsh economy has, as I have just said, for over a century been over-dependent on a few major industries: on coal and steel in the main; on tinplate and, until recently, on slate in the North. Recessions have always hit us harder, and successive Governments have recognised this and made provision for it in various ways. Special development area status was given to wide areas. The Labour Government of 1964–70 made an impact on the problem, and the last Government set up the Welsh Development Agency and the Development Board for Rural Wales. They have both proved themselves to be effective and successful. I should like to congratulate the members of both boards in what they have done.
The party opposite opposed the legislation which set up these boards but they subsequently conceded that they were justified. I shall come to the Government's present attitude towards them a little later. It has been an accepted principle that the so-called regional imbalances in the United Kingdom are wrong, that they are dangerous and that they should be corrected. This again is where the noble Lord, Lord Harris of High Cross, and I will disagree. They exist, as he knows, in Scotland, in the North-East and in Wales. The attempt to diversify industry in Wales over the past 30 years or so has met with a good deal of success. Important industries have come in and the Welsh worker has shown himself to be skilful and adaptable.
The one lesson that we have learned during that period is that diversification of industry takes time. The last issue of Welsh Economic Trends tells us that it took 10 years to create 32,000 new jobs in South Wales. What the Government are now doing is allowing an unemployment problem of so great a magnitude to develop that we see no prospect that it can be resolved in the foreseeable future. Our current unemployment rate, as some

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of my noble friends have reminded us, is 8.3 per cent. of the insured population compared with 5·9 per cent. for Great Britain as a whole. In figures, that comes to nearly 91,000 people.
Then we have the calculations about the possible consequences of steel closures and pit closures. They estimate a loss of a further 40,000, bringing the total to well over 130,000 people, the figure mentioned by my noble friend Lord Brooks of Tremorfa. I am sure that the Minister of State will agree that we must take that figure against a generally worsening employment prospect in the United Kingdom as a whole over the next decade. It has been projected that unemployment could be of the order of 2 million people by 1982 and 2½ million in 1985. I hope that this will be proved wrong. The predictions must be taken seriously as they are made over a wide range by a number of economists holding a wide range of views.
The Government have a duty to tell us their reaction to these figures and what plans they have to deal with the situation in the United Kingdom and in Wales itself. I noted that the Secretary of State for Wales said a number of things in another place on 4th February. I welcome some of the undertakings that he gave in that debate. Examples were his promise to continue to improve the industrial infrastructure and his promise of an additional grant of £48 million over the next two years. That is obviously to be welcomed. Of course we have to take that £48 million in relation to the other figure mentioned by the noble Lord, Lord Hooson.
What we should really like to know is the nitty gritty of what we are actually going to receive to resolve the problem. The problem is too grave for us to play about with it. I was very dismayed that the Secretary of State in that debate was unable to supply information about the future employment prospects. I believe that the Government should tell us what they think the figures are likely to be in 1981 and 1982, and again what plans they have in mind to resolve the problem.
The Government's mishandling of the steel industry, as my noble friend Lord Brooks eloquently demonstrated, has been a tragedy for the people employed in it and a tragedy for the country as a whole.
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Some of the most responsible workers and trade union leaders in the United Kingdom have been driven to actions which would have been unthinkable a few years ago. I am tired of seeing the Secretary of State for Industry, Sir Keith Joseph, on television, constantly talking about his duty to the taxpayers. By their handling of the steel dispute, he and his colleagues have already cost the taxpayers of this country untold millions of pounds. And who does Sir Keith Joseph think the taxpayers are? They include all those in Wales whose livelihood will be affected by the Government's policies. They include the small shopkeepers and small business people whom the Government affect to care for; and the consequences of this strike are extremely serious for the taxpayers of this country.
It is for the Government in power to take the necessary measures to deal with the problem; but I will in conclusion make one or two suggestions to the noble Viscount. One clear need is for a new economic plan for Wales. Ad hoc, short-term measures are not enough; and I plead with the Government to set up a team to draw up a plan now. I published an economic plan for Wales in 1967: Wales, The Way Ahead. I make no great claims for that, but it is the only economic plan which has ever been published in respect of the Principality. It was produced, as I think now, in too much haste, but it did examine the problems of Wales in quite considerable depth, and gave impetus to a number of developments for which Wales can now feel grateful, including in particular the development of the infrastructure. It was, in fact, the starting point for the M.4 which has been referred to.
I think the time has come for a new plan, because of the changes that have taken place and because of the new developments. In any future strategy, the Welsh Development Agency and the Development Board for Rural Wales must play a central role. I am glad they are not to be abolished, but I believe also at this time that it would be quite scandalous if they were to be deprived of resources or of powers. To do so would be comparable to reducing the number of doctors and nurses in the country in the middle of a serious epidemic. They need to be given the means and the confidence to fulfil their useful functions at this time.

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I also believe that the Government should now intervene decisively to resolve the steel strike, even if this means the resignation of Sir Keith Joseph. The future of the Welsh economy and of its communities is more important than one single Minister. This is not a personal attack on Sir Keith Joseph, who has great abilities, although policital acumen is not one of them. He has lined himself up with the BSC and he cannot now be regarded as a detached observer. This does not mean that the unions will not need to face the realities of steel at home and abroad or settle on a realistic basis, but there must be early negotiations in a new atmosphere which is both realistic and fair. It is no use the Government saying that this is a matter in which they should not intervene. This, I believe, is immoral, because it is the Government which at the end of the day hold the purse strings and it is their manifest duty to intervene, or at least to sit in the chair in the consultations, in order to seek to bring this damaging strike to an end.
Time will not allow me to deal with the equally acute difficulties of other parts of Wales to which reference has been made—in towns like Caernarvon, which was referred to by my noble friend Lord Maelor, Ffestiniog and Llangefni—and also the problems that loom ahead for the agricultural industry. They are very much in our minds, and, I hope, in the Government's mind as well. There is so much that is good in Wales—we must not decry our country—so much that is promising. It is a splendid country in which to live and work, and we do not want to see our people marching out again to look for work as they did in the 'twenties and 'thirties. There has been a good deal of success in attracting new industry in the last few years and there are still jobs in the pipeline. It was stated at some time that there were 18,000 jobs in the pipeline over the next three years. I should be grateful if the Minister of State would be good enough to give us some information about this prospect. Does it still hold good?
I do not underestimate the tasks facing the Government, but I would say this to the Minister of State and to the House. The Government can succeed only if they have the confidence of the great majority of the people in Wales. I hope that the
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Minister, when he replies, will not shrug off his responsibilities or those of his colleagues by blaming the previous Government. We tend to get a little tired of this. The Government have been in office for 10 months and they must learn to shoulder their responsibilities and to realise that a large part of our present crisis is due to their acts or omissions. I do not want to go into detail, but I could tell him precisely what those acts and omissions are.
I am bound to say that there are signs in parts of the Front Benches opposite that some wisdom is entering the counsels of the Government. The Lord Privy Seal, Sir Ian Gilmour, has recently delivered an interesting lecture. I think that he is always worth listening to. I will quote one of his sapient remarks:
"It would be foolish to forget this, to think that we can ignore the social and political consequences of what we do."
He is not a doctrinaire monetarist and he is not a non-interventionist. The Lord Privy Seal went on:
"The size of our task suggests that we should be even more mindful than usual of political considerations. We must not make the same mistake as Karl Marx and give economic considerations primacy over political ones."
Those are very wise words. I think that the people of Wales will applaud Sir Ian Gilmour. If he went there, I think he would receive a welcome.
Now let the Government consider the social and political consequences of their actions and mend their ways before it is too late. They must seek the co-operation and understanding of the Welsh people at this time. If the people of Wales and all the affected organisations in Wales can be brought to work together, we can overcome our problems. This is one point on which I would disagree with my noble friend Lord Maelor. I do not believe that Wales is in danger of becoming an industrial desert. Wales is one of the most beautiful countries, and we are determined that it will not become an industrial desert.
What we are saying tonight in our appeal to the Government is that they should come forward in a spirit of co-operation, not in a carping spirit of constant criticism of the unions, because the unions are part of the community. The men and women who form the trade unions are as much part of the community as anyone else,

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and they want to see Britain succeeding. This means, of course, a new approach and a new spirit and I hope that it will be forthcoming very soon.
9.44 p.m.
The MINISTER OF STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard): My Lords, let me start by saying that if I get some of the Welsh names wrong, I hope that my place of birth will be adequate excuse. I asked those briefing me to make sure that they did not put in any of the more complicated ones. I am afraid that I could not follow all the marvellous hymn which was so beautifully sung by the noble Lord, Lord Maelor. I shall be very interested to read Hansard tomorrow. I do not know whether they are going to interpret it as "Amid the encircling gloom".
We owe the noble Lord, Lord Brooks of Tremorfa, thanks on two grounds for putting down this Question today. First, it gives an opportunity—I think I have to say another opportunity, because in the other place and, in terms of the steel industry, in this House there have been several—to look at a problem which everybody agrees gives deep and real cause for concern in Wales at the present time. I should also like straight away to congratulate the noble Lord, Lord Hooson, on a magnificent and very charmingly expressed maiden speech. We hope very much that we shall be hearing much from him in future debates in this House.
I will start by picking up the positive note that the noble Lord, Lord Cledwyn of Penrhos, mentioned at the end, when he disagreed with one of his colleagues. I, too, believe that all is not lost, neither for Wales nor for the rest of the United Kingdom. I shall touch later on the position of Wales in relation to that of the United Kingdom. We must all look positively at this very difficult problem. I certainly hope that we can send out from this House to all concerned with extremely difficult problems, a message of backing and courage in facing up to those problems.
The noble Lord, Lord Cledwyn of Penrhos, said that he hoped I would not start by recounting the failings, as we see them, of the last Government, but he and his colleagues have castigated our policies —as he put it, for making things worse.
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He did not entirely blame us for the level of unemployment which we have reached. He asked me not to dwell on the previous Government's record, but at the same time his colleagues, more than himself, have described how they see our policies making things worse.
I do marvel—I have to say it; I am not going not to say it when noble Lords opposite have said what I believe to be quite incorrect—at the failure of noble Lords opposite to face facts about the situation that has developed under both their custody and the custody of previous Conservative Governments. As the noble Lord, Lord Harris, pointed out, in the last 15 years we have sunk, industrially, nationally, lower and lower and lower. My right honourable friend the Secretary of State for Industry now has to face up to a situation in which British industry has never had it so bad. I hope that nobody in this House would have the audacity to blame him, after nine months, for that situation.
If one looks at the balance of payments in 1979 as a whole and subtracts from it the North Sea oil and gas credit figure, what is left in the balance is a £10,000 million deficit. It is no good noble Lords opposite castigating us for saving expenditure, for cutting back, when that is our inheritance. If this country is to have anything to live on when the oil runs out, some appallingly difficult decisions have to be taken—and taken now.
So far as the subject of this debate is concerned, in Wales and in the steel industry we are suffering from a situation in which previous Governments did not face up to reality. The predecessors of my right honourable friend the Secretary of State gave British Steel the same targets which he is now requesting them to meet, one year later than Mr. Eric Varley required. It is no good procrastinating.
I must say a word about my Secretary of State and I remember, first, the remarks of my old father when he said: "When you are not criticised in this world it is quite certain that you are not doing anything of consequence or good". We have heard a lot about newspaper articles. I believe that my Secretary of State and his colleagues in the Cabinet and our Leader have the courage and the ability

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to face up to steps which are long overdue. My Secretary of State is a very human man. He not only understands but he feels very deeply the plight of ordinary people. He is not "lined up with the Steel Corporation", as was said. He is standing back very much from the Steel Corporation but, together with his colleagues, is looking at the overall economic situation which I have sketched and which we have inherited, and is saying, "How much more can we possibly give to this industry after the money that has been put in?".
Let me just sketch the real situation in steel; the economic background I want to describe, which makes a decline in the employment in the steel industry inevitable, both in Wales and in the United Kingdom as a whole. The Steel Corporation is faced with a lower demand for its products. It has sold an average of 17 million tonnes in each of the last two years and there is not really any doubt that the demand is going down; but I know. of no reason to doubt its particular estimate, either upwards or downwards, of 15 million tonnes on which it is making its new plan.
It is of course true, as noble Lords have said, that if the British car industry is producing fewer cars then demand for sheet steel from the South Wales strip mills is bound to be affected. We can hope, and indeed we can believe, that longer term, with the superb equipment that the British Steel Corporation now has, we may be able to build up an export and other trades; but there is no question but that at the moment, due to the decline in the share that British Leyland hold of cars, this too is bound to affect demand.
Now BSC judge—and, as I say, I have no reasons for contradicting them—that this is a fairly permanent downturn. I am sure that they will be very quick to sense an upturn, but so often we go on hoping that things will turn up and we get into a worse and worse mess. So BSC believe that they have no option but to make a sharp reduction in capacity. There is no point in producing steel for which we have not got a market. BSC's cumulative losses over the last four and a half years are £1,250 million. Added to money for investment and other essential
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capital requirements, that means that the Government have put taxpayers' money of the order of £3½ billion and more into BSC over the same period. In those circumstances it was not unreasonable that we should require the BSC to break even in 1980–81, and I say that taking account of the points made by noble Lords opposite on coking coal subsidies on the Continent, which have been examined with considerable care, and, I am afraid, taking account of comparative productivity, which is the biggest single reason why these losses, even with superb capital equipment, are continuing; and that productivity is not only in the factories, it is in the factories and in the offices, but we simply are not competitive.
This target, as I have said, was less stringent than that set by my right honourable friend's predecessor, and we have promised a further £450 million in 1981 for capital investment, working capital and redundancy payments. If the BSC does make losses in 1980–81 I say to noble Lords opposite that, against the national figures that I have described and the figures that have been put into steel which I have also mentioned, it is reasonable to require them to cover those losses from within their own resources, by a reduction of stocks and by disposals of ancillary activities.
As we all know, the BSC faces severe international competition. This means that it has little room for manoeuvre through raising prices. Indeed its prices are certianly not low internationally at the moment. That is why it has been insisting that increases in pay must be matched by improvements in productivity, and whatever the arguments over details may be, the comparisons with our European and other competitors leave no room for doubt that substantial improvements are possible.
My Lords, I would hope that this House will endorse the hope that the present strike will soon be settled in a realistic way and on terms that the industry can afford. There are those who have suggested that a slower pace of rundown would be kinder to those who will lose their jobs. Like other noble Lords, one understands that, one understands the sentiment. But recent history shows that such intervention in the past has made matters

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worse, not better. The Beswick review in 1975 guaranteed that East Moors would not shut before January 1980, but events moved on and that plant shut nearly two years ago. Meanwhile the losses mounted, further weakening BSC's finances.
It is against this background that, as noble Lords have mentioned, the BSC propose to reduce their workforce in South Wales by more than 11,000 people by August 1980. I shall not go into the detail of the follow-through possible job losses that the noble Lord, Lord Brooks, mentioned. I feel that he has overstressed the total of the negative in building up to 130,000, on the figures and information that I have. Later I also will come to the upside questions, because there are things which are going for both North and South Wales.
In relation to the EEC aid, I did answer a Question on this asked by my noble friend Lady Vickers on 13th February, at col. 164. I would merely briefly assure the House yet once again that we have taken all the possible aid from existing EEC schemes, and they are very big sums, including recently some £71/2 million for Shotton and very considerable loans, up to £100 million. We have taken some 40 per cent. of the conversion loan scheme in the EEC. So, there has been no lack of communication or system in drawing EEC aid. Commissioner Vredeling, in fact, was referring to a proposed scheme in the EEC which would cost about £70 million for short-term working and early retirement and other factors of that kind. There is no money in the ECSC Budget appropriated for that scheme. It is at a very early tentative stage and at the moment, as far as my information goes, only one country—Belgium—is in favour of that particular scheme.
Lord BROOKS of TREMORFA: My Lords, I wonder whether the noble Viscount will give way for a moment? Will he not accept that the Social and Regional Funds of the EEC are constantly under-spent, and would it not be to the advantage of the people of Wales if the Government were to press for extra moneys for areas like Wales which are suffering the terrible consequences of these closures?
Viscount TRENCHARD: No, my Lords I would not agree with that. We have had our full shares of the Regional and Social Funds. This charge has been levied against us in relation to the changes in the regional policy. But the charge is not correct. We shall be able to take our maximum share for certain—and regional policy is my particular sphere—up to 1982 and I am pretty sure beyond that, but it rather depends on the alterations of the EEC policy which, like ours, is tending to concentrate on narrow areas.
The problems of Wales, of course, are not confined to the steel industry. The problems of coal have been mentioned. Clearly these will be affected. In that context I would mention that I personally was glad to see last week that the BSC and the NCB had reached an agreement on imports of coking coal which covered all the coking coal which the BSC was not committed on. Therefore, I am a little sad to hear the lack of welcome given to this agreement in terms of the economic figures which I have been over. I regard it as a highly constructive agreement between the two parties, and believe that it should be welcomed.
Those are the problems. What can we do about them? Let me say that the Government fully accept the responsibility for alleviating the social and economic consequences of these drastic changes in South Wales as elsewhere. We have them in Consett as well, and we have problems in other industries which affect the North of England and other areas very badly. We must also see what we can do to assist the growth of new industries in the affected parts of Wales.
I think that there are three strands in any strategy. First, basically we must get the economy of the country as a whole right. We have been over that and we shall continue to follow policies which have been highly successful in raising the standards of living of countries miles beyond our own in other parts of the world. We shall push that forward with the utmost vigour. It is only within the framework of a turnround of national industrial decline that we can really hope to help, to a major degree, the sadly affected areas of highest unemployment.

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We also need to make money available so that the basic infrastructure—by which I mean industrial land, factories and similar development—is right for incoming industry. That has been covered by most of those who have taken part in the debate. We have confirmed the plans regarding the M.4 and the A.55. I would tell the noble Baroness, Lady White, were she here, that I am afraid I am not briefed on drains, but I shall look into them! The infrastructure is vitally important, and my right honourable friend the Secretary of State for Wales and the Welsh Development Agency are very clear on that and are very active.
Thirdly, we need to look again at the question of the assisted area status of the localities affected in South Wales. We have received many representations from all the Members of Parliament from the constituencies affected in this area and from most of the local authorities; I have made the acquaintance of many extremely dedicated and interesting people, and have learned a lot—at least in theory—about the region.
After change the regional policy still leaves—and I want to put this comparison in—94 per cent. of the population area of Wales classified as "assisted areas" of one kind or another compared with only 88 per cent. in the North of England, where the unemployment at the current time and over the last two years has consistently been a little higher than in Wales, and 71 per cent. in Scotland. I hope that my friends from the North of England and Scotland will not read those figures and be on my doorstep tomorrow morning.
This then is the basis of what can be done. How does it work out in practice? The Government have already shown their ability to react quickly and positively to drastic changes in employment in Wales. Following the British Steel Corporation's announcement of the cessation of iron and steel-making at Shotton by March 1980, the Government announced that the Shotton travel-to-work area would be upgraded to Special Development Area status. We also announced a provision of an additional £15 million over a three-year period for the Welsh Development Agency for industrial development in the area affected by the redundancies. I
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should emphasise the word "additional"; this was in addition to the Welsh Development Agency's normal budget.
This, together with work already in progress, has been an impressive response. At the Deeside Industrial Park, which is the main focus of industrial development in the Shotton area, 103,000 square feet of advance factory space is already complete —a total of 15 units. A further two units of 25,000 square feet are nearing completion. Moreover, a further 136,000 square feet is planned for the industrial park as part of the WDA's fifth general programme.
At this point I want to say that there has been some questioning whether factories are everything. Of course they are not everything. But the uptake of factories in Wales and elsewhere is one of the most encouraging signs amid the encircling gloom that we have. This applies particularly to the small factories, and it applies all over Great Britain. There is growth, there is uptake and there is confidence in small industries—as yet far too small to compensate for the decline of the large ones. However, we intend to support success and to try to quicken it.
I take note of the remarks made by the noble Lord, Lord Harris of High Cross, in relation to enterprise zones. I should love to have entered into the quasi-economic debate between the noble Lord and the noble Lord, Lord Davies of Leek, on a number of interesting subjects, but I should detain your Lordships too long.
Still referring to North Wales, of the units completed or under construction, 13 have been already formally allocated and two units have been provisionally allocated. Only two units are still vacant. This shows that even in these difficult times there are still plenty of firms in-interested in factory space, if it is available. It is not only the Deeside Industrial Park in North Wales that is proving successful. In Delyn, for example, six factory units totalling 40,000 square feet have been completed. All but one have been formally allocated, and that one is already provisionally allocated.
In the difficult situation in South Wales we are reacting in the same positive way. My right honourable friend the Secretary of State for Wales recently announced an allocation of £48 million additional re

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sources for remedial action following the BSC rundown. (Those are the words from my official brief, approved from his office.) It will thus be able to get on without delay with a substantial programme of acquisition and development of industrial sites which will be available for public and private sector development.
Lord RAGLAN: My Lords, will the noble Viscount give way? My noble friend Lord Hooson is too diffident, being a maiden, to press the point. He raised the question as to whether this aid was in fact additional, because, according to his information, the aid had previously been cut by £35 million.
Viscount TRENCHARD: My Lords, I believe that the cuts to which the noble Lord referred were in regional policy. If he refers to copies of Hansard which I shall let the noble Lord have, he will see that we have discussed regional policy, its cuts and its effectiveness on many occasions, and I am quite satisfied that Wales, with a bigger share than any other of the main unemployment areas with less areas covered, has a greater drawing power to the areas of greater need in regional policy now than it ever did have.
Lord PITT of HAMPSTEAD: My Lords, what the noble Viscount has said is that the £48 million comes after you have cut £35 million. Therefore, in effect you ought to be saying that you have given £13 million.
Viscount TRENCHARD: We are not talking about cutting the same thing. We have cut the cost of regional policy for what we believe is a more effective one by some £200 million in Great Britain over a transition period of one year and three years. As I understand it, £35 million is the Welsh part of that cut. I will not say that that has nothing to do with this, but I would ask the noble Lord to read the debates we have had on regional policy in this House.
I am sorry, but I am getting a bit behind. In relation to assisted area status in South Wales, the Government are looking at this subject urgently at the present time, and we have the usual inter-departmental group looking at it closely, and we shall act at what I believe will be the right time. There are two other steps which my right honourable
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friend the Secretary of State for Wales has already mentioned. The Manpower Services Commission clearly has a major role to play, and since he described this in the other place I shall not detain your Lordships by describing it now. I shall leave the second point because I cannot find it. I think I have deleted it.
I had better close on this note. I hope that what I have mentioned already will show that the Government are taking effective and constructive action in South Wales within the limitations of the extremely serious situation which we face there and nationally, and there will be more to come. No one can dispute that the problems are serious, but if I may be permitted to speak as an Englishman, I hope well disposed to the interest of Wales, the gravity of the problems must not lead us to talk Wales, as some have suggested, almost into an industrial desert. Welsh industry is diversifying fast. Wales has good communications and a good labour force, and it was the excellent reputation of the labour force and their experience at the Swansea plant that were key factors in leading Fords to decide to locate their new engine plant at Bridgend. In short, Wales has a lot going for it. Industry has appreciated this. In 1979 140 factories were allocated promising just under 5,000 new jobs. In the first few weeks of 1980, 10 advance factories were firmly allocated and a further 80 provisional allocations are being processed. We need to build on this firm base and it is a positive approach that will succeed.
Of course we understand the concern that everybody feels, but the Principality is an attractive base for profitable operations. In recent years it has attracted an impressive list of new investment projects, including many from Japan, and to many of those firms I have spoken; and if we can keep things going as they are, which has happened in all bar one case, then I believe we can attract more investment from that country into Wales. They are very fond of Wales and the Welsh.
A study of the unemployment statistics, as I have said, reveals that in every month between January 1978 and December 1979 the unemployment rate in Wales was below that in the northern region of

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England, which contains most of England's major unemployment blackspots except Merseyside. I say that not because two blacks make a white by any manner of means, but to try to put Wales in perspective. Despite the impact of a contraction in steel and any resulting contraction in coal, Wales should still remain attractive to inward investment.
I hope I have indicated, first, that the constraints on this Government are very real; secondly, that I believe other policies to turn round industrial decline have failed, and I would ask your Lordships to give our present ones the backing they deserve; and, thirdly, I hope the whole House will look towards the Welsh problems with a constructive attitude and will encourage all those faced with appallingly difficult decisions, including my right honourable friend the Secretary of State, by at least giving the support that they require. I do not expect for one moment that we shall all always agree about every detail, but let us at least work within the constraints of the facts about the general economic situation and the Welsh situation, and let us back those who have difficult decisions to take.
Lord GORON WY-ROBERTS: My Lords, may I put a question to the Minister before he finally sits down? He referred a few moments ago in his speech, a very fair speech, to the likelihood that the Government would look again at the situation in South Wales, and I believe that by association he included Deeside and Shotton, particularly in regard to assisted area status, if I heard him aright. I beg him, in any such reappraisal of the possibilities of helping certain parts of Wales very badly hit by the recession in any case, and particularly by recent developments, to include the area of North West Wales, particularly the area including and surrounding Caernarvon, about which we heard so eloquently from my noble friend Lord Maelor. And would be, in looking at the position in that area—where I believe the incidence of unemployment is already the highest in Wales; I believe that is true of the unemployment count districts—look at the possibilities of helping that area and particularly look at the circumstances, the almost inexplicable circum
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stances, under which a highly viable industry is now proposed to be moved from Caernarvon to Lancashire?
Viscount TRENCHARD: My Lords, at this hour, with 36 minutes on the clock—which for me is worse than ever before; and that is saying quite a lot—I should like to say to the noble Lord, Lord Goronwy-Roberts, that I will write to him on the points that he has raised in relation to Caernarvon and its current situation and the particular removal that he mentioned, I am not briefed in detail on these matters. I was surprised when he said that the unemployment figure was the highest in Wales. At the time that we did the regional regrading that was not so—that I can remember. But I have not looked at the figures very recently.
However, let me assure the noble Lord that we are looking at these figures constantly. There is no possible way by which I could not look at them constantly because of the steady stream of all the Members representing Welsh constituencies in the other place who come into my office week after week. That requires me to look at the figures. I am determined that the criteria and the policy that we have announced shall be applied fairly and offensively all over the country. We have that now, and we shall keep it. We will not alter gradings every five minutes. The criteria are to look forward and look back on unemployment and to look at prospects for the region generally. But we will continue to act as and when necessary, when a change of substance is clear.
Lord DAVIES of LEEK: Before the noble Viscount sits down—
Lord SANDYS: My Lords, my noble friend has already sat down.

COUNTY OF MERSEYSIDE BILL [H.L.]
Returned from the Commons agreed to with amendments; the said amendments considered and agreed to.
RESIDENTIAL HOMES BILL [H.L.]
Returned from the Commons agreed to with amendments; the said amendments to be printed.
WEST MIDLANDS COUNTY COUNCIL BILL [H.L.]
Returned from the Commons with the amendment to which the Lords have disagreed not insisted on.
  EEC INSTITUTIONS: GUIDELINES
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  NUCLEAR PROJECTS AND EURATOM LOANS
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  EFFLUENT AND WASTE DISPOSAL: PUBLIC REGISTER
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