Sitting of 23 January 1980

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

  ARDVEENISH HARBOUR ORDER CONFIRMATION BILL
  FORTH PORTS AUTHORITY ORDER CONFIRMATION BILL
  FORTH PORTS AUTHORITY (No. 2) ORDER CONFIRMATION BILL
  INVERNESS DISTRICT COUNCIL ORDER CONFIRMATION BILL
  KIRKCALDY DISTRICT COUNCIL ORDER CONFIRMATION BILL
  LOCHABER DISTRICT COUNCIL ORDER CONFIRMATION BILL
  STRATHKELVIN DISTRICT COUNCIL ORDER CONFIRMATION BILL
  WEST LOTHIAN DISTRICT COUNCIL ORDER CONFIRMATION BILL
  Considered; to be read the Third time. tomorrow.

ORAL ANSWERS TO QUESTIONS
  TRANSPORT

    British Railways
    Mr. Cryeraasked the Minister of Transport when next he will meet the chairman of the British Railways board.
    Mr. Beithasked the Minister of Transport when next he plans to meet the chairman of British Railways.
    Mr. Foulkesasked the Minister of Transport when next he plans to meet the chairman of British Railways.
    Mr. Pollockasked the Minister of Transport when he plans next to meet the chairman of British Railways.
    Mr. Cookasked the Minister of Transport when he will meet the chairman of British Railways.
    Mr. Durantasked the Minister of Transport when next he plans to meet the chairman of British Railways.
    Mr. Gordon Wilsonasked the Minister of Transport when next he intends to meet the chairman of British Railways.
    Mr. Moateasked the Minister of Transport, when he plans next to meet the chairman of British Railways.
    The Minister of Transport (Mr. Norman Fowler): Soon.
    Mr. Cryer: When the Minister "soon" meets the chairman of British Railways, will he emphasise to him that he means to start improving British Railways on the principle of the retention of all present routes and services, including the Woodhead cross-Pennine route? Will the Minister also encourage British Railways by authorising more investment, especially in commuter services in the Leeds-Bradford area, which has been starved in comparison with London and the South-East? Does henot agree that the Government would be derelict in their responsibility if they failed to encourage and regenerate British Railways,

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    bearing in mind the world's finite fuel resources?
    Several Hon. Members rose—
    Mr. Speaker:Order: I hope that other hon. Members—this is no reflection on the hon. Member for Keighley (Mr. Cryer)—will ask brief questions, because it will help us all.
    Mr. Fowler: The Government certainly appreciate the importance of British Rail and support it. The Woodhead cross-Pennine route is a freight service, the responsibility for which lies with the chairman of British Rail and does not come to me. With passenger services the responsibility and decision come to me, and I have informed the chairman that we would be totally opposed to the massive cuts that are mentioned in the corporate review.
    Mr. Beith:Is it not sound policy that British Rail should exploit to the full the commercial potential of its existing assets? When the Minister meets the chairman, will he encourage him to develop the services—modestly, but on a better basis—at Alnmouth station in Northumberland, where there is considerable potential for improvement?
    Mr. Fowler: I shall certainly look into the specific matter raised by the hon. Gentleman. On the general point, I agree with him; I believe that the energy crisis underlines the importance of the railway system.
    Mr. Foulkes: When the Minister meets the chairman, will he encourage him to end the penny-pinching restrictions that are causing British Rail to reduce the services between Glasgow and Girvan, a line that has been developing over the last few years? If there are any difficulties with oil, the Minister might encourage the chairman to introduce steam trains on that line, and others in Scotland.
    Mr. Fowler:The chairman will have heard what the hon. Member said. As I understand the present position, five trains will be cancelled on that line—only on Saturdays, and only in the winter months—as a means of saving fuel.
    Mr. Pollock: When my right hon. Friend next meets the chairman, will he discuss with him the rapidly declining
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    quality of the Aberdeen-Inverness railway, which passes through my constituency, and which is of major importance to the many thousands of Service men based there and to the students who have to pursue their studies elsewhere? In particular, will he consider establishing a proper link with the inter-city routes from the North-East of Scotland to the south?
    Mr. Fowler: I shall certainly talk with the chairman about the points that my hon. Friend has put to me. I give my hon. Friend that undertaking, and I understand and admire the concern that he shows for the line.
    Mr. Cook: At the risk of making the Minister's next meeting with the chairman a very long one, may I ask him also to raise with the chairman the forecasts which make it plain that within the next few months British Rail will go through the ceiling on the public service obligation grant and that the figures for future years are unrealistic? Does the right hon. Gentleman accept that, unless he revises the ceilings, the only short-term alternative for British Rail is a sharp increase in fare, at the very time when, if the energy crisis means anything, we should be making public transport more attractive and not more expensive?
    Mr. Fowler: I do not accept that. The chairman has made it clear that he wants and intends to live within the cash limits. The cut in the PSO for 1980–81 was about £22 million, of which £13 million was decided by the previous Government.
    Mr. Wilson: Does the Minister accept that the Scottish area of British Rail is one of the least reliable and punctual of all the areas in the British Rail federation, and that that is largely because of the clapped-out locomotives that, unfortunately, the staff have to use there? Will he authorise the chairman to increase the investment on British Rail in Scotland, to make sure that the services improve, and particularly to electrify the line to take account of the shortage of diesel oil that is likely in the next 20 years?
    Mr. Fowler: I shall certainly talk to the chairman about the points that the hon. Gentleman makes. But I do not accept the hon. Gentleman's description of the position in Scotland.
    Mr. Moate: Does by right hon. Friend agree that there can be no justification for British Rail's freight operations running at anything but a genuine profit? Have new financial targets yet been agreed with British Rail?
    Mr. Fowler:Yes, Sir. The chairman accepts that it is important—I believe that this is common policy on both sides of the House—that British Rail's freight operations should run at a break-even point. That is certainly the policy of this Government. It is one that we shall pursue.
    Mr. Prescott:As the Minister has met the chairman since the production of the British Rail corporate review, will he make clear what options he would regard favourably to meet British Rail's problems—increasing prices, reducing manpower or selling off assets—as he has reduced the option of closing lines?
    Mr. Fowler: The options that are open are under consideration at present. Clearly, one of British Rail's most important aims must be to improve the productivity of the system. I believe that this is recognised by the chairman. British Rail has made proposals to the unions, and they are under consideration at present. I believe that they are important for ensuring the future of the railway system.
    Mr. Sims: When he meets the chairman, will my right hon. Friend put to him that London commuters, who have recently suffered yet another substantial increase in the cost of their season tickets, are rather more concerned with reliability and punctuality than with frequency of service, and that they would willingly accept a reduced spring timetable, a reduced number of trains, if they could rely on those trains running as advertised and on time?
    Mr. Fowler: I am willing to talk to the chairman about that. The Government have already made clear that we shall have a major re-examination of the efficiency of commuter services in the South-East. The Monopolies and Mergers Commission will be given that task, which will be carried out this year.
    Mr. Spriggs: Is the right hon. Gentleman aware that the board has a contract with the Government to provide an effi-
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    cient service, and that there is a severe backlog of repairs and maintenance work to be done, which will cost a great deal of money? What is his Department prepared to do to help the board to overcome that deficiency?
    Mr. Fowler: We recognise the importance of maintenance and of investment generally in the railway system. That is one of the matters about which I shall be talking to the chairman. The hon. Gentleman's point is important, and we have it well on board.
    Mr. Temple-Morris: Will my right hon. Friend give the House a little more detail about what he will say to the chairman about productivity, bearing in mind that Sir Peter Parker said at the end of last year that British Rail had not even begun to get it right yet? Would not the whole question be much easier if there were one confederation of trade unions covering the railway industry, or is that just wishful thinking?
    Mr. Fowler: I do not know whether it is wishful thinking. It is certainly not something that the Government or I can influence. What my hon. Friend says is absolutely correct. As the chairman has said, productivity is the rock upon which British Rail's future is based. British Rail's operating costs are 70 per cent. labour. This underlines the importance of the proposals made by British Rail to the unions, and the importance of their being accepted.
    Mr. Dempsey: Will the Minister draw to the chairman's attention complaints from two of my constituents that they were refused admission to the restaurant car when travelling north, from London to Glasgow, because it had been reserved exclusively for the Prime Minister, who was travelling to the Conservative Party conference at Blackpool—and who, incidentally, did not turn up? Will the right hon. Gentleman discuss with the chairman by all means giving the Prime Minister adequate security but minimising the the inconvenience caused to all rail travellers?
    Mr. Fowler: If the complaint concerns travel to the Conservative Party conference, the hon. Gentleman is a little late in making it. But if he gives me details, I shall have it investigated.

    Trunk Road Schemes
    Mr. Roy Hughesasked the Minister for Transport how many trunk road schemes listed in the Supply Estimates as starting in 1979–80 are unlikely to start in the current financial year.
    The Parliamentary Secretary to the Ministry of Transport (Mr. Kenneth Clarke): Only the widening of the M1 in Hertfordshire, on which an action is pending in the High Court.
    Mr. Hughes: Does the hon. Gentleman appreciate the deep concern felt throughout the country about the arbitrary delay in such schemes, without any formal announcement by his Department? Can he say precisely how many schemes are held up and what steps he is taking to accelerate them, particularly over the statutory processes? Does he not feel that his party and Government owe that to the country, bearing in mind their criticism of the previous Government's policies?
    Mr. Clarke: I do not think that there are that many arbitrary delays taking place. I have indicated that only one scheme listed to start last year has not started, and that is because of a legal challenge. It would not be right to try to abbreviate the statutory procedures and the legal checks on road construction, because many people have an interest in making sure that their views are properly represented.
    For a list of schemes that are pending and in the pipeline, I refer the hon. Gentleman to the reply that my right hon. Friend gave on 4 December to my hon. Friend the Member for Welling borough (Mr. Fry).
    Mr. Fry: Does not my hon. Friend agree, however, that there was considerable under spending under the last Government? Will he give an assurance that he will take steps to see that it does not occur in the future?
    Mr. Clarke: I am very aware of that under spending, but my right hon. Friend and I are not responsible for the former Administration. There are difficulties in predicting the weather and the statutory procedures that can lead to an under-spend. But it seems that this year spending is likely to be very near the cash limit.
    Mr. Booth: The question of my hon. Friend the Member for Newport (Mr. Hughes) related not to last year but to this year—the 1979–80 Estimates. The hon. Gentleman answered in terms of last year. Will he tell the House by how much the cost of the schemes listed in the Supply Estimates for 1979–80 which will not now start in the current year exceeds the £10 million cut in the road programme announced by his right hon. Friend, whether other schemes will be started to use the balance of the money in the road programme, or whether his right hon. Friend will announce another cut in the programme?
    Mr. Clarke: My answer was about 1979–80. There is only one scheme listed in the Supply Estimates that will not start, and that is because we must await a High Court hearing. It is a scheme that we are anxious to begin—the widening of the M1 in Hertfordshire. There is no spare money in the programme; there will not be the under spend that has occurred in previous years.

    British Railways
    5. Mr. Steenasked the Minister of Transport if he will arrange an urgent meeting with the chairman of British Railways.
    Mr. Fowler: I am meeting him soon.
    Mr. Steen: Will my right hon. Friend tell the chairman in no uncertain terms that the ban on bikes on commuter trains is contrary to Government policy both on energy conservation and on making the best possible use of resources? Will he remind the chairman that there are only a few trains that do not have luggage space and goods van space—namely, the new commuter trains? Is he aware that the majority of trains have plenty of space? Will he remind the chairman that although bikes have been banned in goods vans no similar ban applies to motor cycles and prams?
    Mr. Fowler:I very much support cycling and the interests of cyclists, as I know my hon. Friend does. This is essentially a matter of management for British Rail. Clearly it has problems with new trains. I am writing to Sir Peter Parker to ascertain whether there is more scope for flexibility in the arrangements that he has announced.
    Mr. Alton:Will the right hon. Gentleman raise urgently with the chairman the cancellation last week of 98 of the rush hour trains on the eastern region of a possible 1,975? Will he raise with him the issue of the removal of seats from some train services so that more commuters may be squeezed into the carriages?
    Mr. Fowler: I am prepared to raise both those matters.
    Mr. Flannery: When the right hon. Gentleman meets the chairman will he raise with him the miserable inadequacies of the railway line from Sheffield to London, which cause trains to be almost permanently late, which cause food to be almost constantly missing and which cause passengers to miss meetings? Is he aware that if the line to Woodhead is closed it will be regarded by the population of South Yorkshire as one more abuse and one more public political statement that the area is being played down and no longer seems important to the Government?
    Mr. Fowler: I have already made the position clear on Wood head. I have nothing further to add. I am prepared to talk to the chairman about the quality of the service from Sheffield to London. Given the number of matters that I shall have to put to the chairman so far, it is likely to be an all-day meeting.

    M40 (Oxford-Birmingham)
    Mr. Fryasked the Minister of Transport when he plans to announce his decision on the standard to which the Oxford to Birmingham section of the M40 is to be built.
    Mr. Kenneth Clarke: The necessary further studies have now been completed and I hope to announce the decisions on the standard and status of the new road in the near future.
    Mr. Fry: I am grateful to my hon. Friend for that reply. Will he bear in mind that motorways are by far the safest type of road and that any down-grading from the original plan will mean that more people will be killed and injured? Does he recognise that that will be the result of the dual-purpose road is built instead?
    Mr. Clarke: I accept that the accident record of motorways is much better than that of other major roads. The decision on the appropriate standard for the road must be made in the light of traffic surveys and an economic analysis of the costs and benefits. We are near to making a decision. It is a vital route.
    Mr. Stokes:Would it not be cheaper and generally more satisfactory if the M40 extension from Oxford to Birmingham were abandoned and the present main road from Oxford to Birmingham widened and improved, as has been done most successfully along many stretches of the A1?
    Mr. Clarke: That is one of the decisions that we have to make. There has been an investigation into a possible alternative—namely, improving the existing roads north of Banbury. We shall reach decisions on that at the same time as we reach decisions on the status of the whole route.

    Heavy Lorries
    Mr. Snapeasked the Minister of Transport if he will make a statement on the progress of the Armitage inquiry into heavy lorries.
    Mr. Fowler: Sir Arthur Armitage has received written evidence from a large number of organisations and individuals. This evidence is now being considered in detail by Sir Arthur and his assessors. I understand that Sir Arthur hopes to present his report by the summer.
    Mr. Snape: Will the Minister give an undertaking that before he acts on the report of the Armitage inquiry the issue will be debated in the House? Will he tell us why his Department recently increased international road haulage quotas by 20 percent. in December 1979? When will his Department change its attitude towards the menace of a heavy lorry?
    Mr. Fowler: I can give an assurance that no decision on the issue of lorry weight will be made before the House has had an opportunity to debate that important issue. The hon. Gentleman referred to quotas for international journeys. Surely it is the joint policy of both sides of the House to help British road hauliers to expand their business inside Europe.
    Mr. Penhaligon: When motorways are being designed is the assumption made that larger lorries will be permitted or is it assumed that they will be banned?
    Mr. Fowler: Assumptions are made on the same basis as hitherto. We are not making assumptions that the weight of lorries is to be increased. That is one of the major reasons for setting up the Armitage inquiry.
    Mr. Rooker: Does the Minister realise that the assumptions to which he has referred take account of the noise of vehicles? Is he aware that of the mix of ordinary private vehicles and heavier lorries the latter are noisier? Does he agree that the Armitage inquiry should pay more attention to the noise generated by heavy lorries, especially on motorways in urban areas? Is he aware that some bedrooms are no more than 50 ft. away from the motorway? That is one of the many reasons why heavier lorries should not be allowed.
    Mr. Fowler: That is one of the major issues. I agree with the hon. Gentleman that it is important. It is a matter that may be submitted to the Armitage inquiry. If the hon. Gentleman and his colleagues want to put such matters to the inquiry, he and they will be able to do so. That is why we have set up the inquiry. The inquiry was promised by the previous Labour Government. It is a promise that we have sustained. The purpose of having such an inquiry is illustrated by my reply.
    Mr. Dover: During my travels along motorways it has become clear to me that water spray from heavy lorries—
    Mr. Speaker: Order. Many things may be clear to the hon. Gentleman, but he must ask a question.
    Mr. Dover: Will my right hon. Friend ensure that investigations into heavy lorries include water spray from lorries and the major accidents that are caused because lorries travel far too close to one another on motorways?
    Mr. Fowler: The Transport and Road Research Laboratory is working on water spray. There is no reason why that matter should not be referred to the Armitage inquiry. I should like further to consider my hon. Friend's second point.

    M11 (Service Area Site)
    Mr Haselhurstasked the Minister of Transport if he has now decided the site for a service area on the M11 motorway; and if he will make a statement.
    Mr. Kenneth Clarke: Yes, Sir, at Birchanger, at the junction with the A120.
    Mr. Haselhurst: Is my hon. Friend aware that that firm decision will be welcomed? Is he able to give some idea of the date of completion of the construction? On a somewhat lighter note, will he promise my constituents that it will be insulated against noise rather more successfully than the road itself?
    Mr. Clarke: The next stage is to have a meeting with the four local authorities that are involved. The meeting has been arranged for 31 January. The Department will seek outline planning permission. As my right hon. Friend has outlined, we have a policy towards motorway service areas. That will involve putting out the long lease to tender. The developer will deal with detailed planning permission and the eventual development of the site. Noise will be borne in mind when dealing with planning decisions on site. I am aware of the disquiet that my hon. Friend has passed on to me. I refer to the noise from the concrete surface of the new motorway that passes through his constituency.

    Channel Tunnel
    Mr. Whiteheadasked the Minister of Transport when he expects to receive the report of the Cairncross review of the Channel Tunnel project.
    Mr. Fowler: I hope to receive very shortly interim comments from Sir Alec Cairncross on the economic aspects of the Railways Board's preliminary studies.
    Mr. Whitehead: Has the right hon. Gentleman had time to study his right hon. Friend's statement on airports policy, in which it is stated that the Government assume the existence of the Channel Tunnel by 1988 in terms of the plans for the third London airport? May we take it that the Channel Tunnel is now Government policy? Such an announcement, if made formally today, would be widely welcomed on both sides of the House and on both sides of the channel.
    Mr. Fowler: The hon. Gentleman would be wrong to assume that. No decision has been taken on the Channel Tunnel. We hope to have the preliminary views of Sir Alec Cairncross very shortly. I shall be making a statement to the House within the next four to six weeks.
    Mr. Costain: Is my right hon. Friend satisfied that full account is being taken of the views of local authorities?
    Mr. Fowler: We have not come to a conclusion. In reaching a conclusion the views of local authorities will be one of the factors to be borne very much in mind.
    Mr. Arthur Lewis: The Minister has said that he is awaiting the view of Sir Alec Cairncross on the economics of the project. We are all aware of the dangers of terrorism. Does he agree that if we had a Channel Tunnel it would be impossible to control it against terrorism?
    Mr. Fowler: Obviously that point will be considered, but we are at a preliminary stage in the consideration of the project. If the hon. Gentleman will wait until I have made a statement on the Cairncross report, we shall then be in a better position to look at that specific project.
    Mr. Alan Clark: Is not one of the two principal objectives and probable consequences of the project to facilitate the extinction of our manufacturing industries, by allowing the products of our industrial competitors to come in more easily and quickly? Does the Minister agree that the other objective and consequence is that it will disguise what the Community will pretend is a cut in our contribution, by giving a grant towards the project that will only further its own industrial purposes?
    Mr. Fowler: I had always thought that the case for a Channel Tunnel was based upon the need for a better transport link. However, no decision has been made and I shall make a statement as soon as possible.
    Mr. Dalyell: If this is not within the terms of reference of the Cairncross report, will the Government consider the possibilities of using steel for a channel tunnel as that could be of great help to the steel industry next year?
    Mr. Fowler: I am happy to look at that point.
    Mr. John Wells: Will my right hon. Friend the Minister consider introducing an early Bill allowing the two Governments involved to do the basic job of digging a hole? That is the most complicated Bill of all, and we need a preliminary Bill at the earliest opportunity.
    Mr. Fowler: I hope that my hon. Friend will allow me to obtain an assessment of the financial effects of a Channel Tunnel before we consider digging the hole.

    Motorways
    Mr. Rookerasked the Minister of Transport how many miles of motorways he expects to be opened in 1980.
    Mr. Kenneth Clarke: About 40. The widening of five and a half miles of the M5 should also be completed this year.
    Mr. Rooker: Will the Minister tell us how many of those 40 miles will be elevated section? Will he assure the House that those elevated sections will not involve the catastrophic problems that arose in the West Midlands, because of the failure of the road joints? As the Minister knows, those road joints have caused considerable problems on the M5 and the M6.
    Mr. Clarke: To the best of my recollection, not very much elevated section will be opened this year. I am familiar with the problems that have arisen on the long elevated section in the West Midlands. There are design defects and technical problems that were not foreseen. I have seen the work that is being undertaken to replace those joints with joints which, it is hoped, will be of better wearing quality and more suitable for the traffic.
    Mr. Higgins: In view of the problems and costs that are now arising due to the short design life of surfaces on the original motorways, how does that compare with the design life of roads now being constructed?
    Mr. Clarke: Fortunately, the present standards of paving on motorways are designed to meet modern levels of traffic. However, we face many years of difficulty, because the early motorways were

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    built on expectations of traffic load and vehicle weight that have been far exceeded.
    Mr. Straw: Will the Minister look beyond 1980 and tell us when he expects to publish the long delayed White Paper on the Government's plans for future motorways? How much longer will the people of North-East Lancashire have to wait for the M65?
    Mr. Clarke: The White Paper will be published after the Government's White Paper on public spending programmes. I can only estimate that it will be published some time in April. I am familiar with the anxiety felt in that part of Lancashire to get on with the motorway and, fortunately, we have recently made some announcements about the Burnley section.
    Sir Anthony Meyer: Will my hon. Friend tell us whether those 40 miles include the completion of the M56 as far as the Welsh border? There is a great need in that area for improved communications, as job losses are becoming severe.
    Mr. Clarke: Unfortunately, it does not include the completion of that part of the motorway, as that section has been delayed by a strike. However, those sections are important and they will probably be opened next year.

    Railways (Disabled Persons Facilities)
    Mr. Mylesasked the Minister of Transport if he is satisfied with the provision of facilities for disabled people on trains and in stations.
    Mr. Kenneth Clarke: Facilities on trains and stations are the responsibility of the British Rail board. However, I know that it has already taken a number of steps to cater for the special needs of disabled people.
    Mr. Myles: Will my hon. Friend the Minister ensure that provision is made for the disabled on the Inverness to Aberdeen train? That is often the only way that the disabled can travel in the North-East of Scotland.
    Mr. Clarke: I shall consult the British Rail board about facilities on those particular trains. British Rail is anxious to improve facilities and the most modern
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    stock contains elaborate provisions for the disabled and caters for wheelchairs and other necessities.
    Mr. Gordon Wilson: Will the Minister consider that British Rail, by attempting to cut costs in ticket collection, has reduced staff? Certain stations in Glasgow that formerly had two exits now have only one. That causes difficulty to the disabled and perhaps the Minister will discuss that with the chairman of British Rail.
    Mr. Clarke: The question of the particular number of entrances and exits to a station must be taken up with the board of British Rail. The design and rebuilding of modern stations now takes full account of the 1970 Act, and the need to make provision for access for disabled people at all stages of boarding a train.
    Dr. Glyn: Does my hon. Friend agree that the question of the carriage of disabled people cannot be dissociated from the carriage of bicycles and British Rail's policy concerning what can be carried? I reinforce the words of my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) concerning the considerable disadvantages suffered by commuters as they are not allowed to put bicycles on commuter trains.
    Mr. Clarke: My right hon. Friend the Minister has already dealt with the question of bicycles and we realise that there is a great concern. However, the disabled are a separate category, although they are equally important. As I have said, British Rail makes considerable efforts to accommodate the disabled on trains.

    M25
    Mr. Garel-Jonesasked the Minister of Transport if he will make a statement on his policy towards the M25 scheme.
    Mr. Kenneth Clarke: Its completion retains the highest priority in the trunk road programme and is not likely to be delayed by any policy decisions or expenditure constraints.
    Mr. Garel-Jones: I thank my hon. Friend for that reply and for the courteous way in which he received a delegation of councillors from the borough of Watford last week, but will he reassure the people of Watford that both he, and

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    his Department, are opposed to any suggestion that the A41 or the A405 should be upgraded?
    Mr. Clarke: I appreciated the discussions that I had with representatives from Watford. We were in complete agreement that the alternative possibility of upgrading the routes through the middle of the urban area of Watford—which would almost certainly necessitate the demolition of houses in order to accommodate the traffic—is regarded as unacceptable. We prefer the M25.
    Mr. Jessel: As the section of the M25 between the top of Reigate Hill and the M3 and the M4 would greatly relieve my constituents in Hampton and Hampton Hill who suffer from heavy traffic, can my hon. Friend tell us whether he has received the report of the public inquiry into that section? Will he do everything possible to speed up a decision?
    Mr. Clarke: As regards the Leather-head interchange, we have the inspector's report, but we have not yet reached a decision. If my hon. Friend is referring to the section between Leatherhead and Wisley on the A3, some decisions remain to be made on minor variations to the route. However, subject to those variations we expect that, if everything goes well, the section will be opened in 1983.
    Mr. Stanbrook: How soon can we get on with the construction of the section of the M25 that runs between Swanley and Sevenoaks?
    Mr. Clarke: We are still awaiting the inspector's report about a section of the M25 that is probably more controversial than any other. As soon as I have the inspector's report, we shall begin consideration of it.
    Mr. Forman: Is my hon. Friend aware that his first answer is most welcome as thousands of my constituents still feel threatened by the uncertainty surrounding the M23? Is he further aware that the early completion of the M25 will help them considerably?
    Mr. Clarke:I am grateful to my hon. Friend and I am convinced that large areas of outer London in particular will experience great relief from traffic problems—particularly those caused by heavy lorries—once the M25 is completed.

    Public Transport (Government Support)
    Mr. Strangasked the Minister of Transport if, in the light of the recent increases in oil prices, he will review the level of Government support for public transport.
    Mr. Fowler: The level of support to public transport by central and local government is currently running at almost £800 million a year. The price of oil is one of the factors I have in mind in making provision for the level of support.
    Mr. Strang: When other Governments are increasing their investments in public transport as part of their policies of energy conservation, is it not monstrous that our Government are cutting expenditure on public transport? They are forcing up fares, cutting back on services and forcing more people to use cars, and therefore oil.
    Mr. Fowler: I do not accept that as a characterisation of our policy. Clearly public expenditure policy has implications for transport policy. However, if the hon. Gentleman looks at the policy as regards railways, he will see how successful we have been in maintaining support for that system.
    Sir Anthony Meyer: In many rural areas buses are an extremely wasteful form of public transport, and will my right hon. Friend persevere with his policy of encouraging such forms of transport as social cars?
    Mr. Fowler: I am grateful to my hon. Friend. That is what we intend to do. We intend to extend the opportunities for car sharing and take away some of the restrictions that have been imposed. I agree that such a policy has implications for energy conservation, and at some stage we hope that we shall have the support of the Opposition Front Bench.
    Mr. Prescott: Does the Minister's reply mean that, where cross-subsidisation is maintained, the transport system as we know it today, particularly in rural areas, will be undermined by a reduction in grants and by the Transport Bill which proposes to replace buses and rail transport by cars?
    Mr. Fowler: That is a ridiculous statement of the position. The Transport Bill

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    seeks to extend and increase the provision of transport. I would have expected the support of the official Opposition Front Bench.
    Mr. Robert C. Brown: Is the Minister aware that the reduction of the transport grant to the Tyne and Wear county council will make it difficult for the lower paid worker to afford the heavily increased cost of transport to work?
    Mr. Fowler: If the hon. Gentleman looks at the provision made for Tyne and Wear over the years, he will see that Tyne and Wear has not done badly from the TSG system.

    Road Accidents
    Mr. Dormandasked the Minister of Transport what further steps he is taking to reduce the number of road accidents.
    Mr. Kenneth Clarke: Our immediate priority is drinking and driving, and in that connection we published a consultation paper last month. We are also concerned with the problem of motor cycle safety, and we expect to bring forward further proposals in due course.
    Mr. Dormand: May I remind the Minister that the average number of road deaths per year in this country is 6,500? Does he agree that, if that many people were killed on the railways or in aeroplane crashes every year, the Government would be forced to take immediate and decisive action? Is he aware that, although the proposals that he mentioned are important, they are comparatively minor compared with the scale of the problem? Will he and his right hon. Friend shake off their complacency and take a major initiative to end the appalling slaughter on our roads?
    Mr. Clarke: No one is complacent. The figures are appalling. They have improved, but that is no great cause for satisfaction. However, I do not accept that our proposals are irrelevant or unimportant. When one looks at the association between drink and road accident figures in this country, that shows that we are tackling the most important problem of all by dealing with defects in the breathaliser law.
    Mr. Michael McNair-Wilson: Can my hon. Friend say whether mini round-
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    abouts have proved more safe than traditional roundabouts?
    Mr. Clarke: Such considerations are constantly under review with the Transport and Road Research Laboratory. To the best of my recollection—although I had better promise to write to my hon. Friend—the effect of mini roundabouts on road safety is fairly adequate. They certainly improve traffic problems at junctions, and we would not persevere with them if they increased accident statistics.
    Mr. Haynes: How long must road safety committees, this House and the nation wait before the Minister makes up his mind what to do about motor cyclists, who can buy a motor cycle from a showroom and, without instruction or training, go immediately on the road? That practice is adding to the number of fatal road accidents.
    Mr. Clarke: Not very long. The discussions that I am engaged in should be completed in about a month, and we can then produce a policy on motor cycle training and motor cycle safety generally. We had to wait for the report of the advisory committee set up by the previous Government, and we have had that for only a little over a month. It is a matter of great urgency, and we are dealing with it as such.

    Railways (Main Line Electrification)
    Mr Bagierasked the Minister of Transport when he expects to publish the final report of the steering group on the case for further main line electrification.
    Mr. Fowler: I expect the report to be ready for publication by early summer.
    Mr. Bagier: Will the right hon. Gentleman hazard a guess as to what might be in that report? Can he indicate whether he looks favourably on a further escalation of main line electrification and, if so, how does he see his chances of getting the money out of the modern day Scrooge who is ensconced in No. 12?
    Mr. Fowler: I am not sure that such language improves the hon. Gentleman's case. The interim report looked at the costs of electrification. We are now looking at the revenue implications in the sense of more traffic for British Rail. As I have made clear on a number of occasions, I am sympathetic to what is being

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    attempted, but we must wait for the report before making final decisions.
    Mr. Michael Brown: Does my right hon. Friend accept that on electrification we are taking decisions for a generation ahead? If we accept that in 10 or 20 years' time oil will be limited, we have to consider electrification as soon as possible.
    Mr. Fowler: My hon. Friend is absolutely right. That is one reason why we are considering electrification sympathetically.
    Mr. Whitehead: Will the Minister consider the problems caused by the failure so far to take electrification beyond Bedford for the London-Midland region? That is the prime cause of the type of breakdown referred to by my hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery). Does the Minister agree that those breakdowns cannot be alleviated without an early decision on electrification for the line between Sheffield and Bedford?
    Mr. Fowler: We can consider individual schemes on their merits, but we shall still have to wait for the report before finalising our policy. I believe that there is great sympathy and support for electrification.
    Mr. Booth: Does the Minister agree that the option set out in the joint study by his Department and British Rail for maximum electrification has enormous economic, social and technological implications and will have an important effect on future energy policy? Will he therefore consider a debate in the House before or immediately following the final report and before any Government decision?
    Mr. Fowler:I shall certainly pass on the right hon. Gentleman's views to the Leader of the House. However, I believe that it would be more constructive to have any discussion after the final report is published. Clearly it will be published and made generally available.

    Street and Motorway Lighting
    Mr. Farasked the Minister of Transport if he will arrange to make a substantial saving by arranging for the extinguishing of all unnecessary street and
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    motorway lighting between the hours of midnight and 6 a.m.
    Mr. Kenneth Clarke: Lighting is installed and operated on motorways and trunk roads only where and when the estimated cost of accidents that it saves exceeds the cost of the basic energy required for the lighting.
    Lighting on local authorities' roads is a matter for them, not for this Department.
    Mr. Farr: I appreciate my hon. Friend's answer, but will he consider whether the lights, for instance, on motorways that blaze away all night, regardless of the weather, could be extinguished, as that would be a tremendous saving in fuel costs?
    Mr. Clarke:The lights on motorways make a substantial difference to accident levels, which is an end in itself, but that in turn leads to substantial savings in cost. To the best of our ability to estimate, the comparatively small cost to the community of lighting is less than the accident costs that would otherwise be incurred.
    Mr. Rooker: The Minister accepts that motorway lighting reduces accidents, so does he intend to continue the lighting programme on the motorway between London and Birmingham all the way along?
    Mr. Clarke: There is no present intention to continue it all the way along. Throughout most of the route there is fairly full provision at hazardous and urban areas. Where inquiries indicate that accident figures can be substantially improved by more lighting, we remain ready to extend lighting arrangements.
    Mr. Albert Roberts: Does the Minister agree that life is pretty miserable as it is without returning us to the dark ages?
    Mr. Clarke: I trust that we have more to enliven us than merely motorway lighting, although that lighting serves a useful purpose.

    Competition
    Mr. Ioan Evansasked the Minister of Transport what action he proposes to avoid wasteful competition in the transport industry.
    Mr. Fowler: My policy is to encourage fair competition in order to improve efficiency and widen consumer choice.
    Mr. Evans: Will the Minister try to integrate our road and rail transport system and get the heavy traffic onto the under-used railways? Will he also pursue the policy of electrifying main line railways to conserve energy for the future?
    Mr. Fowler: I am entirely in favour of fair competition between British Rail's freight service and road haulage, but I am not in favour of directing freight from road to rail. That would be a foolish policy and one that was even rejected by the previous Government.
    Mr. Cryer: Does the Minister accept that his policy of curtailing investment is leading British Rail to consider the closure of freight-only routes, like the Wood-head route across the Pennines? Does he further agree that that will mean a shift away from rail freight to road transport, which is retrogressive.
    Mr. Fowler: I do not accept that. I have already answered the question twice about the Woodhead tunnel. We are not curtailing investment as the hon. Member suggests. We are maintaining it at the level of the last Government.
    Mr. McCrindle: Is it not a fact that the very success of British Rail's intercity services has forced the passenger road transport industry to look again at its fares? Is that not, in essence, the best possible outcome of competition?
    Mr. Fowler: Absolutely. I entirely agree with my hon. Friend. Under the Transport Bill we shall be able to have further competition between coach operators on long-distance services. I believe that competition like that makes sense, and is in the best interests of the travelling public.
    Mr. Cohen: Will the Minister accept that the competition to which he has referred has resulted in duplication and has had wasteful economic and social consequences? Are the Government prepared to look again at these consequences?
    Mr. Fowler: The alternative policy that the hon. Member suggests is one of having a transport central planning authority, which would be vastly wasteful.
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    Also, it was entirely rejected by the previous Labour Government during five years in office.

  CIVIL SERVICE

    Efficiency
    Mr. John Evansasked the Minister for the Civil Service if he is satisfied with the efficiency of the Civil Service.
    The Minister of State, Civil Service Department (Mr. Paul Channon):I am never satisfied. But progress is being made all the time.
    Mr. Evans: Is the Minister aware of the near collapse in morale among engineers in the Civil Service as a result of their recent arbitration award—if that is the correct word for it? Will he accept that that collapse in morale will gravely weaken and endanger the efficiency of the Civil Service? What does he intend to do about it?
    Mr. Channon: I very much hope that that is not the case. The award to which the hon. Member referred is the award by the independent Civil Service Arbitration Tribunal. I have no control over its findings. It is an independent body and it has been the practice in the past for both sides to agree to its findings.
    Mr. Henderson: Does my hon. Friend agree that in many cases the organisation methods of the Civil Service are not at all bad, but the problem that really arises is whether whole Departments need to exist at all? Does he agree that this is primarily a political question for Ministers and perhaps for departmentally related Select Committees as well?
    Mr. Channon: The important point that we, as a House of Commons, must decide is whether a great many of the functions of government need to continue. This is continuously under review and I welcome my hon. Friend's support.
    Mr. McElhone: Is the Minister aware that the efficiency and morale of the Civil Service in West Central Scotland would be further enhanced if he would give an assurance that there will be no redundancies at the Post Office savings bank in Glasgow? Also, can he tell us when a firm date will be anounced for the dispersal of defence jobs to Glasgow?
    Mr. Channon: There was a debate in the House on dispersal recently. I shall draw my right hon. Friend's attention to the hon. Member's comments. The question of the national savings bank is not for my Department, but, as I told the House on 6 December, we hope to have very few redundancies.

    Pay Research Unit
    Mr. Bruce-Gardyneasked the Minister for the Civil Service what progress he has made in recruiting new members to broaden the experience of the Pay Research Unit board.
    Mr. Channon: I have had discussions with the National Staff Side and am considering possible candidates for recommendation to my right hon. Friend the Prime Minister, who is responsible for making the appointments.
    Mr. Bruce-Gardyne: This is a matter of some urgency. Will my hon. Friend agree that taxpayers in the private sector can hardly be blamed if they look askance at a system which puts a value of 2·6 per cent. on the benefit of index-linked pensions? These are unavailable in the private sector, they would not be allowed by the Inland Revenue even if they were available, and they must be topped up by taxpayers in the private sector. Will my hon. Friend ensure as a matter of urgency that if he must have the investigations of the Government's actuaries investigated by the Pay Research Unit board, that body should include people who are qualified in the business of actuarial computations in the private sector?
    Mr. Channon: I note what my hon. Friend says. I do not think that the proposal to refer pensions to the Pay Research Board is a good idea. The Government are now considering how best to ensure that independent outside scrutiny can be given to the valuation of pensions.
    Mr. Straw: Will the Minister say whether the Pay Research Unit board will have anything to do? If a report in The Guardian on Monday is correct, it seems that the Government are considering abandoning pay research as a means of negotiating Civil Service pay. Will the Minister say whether that report is correct?
    Mr. Channon: It is most unwise for me to comment on speculation in the press. There is a later question on this matter.
    Mr. Wrigglesworth: But in view of the speculation that has occurred—and which has been enhanced by hon. Members today—about the removal of index linking pensions for policemen, the Armed Forces, teachers and all other public servants, will the Minister tell the House whether the Government are reconsidering index linking for Civil Service pensions?
    Mr. Channon: I told the House just a few moments ago that we had proposed to refer the question of pensions to the Pay Research Unit board, but now the idea is that we should consider how best an independent outside scrutiny can be given to the valuation of pensions in the public sector.

    Manpower
    Mr. Chapmanasked the Minister for the Civil Service what is the total number of civil servants at the last date for which figures are available; and what is the number who retired or voluntarily transferred to non-Civil Service jobs in the last 12 months for which figures are available.
    Mr. Channon: At 1 October 1979,the latest date for which figures are available, there were 712,300 civil servants: of these, 552,000 were non-industrials and 160,300 were industrials. During the 12 months ending 30 September 1979, 63,000 non-industrial civil servants retired or voluntarily transferred to non-Civil Service jobs. No information is held centrally on retirements or voluntary transfers of industrial staff.
    Mr. Chapman: Apart from the Government's short-term commitment to reduce the number of civil servants, is there any long-term strategy? If so, would it be based upon permitting an intake each year of but a proportion of the natural wastage?
    Mr. Channon: That is an interesting idea which I shall certainly consider. The Government's long-term strategy is to try to reduce the role and functions of government in such a way that we can also reduce the size of the Civil Service as a

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    whole. But the Civil Service, of course, must do the job that this House sets it to do. We must have a number of civil servants for that purpose. The problem is to match what is required by this House in the most efficient and proper way.
    Mr. English: Does the Minister ever wonder how his Department gives him such precise figures when at the same time it refuses to define the term "civil servants"? Is it not true that the number of people paid either by the taxpayer or by corporations owned by the Crown and who receive inflation-proof pensions is about 7 million—one-third of the work force?
    Mr. Channon: I believe that the number who receive inflation-proof pensions is about 5·5 million, including every Member of this House, the Armed Forces, teachers, nurses and everyone in the public sector.
    Mr. Marlow: My hon. Friend says that he seeks rigorously to cut down the number of functions that must be performed by the Civil Service. Will he speak with his colleagues and ask them to speak with their colleagues in Europe to stop some of the damn silly regulations which arrive in this House late at night and which we then must process? Does he not agree that this causes more civil servants to be employed?
    Mr. Channon: That is a matter for the Foreign Secretary and I shall certainly draw his attention to my hon. Friend's remarks.

    Pay
    Mr. Wrigglesworthasked the Minister for the Civil Service if the Government will accept the principle of fair comparison on the basis of pay research for the settlement of Civil Service pay in the forthcoming round of negotiations; and how this will be affected by cash limits.
    Mr. Channon: The Government will reconcile pay research with the system of cash limits. When the pay research evidence for the non-industrial Civil Service is available, but before the negotiations have been concluded, we propose to determine a single cash limited provision for Civil Service pay awards in 1980–81.
    Mr. Wrigglesworth: Will the Minister confirm that the cash limit that has been put on the Civil Service for pay is 14 per cent., as has been leaked in documents to the newspapers from Treasury civil servants? If that is the case, and the Pay Research Unit comes up with figures of 17 per cent. or 18 per cent. as suggested in the press, will he tell the House how many further cuts in manpower or services there will be in order to match the figures?
    Mr. Channon: I cannot confirm that figure. No cash limit has been set for Civil Service pay. I have explained that that has yet to be settled. It will be settled in the light of evidence supplied, and therefore the rest of the hon. Member's question is purely hypothetical.
    Mr. Bruce-Gardyne: Will not my hon. Friend agree that the hon. Member's question highlights the folly of these comparability exercises which lead inevitably to redundancies that might not otherwise occur or be necessary had the trade unions involved been encouraged
    to negotiate direct with their employers on the basis of ability to pay?
    Mr. Channon: As a general principle, that must be right. Civil Service pay rises have been worked out in this way for the past 25 years. My hon. Friend will recall what the Conservative election manifesto said about reconciling pay research with cash limits. I did not write that part of the manifesto, but I am trying to implement it.

    Manpower
    Mr. Strangasked the Minister for the Civil Service what representations he has received from the Civil Service unions following his announcement on 6 December about cuts in manpower.
    Mr. Channon: My right hon. and noble Friend the Lord President and I met representatives of the National Staff Side immediately after the announcement on 6 December and they put to us their views on the manpower reductions. Since then they have been in contact with my Department on a number of occasions.
    Mr. Strang: In view of the evidence that is coming to light that the Government are making manpower cuts and are farming work out to the private sector

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    even where there are no apparent financial savings, will the Minister say whether it is Government policy to farm out work to the private sector even where there is no evidence of increase in efficiency or reduction in cost?
    Mr. Channon: The Government's policy on putting work out to the private sector is that it should be done onl where there is clear operational or economic justification.

RHODESIA
Mr. Shoreasked the Lord Privy Seal whether, following the assassination last night in Salisbury of a candidate of one of the main political parties, he will make a statement on the progress of the ceasefire and the preparation for the elections.
The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Richard Luce): In the absence of my right hon. Friend the Lord Privy Seal, I shall reply.
We naturally greatly regret the incident to which the right hon. Gentleman refers. I understand that police investigations are in hand. My right hon. Friend the Lord Privy Seal gave a full account of progress on the ceasefire and preparations for the elections in this House on Wednesday 16 January. I have nothing to add to that and to the remarks that I made during the debate on the two Southern Rhodesia orders the following day.
Mr. Shore: I thank the Minister. Because we all want elections that are free and fair, we deplore this act of violence and, indeed, all other breaches of the ceasefire, from whatever source they come. Whoever turns out to be responsible—and I understand that police investigations are taking place—does not the Minister agree that this event reinforces the warnings and complaints against the use of undisciplined auxiliaries made by Mr. Sithole and Mr. Nkomo in Salisbury only this weekend? Can the Minister assure the House that these auxiliaries are under proper control and are being effectively monitored by the Commonwealth military observers? Will he now reaffirm the Lancaster House agreement that breaches
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of the ceasefire should in the first instance be dealt with by the armed forces—Rhodesian and Patriotic Front—to which the malefactors are thought to belong?
Will the Government now instruct the Governor that in those circumstances, when the security forces have to be used it will be the regular forces and not the auxiliaries that are deployed?
Finally, will the Minister take this opportunity of refuting the very damaging report in The Times today that Mr. Mugabe may be banned from entering Rhodesia owing to unresolved differences over the release of detainees? Such a ban would be a disastrous error of judgment.
Mr. Luce: The specific incident to which the right hon. Gentleman referred, as I have said, is under police investigations. I do not think that there is any more that I can add to that.
The auxiliaries, as the right hon. Gentleman well knows—we discussed this last week—are, of course, accountable, like all the other forces—Rhodesian security forces, the police and the Patriotic Front forces—to the Governor. In that sense they are monitored. If any incidents are reported with regard to their activities—there have been some—they are reported to the Ceasefire Commission and investigated.
Breaches of the ceasefire are part of the same question. All these forces are responsible to the Governor for ensuring that the ceasefire is observed. I remind the right hon. Gentleman that the Governor's primary responsibility is to call out the police first, and it is only when the police are unable to deal with the situation that he can call upon the Rhodesian security forces, or, for that matter, the Patriotic Front forces, to help him to deal with the situation and to bring matters under control.
As for Mr. Mugabe, I understand that he hopes to return very soon. There is one very serious point and one very serious obligation, which I believe—I am sure that the whole House will agree—is of very great importance if this agreement is to succeed. At present,Mr. Mugabe detains no fewer than 71 people in Mozambique. If the Lancaster House agreement is to be fulfilled, it is singularly important that he should undertake

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his part of the agreement and his obligation by releasing the detainees. I hope that he does that this week.
Mr. Shore: Perhaps I may pursue the Minister a little further on the question of the detainees. Of course they should be released, but is the Minister confident that these detainees are in the charge of Mr. Mugabe and not in the charge of the Mozambique Government, in whose territory, certainly, they are? What efforts have been made to establish that point? The Minister mentioned a figure of 71. That is an important number, but can he say how many detainees there still are inside Rhodesia itself—those who are still being held under martial law and other legislation? I think that it is time that we had the two figures, as it were, brought together.
Mr. Luce: The detainees in Mozambique are people who were detained by Mr. Mugabe and his ZANU movement, but they are detained in Mozambique prisons, so there is a joint responsibility by both the Mozambiquan Government and Mr. Mugabe. I should say that we are therefore making very strong representations both to the Mozambiquan Government
and to Mr. Mugabe. We hope that they will both be able to respond.
I should also add that in many other respects the Mozambiquan Government have been very co-operative in respect of this agreement.
Mr. Cyril D. Townsend: Is my hon. Friend aware that while the Governor is troubled on all sides by those who seek to gain political ground by the use of violence, many Conservative Members feel that the Governor has been remarkably judicious and even-handed in the weeks during which he has been in Salisbury? Secondly, will the Government continue to resist calls for British troops to play a more active part in maintaining peace in Rhodesia?
Mr. Luce: I am grateful to my hon. Friend, and I am quite sure that the Governor will be. Bearing in mind the extremely difficult situation with which he deals, he will be the first to accept that complaints are coming in from all sides, and he regards this as part of his job. I do not think that he would mind
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my saying that he has broad shoulders, both physically and metaphorically, to enable him to deal with this very difficult situation. The House should not underestimate the achievements of the Governor and his team over the last five weeks. They are quite remarkable.
As for British troops, as my hon. Friend knows, we make a substantial contribution to the monitoring force. The Governor has already stated that in his view all component parts of the monitoring force have fulfilled an outstanding task in the last five weeks. There is no question but that their task is a monitoring task and not a peacekeeping task. There is no suggestion that any British troops should be involved in peacekeeping as opposed to monitoring.
Mr. Faulds: Is the hon. Gentleman satisfied that the Governor is complying with the agreement in the following respects: in allowing the undisciplined auxiliaries, with their personal allegiances, to act as part of the security forces; in allowing Walls—as he has been doing—to publish communiqués without the Governor's oversight and vetting; in making clear in public comments—again, he has been doing this—that he hopes that Robert Mugabe does not win; and in accepting South African intervention, particularly in view of the Lord Privy Seal's words during Question Time on, I think, 18 December, that there could be no question of any foreign intervention in Rhodesia?
Mr. Luce: I am a little surprised by the one-sided nature of those questions. [Interruption.] Of course, I accept that they are all valid questions, but I am slightly surprised by their one-sided nature.
All the parties agreed at Lancaster House that the auxiliaries would come under the authority of the Rhodesian forces and, in turn, of the Governor, once he arrived. That is the position now. As I have already stated several times previously—last week and today—any incidents that are reported with regard to the auxiliaries or, for that matter. any other forces—and we are at present deeply disturbed by the number of incidents that have emanated from the ZANU forces—are reported to the Ceasefire Commission.

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General Walls is accountable, and all his actions are accountable, to the Governor. At the end of the day, all these forces are accountable to the Governor. That is the essential prerequisite to success.
As for the South African situation, we made it plain before the Governor arrived that there would be no external intervention. As we discussed very fully last week, the Governor has announced, with the agreement of my right hon. and noble Friend the Foreign Secretary, that there should be a small contingent of South African troops within the vicinity of Beitbridge, whose sole purpose is to defend that bridge. We have been over the argument for this, and I gave the reasons very carefully last week.
Mr. Russell Johnston: Given that it is enormously difficult to protect people from assassination, can the Minister assure the House that particular efforts are being made to protect the major personalities, who are obvious targets in the election? Given that two wrongs do not make a right and that the detention of people in Mozambique cannot be justified by the argument that some are detained in Rhodesia, will the hon. Gentleman say what right of appeal exists for those still in detention in Rhodesia? What direct contact has he had with the Government of Mozambique in regard to the 71 persons in detention there?
Mr. Luce: It was agreed at Lancaster House that the Governor would have responsibility for doing his best to ensure that during the election all the political candidates were as secure as possible. Naturally, the Governor is deeply concerned by what happened last night. His major obligation is to undertake to give the best security possible to the main political leaders in Rhodesia. That he has undertaken to do.
I apologise to the right hon. Member for Stepney and Poplar (Mr. Shore) for not giving a complete answer to his original question about detainees, whether in Mozambique or Salisbury. The Governor has released the 81 detainees who were detained under ministerial orders in Rhodesia when he arrived. The final lot were released during the course of last week. He is at the same time reviewing the cases of all those who might be
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affected by the amnesty ordinance that was passed in Rhodesia.
As for martial law detainees, which may have been in the back of the right hon. Gentleman's mind, martial law will be brought to an end just as soon as all the parties are prepared to conform with the ceasefire. We are in daily touch with the Mozambiquan Government, the President and his Ministers, as well as with ZANU, on the question of the detainees in Mozambique.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call three more hon. Members from either side. This is a private notice question, and an extension of Question Time.
Mr. Emery: Does my hon. Friend realise that the happy marriage is never news but the seamy divorce always hits the headlines? It is important that the achievements of the Governor and information such as that of the release of the 81 detainees that the hon. Gentleman has given to the House today—all moves in the right direction—should be given greater publicity. It is important to obtain a balance rather than that the world press should report only the odd bad instances that occur during the ceasefire.
Mr. Luce: I am grateful to my hon. Friend. It is a natural characteristic to focus on the problems rather than on the progress that has been made. My hon. Friend is right in stating that we should not underestimate the remarkable achievements of the last few weeks, whether we are talking about progress on the ceasefire, the normalising of relations between Rhodesia and the surrounding States, the progress on refugees, freedom of the individual, electoral progress achieved by the Election Commissioner, or economic progress.
Mr. Alexander W. Lyon: Is it not clear that the Governor has shown unmistakable bias against ZANU and that the total evidence indicates that he is going out of his way to ensure than ZANU is inhibited in the election campaign? If that is not true, will the Minister give details in response to the written questions that I asked earlier this week? His answers neglect to show how many incidents were attributable to ZANU and how many to any other party.
Mr. Luce: I refute totally any suggestion that the Governor is biased. It is my view and, I think, the view of those who have observed him at work, that the achievements of the Governor and his team over the past few weeks have been terrific. He should be thanked for everything that he is doing in that respect. The hon. Gentleman may have his complaints—he has every right to raise them—but participants in the election, now that they are in Salisbury, have every right to make their anxieties known through the machinery that is available—the Ceasefire Commission, the Election Council, or the Governor himself—which all the leaders are in the process of doing. The Governor's doors are open. He is anxious to fulfil the letter and the spirit of the Lancaster House agreement.
Mr. Hastings: Is it true that there are still many thousands of ZANU guerrillas out in the bush and that no serious attempt appears to have been made to persuade them to come in to the collecting points? If this is true, why should Mr. Mugabe be permitted to take part in this election on the same basis as other parties?
Mr. Luce: About 21,600 Patriotic Front forces have now assembled in the 14 assembly places. That is a remarkable achievement in itself. On the other hand—I think that this is the point that my hon. Friend is making—there are still substantial numbers of forces, particularly ZANLA forces, who have infringed the ceasefire agreement, who have come across from Mozambique and who are still operating, particularly in the eastern parts of Rhodesia. This is a very serious point. It challenges the whole agreement. We hope that, very quickly indeed, Mr. Mugabe will bring his forces under control.
Mr. Whitehead: Surely, the Minister will agree that it is a cause of concern that there are deteriorating relations between British troops enforcing the ceasefire and some of those who have come out of the bush. How many instances have been reported to him of attacks upon, and shooting of, ZANU and ZIPRA forces, who have initially come out of the bush into the assembly areas?
Mr. Luce: I am not able to give precise figures. As the hon. Gentleman will know, every day complaints of incidents
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are taking place. I can tell him that the largest proportion of allegations of incidents and actual evidence of incidents comes from the operation of ZANLA forces. That is a clear fact.
Mr. Ian Lloyd: Will my hon. Friend make clear to the Governor not only that he enjoys our immense admiration for what he has already achieved but that he will have the whole-hearted support, at least of the Government side of the House, for any steps that he considers it necessary to take anywhere in Rhodesia to make clear that legitimate terrorism no longer exists?
Mr. Luce: I am grateful to my hon. Friend. I am sure that his views reflect those of the vast majority in the House. In fairness, this point was made last week by Opposition Members.
Mr. Robert Hughes: Is the hon. Gentleman not aware that there are increasing complaints about auxiliary forces and indiscipline? What steps is the Governor taking to summon Bishop Muzorewa, whose forces are mainly involved, to make sure that these people are taken out of sensitive areas? Will he publish, as early as possible, the reports so far of the Ceasefire Commission so that we can see the evidence? Will he accept from me that the evidence that we read in the press in this country—we have no other source of information—is that emanating from the Governor's office, and that it takes the form of a continuing bias and continuing statements against Mr. Mugabe? If the hon. Gentleman thinks that this policy will succeeed, perhaps in his own interest he will advise the Governor that the more the Governor's staff complain about Mr. Mugabe and ZANU, the more likely it is that they will win the election.
Mr. Luce: I have already said that the Governor has broad shoulders and can take this. He has been criticised by all participants as well as being praised by many sources. That is perhaps an indication of his impartial approach to the whole problem. I am interested that the hon. Gentleman focuses solely on the auxiliaries. I have already told the House that there have been a number of reports of incidents caused by auxiliaries that are already being investigated, but the largest bulk of reports of incidents

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emanates from ZANLA. This is the serious aspect of the problem.
We want all sides to participate successfully in the agreement. If the hon. Gentleman thinks that after a seven-year war the Governor can simply wave a magic wand and overnight solve the problem, he is living in cloud-cuckoo-land. Great progress has been made. Casualties are down, and all incidents are fully investigated.
Mr. Shore: We acknowledge that progress has been made, but the Government would be unwise to minimise the growing concern—there is plenty of evidence of it inside and outside Rhodesia—about stability and the way in which the ceasefire arrangements have been carried out. The Commonwealth military observer forces have a crucial part to play. Those forces and units, regular or irregular, that are observed by them are clearly under a form of scrutiny that limits their freedom of action. That is important. Has the hon. Gentleman given any thought to the possibility of reinforcing the tightly stretched 1,200-man force there now? If so, has he consulted other Commonwealth Governments?
Mr. Luce: I am grateful to the right hon. Gentleman for his reference to the importance of the work of the monitoring force, which is, of course, fully stretched because its task is extremely difficult. Without going into precise figures, I can say that there are roughly 1,400 personnel in the force, the bulk being British
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soldiers, with other component parts. They are doing a marvellous job. I think that it is up to the Governor—he is the man on the spot, and in a position to judge—and if it becomes necessary to ask for additional assistance, I am sure that he will feel quite free to ask us to provide it.

FRIDAY SITTINGS (PRIVATE NOTICE QUESTIONS)
Mr. Speaker: I have a short statement to make about the new arrangements for Friday morning sittings.
Since the House has agreed that private notice questions and statements should still be taken at the hour of 11 o'clock, despite the earlier meeting of the House, I propose to continue to regard 10 o'clock as the latest hour at which a private notice question may be received on Friday in my office.
If a private notice question is allowed on a Friday, or if there is to be a statement, notices will be posted in the Members' Lobby in the usual way. In addition, the subject matter of any such question or statement will be shown on the annunciator screen for three three-minute periods, at 10.15, 10.30 and 10.45, replacing the description of the business currently in progress.
During the rest of the period from 10.15 to 11 am, a simple indication that there will be a statement or question at 11 o'clock will be shown on the screen in addition to the current business.

EUROPEAN COMMUNITY (COUNCIL OF AGRICULTURE MINISTERS' MEETING)
The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker): With permission, Mr. Speaker, I wish to make a statement about the Council of Agriculture Ministers' meeting in Brussels on 21–22 January, at which I represented the United Kingdom, with my hon. Friend the Minister of State.
The Council had a general discussion on the proposals on milk and sugar which the Commission put forward in December. The Commission confirmed that it would be changing these proposals and that new proposals, together with proposals on the price fixing, would be made on 6 February. I stated the urgent need to achieve savings in expenditure on the CAP but pointed out that these savings must be made in a way that did not discriminate against any one particular country.
In this regard, I confirmed that the United Kingdom Government would not agree to any co-responsibility levy which provided exemptions to exclude from the levy a substantial percentage of producers in other member States. I also confirmed our objection to the original proposals for a sugar quota which resulted in a larger cut for Britain than for any other country. The Commission confirmed that it would be reviewing the sugar quotas, taking into account the much higher production of the United Kingdom during 1979.
I expressed the necessity to confirm the difference between savings in expenditure and increases in income obtained from levies. On the Commission's original proposals, in 1980 85 per cent. of what were described as savings would in fact be increases in income derived from levies.
In a discussion on sheepmeat, I strongly objected to the fact that the French Government continued to disregard both the treaty and the findings of the European Court. The Italian Presidency and the Commissioner pointed out the damage that this was doing to the Community and urges the French Government to comply with the decisions of the European Court so that progress on a
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permanent sheepmeat regime could be made in tolerable climate.
The French Minister was asked during the meeting to confer with the Commissioner on legal interim measures that would enable the French Government to comply immediately with the Court's decision. After discussions with the Commission, the Commissioner had to report that the French Government were unwilling to pursue any of these legal interim measures that were available to them.
The French pressed for a commitment on common measures which would include intervention. I pointed out that seven member States had opposed intervention and that we remained totally opposed to any intervention within a sheepmeat régime. At the end of the discussion, the Italian President expressed his regret that the French Government were unwilling to agree to comply with the law and stated that it was now the Commissioner's duty to take every action available to safeguard the treaty. The Commissioner informed me of the further legal action being taken against the French, and I presume that, with the instruction of the Presidency and the general views of the Council, the Commission will now seek an interim injunction from the European Court against the French illegal actions.
In a discussion of additional support measures for wine outside the agreed wine package, I pointed out the great expense of these measures and the lack of need for them. Therefore, no progress was made towards any decision on this question.
There was a discussion on certain proposals which are part of the structural package. I maintained the United Kingdom's reserve on the whole of this package and pointed out the difficulties that were likely to be involved in funding such a package.
Mr. Mason: The House is obliged to the right hon. Gentleman for that full statement. With regard to milk and sugar, I am pleased to note that fresh consideration is being given to the original Commission proposals. I hope that the right hon. Gentleman will continue to take a firm stand on both these issues, and particularly on the unfairness of the sugar quotas against Britain.

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Regarding sheepmeat, will the right hon. Gentleman agree that the French tactics must not be allowed to succeed? Their aim is to delay recognition of the European Court's decision until they can get a favourable sheepmeat regime for themselves in barters and deals on the United Kingdom budgetary problem, on fisheries policy and on the sugar quotas.
Am I right in thinking that, even if the Commission seeks an interim injunction from the Court in order to make France comply, it will still take some weeks, and by then the Minister will be into the agricultural price review with the intransigent French trying to blackmail him and the Council on sugar, milk and so forth? Will the right hon. Gentleman take it, therefore, that we hope that he makes sure that the French do not succeed in their goal?
What is the Council's present view on shipments of grain and subsidised butter going to the Soviet Union, and what is Her Majesty's Government's policy on this issue, since it must stick in the gullet of the British taxpayer that he is subsidising butter mountains in the Common Market and the beneficiary is the aggressor in Afghanistan?
Mr. Walker: I am grateful to the right hon. Gentleman, and I welcome his support on the milk and sugar questions. The points which he made are totally valid. In almost the very words which he used, I expressed to the Council of Ministers that, in my judgment, the French Government were pursuing a tactic of trying to create a major crisis in the Community in the hope that, in order to avoid such a crisis, major concessions would be made to the French viewpoint on sheep-meat. If the Council followed that course, it would, I beleive, be disastrous for the future of the Community.
I think that the important feature of this Council meeting, perhaps more than any other, is that it was clearly seen that this was not a dispute between the British Government and the French Government but was a dispute between the whole of the Community and the French Government. It is, in fact, the whole Community which is being threatened by these tactics, and if they were allowed to succeed and bring benefit to France, that would be against the interests of the Community as a whole.
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The right hon. Gentleman asked about the time scale. The application for interim measures can only be taken once the two cases which the Commission is bringing against France are in the Court. One action is already in the Court. The second, which is on the levy, will be in the Court within seven days. If an application for interim measures is then immediately brought, the total time scale will be three to four weeks before the Court could actually decide and order the interim measures.
There was no discussion on butter, although there was a discussion on grain, on which the Council agreed to comply totally with the insistence of the Council of Foreign Ministers at their meeting that there be no replacement by the Community as a whole of the American cereals going to the Soviet Union.
With regard to butter, it has been the consistent position of this Government and still so remains that it is appalling for taxpayers throughout Western Europe to provide massive subsidies for butter when the Community has been selling butter to the Soviet Union at 25p a pound which was sold within the Soviet Union at 110p a pound. We as a Government are totally opposed to the continuation of such trade.
Mr. Geraint Howells: Will the Minister agree that it is very difficult for a British Minister of Agriculture to persuade his counterparts to agree to anything in Brussels these days? In view of the seriousness of the situation, will the right hon. Gentleman agree that the Commission should reform the common agricultural policy if we are to save a great deal of money?
With regard to the export of lamb, does the Minister agree that the ban will not be lifted this year? Because of the serious plight of the sheep producers, will he consider increasing the deficiency or guarantee payment at the price review this year?
I am sure that the dairy and sugar producers in Britain are pleased that he is taking a firm stand on their behalf on Europe. Will the Minister say what are the latest developments on aid to marginal farmers in Britain?
Mr. Walker: It must be recognised that there is an existing CAP that has a

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budget of £8 billion. That is of considerable social and economic consequence to many of the member States. A radical and dramatic reform of that policy is not possible without causing considerable social and economic disruption within Europe. It is not for the Commission to reform the CAP; it is for the member countries collectively to do so. A major reform is necessary, but, for obvious reasons, it is unlikely to take place within a matter of weeks or months.
On the question of sheepmeat, this year I believe that the French will comply with the law and that there will be free entry to the market. I do not believe that after a Court decision, five months delay and an interim injunction, the French Government, in the face of opposition from all member States in the Community and the Commission, will pursue their action.
I enjoyed perhaps less than anybody the frustrations of the past few months. I am sure that in the interests of Europe it has been right to work through the Commission, to go through the right procedures, and to rally the whole of the Community against the French action. I hope that within the next month or two we shall succeed in opening the market.
The hon. Member for Cardigan (Mr. Howells) knows of, and has personally welcomed, the substantial increases made in hill farm subsidies. By that act alone, we have shown that it is our intention to ensure that sheep producers in Britain do not suffer.
Mr. Farr: I congratulate my right hon. Friend on being so firm about the co-responsibility levy for milk, the unfair suggestion about sugar and the other negotiations on French lamb, in all of which the House will support him in taking a strong and robust line.
With regard to the export of grain from Britain or Europe to Russia, I urge him to consider the large contracts that are already signed and under way with Poland and other Iron Curtain countries, and to ensure that Russia does not import excessive amounts through the back door.
Mr. Walker: I am grateful to my hon. Friend for his remarks on milk, sugar and sheepmeat. It is the policy of all Community countries that any exports
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of grain to countries such as Poland should be in line with the traditional volume of exports that have taken place to those countries. The Government believe that that is a right decision. Continuing sensible trade arrangements with these countries—but not on the basis of increasing exports to allow them to assist the Soviet Union—is the correct policy.
Mr. Wm. Ross: Surely it is clear to the Minister that the French intend to protect the income of their lamb producers at all costs. They will not submit to any measures that do not provide that income in the future.
Will the right hon. Gentleman expand on paragraph 8 of his statement, which is interesting but does not tell us very much?
Mr. Walker: I take the opportunity of the hon. Member's remarks to point out categorically to the House that the decision of the Court and the position of the treaty do not demand that sheep producers in France should suffer a drop of income. They have a perfectly legitimate, legal right under the treaty to provide aids to their sheep producers, as long as there is not a sheepmeat regime, that will maintain their incomes. The claim that the French Government are taking such action to defend their producers because there is no other way is a total myth.
The talks that took place yesterday between the Commission and the French Government were for the purpose of telling the French Government of the methods that they could employ, at their expense, to defend their sheep producers. I do not believe that the French will continue to persist in violating the treaty and the European Court's decision. It is not in the interests of their sheep producers to do so. I believe that they are taking this action to provide a bargaining position within Europe, and I intend to see that they do not succeed.
Paragraph 8 of my statement refers to structure packages. It is a series of regional aids to various parts of the Community that affects a whole range of countries, including parts of Britain. The totality of that package is expensive, and, in our judgment, is not cost effective in its present form.
Mrs. Kellett-Bowman:Will the Minister accept, on behalf of my farmers, my thanks for his extremely firm stand on the co-responsibility levy? Can he go further and say what will happen in four weeks after the interim injunction is passed? If the French do not comply, what are the means by which the interim injunction can be enforced?
Mr. Walker: It is the first time in the history of the Community that a member State has decided to continue to defy a decision of the European Court. There is always some acceptance that a Court decision might not be complied with within a few days, or even a few weeks, of the decision, as it may cause difficulties and rearrangements may have to be made. A community such as ours, would be tolerant in such circumstances.
When it is a question of five months' delay after a decision, with the Commission returning to the Court for further action, and the Court then ordering an interim injunction on the principles on which it has judged five months previously, I believe that for a member State to continue to act against the law and against the treaty would be intolerable to other member States. It would be for those member States, perhaps at a higher level than that of the Agriculture Ministers, to discuss what action needs to be taken to ensure that all member States comply with the treaty.
Mr. Maclennan: Why has the Minister apparently abandoned his claim for damages against the French Government in the European Court for the losses already suffered by the sheepmeat industry? Is he aware of the growing concern, especially among hill sheep farmers, that there is a weakening in the present market for fatstock that will be reflected in the autumn store prices? Although the Government are right to say that the case is between the eight member States of the Community and France, the principal sufferers are the farmers and hill sheep farmers of Britain. What will he do about that? Will he listen to the point made by the hon. Member for Cardigan (Mi. Howells) about increasing the guarantees?
Mr. Walker: As the hon. Gentleman knows full well, because he has tabled questions on the subject, the Conserva-
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tive Government increased the payment to the hill sheep farmers from the rather miserable 50p offered by our predecessors to a sum that is a considerable multiple of that figure. The result was to restore confidence that would otherwise have been lost.
I have dropped no claim for compensation. I have worked quickly through the Commission. It was the Commission that asked me for the figures on damage that had been done to both the British Government and the producers as a result of the illegal action by France. I have supplied the Commission, at its request, with that information and with the figures. In my judgment, it is the duty of the Commission to ensure that the treaty and the law are enforced.
Mr. Stanbrook: Is the Minister aware that a great many British people do not understand why we are being so beastly to the French, bearing in mind that they are pursuing policies similar to our policies in the EEC, namely, those directed at the national interest? Would not a little more intelligence on all sides be helpful in securing an amicable settlement with our most-needed ally in Europe?
Mr. Walker: No member State has pursued its national interest to the degree of, first, totally violating the basic principle of the treaty and, secondly, totally ignoring a major decision of the European Court. When a number of actions were taken against the British Government in the European Court in the lifetime of the previous Labour Government, and whenever those actions were against us, we always complied with the law. I should have thought that my hon. Friend, in view of his considerable connection with the law, would at least suggest that member States should set a good example in respecting the law.
Mr. Torney: In view of what the right hon. Gentleman has said about the rights of the French farmer with regard to the protection of sheepmeat, does he agree that the British sugar industry, and particularly workers in the British sugar beet industry, should have the same right of protection from unfair quotas imposed by the Commission as there is no surplus of sugar in this country? Will he promise to act, if necessary unilaterally, to protect that industry, particularly the workers who would otherwise be unemployed if

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the French get away with the quotas that they want to impose on it?
Mr. Walker: The hon. Gentleman mentioned workers in the sugar industry. I am receiving two lots of letters from those workers, one asking that I reduce the quotas in the sugar beet industry for the benefit of the cane industry and the other asking me to increase the quota to the sugar beet industry and lower the quota to the cane industry. Therefore, there is a slight difference of opinion among workers in that industry as to what should happen in regard to quotas.
I think that the quotas suggested by the Commission were unfair. We believe that it is essential to reduce the cost of the CAP by reducing the total sugar beet quota throughout Europe. We believe that all countries, including our own, must make a contribution, but the contribution that was suggested for the United Kingdom under the original proposals was totally unfair and unacceptable to the British Government.
Mr. Donald Stewart: Is the right hon. Gentleman aware that, despite his efforts and those of his predecessors, many of us are becoming rather tired of Ministers of Agriculture, Fisheries and Food deploring the CAP, the lack of an agreement on fisheries policy, the intransigence of the French and so on? There seems to be no prospect that any of those things will be changed for the benefit of the United Kingdom. Will he now start to take steps that are inevitable and, for the survival of the United Kingdom, start negotiations to come out of the Common Market?
Mr. Walker: In the world of the 1980s, with the considerable trading pressures of the new emerging manufacturing countries, of the United States and Japan and the increasing intervention in economic affairs by the Soviet Union, I believe that it would be totally disastrous for Europe to become divided. The need is for it to become much closer.
Several Hon. Members rose—
Mr. Speaker:Order. I propose to call the five hon. Members who have been rising to speak, but I urge them to be brief.
Mr. Bruce-Gardyne: Will my right hon. Friend confirm reports that have appeared in the press to the effect that he has told his colleageus that the Government are ineradicably opposed to any increase this year in the price of commodities that are already in surplus?
Mr. Walker: It has remained the Government's policy that in regard to those commodities which are clearly in surplus, and for which there is no strategic purpose in the surplus continuing, it is absurd to increase their price. That is the attitude that we have consistently taken.
Mr. John Home Robertson: Will the right hon. Gentleman vigorously pursue his legal action in order to obtain compensation from the French for the damage that has been caused to our sheep industry by their illegal import ban? If he is successful in that legal action, how does he propose to distribute among the producers who are affected the funds that he obtains?
Mr. Walker: I must correct the hon. Gentleman. The legal action is not a legal action of the United Kingdom Government. It is a legal action of the Commission, which has sought from me information with regard to damages. Obviously the decisions of the European Court with regard to compensation and damages are unknown and are, indeed, difficult to predict as there is no precedent for a Government failing to comply with the decision of the Court. If as a result of these processes there comes a time when compensation is payable, I shall he happy to dwell upon the subject of how I distribute the compensation that I receive.
Mr. Michael Brown: As one who represents a constituency with both a large sugar beet acreage and a sugar beet factory, may I ask my right hon. Friend to state what sort of response he has received from the Commission in reply to his representations?
Mr. Walker: We have received a very important step forward and response from the Commission. As my hon. Friend will know, the quota for Britain was previously based on the average for the previous four years, two of which were very bad years for Britain due to the drought and during all four of which

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we suffered from massive MCAs against us as a result of the policy of my predecessors. Therefore, we considered that this was an unfair basis. I am glad to say that at this meeting the Commission confirmed that it would take into account the 1979 production figures, which are by far the best sugar beet production figures in British history.
Mr. Dalyell: If ethyl alcohol was not on the agenda, why not?
Mr. Walker: Because it was not put on the agenda.
Mr. Dalyell: This affects many jobs in the Grangemouth and Falkirk area—
Mr. Speaker: Order. Out of fairness, I shall call the hon. Gentleman, but he ought to wait until he is called a second time.
Mr. Dalyell: The Minister knows full well, and so does the Secretary of State for Scotland, that this is a matter of great industrial importance to this country. It is not good enough to come here time after time and casually to say that it is not on the agenda. Surely it is up to the right hon. Gentleman to put it on the agenda.
Mr. Walker: I am sorry, but the agenda is not decided by each of the nine member States. In this connection, we discussed a proposal for the distillation of wine into alcohol and, therefore, there was a discussion relating to this topic. We made clear what the hon. Gentleman and the Commission know to be the position of the United Kingdom, which is that we are anxious to preserve a whole area of industry in this country which would be in jeopardy if the wrong decisions were made.
Mr. Myles: I, too, congratulate my right hon. Gentleman on his actions up to now, but may not the time now be right, when the French are softened up a little, for he and the French Minister of Agriculture to get together behind closed doors to settle the lamb issue?
Mr. Walker: I have had talks with the French Minister on several occasions and have discussed that topic with him outside the Council of Ministers' meeting. My hon. Friend's suggestion that that is the way to solve this problem fails
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to understand that this is not a dispute between the British and French Governments. It is a dispute between the Community as a whole and the French Government. What the French Government are doing is a violation not merely against this country but against the Treaty of Rome and the decision of the European Court. It is the entire European Community which should be concerned with that fact.
That is why I believe it is right that the negotiations, talks and agreements should take place between the French Government and the Commission. It is not a matter for bilateral talks between the British and the French. From the very beginning, we have been willing to allow the French Government to take legal actions to protect their sheep producers, and there is no reason why complying with the law should in any way damage their producers. That remains the situation.
Mr. Strang: Following the right hon. Gentleman's answers on the question of sheepmeat, is it not quite intolerable that he should be negotiating with the French and with other member Governments on a new EEC sheepmeat regime under the duress of the continued French defiance of the European Court? Has not the time come when the right hon. Gentleman should make it clear to the Commission and to his partners that he will not participate in any more negotiations on a new regime until the French comply with the European Court's decision?
Mr. Walker: No, because the only truth in that suggestion would be if our negotiating position was in any way affected by the French Government's attempts at duress. So long as our negotiating position is totally unaffected by that duress, the whole Community recognises that we are willing to negotiate a perfectly sensible regime, but not one dictated to us by the methods of the French Government.

BILL PRESENTED
POLICE (SPECIAL INQUIRY)
Mr. Frank Hooley, supported by Mr. Alexander Lyon, Mr. Robert Kilroy-Silk, and Mr. Michael Meacher, presented a Bill to provide for a special inquiry into the circumstances of the death of any

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person while in police custody, or the death of any person during or following his or her arrest by the police, or in the course of action taken by the police; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 8 February and to be printed. [Bill 127.]

NATIONAL HEALTH SERVICE
Mr. Speaker: I have selected the amendment in the name of the right hon. Gentleman the Leader of the Opposition.
4.21 pm
The Secretary of State for Social Services (Mr. Patrick Jenkin): I beg to move,
That this House takes note of the Report of the Royal Commission on the National Health Service [Cmnd. 7615].
The purpose of today's debate is to give right hon. and hon. Members in all parts of the House the chance to express their views on the Merrison report. Since the establishment of the National Health Service after the last war, there have been a number of reports on various aspects of the Service, but this was the first set up to examine the Service in its entirety. Some had expected, perhaps, something more dramatic—a report which would signal a major turning point in post-war policies for health. Others anticipated a much more pessimistic document reflecting so much of the evidence which Sir Alec Merrison described at an early stage in the commission's work as "a high-pitched scream".
I know that I speak for the whole House when I express thanks to Sir Alec and his colleagues for the long and arduous hours which they devoted to their task. Whatever its origins—I shall come to that in a moment—the report stands as a valuable compendium of information and proposals about the nation's health care services. I believe that many, perhaps most, people will accept the commission's judgment that the National Health Service is neither
"the envy of the world"
nor
"on the point of collapse".
Many would agree, too, with the conclusion that
"we need not feel ashamed of our Health Service and that there are many aspects of it of which we can be justly proud."
The commission recognised that it dealt
"only cursorily, and sometimes perhaps even superficially, with important topics".
That does not detract from the value of much that the report contains.
The commission started life in very curious circumstances. It was conceived in crisis. No doubt the appropriate parts of Mrs. Barbara Castle's diary will shed

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as much light on the events leading up to the establishment of the commission on 20 October 1975 as they have on her defeat on "In Place of Strife"
Right hon. and hon. Members who were in the House at the time will remember that, as Secretary of State for Social Services, Mrs. Castle had succeeded in antagonising virtually every major group in the National Health Service, with the possible exception of isolated groups of trade union militants who were blacking private patients. There is little doubt that the main purpose of the establishment of the commission was to get Mrs. Castle off the hook. If she had not chosen to "stir it up" after the 1974 election, there would have been no Royal Commission, no 500-page report, none of the 117 recommendations, and little of the vast volume of evidence which the commission studied. So perhaps, after all, Mrs. Castle was not wholly in vain.
I begin my remarks on the report with three general points on which I hope there can be wide accord in the House.
First, although public concern about our health services tends to focus largely, sometimes even exclusively, on our acute hospital services, the health of the nation depends upon a far broader spectrum of services. It is sometimes said that the public health measures of the last century, coupled with the notable improvements in the standard of living of the country that have been made in this century, have done more to improve the health of our people than all the ministrations of the entire medical and nursing professions. Clean water, clean air, better housing, better standards of nutrition, the control of infectious diseases—all these have transformed the lives of our people as they have transformed the lives of countless millions all over the world, many of whom have no access at all to a national health service as we understand the term.
The point I am seeking to make is that the range of services which we usually think of as constituting the National Health Service form but a part of a much wider range of policies and attitudes which influence people's health. In this wider context, as much responsibility attaches to individuals as rests upon public authorities. There is a risk that if we attach disproportionate attention to the National Health Service in its narrow
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sense we may fall into the error of underrating the extent to which individuals can and should accept responsibility for their own health.
That leads on to my second point—that the demand for health services exceeds the supply. There is no limit to the amount that could be spent on health services. The Royal Commission quoted one witness as saying that we could easily spend the whole of the gross national product on health care. The 1944 White Paper, and many of the debates and the legislation that followed, failed to recognise the truth of that point. The 1944 White Paper stated:
"The proposed service must be comprehensive in two senses—first that it is available to all people, and, second, that it covers all necessary forms of health care".
The Royal Commission commented:
"The impossibility of meeting all demands for health services was not anticipated".
It can say that again. Perhaps one of the heaviest burdens which our doctors and nurses and others who work in the National Health Service have to carry is the sheer pressure created by rising expectations.
Our people have been encouraged by successive generations of politicians to believe that they are always entitled, as of right, to have their every health expectation promptly and expertly satisfied. I believe that that is a sheer impossibility.
Dr. M. S. Miller (East Kilbride): Will the Minister indicate whether that statement refers only to the National Health Service or to health services in general?
Mr. Jenkin: Obviously it refers to health services in general. In a privately financed health service—financed by insurance or by charges—a market can operate and demand can influence supply. My proposition is true generally. Certainly it is true in countries that finance their health services in different ways. Every Minister of Health has had to recognise that.
I note that my predecessor, the right hon. Member for Norwich, North (Mr. Ennals), is in the Chamber. He told the House in April 1978:
"Of course there are limits to the amount of money that can be made available and limits to what we can do within any given budget. We should all like more money for the NHS. But there is only so much that the taxpayer is prepared to afford."—[Official Report, 20 April 1978; Vol. 948, c. 700.]

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The right hon. Gentleman was right and, I am glad to see, still stands by what he said.
However, we must be prepared, as politicians, to accept the logic of that proposition. We must stop encouraging the public in the belief that they can have whatever they want, whenever they want it. We must begin to protect our doctors, nurses, hospitals and clinics from the ever-mounting pressure of demand which seems sometimes to threaten and engulf the Service. People must learn that if they consult their doctor for every minor ailment, or seek help for problems that are not really medical problems, if they demand "a pill for every ill", they cannot legitimately complain if the resources do not exist when serious trouble arises.
Mr. Laurie Pavitt(Brent, South): Will the right hon. Gentleman consider the corollary of his statement? One of the greatest problems is early diagnosis, and to persuade people who are reluctant to go to their doctor anyway not to go would be just as counter-productive to the NHS as the nostrum he is putting before the House.
Mr. Jenkin: I realise that the hon. Gentleman knows a great deal about these matters. He is perfectly right. There is a real dilemma which people have to face. The hon. Gentleman must have complaints, as do many of my right hon. and hon. Friends, from general practitioners that their surgeries are filled with people who have no need to be there. Labour Members are always complaining about the huge drugs bill which is incurred by the National Health Service. Hon. Members are now receiving continuing complaints of people being referred to out-patient departments for treatment which in past years was carried out by general practitioners.
Dr. Shirley Summerskill(Halifax): The right hon. Gentleman has mentioned the crowded surgeries and the huge drugs bill that results, but the Royal Commission report distinctly points out that the charges for drugs imposed on patients at the time of need do not make for "better doctoring" or discourage
"frivolous use of the Health Service by the public".
Will the right hon. Gentleman assure the House that he will make representa-
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tions to the Chancellor of the Exchequer on the basis of the report, and that he will not raise prescription charges as they do not discourage patients from going to surgeries?
Mr. Jenkin: I shall have something to say about charges in a few moments. Perhaps the hon. Lady will wait until then for my answer.
Mrs. Elaine Kellett-Bowman(Lancaster): With regard to the huge drugs bill, my right hon. Friend will have seen the report about various local authorities making vast savings on drugs. One of them has saved £100,000. If that were multiplied all over the country, would it not be true to say that we could get an equally effective, if not more effective, Health Service without paying at all?
Mr. Jenkin: Although we may have had some criticism of the campaign that my predecessor launched, with the funny little Disney-like figure, which irritated a lot of people, the objective is clear. There is a case for trying to persuade patients that they should not ask for a pill for every ill. Doctors should also try to be more sparing in their prescription of drugs. It is a clinical matter and it is dangerous for politicians to tread on clinical paths, but my hon. Friend is right in what she says. There are instances in which medical practices and hospitals have deliberately set out to try to reduce the drugs bill. They have found that by giving attention to the question it has been possible to succeed. That is the kind of thing for which we must look.
Mr. David Ennals (Norwich, North): Will the right hon. Gentleman be dealing with the recommendation of the Royal Commission that there should be a limited list, which I believe would save a great deal of money that is being overspent on drugs?
Mr. Jenkin: There is a wide range of views on this matter. When I spoke to the British pharmaceutical conference in Exeter in September, I indicated that I was not much attracted by that proposition, but it will continue to be studied.
The point that I was making is that the National Health Service simply cannot attend to all ills. It used to be the envy of the world. The commission

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believes that there are still aspects of it of which we can be proud. But even this muted praise will fade into recrimination if all of us who use the Health Service do not learn to do so with a greater sense of responsibility.
Doctors often tell us that their best patients are those in late middle age or older; they do not seek help unless it is really necessary. Many younger people, who have grown up knowing only the National Health Service, seem to have fewer inhibitions and are very much more demanding. I believe that there is a need for a widespread programme of public education to encourage a more responsible, a more restrained and a more informed use of our health services.
I have been told that the financial constraints of the last few years have in some ways been good for the Service, in that they have encouraged the elimination of much waste. I am sure that that is true. But have these constraints yet begun to influence patient attitudes? It is difficult to be clear about this. It is very subjective but I get the impression, in talking to doctors around the country, that there is as yet little sign of it. It is a fact that should give the House cause to think.
Of course, we can encourage individuals to do more to insure themselves and to seek treatment outside the Health Service. Of course, we can encourage people and firms to give voluntarily to finance Health Service projects. That must be common sense in the circumstances in which we find ourselves. But it will not be enough. Every developed country has had to take steps to restrict its expenditure on health services. We are no exception. I agree with the commission when it said:
"To believe that one can satisfy the demand for health care is illusory and that is something that all of us, patients and providers alike, must accept in our thinking about the NHS".
After 30 years of rising expectations, it will not be an easy lesson to learn.
This brings me to my third point, which concerns resources. The commission stated:
"It would be unrealistic to suppose that the fortunes of the National Health Service can be insulated from those of the nation."
The Government are committed to maintaining spending on the National Health Service at the level set out last January in
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the White Paper of the Labour Government. We have every intention of adhering to that pledge.
The gross expenditure on the National Health Service for Great Britain for 1978–79 was £7,900,000,000. The estimated out-turn for 1979–80 is £7,930,000,000. The planned spending for 1980–81, set out in the White Paper published before Christmas is £8,170,000,000. If we look at the net spending, we find that the growth is rather more, because more of the expenditure is covered by charges. The 1978–79 outturn was £7,720,000,000, in 1979–80 it was £7,730,000,000, and the plan for 1980–81 is for £7,900,000,000.
The figures are clear. I have never tried to conceal that in the current year, 1979–80, the Service is facing difficulties. The squeeze on spending this year has to be contrasted with the obligations that we inherited—and have fully honoured—to finance the pay increases that we inherited, particularly those arising from the Clegg comparability exercises. By the end of the year, the Government will have had to find between £350 million and £400 million over and above the cash limits laid down by our predecessor. That is three times the amount that we have had to ask the Health Service to find by making savings.
No one can escape the facts. If we spend more on pay, there is less left for services, and 1 per cent. on the NHS wage bill could provide for 80,000 in-patients, or could build 1,000 hospital beds or buy 6,000 kidney machines. The trade-off between pay and services is evident.
For 1980–81, the Government will make up for this year's inflation and, over and above that, provide for 0·5 per cent. growth, which is precisely in line with the previous Government's projection. We can all recognise—this is common ground—that this rate of growth is not as much as the Service needs to cope with an ageing population, to keep up with medical advances and to maintain standards. We recognise that.
It cannot be said too often that what we spend on health depends on what we earn as a nation. Until the nation is earning more, we shall have to make do with this very low level of growth.
I have, nevertheless, decided to continue next year the redistribution of resources across the country that has been

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going on since the Resource Allocation Working Party reported in 1976. No region should receive an increase in real terms in its allocation of less than 0·3 per cent. This will enable me to give the worst-off regions, as defined by the RAWP, an increase twice as big, of 0·6 per cent., when more funds become available to the Service in the future so that the redistribution process can go faster. I hope to announce the volume allocations next month.
It is against this financial background that we have to look at the Opposition's amendment and at the commission's suggestion, to which my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) referred, that all charges should be eliminated. It put the cost at about £200 million at the price levels of a year or so ago. I have to tell the House that, if the charges were to be abolished today, this could be achieved only by a cut in spending on the National Health Service by an equivalent figure, and today's figure would be nearer £250 million. [Interruption.] Where do the Opposition think that the money is to come from? Would they have been any more successful in getting it out of a Labour Chancellor of the Exchequer? Of course not. It would be the equivalent of building five new hospitals each year, each costing £50 million. That is what we would have to forgo if we were to do without charges.
The commission, as an advisory body, was not faced with the practical consequences of abandoning charges, but the Opposition have been faced with those consequences. The pattern of their behaviour—I say this in all frankness—has been entirely consistent. In Opposition Labour Members invariably demand the abolition of charges. In Government they invariably put them up. That is the consistency of sheer humbug. I see hon. Members shaking their heads, but they should look at what happened with dental and optical charges. The Labour Government tried to put up road accident charges and produced a silly scheme that they had to abandon. Who introduced the present pattern of prescription charges? It was Kenneth Robinson, a Labour Minister of Health.
The Conservative Party does not say one thing in opposition and do another when in Government.
Mr. Ennals: Will the Secretary of State give way?
Mr. Jenkin: No. The right hon. Member is obviously poised to make a speech. He can make his point then.
We have never pretended that we could do without charges. Charges are an essential part of paying for the National Health Service. Unlike the Labour Party, we believe that that is one way of underlining the responsibility of the individual for his own health care—that he should pay part of the cost where he can afford it.
Against that background—of knowing that one can never meet all expectations, and that there is a limit to what the taxpayer will pay—is it so unreasonable for the Government to examine alternative methods of financing health care? I know of no other advanced industrial country that finances so high a proportion of its health care needs from taxation.
The Royal Commission pointed out some of the disadvantages—and I acknowledge them—that a shift to greater reliance on insurance might entail. These disadvantages are neither fanciful nor insubstantial. We have no intention, for instance, of trying to imitate the United States. However, across the Channel one finds countries that have comprehensive health care. People there are not denied the benefit of medical attention because they cannot pay for it. Such countries are able to pay a higher proportion of their gross national product on health care services but a substantial proportion of the cost is met by some form of health insurance. There are advantages in such a system.
My hon. Friend the Minister for Health and I, when touring those countries, noted some of those advantages. For instance, we noted the advantage gained in a hospital which can generate its own finance. It is thus autonomous and runs its own show in a way that is almost impossible in this country. I believe that any sensible Government, faced with financial constraints, should look at the experience of other nations to see what can be learnt.
I therefore make no apology for the fact that this Government have set in train an investigation of the possibilities of increasing the insurance element as a means of financing the National Health

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Service, though I have to tell the House that it is likely to be some little while before I can report the outcome of this study. A number of bodies outside the Government are similarly engaged on work in this area, and we shall wish to take account of this in our own thinking.
I turn now to some of the specific recommendations of the Royal Commission on which the House will want to know the Government's views.
First, I shall deal with structure and management. The House will remember that on Second Reading of the Health Services Bill I specifically reserved my remarks on that subject for today's debate. We warmly endorse the Royal Commission's view that
"…large organisations are most efficient when problems are solved and decisions taken at the lowest effective point."
I believe that more local responsibility will mean greater responsiveness to patients' needs and better staff morale. That is the thinking that illuminates the proposal which we have put forward for consultation in our document "Patients First".
The Royal Commission, in proposing a strengthening of management at the unit level and a simplification of the structure above that level, reflects a wide consensus. Attention both inside and outside the House has tended to concentrate on the elimination of the area tier. It has to be recognised that in many places there are six tiers of management, not three. There are the DHSS, region, area, district, sector and unit levels. In the Government's view, it is the last named, the unit level—that is, the hospital and the primary care services—which is much the most important.
The main thrust of the proposals in "Patients First" is aimed at pushing down responsibility to the hospital and primary care service levels. To achieve that, we need to strengthen the administration at that level so that managers can take on the greater responsibility that they will bear. We want senior administrators, senior nurses, back in the hospitals and running the community services. If this can become effective, we see no need for an intermediate sector level between the hospital and the health authority. By "the hospital" I mean, In some cases, a group of smaller hospitals.
Mr. William Hamilton: It will increase bureaucracy.
Mr. Jenkin: It will reduce bureaucracy. We have had the grace to recognise mistakes and are doing something to put those mistakes right.
It is common ground that multi-district areas have not proved satisfactory in practice. There has been a duplication of staff and functions at area and district level and health authorities have been somewhat remote both from Health Service staff working with patients and from local communities. We therefore propose a rather larger number of smaller district health authorities normally covering populations between 200,000 and 500,000. Such authorities would make for more effective management of the services for which they are responsible and allow a much better understanding between health authority members, the staff and the public.
The Royal Commission gave consensus management what I think many people regarded as a surprisingly clean bill of health. For the management of districts, we will retain consensus management. In the Government's view, however, this team approach can never replace the personal responsibility of individual managers for managing the services for which they are answerable. What the Service needs above all else is good, effective local leadership, and leadership is essentially a matter of individual men and women in positions of responsibility.
The role of a consensus team is to take strategy decisions and deal with broad planning and matters of that sort. Their task is to gain the commitment and support of all the disciplines involved.
In "Patients First" we said that we would not change the system of family practitioner committees, which, on the whole, have worked well and given rise to few difficulties. We therefore disagree with the Royal Commission and propose instead to accept the views of the professions administered by the FPCs. We want them to be retained.
The question of the future of community health councils is more difficult. I am on record in the House, and outside, as paying tribute to the work of many CHCs on behalf of the public as consumers. Paragraph 26 of "Patients First" means exactly what it says. The

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creation of more locally based district health authorities certainly raises the question about the need to have community health councils in addition.
Next year the cost of these councils will be over £4 million. It is certainly proper to ask whether that money would be better spent directly on patient care. However, the Government's mind is genuinely open on this question, and we shall listen with great care to what is said both in the House and in response to a consultative paper.
Another recommendation of the commission, which we have rejected, is its suggestion that regional health authorities should become directly accountable to the House. I do not see how that could accord with our constitutional arrangements. It is the Secretary of State who is accountable to this House for the Health Service and for the money spent on it, and it is he who can be made to answer on the Floor of the House or in Committee for failures.
I cannot see how the chairman of a regional health authority, let alone all the members of that authority, can be held accountable. In any event, it does not seem to us that it is consistent with our desire to give more authority and greater autonomy at local level.
We see a continuing and important role for regional health authorities, principally for the allocation of resources, for ensuring firm financial control down the line, and for strategic planning. Regions will have the immediate task of making proposals for the restructuring of the Service in their regions, but "Patients First" opens up the possibility of looking at regions rather differently in the future.
What we have in mind is that it would help to underline our desire to see more local autonomy if the regional role were more a co-ordinating and less a controlling role. That is why in paragraph 40 of "Patients First" we suggest that one possibility is for the majority of the members of the regional health authority to consist not of independently appointed people but of the chairmen of the district health authorities and their constituent districts. I must stress that any such change would come, not immediately but in perhaps three or four years, after the Service has been simplified at the local level as I described a moment ago.
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We also propose to simplify the professional advisory machinery, so that the views of clinical doctors and other professionals will have more impact on health authorities, but at lower cost to the Service and with less wasted time by highly trained clinicians sitting on committees and doing tiresome paper work. I should like to make it clear that the same principle applies to community physicians. I share the view of the Royal Commission that the specialty of community medicine has a future, but the highly specialised doctors concerned must be allowed to concentrate on profesional matters and be given help to spare them merely administrative chores. If in our restructuring of the health authorities we can manage with fewer administrative doctors, they must be encouraged to move back into clinical work.
In the same way, the NHS needs the nurses who carry out essential administrative and managerial functions. However, I want to ensure that we do not have more managers than we need. Above all, I want to ensure that professional people who are mainly engaged in clinical work are not distracted from it by avoidable and repetitive administrative chores of one sort or another. In so far as they are, I believe that we must try to relieve them of the burden so that they can concentrate on their main task—the clinical care of patients.
London has especially difficult problems. The Royal Commission recommended an independent inquiry into London's problems. We came to the conclusion that this was a recipe for delay, and we do not propose to proceed in that way. As it happens, the problems are becoming better understood as a result of a number of studies by the London Health Planning Consortium, the University of London—the Flowers working party—and others. I recognise that difficult decisions lie ahead, but the Government are determined that they will be taken with the minimum delay. As a London Member, I say that London's problems have been left unresolved for too long. In the interests of Londoners and, indeed, of the rest of the country, the uncertainty must be ended—and this is what we aim to do.
I stress that the Government document is genuinely consultative. We have to strike a balance between giving time for

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proper discussion and a long period of uncertainty for staff. There is also the danger of planning blight, stressed by the Royal Commission. We propose to take decisions in the light of comments on "Patients First" received by the middle of the year. We hope that all structural and managerial changes will have taken effect by the end of 1983.
I turn to the rest of the Royal Commission's recommendations. Obviously, I cannot deal with more than a few. Some of the recommendations involve heavy spending. In round figures, it is estimated that the cost of the Royal Commission's recommendations could be another £2 billion a year. Obviously, that amount of money does not begin to be available under present circumstances. Those recommendations must await the availability of money.
Many of the recommendations either endorse existing policy or can be taken on board in the course of normal departmental business. However, some of them touch on the wider issues which I mentioned at the beginning of my speech. The first is prevention. The commission set as its
"first objective for the NHS"
that it should
"encourage and assist individuals to remain healthy".
This is as much a matter for each individual as it is for the Health Service. Certainly prevention is infinitely better than cure, and each of us must accept a primary responsibility for looking after our own health.
Health education is an essential process in creating understanding and in generating the will to safeguard one's health. When examining departmental quangos, I had no difficulty in deciding that the Health Education Council has an essential role, which is better performed outside than in Government. However, I have asked the new chairman, Professor Lloyd, to conduct a thorough review of the council's work, with a review to seeing how the council can become more effective in reaching out to the public and influencing the public's attitude on health matters.
I am in little doubt that much health education can take place only in our schools. That is the age at which the basic lessons of good health can be
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learnt. Later in life, teaching has an uncomfortable way of turning into preaching, and that tends to be both resisted and resented. I want to see the Health Service playing a fuller role in health education. In one sense, every time a patient sees his doctor it should be an occasion for health education. I want to see health education officers playing a leading role at the local level as initiators, organisers, providers and distributors of information. My right hon. and learned Friend the Secretary of State for Education and Science has recognised in his rec0ent consultation paper on the curriculum the place of health education in schools. If we ask individuals to accept more personal responsibility, as we are right to do, we must ensure that they have the necessary knowledge to make that a reality.
The Royal Commission has endorsed the call for fluoridation of water supplies. I am fully alive, as is every Minister who has held my office, to the controversial nature of this recommendation. I have to tell the House that it remains the Government's view that extensive trials throughout the world have shown that it safely and effectively reduces the prevalence of dental caries—one of the commonest diseases and one which has lifetime consequences for general and dental health. Like all my predecessors in this post, I have been impressed by the authority of bodies which support fluoridation—the Royal College of Physicians, the British Medical Association, the British Dental Association, the United States Public Health Service, the Canadian Department of National Health and Welfare and the Australian National Health and Medical Research Council. The list is long and distinguished.
In Britain only 9 per cent. of the population is receiving fluoridated water. In Canada the figure is 46 per cent., in the United States of America 47 per cent., in New Zealand 63 per cent. and in Eire 90 per cent. Children in areas receiving fluoridated water have markedly healthier teeth, and I understand why the Royal Commission recommended legislation.
However, on such a controversial issue we in this country have to proceed by consent and I must tell the House that the Government have, at the moment, no proposals for legislation. Rather, let us see whether we can achieve better results by persuasion. [HON. MEMBERS: "Why

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not?"]. The powers exist but we need to persuade people to use them.
Mr. Ennals:This issue is of extreme importance. When I was Secretary of State, it became clear not only that the evidence in favour of fluoridation was overwhelming but that the vast majority of the area health authorities wished to have it. However, I discovered that a modest amendment of the law was required to enable the health authorities to carry out their wish. I cannot understand why the Secretary of State does not proceed now, in the early months of a new Government, on a controversial subject and introduce that small item of legislation.
Mr. Jenkin: My hon. Friends want to know why, if the right hon. Member for Norwich, North is so sure, he did not introduce legislation himself. A motion has been signed by many hon. Members on both sides of the House supporting a view which is reflected in our postbags. This is not only a matter for the area health authorities; the water authorities also have a responsibility. In those circumstances, the right way to proceed, for now, is by persuasion.
Mr. Pavitt: Will the right hon. Gentleman give way?
Mr. Jenkin: No. I must move on.
The Government attach great importance to perinatal care. I am pleased to know that the new Select Committee marking my Department intends to complete the study started by its predecessor in the last Parliament. We await its proposals with great interest.
The House is already considering a Bill on seat belts. We await the decision. We are in the course of discussing with the tobacco industry new arrangements to replace the current agreement, which runs out at the end of March, covering advertising, promotions, the health warning, and reductions in the yield of harmful substances in cigarettes. It is often said that smoking is the greatest single preventable cause of disease and premature death. Yet some 20 million people in Britain continue to smoke. We are determined to make progress in this area.
The House will have seen that, in November, the Incorporated Society of British. Advertisers announced tighter guidelines on alcohol advertising—a wise
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move which rightly recognises the seriousness of the problem of alcohol misuse.
The House will recognise that all this is a familiar catechism; but familiarity in no way lessens the importance of making progress in these areas.
There are two other general points on which I should like to touch. One concerns industrial relations in the National Health Service, about which the commission had much to say in chapter 12 of its report. I fully accept the commission's view that people who work in the National Health Service have special obligations and that the Government must not take advantage of this. The commission recommended that there should be a review of the arrangements for negotiating pay and settling disputes at national level in the National Health Service. I know that whereas, in general, the Whitley Council system has worked well, there is no doubt that "it grinds exceedingly slow" and this has, at times, led to frustration and strife.
The commission made the interesting recommendation that it should be for the TUC to initiate discussions with staff interests, with the objective of recommending agreed procedures to me. I am glad to be able to tell the House that the TUC has accepted this proposal and, at a meeting in my office last week, Len Murray told me that discussions will begin shortly. Of course, the issues concern staff associations and professional bodies which are not affiliated to the TUC, as well as many unions that are. Mr. Murray assured me that there would be no difficulty in bringing the non-affiliated bodies into these discussions, and this I very much welcome. He also gave an undertaking that the Department and management in the Health Service would be kept in close touch with their work as it proceeded. I wish this exercise well, which, as the commission points out, requires patience, good will and, above all, the determination to succeed.
The other matter to which I should make a brief reference concerns hospital policy. The Royal Commission made a number of recommendations on hospital services, and most of these are for hospital managements to pursue. Of course, the commission wanted to see
"a much more rapid replacement of hospital buildings",
but this must depend on extra money becoming available.

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The commission had a good deal to say about the human aspects of the sheer size of hospitals, and quoted criticisms about district hospitals that were too large, too impersonal and too remote. Concentrating services in a few large hospitals also deprives local communities of the benefit of much-loved smaller, local hospitals. Such hospitals are often the pride and joy of local communities and their closure strikes at the heart of community life. Smaller hospitals are much less prone to the difficulties of industrial relations and morale, and we have made no secret of our desire to try to save as many of our small hospitals as we can.
In the light of this, we have reviewed our hospital policy and have decided that the issue is one of such importance that we intend to put out the discussion document explaining the problems and setting out the options. We hope that it will be widely considered both inside and outside the Health Service. I attach great importance to this review, which in time will, I hope, lead to a reassertion of the human values in society without which any health service can become remote and impersonal.
The review of hospital policy is only one aspect of our overriding concern that the Health Service exists primarily for patients. Indeed, that was one of the central themes of the Royal Commission, and it is a proposition which illuminates the whole of the Government's thinking about the future of the Service.
In the foreword to "Patients First", my right hon. Friend the Secretary of State for Wales and I said:
"Our approach stems from a profound belief that the needs of patients must be paramount."
We made another equally important point:
"It is doctors, dentists and nurses, and their colleagues in the other health professions that provide the care and cure of patients, and promote the health of the people. It is the purpose of management to support them in giving that service".
These two principles seem to me to be paramount in any consideration of our National Health Service, and I know that they are principles which attract support in all parts of the House.
The commission's report is an important document which deserves a full
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and rational discussion by the House. It is a pity that the Opposition have chosen the occasion for yet another party political re-run of their ancient and irrelevant prejudices. If they insist on voting on it at the end of the debate, I must ask my right hon. and hon. Friends to join me in the Lobby against the Opposition's ritual amendment.
5.5 pm
Mr. Stanley Orme: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
"welcomes the Report of the Morrison Royal Commission on the National Health Service and particularly its unanimous endorsement of the principle that the National Health Service should be free at the time of need and nationally financed."
I ask my right hon. and hon. Friends to support the amendment in the Division Lobby. The Secretary of State criticised it. Yet what the Opposition are doing is to support a unanimous recommendation by the Royal Commission.
This is an important debate about one of our major institutions. I endorse the Secretary of State's thanks to Sir Alec Merrison and his colleagues for, and his congratulations on, producing a lucid and comprehensive review of the NHS.
Before dealing with the report, the House should be aware that the debate takes place against a background of major policy changes from this Government, and, if many of these proposals are carried out, that will have the effect of making either redundant or more pertinent many of the key suggestions proposed by the Royal Commission.
I turn to the report itself. The most striking thing about it is that, after three years' intensive work, the commission is unanimous. That, of itself should carry a great deal of weight both in the House and throughout the country.
In paragraph 2.6 the report sets out what the Royal Commission believes the objectives of the NHS should be. They are to:
"encourage and assist individuals to reman healthy; provide equality of entitlement to health services; provide a broad range of services of a high standard; provide equality of access to these services; provide a service free at the time of use; satisfy the reasonable expectations of its users; remain a national service responsive to local needs."

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As the fundamental basis for achieving these objectives, the commission unanimously recommended that the Service should be free to all at the time of use, paid for by national financing, and that all charges should be abolished so that this principle could be fully implemented.
To meet this requirement of the report, charges would have to be phased out by a future Labour Government, and that is our policy goal. I make that very clear. This recommendation is central to the Royal Commission report, and the Labour Party believes that it is crucial to the future of the National Health Service.
Mr. Patrick Jenkin: The right hon. Member for Salford, West (Mr. Orme) must face the logic of the proposition. His party has been totally dishonest on the issue of charges. Does the right hon. Gentleman remember that in the Labour Party manifesto in February 1974 his party promised that a Labour Government would abolish prescription charges—
Mr. Roland Moyle (Lewisham, East): No, phase them out.
Mr. Jenkin: It said "abolish". I have the quotation here. The Labour Government did nothing about that.
In its manifesto of October 1974, the Labour Party boasted that it had frozen dental charges. But a Labour Government raised dental charges two or even three times over the next few years. The Labour Party cannot go on saying different things when in Opposition.
Mr. Orme: The prescription charge of 20p was not increased during the five years of Labour Government. I admit that the introduction of charges by a Labour Government was regrettable. We want to get back to first principles and we will. I make that statement on behalf of the party I represent.
This debate is taking place in the first weeks of 1980, a fresh decade, one far removed from 1948 and the inception of the National Health Service. The right hon. Gentleman referred to the problems earlier in the century, the need for better food, clean water and so on. I want to look at the position as it was in 1948. It was assumed then that, with the universal
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availability of medicine and hospital treatment, better housing, food and education, the demand on the NHS in the ensuing years, both financially and physically, would diminish. That has not happened.
The following factors must be taken into account when we assess the present and the future. Technology and science have made vast steps forward in medical care. They play a major part in the pressure for hospital treatment. This is one of the big factors adding to the increasing hospital waiting lists. Demographic changes relating to the elderly, and particularly the over-75s, will bring an increasing burden, both financial and administrative. Inner city problems, with which the Royal Commission deals but to which the right hon. Gentleman did not refer in detail, are a major headache for medical practitioners.
The difficulties of financing and the increased pressure on limited resources will be with us for the foreseeable future. For a labour-intensive organisation such as the NHS now to have to pay decent wages and salaries to those employed in it means increasing costs. We do not dodge that. In addition, there is a need for capital development and the introduction of sophisticated equipment. All those matters add up to a continuing call upon our national resources. How people can say, as some do, that the NHS does not need more money beats me. That idea is not acceptable to me and my hon. Friends.
Those are some of the major problems. I shall deal with some as we proceed, but I want first to look at the Royal Commission's views on the proposed reorganisation—with which the right hon. Gentleman dealt, and which we discussed initially in the debate before Christmas—the removal of a tier of administration and the effects that that will have on the Service. The Government will be giving us details of their proposals, I presume, during the Committee stage of the Health Services Bill, after consultations have taken place. But I wish to make one or two central observations during this debate.
We, of course, support means of improving administration, as long as they lead to cost savings, less bureaucracy and simplification, and particularly if they will put right the disastrous measures introduced by the present Secretary of State for Industry during the last Conservative Government's period in office. But, while

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generally supporting the proposals for change, we must beware of treating them as a panacea for all NHS problems. They will not raise morale overnight, they will not suddenly release vast resources to be spent on new buildings or cutting waiting lists. Nor will they make patients suddenly feel part of a small organisation instead of a large bureaucracy.
We must keep matters in perspective and realise that because there are no obvious answers, as the Royal Commission confirmed, there will inevitably be difficulties with the form of reorganisation selected. Every hon. Member is aware that when one starts out on change, both in local government and in the NHS, the ideas seem perfect or near perfect. One thinks that they will resolve all difficulties, but often they create many more than they resolve.
Another question with no easy answer is that of democracy and local accountability. The Royal Commission is almost silent on this. Although the report talks about the possibility of some forms of local democracy, perhaps through local government, it avoids making any firm recommendations. In this regard there are special considerations to be taken into account, as the report states. It says that the NHS:
"is a self-help system, reacting to individual demands but not actually seeking out those most in need of its services."
In many instances it is the reverse of local government and its operation. Clinical judgment is also an issue with which there is no comparison in any other service, because the layman is not allowed to make a challenge.
For those reasons and many more that it is not possible to elucidate today, I acknowledge that there are no easy answers to the problems. But the issue of democracy and accountability is continually raised by people both in and outside the NHS, not least by the Labour and trade union movements.
The question must be asked: how many people using the NHS are aware of their representatives on district, area and regional authorities? I suspect that very few are. There is no direct link, no election. People know their councillors and their Members of Parliament, but they would be hard put to it to name members of those authorities. In an
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organisation as important as the NHS, they should know who is responsible for decisions, of whom they should ask questions and to whom they should complain. If the Government go ahead with their proposals to reduce the numbers of elected local representatives on area and district authorities, that will further diminish the indirect local accountability.
Against that background, it is ironic that the Government should threaten the very existence of the community health councils, which are possibly closest to patient need and which the Royal Commission recommended should be strengthened. The Secretary of State did not allay any of our fears this afternoon.
Mr. Cyril Smith: I am very interested in what the right hon. Gentleman is saying. Do I understand that his party is giving an assurance that, if and when it again forms a Government, area health authorities may have on them a proportion of members directly elected by the people? Does not he agree that the expression "elected representatives" usually means representatives of the political caucus of the town council, whichever that political caucus happens to be? Would it not be better to agree to direct representation through the ballot box?
Mr. Orme: I take the hon. Gentleman's point. We do not have the answer to the problem. In fact, the Labour Party evidence to the Royal Commission is very confused on this point. It talks of "on the one hand this" and "on the other hand that". But the question of election and accountability should be properly raised. There should be a public debate, and that is what I am trying to encourage. I am certainly not laying down any policy, because we have no policy on this matter, but it would do no harm to have an open and frank debate.
I turn to private practice, which is a major issue that the present Government are to introduce, turning us away from the fundamental principle under which the NHS was created. In its observations on private practice, the Royal Commission said that it was only a minor factor. But it made that comment under a different Government, when there were different types of policies which had been pursued by consecutive Governments since the inception of the NHS. If it

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had had the right hon. Gentleman's proposals before it, the Royal Commission might have taken a much sharper view.
After careful study, the Royal Commission dismissed the insurance principle. On pay beds, which were being phased out, it advocated the strengthening of the Health Services Board, which is now to be abolished.
Mr. Patrick Jenkin: The Royal Commission accepted the existence of the Health Services Board. It made one recommendation about strengthening the powers of control over private medicine, a recommendation that is in the Bill that will shortly go into Committee—namely, that the aggregate of small developments should be open to inspection. It made no recommendation whatever about keeping or getting rid of the board. It took it for granted.
Mr. Orme: That is not quite correct. The board endorsed the policy of my right hon. Friend the Member for Norwich, North (Mr. Ennals) of phasing out pay beds. It went into some detail. There was no recommendation immediately to abolish pay beds, but the board recognised that it should carry out the proposals of the previous Labour Government. Surely the Secretary of State does not deny that he is reversing pay bed policy. The reversal is a major policy change.
The Royal Commission examined the insurance principle. After careful examination it dismissed it.
Mr. Ennals: I am sure that my right hon. Friend is as well aware of paragraphs 18.40 and 18.42 of the Royal Commission's report as is the Secretary of State. Paragraph 18.40 states:
"Pay beds arouse strong emotions."
Paragraph 18.42 states:
"From the point of view of the NHS the main importance of pay beds lies in the passions aroused and the consequential dislocation of work which then occurs. The establishment of the Health Services Board led to a welcome respite from discussion of this emotional subject."
Clearly, the Royal Commission welcomed the actions and the consequences of the Health Services Board.
Mr. Orme: I thank my right hon. Friend for underlining my arguments with
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a direct quotation from the report of the Royal Commission.
Mr. Patrick Jenkin: The right hon. Gentleman will remember that on Second Reading of the Health Services Bill I quoted the views contained in a leader that appeared in The Guardian. The leader stated that the climate now is very different from that at the time of the furore in 1975. That cannot owe anything to the work of the Health Services Board over the past two or three years. The pay beds that it has phased out have almost exclusively been those that have been little used. The argument that peace is attributable to that policy and that dispute will break out again cannot be sustained. I do not believe that this will happen.
Mr. Orme: The Secretary of State seems sensitive about the work of the Health Services Board. We know that he intends to abolish the board. I am sorry to say that the arguments that existed prior to the board undertaking its work may return. I hope that that will not be so, but I foresee difficulties in future.
The Royal Commission advocated the abolition of charges. We have since seen charges increased by 250 per cent. We know that further increases will be introduced. My objection to private practice is that it is immoral. No one should have the right to buy health care that extends beyond that which can be obtained by another person. The insurance principle would have to be introduced to achieve a major increase in the private sector. The Secretary of State has confirmed this afternoon that he is giving serious consideration to doing exactly that. I acknowledge that that principle appeared in the Conservative Party's election manifesto.
It is worth repeating what Professor Brian Abel-Smith had to say in a recent lecture.
Mr. Patrick Jenkin: He is one of your boys.
Mr. Orme: It is the facts that matter, not who states them. The professor said:
"The only problem which a switch to health insurance could help to resolve would be that of unemployment. If we followed the German or French examples it would mean creating some 150,000 to 200,000 extra bureaucratic jobs to collect the separate contributions and pay the individual bills for the over 500 million

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separate parcels of health care used by the British population each year. The elimination of separate billing is one of the largest economies from having a national health service."
The Secretary of State has criticised Professor Brian Abel-Smith. He said "He is one of your boys". Does he wish to contradict the facts that I have put before the House?
Mr. Patrick Jenkin: I understand that the right hon. Gentleman wants to know whether it will be possible to devise an insurance system that will not mirror the extraordinarily complicated three-tier structure of the French health service with its national caisse, local caisse and mutual scheme. I dare say that at some stage we shall be able to advise him that such a scheme has been devised. In the age of the micro-chip it does not seem necessary to make administrative problems the dominating factor. These are problems that can be overcome.
Mr. Orme: We shall await with some interest the scheme that the right hon. Gentleman brings before the House. A member of the Royal Commission told me that on a visit to the United States he was appalled, when visiting American hospitals, to see whole floors of accountants dealing purely with billing for the health service. I cannot believe that such a system is right.
Mr. Patrick Jenkin: The right hon. Gentleman labours this argument. My hon. Friend the Minister for Health and I visited a Belgian hospital. We pressed the management on this very issue. There is an insurance system in Belgium. We asked how many members of the staff in that hospital were engaged in sending out bills. Apparently the bills are sent out in duplicate—namely, one to the patient and one to the insurance company. We were told that only two people were so engaged. There were two people rendering bills.
Mr. Orme: That does not square with the American, French or German systems.
Mr. Pavitt: I have been able to examine in some depth both the Blue Shield and Blue Cross systems that operate in the United States. My right hon. Friend is right when he describes the amount of paperwork that is involved and the number of forms that have to be completed for a schedule of different
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matters. Probably Professor Brian Abel-Smith has made a conservative estimate.
Mr. Orme: I thank my hon. Friend for telling the House of his experience in these matters and for underlining my argument.
The insurance system would lead to the transfer of resources from stress areas to non-stress areas. That would be the result if market forces were allowed freely to operate.
Paragraph 2.12 of the Royal Commission's report states:
"about 60 per cent. of the total expenditure of the NHS goes on children, the old, the disabled, the mentally ill and the mentally handicapped."
Those recipients would have no chance in a free-for-all system. It is worth saying that over 50 per cent. of NHS hospital beds are occupied by the elderly. It is no good the elderly going to BUPA and other such organisations for assistance.
Mr. Ronald W. Brown: The Government seem to be getting all their advice from Australia. I am told that in Australia it is necessary for a patient to pay before he is given a blood transfusion.
Mr. Orme: I thank my hon. Friend for underlining my argument.
The Royal Commission recognised that the problems in the inner cities are of major proportion and concern. It considered it a sad fact that on average the worst primary care is to be found where health needs are greatest—in our decaying city centres. The Royal Commission quoted the courageous evidence of the Royal College of General Practitioners, which reads:
"Care by some doctors is mediocre and by a minority of an unacceptably low standard."
I welcome what the Royal Commission reported, but I believe that we shall have to go even further. It is one of the major problems facing the Health Service.
The previous Labour Government initiated a move towards giving more health resources to deprived areas, including inner cities. The commission has rightly given considerable attention to the quality of primary care services in such declining inner city areas. This was a main plank in the Labour Party's evidence, and the commission has come out with bold proposals for retiring

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elderly general practitioners, extending health centres, establishing general practitioners on a salaried basis and with limited lists, improving deputising arrangements and reviewing the control exercised by the Medical Practices Commission. Such proposals would bring about a substantial improvement in the health care of the population living in the centres of our great industrial towns.
The inner city problem is not unconnected with the whole question of preventive medicine. An extension of preventive medicine would be to the advantage of the whole population and I welcome the emphasis that the commission places on anti-smoking campaigns, compulsory seat belts, tackling the problem of alcoholics, the statutory fluoridation of water, and on bringing abortion more firmly into the National Health Service.
I appreciate that some of these issues are controversial, but, bearing in mind the Secretary of State's comments regarding smoking and fluoridation, we shall give him full support if he goes ahead along the lines suggested by the Royal Commission. We shall give him unstinting support, as these issues must be argued out with the public as well. As the Royal Commision said, smoking is probably the greatest factor contributing to ill health. To deal with the problems of smoking would not be unpopular with smokers, because many of them would like to be released from the habit. We welcome the proposals of the Royal Commission. They should be implemented. However, much more needs to be done concerning preventive medicine.
As regards inner city areas, the present Government's policy of phasing out school meals will have a detrimental effect upon child health. It will lead to an imbalance in diet and will be unsatisfactory for many children attending city schools.
The Secretary of State raised the issue of drugs. The widespread use of drugs and the escalation of their cost is an issue that the Royal Commission considered. However, it did not make any firm suggestions, apart from giving advice to doctors. The question of drugs will become an increasing problem, and some form of control over the drugs industry and the way that drugs are prescribed is inevitable. The Labour Party proposed
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the bringing into public ownership of one of the major drug companies.
That should be seriously considered. However, the Tory approach of deterring people from obtaining drugs that they need, by imposing penal charges, is unacceptable.
Mr. Frank Haynes(Ashfield): Does my right hon. Friend agree that the Government's policy of increasing prescription charges will encourage patients to take more drugs each time they visit the doctor, in order to cover a longer period so that they do not have to pay the increased charges so often?
Mr. Orme: My hon. Friend has underlined another problem facing the drugs industry. The prescription of drugs must be taken into account. The Service employs over 1 million people—800,000 in England alone—and, therefore, industrial relations and industrial democracy are vital factors. Much needs to be done. While some positive steps were taken in that direction by my right hon. Friend the Member for Norwich, North, he would agree that we were only at the beginning of the road. It is not impossible to bring together those in the profession and other workers so that an agreement and understanding can be reached.
We must return to the issue of pay beds, because the Government's policy will not help. I am disappointed that regional secure units in some areas have not been able to proceed because of difficulties in industrial relations. That is regrettable and I hope that the dispute will be cleared up soon, because those units should be fully operational. I have seen a unit in the Manchester area. What is happening now is most unfortunate.
The question of finance is at the centre of an organisation of the size and complexity of the National Health Service. It is quite right that we can no longer have such a service on the cheap. Consultants, doctors, nurses, craftsmen and all types of ancillary workers are entitled to decent wages and working conditions, with modern and better-equipped hospitals. More money is needed, and no short cut can be taken. Raffles, bazaars, casinos and street collections will not even scratch the surface of the problem, as the Royal Commission has clearly stated. If we are to maintain one Health Service that is available to all and is based

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on the principles that I enunciated earlier, it must be financed nationally.
The National Health Service needs more money, and the British people should be made aware of the only sensible, humane and democratic way of financing that Service—through taxation. In return they will receive some of the best medical services available. Both the Labour Party and the Conservative Government aimed at a ½ per cent. growth rate, but that is not sufficient. The Health Service needs more resources and, if necessary, we must educate the British public. If they want that type of Service, they must pay for it. The only way to do that is through direct taxation. We now stand at a crossroads.
Mr. David Mellor (Putney)rose—
Mr. Orme:The statement made by the Chief Secretary last Saturday bodes ill for those principles. However, the Prime Minister slapped him down very firmly yesterday. The Chief Secretary referred to doctors visiting patients, and in her reply yesterday the Prime Minister talked about paying for visits. Perhaps the Secretary of State can clarify the situation.
Mr. Patrick Jenkin: There is no question of introducing a boarding charge for hospitals or of introducing a new charge for seeing a doctor, whether on his premises or at home.
Mr. Orme: The Chief Secretary referred to increasing prescription charges, and the Prime Minister did not repudiate that. Nor has the Secretary of State repudiated it today. I wish that the Secretary of State would show me where those charges were mentioned in the Conservative manifesto. The public were not informed that prescription charges would become 75p or more. That is not in the manifesto. The Government have carried out some sleight of hand.
The last paragraph in the report of the Royal Commission says,
"In our review of the National Health Service as it exists we found much about which we can all be proud. Our examination of foreign health systems for the most part reinforced that view. If in considering some aspects in detail we have made specific criticisms, we have done this in the hope that in the future the NHS can provide a better service, not because we think it is in danger of collapse".
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That is the conclusion of the report. It says that it has recognised all the difficulties and all the problems.
I believe that the Health Service can be improved and that some bureaucracy can be removed. Industrial relations can be improved. It will not be an easy job and it will not happen overnight. We can succeed only if the National Health Service is treated as such and is free and paid for by the whole community throughout its working life. That is the only way to improve the National Health Service, and that has been unanimously endorsed by the Royal Commission. I therefore have no hesitation in asking my right hon. and hon. Friends to vote for the amendment.
5.39 pm
Mr. David Mellor: The report results from the establishment of a Royal Commission under the most ill-starred circumstances. It would have been preferable for the Royal Commission to have been established as part of a carefully thought out proposal by the then Government to seek radical reform and improvement of the Health Service. When one looks at the history of events, it is obvious, however, that it was set up as a matter of expediency because of the widespread concern—indeed, uproar—in the medical profession at the activities of the then Secretary of State, Mrs. Barbara Castle. Like my right hon. Friend the Secretary of State, I, too, cannot wait for the next few Sundays to complete reading, over the breakfast table, her account of those exciting days. It would, therefore, be surprising if the Commission, which was set up in those circumstances, provided any fundamental answers to the problems that we are all aware exist in the National Health Service.
In a report of this length it is inevitable that there are matters with which few of us would disagree, but there is also an absence of positive contribution to solving the problems that all our constituents experience with the Health Service today. This is partly due to its terms of reference, which greatly tied the hands of the commission. They were:
"To consider in the interests both of the patients and of those who work in the National Health Service the best use and management of the financial and manpower resources of the National Health Service."

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The hands of the Royal Commission were tied merely to consider improving the present system. The commission was not to be permitted to cast its net wider and consider whether, having regard to the water that has flowed under the bridge since the Beveridge report and the events just following the war, there might be a need for a new ideal in deciding what was the best Health Service for the 1980s.
Mr. Clinton Davis: Is the hon. Gentleman suggesting that the members of the Royal Commission objected to the terms of reference? It is not unknown that where members take a strong view on such a matter they make representations to the Government or allude to the matter in the report.
Mr. Mellor: I do not suggest for a moment that they objected. If I am driven to say so by the hon. Gentleman, one of my complaints—and I believe that a number of my hon. Friends will agree—is about the ease with which the commission seemed able to accept some of the propositions advanced by the Labour Party about matters such as charges. That, to me, indicates an ideological inclination on the part of members of the commission that might have something to do with the fact that a Labour Government set up the commission.
Mr. Ennals: The hon. Gentleman is casting aspersion son the balance of the commission, but it was extremely well balanced. It consisted of people with experience from within the Service and from outside. No one from the Government Front Bench has critcised its nature, structure or balance.
With regard to the commission's terms of reference, the hon. Gentleman cannot have read paragraph 1.6, which says:
"It would have been possible to have interpreted our terms of reference in a narrow financial and administrative context and written a straightforward technical report along these lines, but it would have been wrong to do so."
The commission went on to say how widely it had interpreted its terms of reference. The hon. Gentleman cannot get away with the arguments that he is putting forward.
Mr. Mellor: It is a long report, and we can all fling pieces of offal from the carcase into each other's faces. The com-
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mission says that it was unable to come up with more fundamental proposals for reform or a new look for the Service. I suggest that that has a great deal to do with the basis on which it was set up.
The right hon. Gentleman suggests that my hon. Friends do not share my views, but I do not see any obvious sign of dissent from my hon. Friend the Minister for Health. The right hon. Gentleman has his story and he is sticking to it. Equally, it is wrong for him to think that there is not a formidable body of opinion within the medical profession and outside the Conservative Party that certain of the ideological convictions that underlie the report are not the most persuasive to many of those who have to try to make the Health Service work.
A further problem derives from the statement of the objectives of the National Health Service on which the commission based its work. It was:
"We believe that the NHS should: encourage and assist individuals to remain healthy; provide equality of entitlement of health services; provide a broad range at services of a high standard; provide equality of access to these services; provide a service free at the time of use; satisfy the reasonable expectations of its users; remain a national service responsive to local needs."
It is all very well setting out these grand and, indeed, proper considerations, but I do not believe that the commission considered in any fundamental way the practicality of those objectives while tied to the present system. It is merely repeating the underlying basis on which the Health Service was set up in the 1940s, without recognising the extent to which some of those ideals have been undermined by the passage of time.
I have before me paragraph 437 of the original Beveridge report, which sets out the fundamental ideal behind setting up the Health Service, and very good it sounds. However, at that time there was a total failure to appreciate the inordinate cost to the State of
"a health service providing full preventive and curative treatment of every kind to every citizen without exceptions, without remuneration limit and without an economic barrier at any point to delay recourse to it".
The Beveridge report goes on to express a suggestion that underlay the setting up of the National Health Service. With the passage of time it now seems naive, but it was that the effect of setting up the National Health Service in

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that form should be to reduce progressively over the years the volume of use of that Service, since an effective medical service has its impact on the health of the nation. We have seen quite the contrary, and we are facing a situation today where more demands are being made on the Health Service than ever before.
We on the Conservative Benches should like a fresh look at, perhaps, a partnership between the present basis on which the Health Service is run and more private intervention. That would assist in creating the sort of service that would give everyone in the country the treatment that he or she requires.
The right hon. Member for Salford, West (Mr. Orme) was a member, or supporter, of an Administration that looked after the affairs of the Health Service for almost 12 of the past 15 years. The Health Service was run during that time on exactly the basis set out in the amendment to the motion. It is fair to ask what has been achieved by running the Health Service in that way. What sort of Health Service did this Administration take over?
The Royal Commission commented on that, but its comments are not such that they can be unreservedly accepted by the Conservative Party or those who work in the medical profession. The commission does not say that it is the finest health service in the world—and in these days we do not even hear that from the Labour Party—but it rightly pays tribute to its emergency care and says that it is splendid. However, people are not looking only to emergency services. A hernia can have an intensely debilitating effect on one's ability to lead a full life, to work and to contribute to society. During the time that the right hon. Member for Salford, West and his right hon. Friends were in office, people suffering from such painful conditions had to wait longer and longer for treatment.
On its view of the morale of Health Service workers, the commission totally underestimates the blow to morale, particularly of professional workers, of deteriorating working conditions and remuneration.
Whether one likes it or not, doctors, nurses, pharmacists and dentists are in no way satisfied with the conditions under
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which they operate within the National Health Service. Very little attention is paid to the debilitating effect of conditions in the Health Service on the willingness of qualified personnel to work within that Service.
I have extracted some figures about the number of doctors who have left this country over the past 15 years. In 1964 more than 1,000 doctors left Britain, and that figure was repeated throughout the next 11 years. Therefore, up to 1975 we had a total outflow of 11,000 doctors who qualified in England—
Mr. Pavitt: But what about those who came back? The figure is about 40 per cent.
Mr. Mellor: Even if the hon. Gentleman is right—andI do not know about that—it still means that there was an outflow of nearly 7,000 doctors who qualified in England. That is hardly a satisfactory state of affairs in which Labour Members can take any pleasure. How many of their constituents in the inner city areas have complained about GP care? How many of them would have been much happier had all those doctors stayed and worked in the National Health Service?
The figures from 1975 are not available because they have not been collated. Is that because the Department is embarrassed about collating the figures of doctors who have left the country? There can be little doubt that the figures would show a dramatic increase as a result of the malignant interference in the affairs of the medical profession by the former right hon. Member for Blackburn, Mrs. Barbara Castle.
When one considers the number of doctors who have come to this country, one is still left with a dramatic shortfall in staff, particularly when one takes account of the recent regulations on the re-examination of doctors coming from overseas. The position is hardly satisfactory. I am sure that Labour Members, who care so much about the Third world, do not really think that it is right that we sohuld have to rely so extensively on doctors from the Third world to keep our Health Service going. The fact is that we are unable to provide a Health Service in which thousands upon thousands of our doctors, qualifying in England, are prepared to work.

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How can we rectify that position? The right hon. Member for Salford, West talked about more money. He said boldly—as Labour politicians always do after an election—that this meant increased taxation. Yet he fought the election alongside his right hon. Friend the Member for Leeds, East(Mr. Healey), who claimed that Labour, too, could cut taxes.
When in the last 11 years of Labour Government was there ever satisfactory funding of the National Health Service totally from the State? When did we have adequate funding that enabled nineteenth century hospitals to be cleared away and provided nurses to staff all wards? I remember wards in hospitals in my constituency being operated at 75 per cent. capacity because the nurses were not available to staff them. When will we reach that golden age when funds will flow from the Treasury to enable us to do all the things that appear in the windy speeches of Labour Members?
The answer is, of course, not until the economic base of this country has been restored. We all know that that is never likely to happen under a Labour Administration. Even under this Administration it will take a long time to achieve because the rot has set in so far.
What are we left with? How can we restore our constituents' belief that they will get a Health Service worthy of them in every respect? The answer must be that people should be encouraged to recognise that while they make their contributions to the Health Service through taxation, the prudent ones among them will ensure that they are protected against the sort of illnesses with which the National Health Service, as presently constituted, cannot deal. I am referring not to emergencies, with which the Health Service deals adequately, but to debilitating long-term conditions. A person suffering from such a condition may find, if he is not properly insured, that he will have to wait for a year, two years, three years or even more before a necessary operation can take place.
Mr. Reg Race(Wood Green): Will the hon. Gentleman tell the House how this insurance system would deal with people who were totally uninsurable? One example is my wife, who is a chronic
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diabetic and must have two injections a day. How would he deal with her?
Mr. Mellor:The hon. Member erects a haystack and then fires his rather rusty blunderbuss at it without paying any attention to the point that has been made. I am not suggesting that everyone would necessarily want or be able to afford insurance. But those who can afford it should do so, and by affording it and taking themselves out of the system they make it easier for those who cannot afford any additional contribution to get treatment. Obviously, there are some darknesses that no light could ever penetrate, and from the look on the hon. Member's face it is obvious that my argument does not persuade him. But we live in hope.
In this country now, private insurance companies are capable of providing additional cover for the vast majority of working people at prices they can afford. If only the TUC would take a more sensible attitude to such negotiations forming part of wage negotiations, it would give a lot more benefit to its members, particularly those who, while protesting loudly, have access to a private hospital when it is needed. For the cost of a holiday in Majorca, any family can obtain the best insurance policy from either BUPA or Private Patients Plan.
In a civilised society, it is the height of irresponsibility to encourage members of the public to throw away their money on bingo and gambling and not to encourage them to use it on the provision of elementary health cover for their families against the evil day that may dawn. I hope that during the course of this Government's tenure of office it will be possible to evolve successful partnerships between the private medical insurance companies and the National Health Service, with, perhaps, the shared use of smaller hospitals.
Mr. Haynes: Has the hon. Gentleman considered seriously the question of insurance? Let us consider motor insurance, for example. Each year costs rise and the cost of the premium rises in proportion. That will happen in the same way in the kind of scheme that the hon. Member is suggesting.
Mr. Mellor: I suspect that I have considered it at least as seriously as the hon. Member has. I can obtain private

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health insurance for myself and my wife for £150 a year. I do not think that there are all that many people, considering present industrial wages, who could not contemplate that amount, provided that they thought it important enough to let it take precedence over certain other things. I am saying to people "For heaven's sake be responsible about your health, because nothing is more important."
It is very important, notwithstanding the enormous difficulties facing Ministers in trying to bring the Health Service back to acceptable standards after a substantial period of Socialist Government, that we should look creatively at the possibility of recognising the truth of the proposition that, essentially, health care in the future for the vast majority of people must depend upon their paying taxes and dealing with the NHS to some extent, and also on making creative use of the private insurance companies and their facilities. I hope that the use of shared facilities will be examined, because this represents a way forward which will enable us to get out of the cycle which enabled a Labour Government—notwithstanding all the cant and hypocrisy that they bring to bear on this subject—to close no fewer than 280 hospitals during their last five years in office.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. There can be no 10-minute limit on speeches because this is not a Second Reading debate, but many right hon. and hon. Members wish to take part. Therefore, I appeal for short contributions so that Members are not disappointed as we approach 9 o'clock.
6 pm
Mr. David Ennals: I wish that I could make some complimentary remarks about the speech which has just been delivered by the hon. Member for Putney (Mr. Mellor). Because he disagreed with so many of the Royal Commission's conclusions, he decided that he would disparage those who had reached those conclusions. That was absolutely without justification.
I quote the views expressed by Jean McFarlane, who has subsequently been ennobled in another place. She pointed out that some people who did not like the
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conclusions had referred to the commission as an unbalanced or a Socialist commission. She said:
"Members had a wide experience of the service as consumers, members of health authorities, health professions and trades unions and there was a full spectrum of political allegiance."
The allegation that it was in some way an unbalanced commission simply does not stand up to examination.
In my period as Secretary of State, I very often heard the present Secretary of State—I am sorry that he is not now in the Chamber—talk of low morale in the NHS. He was not entirely wrong. As part of our struggle to bring down inflation, which the present Government have obviously totally given up, I was obliged to run the NHS on a tight financial rein. In recent months I have had many frank and informal discussions with people working in all fields in the NHS—not least in my own hospital, which I have to visit far too often for my liking. I tell the right hon. Gentleman and his hon. Friends, who may be misled by their pundits, that morale is now much lower than it was.
I find that people in the NHS deeply resent the failure to adjust cash limits to cover the penal level of value added tax, with all its consequences. They face with horror the misery of grossly inflated gas prices. I hope that when he replies to the debate the Minister for Health will tell us what estimate he has of the effect on the NHS of the announcement of gas price increases over the next two years.
People in the NHS resent the new levels of prescription charges. Also, they face with horror the Chief Secretary's proposals for new charges, which would undermine the principles upon which the NHS is based.
I saw what was said by the Prime Minister yesterday, but I know what she said during the election campaign. She was asked about prescription charges. She said:
"I have no plan to increase prescription charges."
She then worked out a plan and increased them twice. I hope that we shall press to ensure much fuller certainty that we shall not see new charges introduced.
I support the Royal Commission almost entirely in its conclusions. I merely say that I wish that it had been able

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to report 12 months earlier. It would have meant setting it up 12 months earlier in order that it could have reported in July 1978 rather than in July 1979. From my point of view when Secretary of State, it was intensely frustrating to be constantly waiting for this report and to be held back from some actions that could have been initiated earlier.
I should have liked to set out, well before the election was upon us, our Labour proposals for structural reorganisation to undo some of the damage of the Joseph L. McKinsey reorganisation, on which eventually we shall see legislation. Some people have said "Why did you not do it when in Government?" We set up a Royal Commission for that purpose. If anyone thinks that we ought either to have stopped the decision already taken or in mid-term, before the Royal Commission had reported, thrown the NHS into another reorganisation, clearly he does not know what he is talking about.
For all those reasons, I should have liked to have also the commission's robust defence of the NHS and its principles and achievements, as outlined by my right hon. Friend the Member for Salford, West (Mr. Orme), before the nation in 1978 to set in some balance the sort of criticism that we have now from the Conservative Party. I should have liked to see the proposal that the TUC should initiate discussions for a procedure for dealing with national disputes in the NHS. That might have influenced the situation of a year ago. I wish that that proposal had been made.
No less do I wish that the Royal Commission's clear, concise rejection of proposals to finance the NHS by insurance payments had been published before the present Secretary of State and his Conservative colleagues became as committed to that concept as they were before the election and as they are clearly committed now.
The commission was set up by a Labour Prime Minister, and it reported to a Conservative Prime Minister —one who is in principle dedicated to private enterprise as opposed to public enterprise and private expenditure as opposed to public expenditure. The report has come at a difficult time, when the squeeze is
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on and is affecting the health authorities, faced with the dramatic implications of VAT at 15 per cent. and cash limits tied to a long-past 8½ per cent. inflation rate. It has come at a time when social services are being slashed by local authorities, all of them putting new pressure upon the NHS.
Speaking consciously as one who carried the responsibility of Secretary of State for three years, I want to comment on four aspects of the report: the state of the NHS, its structure, its source of finance, and finally—it will have to be quickly—industrial relations.
Naturally, of course, I profoundly agreed with the commission's conclusions about objectives, which my right hon. Friend the Member for Salford, West outlined. I thought that it was the best possible definition of how our NHS should be structured and of its aims and objectives. I am glad, therefore, that we tabled the amendment to the motion. With no less conviction, I agree with the commission's careful assessment that
"although there is room for concern we do not believe that the NHS is on the point of collapse as many of our witnesses would have us believe."
Let us note that most of the gripes came from those who worked in the NHS. I do not blame them all. They were perfectionists. They wanted to see the NHS improved. The gripes were not mainly from the public. There never has been a more popular public service than the NHS.
I also shared the views of the right hon. Member for Down, South (Mr. Powell)—it is easier to say it out of office than in office—when in his book "A New Look at Medicine and Politics", published in 1966, he said that those who worked in the Service had
"a vested interest in its denigration",
presenting what must be
"the unique spectacle of an undertaking that is run down by everyone engaged in it."
I hope that some people will learn some lessons from this.
I think that the Royal Commission did a good job in speaking up for the general quality of service provided by the NHS. That is not to say that many criticisms are not justified. There are strong feelings that we must find ways to improve

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industrial relations. There are the under-financing of the NHS and the feeling that it is over-administered and that too often decisions are taken by people who do not really know the issues at stake. Those are issues which we shall try to put right as we work our way through the Government's proposals.
However, the report puts many of the moans into proportion by showing, first, what very good marks the NHS gets from its consumers and, secondly, that we get good value for money as compared with what is available in most other advanced industrialised countries, some of which—the United States and Germany are good examples—spend much more and in many important respects do less well.
That does not mean that the quality of our NHS is the envy of the world. It is not. But the principle still is the envy of the world—the principle so clearly set out in the report. The commission concluded that there was no need for Britain, as the Secretary of State said, to feel ashamed of its Health Service—nor should we. There are many aspects of it of which we should feel justly proud.
The report says:
"we must say as clearly as we can that the NHS is not suffering from a mortal disease susceptible only to heroic surgery".
I think that what was in mind was some of the heroic surgery of the present Secretary of State for Industry, the right hon. Member for Leeds, North-East (Sir K. Joseph), when he created so many of the problems that we are now trying to put right.
That brings me to the central issue—the structure of the NHS. Merrison examined and discarded a number of heroic ideas—for instance, that there should be a public commission to run the NHS and that the NHS should be put under the direction of local authorities. I think that the commission was right to reject these conclusions. It was rightly convinced by the massive weight of evidence that the 1973–74 reorganisation created, in most places, one tier too many. But, thank heavens, the commission was not as dogmatic as the Secretary of State, who, when in Opposition, talked about abolishing the area tier as if there was not to be flexibility. I am glad that he has learnt some lessons.
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Professor Kogan's research paper, commissioned by the Royal Commission, got the mood right when he reported that there was
"a great deal of anger and frustration at what many regard as a seriously over-elaborate system of Government, administration and decision making. The multiplicity of levels, the over-elaboration of consultation machinery, the inability to get decision making completed nearer the point of delivery of services…were current themes in most of the areas where we worked."
These are problems that have beset the Health Service during the whole of the last five years. They will go on besetting the Health Service until we have got its structure right.
Regions have to start looking as quickly as possible at improvements that they can make in the creation, for instance, of single-district areas. Some two-district areas were merged into single-district areas with my approval as Secretary of State. When it became clear that the Royal Commission was to report in a few months—and it was not known what it would say—I had to stop taking some of the actions that it has recommended. It commended the methods that I was using at that time. Some flexibility is needed. It makes no sense to have five separate districts in Birmingham without some co-ordination at city level. Flexibility will need to be considered carefully in dealing with structural points.
I was disappointed that the Government rejected so many of the methods put forward for achieving savings. A lot of savings could be made on drugs. The recommendation of the commission for a selected list to try to ensure that too much is not spent on drugs is important. I am sorry that the Secretary of State seems to have pushed the recommendation aside. I am sorry, too, that the right hon. Gentleman has turned down the proposal to end the separate family practitioner committees. I am sure that his action followed pressure by the medical profession, which has never understood the problems of financing the National Health Service. The profession has always believed that it has total freedom and that it is the task of others to show responsibility in terms of saving. This is a responsibility of all who work in the National Health Service.
The most acute subject of controversy in the debate and in the Merrison report itself is the financing of the Service. The

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commission has made many recommendations which, both in the short and the long terms, may have results. I was disappointed at the attitude that the Government took today to fluoride. People ask why I took no action. The answer is simple. It became clear only a few months before the election that area health authorities had the power to require water authorities to do what health authorities had decided. It became clear only at a late stage that legislation was required. The best time to take controversial bold decisions is during the early life of a Government. Such a decision could be taken on fluoride, on smoking, on drinking and driving, and on the wearing of seat belts.
There are further methods of saving with which I do not wish to deal at this stage but which must be examined on another occasion. The real argument about financing relays not to charges—a minute part of NHS revenue—but to whether the Government are to make a fundamental change in moving to a two-tier service by introducing a scheme of medical insurance.
Almost two years ago, the right hon. Gentleman who is now the Secretary of State asked:
"Must we cling dogmatically to the concept of a service always free at the point of use?"
The commission gave its answer unanimously. It said "Yes. We must stand by that principle." It warned the Government bluntly against any attempt to introduce a health insurance scheme. I add any weight that I possess, small though it may be, to the recommendation of the commission that if the Government proceed down this road it will lead to great problems and big dissensions in the National Health Service. As proposed, health insurance would be bought in the same way as people buy houses or motor insurance. There would be competition between companies. There might be a compulsory minimum level of health insurance, much as owners of motor cars are obliged to take out third party cover. There would be good risks and bad risks among users, and premiums might vary accordingly.
We know that those who look to the Health Service most are the bad risks—the elderly, the disabled, the chronically sick and children. They are the bad
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risks. They are too poor to pay the high premiums. Sixty per cent. of National Health Service expenditure is currently accounted for by the elderly, the mentally ill, the mentally and physically handicapped and children.
Any insurance scheme that offered a range of benefits according to ability to pay would inevitably favour the wealthier members of society. This is the fundamental principle. Facing up to this principle, the Royal Commission, consisting of people of different parties and backgrounds, business men as well as those in the National Health Service, said unanimously to the Secretary of State for Social Services "That is not the route down which to proceed." If the Secretary of State discards the main recommendation of the Royal Commission and introduces the insurance principle, he will plunge the National Health Service into a new, tragic, unnecessary and agonising conflict.
I turn now to the difficult issue of industrial relations. This was examined closely by the Royal Commission. It saw that the issue was closely linked with the whole question of morale and identified four factors which, to a varying extent, influenced the attitude of workers in the National Health Service. First, it identified the short-term effects of reorganisation. There is no doubt that morale was affected by the tragedy of the reorganisation forced upon the Health Service by the previous Conservative Government.
Secondly, the country's economic difficulties had an effect on the pay expectations of staff. Public expenditure restraint had implications for staffing levels and buildings. That applies even more now than during the past four years. People are asking whether their jobs will be safe and whether the hospital in which they work is to remain open. They wonder whether the hospital will be able to provide a casualty service. The uncertainty in the Health Service is greater than ever.
Thirdly, there is the changing attitude of Health Service unions. Apart from the increasing use of industrial action by several different groups, there has occurred what the Commission calls
"the growth in influence of nurses and other groups in decisions about the management of services and the treatment of patients."

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Fourthly, there is the continuing criticism of the National Health Serivce, which feeds on itself, panders to the press and makes people feel insecure and unsettled but determined in the sense that they intend to prove themselves.
The commission welcomed the proposals that I had made for dealing with local disputes. I hope that the Minister for Health will explain what has happened to those proposals in the last six months. They were carefully worked out in my room, around my round table, with leaders of the medical profession, leaders of the medical unions and management. We had started discussions on how to improve industrial relations at national level on issues related to Whitley and general conditions of work. What progress has been made? What consultations has the Minister been holding?
I am glad that the TUC has responded immediately. I wish to know whether the BMA and other bodies have responded and whether the Secretary of State has taken any initiative. It is my view that the decision of the previous Government to establish a system of comparability, so that nurses, as well as doctors, feel that their interests are properly looked after, will improve their feeling of confidence in the National Health Service.
It might be worth reflecting what might have been the effect on subsequent events if this recommendation of the Royal Commission had been made 12 months earlier. The commission said:
"We think it essential that a procedure should be worked out for resolving national disputes about pay. This will involve a review of existing pay arrangements, including the role of the Whitley Councils. It will take time and patience. We think the initiative can best come from the TUC. In due course proposals should be put to the Secretaries of State and the NHS management interests."
If that proposal had been made a year ago, and if the TUC had responded as generously as it has today, we might have avoided some of the miseries—and perhaps the Secretary of State felt the hurts even more than anyone else—of what happened just a year ago.
Inevitably, when in Opposition, the right hon. Gentleman formulated many ideas of his own, and he has got himself stuck on the belief that one can create an insurance base for the National Health Service, in the face of all the evidence
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against it. I hope that he will take seriously the recommendations of the Royal Commission and the advice of my right hon. Friend the Member for Salford, West not to proceed down that route.
I believe that if the Secretary of State were not to be so persuaded he would make the biggest single contribution to the breakdown of morale in the National Health Service. So long as morale is as low as it is, we shall inevitably find difficulties that blow up into issues that cannot easily be resolved. Let the Secretary of State and his ministerial colleagues not be so doctrinaire as they are now proving themselves to be in terms of the financing of our National Health Service.
6.20 pm
Mr. Nigel Forman: I share the view that it is broadly right to finance the National Health Service mainly out of taxation and that, when somebody is really ill, there must be no means test effectively on essential treatment. To that extent, I agree with the right hon. Member for Norwich, North (Mr. Ennals).
But there are many run-of-the-mill cases where people feel the need for medical treatment or medical consultation of some kind or require drugs, and in these cases I think it fair and right for the community to expect that a certain portion of the money involved in meeting those costs should be raised directly from the people so applying. That is the argument for prescription charges, and it is the argument for seeking to keep them at realistic and sensible levels at times when inflation is taking its toll of charges which are in no way indexed.
We can readily envisage what would happen if the right hon. Member for Salford, West (Mr. Orme) were free to put his first principles into effect. I refer to his first principles when in Opposition rather than to his second thoughts when in Government. If those first principles were put into effect and all such charges were abolished, the right hon. Gentleman, were he in a position of responsibility, would have to find roughly an extra £200 million to meet the cost.
Furthermore, there is no evidence from public opinion—in fact, quite the contrary—that the public as a whole in this country are necessarily frightened of the principle of contributing directly themselves to some of the costs of medical

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care. One has only to look at the figures for BUPA and other such organisations to see that there are now more than 1 million subscribers, representing a total of nearly 2½ million people in 1978, who in some way or other are involved in schemes, whether private or group schemes. I am sure that the Opposition recognise that this is a strong growth area now in general health care.
In my view, our response on this matter should be non-dogmatic. The Opposition should realise that there is a place for sensible and realistic charging, just as I and, I am sure, others of my hon. Friends will agree that the vast basis of the NHS must continue to be financed out of taxation. That is not only the humane way to do it, but there is some evidence from other countries that one gets better value for money and a better chance of containing overall health costs if one proceeds in that way rather than by placing excessive reliance or relying almost wholly on an insurance basis. For those reasons, I hope that hon. Members on both sides will look at the matter in a balanced fashion.
I agree with those who have said that this is a useful report—it is certainly a large one—and I agree with the view expressed in paragraph 22.4 that
"the NHS is not suffering from a mortal disease susceptible only to heroic surgery".
I noticed that the right hon. Member for Norwich, North quoted those words, and I also picked them out. I believe that that point is worth stressing.
It is well for the House to remember that the Health Service—the point is made in paragraph 22.7—
"reflects the society around it—both society's aspirations towards good health and its careless attitudes towards bad health".
I shall have something to say later about my view of the importance of preventive medicine in all its forms.
The background which my right hon. and hon. Friends have to consider when pressing for an efficient and effective Health Service is bleak. The objectives set out in paragraph 22.10 of the report have to be fulfilled, or the Government have to attempt to encourage the various health authorities to fulfil them, against a fairly bleak economic background, which, I hasten to add, is largely the legacy of the previous five years of
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Labour Government. However, whatever the history of the matter may be, I hope that this Government will strive to protect what I would call the solid core of the National Health Service, however bleak the economic climate may become over succeeding months and years.
I am sure that hon. Members will agree that Britain is still a good country in which to live, and, to my way of thinking, one of the reasons is that we have the National Health Service. I put that on a par with our system of justice, with all its faults, and I always think that the way to put the question to oneself about other countries is to ask "Is this a country in which I would not mind being critically ill or standing trial?" If those questions can be answered in the affirmative, one can take it that any such country is a fairly good place in which to live. As I say, on those two important criteria Britain still does rather well.
I said that I would touch on the importance of preventive medicine. I am glad that the Royal Commission laid such stress on the importance of sensible measures against smoking, measures to help smokers kick the habit, on sensible measures for the prevention of road accidents and on measures to combat and control the growth of alcoholism, and called for more emphasis generally on health education. I am delighted by what my right hon. Friend said about health education and his determination to safeguard the Health Education Council from the effects of any quango hunt.
I think it particularly important to give priority to those preventive measures which the Government can support and which could be done in such a way as to reduce the overall NHS costs. It is freely admitted in the report that the bulk of its recommendations would entail increased expenditure were they to be implemented, but there are some measures, such as vaccination on the preventive side, which could be strongly backed by the Government and which would have the effect of reducing costs overall. In this context, I commend paragraph 5.12 to my right hon. Friend. I hope that we shall hear something positive about that in the winding-up speech from the Government Front Bench.
It is important also for Government policy in other respects to be supportive

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of preventive medicine and not to undermine it. There is a lot that we can learn in this respect from the Norwegians and what they practise rather than what they preach in agriculture and food policy. The Norwegians are well aware—there have been articles in New Scientist about it—of the links between agricultural policy, food policy and diet and the effects which they can have on people's health. They are well aware that the way people live and the signals which they get through the price mechanism in respect of different forms of food can have an influence on their state of health.
If the House asks me for a specific example, I point out that Norwegian agricultural policy includes a deliberately calculated price policy which is biased to discourage the consumption of, for example, saturated fats, which, it is well known—I see the right hon. Member for Norwich, North nodding in agreement—have some connection with various forms of circulatory and heart disease. I commend the Norwegian system to my right hon. Friend. I hope that he will ask his officials to look into it.
Moreover, I stress the broader point that if the Government's policy is to be serious about preventive medicine, they should look not just to health policies but to policies in other areas as well.
Mr. W. R. Rees-Davies: Does my hon. Friend agree that, whether it is in the field of dietetics, dentistry, acupuncture or a number of other important matters to add to those that we have catalogued, a valuable aid would be to use the media to present short films and items of interest to the public? To use the media outside would cost nothing. The Minister should be encouraged to bear that in mind.
Mr. Forman: I entirely agree with my hon. and learned Friend. I am grateful to him for strengthening my argument.
I turn to the question of the mentally ill and the mentally handicapped. As a Member of Parliament, I am especially concerned about that issue as many of those who attend my constituency surgery every fortnight have told me of a number of disturbing cases of inadequate treatment. I am delighted that the report paid sufficient attention to that previously
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Cinderella aspect of the NHS. I hope that my hon. Friend, when he replies, will say something positive about the Government's intentions to support a sector which has previously languished.
Those working in that sector are entitled to ask for better treatment and more recognition of their important work. In return, their patients need to be treated in a more humane and understanding manner. Having been told of some examples of treatment, I hope that it would be possible to achieve less over-administration of tranquillising drugs in knockout doses. I hope that there would be less frequent recourse to electro-convulsive therapy and that we arrive at a stage where it will not be used at all.
I hope that there will be a less cavalier attitude from general practitioners towards the use of section 25 of the Mental Health Act 1959. I hope that any inadequate forms of nursing and supervision in mental wards and mental hospitals will be dealt with and rectified as speedily as possible by the health authorities and the Government. I shall be writing to my hon. Friend on the matter, and I hope that he will be able to give a satisfactory answer.
Dr. Roger Thomas: I remind the hon. Gentleman that the great difficulty in the care of psycho-geriatrics is that those who are not totally cured, but partly cured, cannot be discharged into the community. They cannot be discharged into social service homes because of cutbacks in social service expenditure. With nowhere for these patients to go, the consequence is a cluttering up of our psycho-geriatric hospitals. It is not the over-use of tranquillisers or the over-use of ECT that is the problem but the cluttering up of psycho-geriatric beds because of cutbacks in social service expenditure.
Mr. Forman: I agree that the psycho-geriatric services should receive a higher priority within the total provision available for the Health Service. I shall not make a recommendation to my right hon. Friend that there should be more health spending because of that particular cause, however worthy it may be. If the Government are honest with the country, they have to state their priorities. I wish that the Government would give a higher priority in the order of batting to mental health.
Mr. Ennals: I have great sympathy with many of the arguments deployed by the hon. Gentleman. Does he not agree that it is unfortunate that the Government have decided to abolish, as one of the quangos, the National Development Group for the Mentally Handicapped, which has been performing an invaluable service in giving advice to mental hospitals and area health authorities on how to improve their services? Perhaps he will ask his hon. Friend, when he replies, to deal with that question.
Mr. Forman: There is an argument for every quango. If I were forced to choose between quangos in this sphere, I would rather preserve—and I am glad that my right hon. Friend has done so—the Health Education Council. I do not think that the absence of the quango to which the right hon. Gentleman referred would invalidate or prevent my right hon. Friend, health authorities or anybody else from taking the necessary measures to give the whole sector of mental health a higher priority.
I turn to the important issue of the attitude of those working in the NHS towards patients. I hope that the hundreds and thousands—indeed, I believe it to be more than 1 million—who work in the Health Service always remember the admonition in paragraph 1·7 of the report that the NHS is a service to patients. I hope that that is engraved over all the mantelpieces concerned.
Patients must be given fuller information about their condition. They should be allowed to see their medical records, with proper safeguards for the privacy of records in the light of the use of computers in that sector. They should be treated as individual human beings and not as mere numbers in some data bank. We all remember the recent tragic case in Coventry of somebody dying as a result of an operation that he should never have had because he was confused with another patient.
There should be more certainty and clearer explanations to patients about waiting times. Waiting lists for hospitals—always a politically sensitive issue—can be a red herring. They can be as much of a red herring as council house waiting lists. It all depends on how people are
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placed on the list, how they come to be there and the precise reason for that. As the report points out, it is the waiting times that matter. It is important that people on waiting lists should have some degree of certainty about how long they will have to wait. The health authority concerned should be able to give them promises that can be delivered.
It is vitally important to do everything possible to preserve small community hospitals where both patients and their relatives feel at home and confident of the atmosphere. One of the better aspects of these hospitals, such as the Carshalton War Memorial hospital in myconstituency—and I pay tribute to my right hon. Friend for his constructive and positive reply about that hospital in November 1979, to which I intend to hold him—is that they are run and supervised by the matron and doctors concerned. Worried patients and their relatives feel that when they go to these hospitals they can speak to the people who really matter.
I put in a plea for small hospitals throughout the country. I was delighted to hear the remarks of my right hon. Friend the Secretary of State on this subject this afternoon.
I welcome the Government's intention to concentrate on the regional tier of administration of the NHS and to move towards a slimming down of tiers beneath that level. I hope that that will happen. I was as alarmed as anybody by the 28 per cent. increase in administrative and clerical staff between 1973 and 1977. I note the remark of the Royal Commission that that was not necessarily related to the 1974 reorganisation of the NHS by the last Conservative Government and that there may well have been other factors that contributed to the increase.
I hope that the Government will learn from experience and take on board the lesson that, whereas there may be economies of scale when making plastic ducks, there are seldom economies of scale in administration. It would be an advantage to find means of directly controlling administration which could be implemented by those responsible for giving the services to the patients.

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It is obviously disturbing, as paragraph 22.83 of the report makes clear, that the NHS will have
"to spend about I per cent. more each year merely to provide its existing standard of service"
because of demographic projections and the growing number of elderly people. In those circumstances, and bearing in mind the bleak economic climate to which I have already referred, I suggest that the flexibility of response, which is one of the last points which is made in the report, should be one of the key elements of the Government's policy in future. That implies the encouragement of units of various sizes and categories within the Health Service, not all constructed on the principle that larger is better. It should also imply the judicious use of volunteers in the Health Service wherever and whenever that is appropriate.
The events of last winter showed us what a fund of good will exists at all levels of the voluntary sector to help the NHS. I hope that we shall be able to introduce some of that voluntary effort in quieter times, not when industrial disputes are taking place, so that those who work in the Health Service can get used to the idea of working alongside these well-intentioned people who want to help, often in a part-time capacity.
Fundamentally, the NHS will be only as good as it can be made by the dedication of those who work in it—I pay my warm personal tribute to them—and by the Government's success in creating the necessary climate for future economic growth in which we can pay for, and make realistic, the aspirations that I am sure all hon. Members share.
6.42 pm
Mr. Cyril Smith: I welcome the Royal Commission's report. There are many items in it that one would like to discuss. First, however, I place on record my belief in a taxation-based NHS. Indeed, it is for that reason that I shall support the Opposition amendment, because it is wise to place on record our belief in such a Service.
I should like to discuss prescription charges. If we cannot have their abolition, I plead with the Government at any rate seriously to consider extending the
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exemption list from those prescription charges. I have recently had correspondence with the Minister about cystic fibrosis, which requires the use of many drugs. One hopes that that sort of disease, even at this stage, may be granted exemption from prescription charges.
I could comment at great length about the fluoridation of water. Frankly, I welcome the Minister's statement today on that subject because I am against the compulsory fluoridation of water. That does not mean that I am against the fluoridation of water. However, I believe that those who are to be subject to the treatment ought perhaps to be consulted first. If a local referendum, or something of that type, took place which indicated that it was the will of the people that the water should be so treated, I would go along with it.
I could also comment on smoking and industrial relations. I want, instead, to confine myself to one aspect of the report. Indeed, it is an aspect that has hardly been touched upon as yet. That is the section of the report dealing with the allocation of resources which begins on page 344, paragraph 21.38 onwards. I do so because this is important from a constituency point of view. It is even more important from the point of view of residents in the North-West region, in which my constituency is based. So far as I am concerned, that is the most important aspect of the report, because the North-West region is undoubtedly in need of special help and special allocation of finance even within the existing finance that is available. In other words, I am saying that the Minister should discriminate positively in favour of the North-West.
Paragraph 21.35 of the report speaks of
"our belief that the NHS ought to aim to provide equal access to health services for those equally in need"—
and these are the words—
"irrespective of where they lived".
I hope that the Minister will note those words in particular.
On 21 March 1977, I initiated an Adjournment debate on this very subject. The debate is fully reported in the Official Report from column 1042 onwards. Frankly, I could make almost the same speech today. The aim is to ensure that Ministers continue to make the same response as the Minister made to that

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Adjournment debate. At that time the Minister was the right hon. Member for Lewisham, East (Mr. Moyle), whom I am glad to see in his place.
I concede that this afternoon the Minister gave some indication that it is the Government's policy at present to continue to have some regard to the principles of the RAWP in the allocation of finance. I welcome that statement. I am not exactly sure what 0·3 per cent. means in terms of money, but 0·3 per cent. is better than nowt. One hopes that, as the economic climate improves, more money will become available and that 0·3 per cent. will represent even more money.
Mr. Moyle: It may be of interest to the hon. Gentleman to realise that in the 1978–79 financial year the North-West received plus 4 per cent. and not plus 0·3 per cent.
Mr. Smith: I am grateful for that interjection. I was not sure of the figure and was frightened that if I went out to get it I would lose my speaking place in the queue. I suspected that it was much greater than 0·3 per cent., and I am grateful to the right hon. Gentleman for his interjection. I must tell the Government that while the North-West is always grateful for small mercies, we believe that a much greater share of the cake must go to that region.
Even taking into account the increases that have been made over the last three years, the present allocation to the North-West is still grossly unfair to that region and discriminates against it. That even takes into account the increased allocations that have been made since 1977. For a few minutes I should like to give some illustrations why I believe that to be a statement of fact.
The RAWP report clearly showed that the North-West region was the most deprived region of the country, and in a moment I shall try to give some statistics to prove that. Before doing so, I should like to make one other point. Rumours are floating around—I accept that at the moment they are no more than rumours—that a move is afoot by the Government to switch from capital expenditure some of the finance to cover revenue expenditure items. If that course of action takes place, it would also add to the discrimination against the North-West. I do not accept, nor do members of the North-West re-
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gional health authority, of whom I am not one, that that is a solution, even a temporary one, to the region's present difficulties.
Mr. Lewis Carter-Jones: I am following the hon. Gentleman's argument on behalf of the North-West. Will he take it from me that with the current rates of increase it will be the year 2000-plus before the North-West achieves anywhere near equality?
Mr. Smith: That is certainly the fact. Perhaps I can now give some statistics to try to back it up. For example, the scars of the Industrial Revolution are there to be seen. Many of the buildings, including hospitals, date back to the period of the Industrial Revolution, and that includes some hospitals in my own constituency of Rochdale.
In the North-West region, 35 per cent. of Health Service buildings were built before 1900. A further 40 per cent. were built between 1900 and 1948. Therefore, the switch from capital to revenue expenditure would discriminate against the North-West. The North-West needs revenue cash but it also needs capital expenditure. The strategic plan for the North-West, published in 1974, pointed out that for the region as a whole the quality of life was not
"in balance with the rest of the country".
A person living in the North-West has an expected life span of at least two years less than the average for England and Wales. He will be more at risk from certain diseases. Statistics indicate that the North-West region experiences more deaths from all causes than any other region, and the North-West certainly has the highest ratio of diseases of the circulatory and digestive systems. Perinatal mortality rates in the North-West region have been consistently worse than the average for England for each year from 1973 to 1977. My hon. Friend the Member for Colne Valley (Mr. Wainwright) received disturbing and revealing answers to parliamentary questions on the infant mortality rate when he raised the matter in November 1979. It might have been expected that a realistic attempt would be made to compensate for the high incidence of disease by allocating to the region a higher proportion of the resources available, in order to try to maintain and improve health.

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Life in Rochdale is just as precious as it is in Redbridge. The revenue expenditure per head of population for the Rochdale area in 1978–79 was £91, compared with £136 for Redbridge. There can be no argument that the Health Service should provide the same health cover for people in Wigan as for people in Westminster, yet the revenue expenditure per head of population was £90 in Wigan and £287 in Westminster.
Even as late as 1979–80, the North-West region is still funded to only 91·95 per cent. of the target allocation which was postulated in the RAWP proposals. I referred to the need for adequate capital expenditure as well as for revenue. That is obvious, because buildings need to be improved. It is essential that the increased capital allocations notified for planning purposes should be maintained. Any attempt to switch from capital to revenue expenditure will be disastrous for the North-West region.
I mention that again because it leads me to my last point—the inadequacy of existing buildings and its effect on staff recruitment problems. It is particularly difficult to recruit paramedical staff, such as physiotherapists and occupational therapists. But the situation is even worse in the North-West. There are 35 consultant posts vacant, 19 of which are due to retirement and resignation. Six consultant posts are filled by consultants who have agreed to stay on beyond retirement age because replacements have not been found.
Last November my hon. Friend the Member for Colne Valley pressed for statistics about people on waiting lists in his constituency. The figures were alarming. The hon. Member for Carshalton (Mr. Forman) said that numbers did not matter; what mattered was how long people had been on the waiting list. The waiting time for many people is 12 months, two years or three years. Many people in my constituency are receiving cards giving them appointments to see consultants—for a diagnosis, not for treatment—in 1982. That is what is happening in the North-West region. People who live in the North-West believe that that is partly due to the poor conditions of the buildings, which can be remedied only by a special allocation of capital re sources.
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The Royal Commission, in chapter 7 of its report, deals with the role of the general practitioner in the provision of primary care. It stresses that
"It is impossible to over-rate the importance of the quality of and easy access to services of this kind."
Even in that field, the North-West region lags behind. In 1977 there were 2,415 patients per general practitioner in the North-West, compared with an average of 2,331 patients per general practitioner for England as a whole. In the North-West, 46 per cent. of general practitioners have list sizes of over 2,500 patients, whereas the national average is 38 per cent. It does not matter what criteria are used, the North-West is disadvantaged. It deserves a fairer deal.
The Royal Commission focused attention on the particular problems of inner cities and on the issue of urban decay. The right hon. Member for Salford, West (Mr. Orme) referred to it. The North-West experiences real problems in that connection. I echo the sentiments of the Royal Commission that added incentives should be provided to improve the relatively poor standard of health care provisions in these areas and give impetus to the development of services.
It may not be possible to increase the size of the Health Service cake, in real terms, because of cuts. I was intrigued to hear the Minister say that the Government had had to fund many wage increases. I spent a considerable time in the Christmas Recess meeting many representatives of the Health Service, including the chairman of the area health authority and its officers Because two hospitals out of four in my constituency are to be closed at the end of March I went into the statistics at great length. I was told by area health authority officials that last year, if additional wages as a consequence of national wage negotiations and the increase in VAT payable by the health authority were taken into account, Rochdale was short-funded by £70,000.
It is not sufficient for the Minister to say that the Government have funded many wage settlements. They have not done so. Some area health authorities have not had the extra money given to them in order to pay those increases and are, therefore, faced with hospital closures as the only way in which to finance the Service in its present state.

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I very much hope that, even if it is not possible to increase the size of the cake, and even if there are cuts in real terms, resources which are available will be directed towards the areas of greatest need. One of the objectives of a National Health Service, as defined by the Royal Commission—that there should be equality of access to health care—will then become a reality.
The North-West region has been deprived for far too long. It must now be allowed to make real progress towards the standard enjoyed for many years by other regions. I therefore urge the Government to think seriously about their allocation of funds and to use on the basis of need the funds that are available. The North-West region is undoubtedly at the head of the league table of need, regrettable though that is to those of us who are Northerners. I look for some positive response to my plea when the Minister replies to the debate.
Several Hon. Members rose—
Mr. Deputy Speaker: The House should know that 17 right hon. and hon. Members wish to catch the eye of the Chair before 9 pm.
7.1 pm
Mrs. Sheila Faith: I welcome many of the recommendations of the Merrison report. I am fortunate enough to be a member of the new Select Committee on Social Services. I know that the Royal Commission recommended the setting up of such a Committee, and I hope that we shall live up to its expectation.
I welcome also the suggestion that increases should be made in preventive medicine and health education. I hope that the Select Committee will do valuable work in these areas. I particularly welcome the fact that the Commission believes that bureaucracy should be streamlined and that the Minister is sympathetic towards this suggestion.
However, I must oppose the Opposition amendment, because the most glaring weakness in the report is that, while it suggests increased spending in many directions, including increased hospital building and more help for inner city areas, it does not say where this money is to come from. Increased life expect-
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ancy means an increased need for services for the elderly, and yet I know that in my own constituency a hospital is threatened with closure before there is adequate replacement. This is not a new phenomenon, for throughout the National Health Service the total number of hospital beds has been reduced since 1965 by about 44,000.
We have heard this evening about the North-West region, but my Derbyshire area is also a Cinderella of the Health Service. In fact, it would seem that the commissioners live in a dream world with regard to economics. They even recommend the abolition of all Health Service charges. Even more importantly, they rule out any alternative funding of the National Health Service. They say that all finance should come from taxation and that the Government should not look at other methods of raising funds. They take no account of the fact that Government funds are stretched to the limit and that no country can afford a totally free and comprehensive service from direct taxation. No other country, apart from Italy, attempts to provide a service in this way.
I welcome the idea of holding lotteries, in spite of the reservations in the report, in aid of the Service. I hope that this will prove popular and will harness the British people's gambling instincts to this worthwhile cause. But, of course, no lottery can raise the vast amount of money required by the National Health Service. Even before 1976, when the International Monetary Fund ordered that economies should be made to bring sanity to our economy, the Health Service was in severe financial difficulties.
Britain spends less on its Health Service than do most Western industrial nations. For every £100 spent per head in Britain, the Netherlands spends £147 and West Germany £158. The report states—and I think everyone would agree—that in spite of this the National Health Service gives as good a service as anywhere in the world for acute illness. This has been mentioned already in the debate. It was also stated that anyone with a hernia, varicose veins or osteo-arthritis of the hips has to join a long queue for surgery. Waiting lists have risen by 50 per cent. to over 750,000 in the last five years. As has already been said, this uncertainty is very unsettling for people.

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The public feel that the money paid in taxes goes into a pool and is not being allocated to improve our depressing, outdated and shabby hospital buildings. Studies have suggested that two-thirds of our hospitals should be replaced.
The Government should ignore the advice of the Royal Commission and continue to investigate ways of raising money by other methods, possibly by the introduction of a national insurance fund. Note should be taken that this is the way in which most other countries fund their health service and that they have had better results and are able to spend more money per head. The Government must, of course, still accept the responsibility of ensuring that people with low incomes can afford their contributions.
The Royal Commission places much stress on the fact that an expanding economy will give increased resources for health. The aim of the Government is expansion, but this may take some time to achieve as the first priority is to control inflation. During two of the four years in which the commission sat, there was no growth.
The commissioners have not taken into account that insurance schemes are able to increase their revenue more easily than Governments can because the people who put up the premiums do not have to be re-elected. Nor have they recognised that people will be prepared to give a larger share of their income if they know that it is going directly to health care.
We know, as the right hon. Member for Salford, West (Mr. Orme) said, that the heaviest users of the Health Service are the old, the poor and the chronically ill. They will still have to be provided for and the Government will have to take responsibility for them. But that is not a good enough reason for allowing the present position to continue unchanged.
The level of expenditure on health, as a proportion of total public expenditure, has hardly risen over the last few years, and yet people are spending more of their income on holidays, entertainment and consumer goods. If this situation is allowed to continue, people will take the law into their own hands and decide that
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they will give a higher proportion of their income for health provision for their families. This is already reflected in the increasing number of people joining private insurance schemes, the number of which increased to 2,388,000 in 1978.
The Royal Commission has underestimated this phenomenon. People are joining these schemes so that they can choose the time of their entry into hospital and have a choice of surgeon. As I have already said, while they know that National Health Service treatment may be as good as any in the world while they are acutely ill, they do not want to recuperate in overcrowded wards in old buildings or to seek to regain their health on what is very often unappetising food.
The 2 million people who are joining the schemes are not necessarily wealthy. Firms are taking out insurance cover for their members because they cannot afford to have their employees losing working time. Indeed, 40,000 members of the Electrical, Electronic, Telecommunication and Plumbing Union have negotiated with the British United Provident Association to provide medical care. Even more surprisingly, 1,300 members of the Transport and General Workers' Union at Bass Mitchell and Butlers have defied their union and joined a scheme. The commission is blind to the fact that the discomfort and inconvenience in our National Health Service will result in our having two completely different health services. In that way, dissension will be caused in the country. In a free country, we cannot and must not stop people spending their money as they wish. The standard of comfort and care that people give their families in time of sickness is of great importance to them.
Medical science and techniques have developed at a rate never envisaged when the National Health Service was founded. We have the best trained doctors, the best trained dentists and the best trained nurses in the world. We must also acknowledge the work done by the auxiliary services. But none of those groups is satisfied with its present remuneration or conditions.
I urge the Minister to ignore the Royal Commission's financial directives and to continue to look at and examine new ways of financing the National Health Service.
7.9 pm
Mr. James Molyneaux: For the sake of brevity, I shall deal mainly with those aspects of the report which relate to Northern Ireland, although the lessons to be derived there from are not of exclusive interest to Northern Ireland.
It is very interesting to see how much has changed since the Royal Commission was established, and even since we put forward our own views in the form of a submission almost three years ago. The hon. Member for Carshalton (Mr. Forman) may be interested to read the paragraph relating to the subject of voluntary help in the Health Service and in hospitals, in which we said:
"The present complicated organisation is not clearly understood by the general public and the process of making contact with the appropriate section is a hit or miss affair. As a practical step we suggest that in each unit, however small, there should be one member of staff who, in addition to basic (or normal) duties, would be charged with channelling and encouraging voluntary aid and clearly identifiable to the general public as the individual responsible."
I am not sure that the Royal Commission paid any great attention to that suggestion. Perhaps we could, with the help of the hon. Member, persuade the Secretary of State and the Minister of State, Northern Ireland Office, who are present this evening.
Chapter 16 of the report, entitled "The NHS and Local Authorities," and particularly paragraphs 26 to 28, is, I believe, worthy of special attention. Those paragraphs concern Northern Ireland Members but they should not be overlooked by the House in general. They must also concern many members of local authorities and others who are interested in the relationship between the National Health Service and local authorities.
Paragraph 26 sketches the history of the integrated structure in Northern Ireland embodying health and personal social services. I shall not rehearse the reservations that we expressed in debates in 1972 and 1973. The House will recall many of them. Paragraph 27 admits that at that time there was criticism. It says that there was a fear that there would be
"a de-personalisation of social work."
The Royal Commission, unfortunately, does not say whether that fear was justified.
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In my view, the fears expressed in 1973 were based on far wider considerations. The fears of "de-personalisation" were not confined to the social work sector alone. Most people in the integrated structure, at various levels, would today confess that "de-personalisation" has to a great extent gummed up the works, slowed up decision-making and damaged communication between those who eventually take decisions and those who execute those decisions.
The report makes the point that the full potential of this experiment in Northern Ireland had not, when the commission considered the matter, been fully realised. It quotes Professor Rea and Dr. O'Kane in paragraph 28. They found that
"While some respondents considered that the system was not working as well as it should, nevertheless, the impression gained was that integration was inherently beneficial with, at its best, an improved continuity of care between hospitals and community for all patients and special care groups."
Right hon. and hon. Members will have noted the words "at its best". On those three words depends the beneficial result which might be expected to flow from the change to an integrated structure. Since perfection in this wicked world—as implied in those three words—is unlikely ever to be achieved, I am afraid that we must be content with something less than what the report refers to as "improved continuity of care".
Only when the system is working at its best—I use those three words again—can it be considered superior or even equal to the present system in Great Britain. On that ground alone, this Government—indeed, any Government—ought to distinguish between the recommendation in the report that
"in Northern Ireland the present integration of the health and personal social services should be encouraged and further developed"
and any step which would tend to make permanent the integrated structure without modifications in Northern Ireland in contrast to the pattern which the report has recommended for Great Britain.
Those who take an interest in Northern Ireland affairs will wish to give some thought to the problems which will have to be faced—sooner rather than later—when local government is restored to Northern Ireland. There will be great difficulty in putting the NHS elements

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under local democratic control as opposed to appointing local representatives to hospital boards.
In such a situation there would be no financial responsibility. All net expenditure would be borne by taxes. It would be desirable, on the other hand, that there should be, as in the rest of the United Kingdom, a local democratic responsibility for the personal social services which are partially borne by the rates. That might be a powerful reason for the Government not to accept uncritically the recommendation of the Royal Commission. The Government ought not to suggest that it should remain permanent without modification.
The amalgamation in 1973 did not derive from Health Service considerations. It was a by-product of the centralization of nearly all local government functions in the hands of the Northern Ireland Government. That almost accidental development has over the years aggravated the defects and the teething troubles inherent in the changes within the original structure.
There is the completely separate consideration that there ought to be reforms of social security. Such reforms should produce advantages, both of centralisation and decentralisation, which are presently lacking. District managers are excellent at handling and advising on supplementary benefits. But when other benefits—for example, the family income supplement, attendance allowances and other benefits—are considered, the picture becomes confused. A bewildering variety of central agencies becomes involved.
The Social Security Bill now before the House will help by restoring ministerial responsibility for supplementary benefit. It could be argued, however, that the process should go further. I should like to see the link between personal and environmental health matched by a social security structure which would enable all the circumstances of a family—mental, physical, environmental and financial—to be examined by officers operating at the same level.
It will be noted that the district general hospitals—or, as we would refer to them in Northern Ireland the area general hospitals—are dealt with in chapter 10. In paragraph 41 of that chapter attention is drawn to the contrast between England
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and Wales, on the one hand, and Scotland and Northern Ireland, on the other. In that paragraph the report appears to indicate that the flexible approach in Scotland and Northern Ireland to this question is to be deplored. It seems to indicate that in Northern Ireland and Scotland we should be expected to fall into line.
I understand that in England and Wales a good deal of flexibility has crept into the original 1962 hospital plan. We hope that flexibility will be maintained and encouraged. For that reason, the Ulster Unionist Party welcomes the Secretary of State's announcement that there is to be a review of the role of small hospitals.
We shall work closely with the Northern Ireland Office. We shall co-operate and contribute to the review to ensure that a sensible balance is achieved between the need for general hospitals, which provide a full range of specialist treatment, and the equally important but not conflicting need for small local hospitals with a limited range. We shall bear in mind that our objective is not to produce a master plan which looks impressive on paper but to provide an efficient service for patients—the most important factor in our calculations.
7.21 pm
Mr. Richard Alexander: As I listened to the hon. Member for Rochdale (Mr. Smith) saying how the North-West was the worst-funded area, I thought that that was rather odd, because I have always believed that the Trent regional health authority was the worst funded of the RHAs and that the central Nottingham district was the worst-funded district. We all believe that our own area is the worst funded. Surely, the Trent regional health authority is the worst funded.
Mr. Carter-Jones: Are not some areas very favourably placed compared with others?
Mr. Alexander: I agree. I was making a debating point. We all feel that we are deprived.
The Merrison report is thorough and workmanlike. It has come up with no shattering conclusions, but that does not diminish the effort involved. It is a commentary on there being nothing fundamentally wrong with our National

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Health Service. All hon. Members who visit the hospitals in their constituencies will have that impression. We have the finest generally available health service in the world. The dedication of the doctors, nurses and anciliary staff is beyond praise. It cannot be bettered.
Those who awaited the report with bated breath were unrealistic to expect radical recommendations for a shake-up in the Service. The issues remain as they were before the report was published. The better organisation of the patients' comfort and personal arrangements when in hospital and reorganising the structure and management of the Health Service are of prime importance.
On page 2, the report states:
"Our work has been informed throughout by the idea that the NHS is a service to patients."
The December consultative document is called "Patients First". Many hon. Members wish to speak in the debate, and I shall comment briefly only on one or two aspects of the report which strike me as important and which have not been dealt with in the debate. I was glad that the report devoted a section to wakening times. Anyone who has been a patient in a general ward of a hospital, as I have, knows that wakening times are a prime example of the philosophy of "patients last". The report states that 44 per cent. of patients are wakened before 6 am and 76 per cent. before 6.30 am. That borders on the inhumane.
By definition, a patient is a sufferer and finds it difficult to sleep at night at all. He has no exercise during the day. He is in discomfort and cannot get to sleep until the small hours unless he has the benefit of sleeping pills. By the time he drops off, he has only an hour or two's sleep before he is awakened again. He is not refreshed, dozes fitfully through the day, and by night he cannot get to sleep. Lack of proper sleep during normal sleeping hours cannot be in the best interest of a patient who is recovering from an illness. I hope that all health authorities will review their practices, as recommended in the report.
The report also deals with the question of privacy. Mixed sex wards do not appeal to most people. Least of all they appeal to the middle aged and elderly, who were brought up in an era when modesty was more the order of the day
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than it is today. In hospital things are done to, and by, a patient which, ideally, should be done in total privacy. They can be done—but only just—when people of the same sex are around. For the elderly it is humiliating and degrading if they are done in the presence and hearing of people of the opposite sex. Mixed wards should be a rarity. As the report recommends, patients should be given the choice before they are put in such a ward.
Mental health was mentioned by my hon. Friend the Member for Carshalton (Mr. Forman). The commission deals with mental health in some detail. However, it does not mention housing the mentally ill with the mentally handicapped. There is a proposal to erect a medium secure unit for the mentally-ill at the Balderton complex for mentally handicapped people. Such a development would be a disaster for a hospital for the mentally handicapped such as Balderton.
The proposal is causing alarm to the parents of mentally handicapped children who are patients at that hospital. It cannot be in the interests of mentally handicapped people. Nearly 100 per cent. of the people living in the area are against the proposal and are alarmed about it. I am sorry that the commission did not find time to deal with that recent development, but we shall hear a great deal about it in the coming months.
The report contains a section on complaints within the National Health Service. It states that in England and Wales complaints about general practitioners, dentists, opticians and pharmacists must be made in writing to the family practitioner committee administrator within eight weeks of the event which gave rise to the complaint. Hands up those hon. Members who know that. I warrant that possibly only 50 per cent. of hon. Members know of that requirement.
If only 50 per cent. of Members of Parliament know what to do—and, by definition, they are people who go about the world and understand what should be done—how can people with no great education or influence know what to do? Not one person in a thousand has ever heard of a family practitioner committee, and not one in ten thousand knows where the administrator operates from. Even if a person knew both those things, he could not know that there was an eight-week time limit from the date of

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the event which gave rise to the complaint. Sometimes we in this place overestimate the ability of the ordinary citizen to find his way through the web of bureaucracy to get his rights. This is so also in the National Health Service.
Mr. Ronald W. Brown: The hon. Gentleman has just made an important point. When the patient finally knows that he can go to a family practitioner committee to complain, he has to present his own case. He can take a friend, as long as that friend is not legally qualified, but the friend has to whisper in his ear to tell him what to say in answer to any questions. Therefore, even if the patient understands the procedure, it is made difficult for him.
Mr. Alexander: I thank the hon. Member for that helpful intervention. I entirely agree with him.
The way in which we deal with complaints can be considered at a later date. If we must have a complicated and obscure system of complaints through family practitioner committees, we should at least extend to six months the time limit for making the complaint, as recommended in the report.
I have adhered to the instruction to be brief. I trust that my remarks will fall on receptive ears and will be dealt with by my right hon. and hon. Friends.
7.31 pm
Mr. Laurie Pavitt: I hope that the hon. Member for Newark (Mr. Alexander) will forgive me if I do not take up his points, but I also want to be brief.
I am not without a little knowledge of the National Health Service. I believe that the Merrison report is a truly great report. Since the inception of the Health Service we have had dozens of reports. I believe that this report compares favourably with the report of a quarter of a century ago—the Guillebaud report. That report was commissioned by a great Conservative parliamentarian, the late Iain Macleod. I say that Iain Macleod was a great parliamentarian because he was prepared to accept the recommendations of that report, and until 1976 the Tory Party followed the general consensus of opinion that came out of that report. I hope that the present Government will follow that
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example. The pattern set by Iain Macleod was a good one.
This report gives a number of signposts which are the result of careful study. Athough the commission gives no answers, it at least has charted the way for a Government to move forward. The House knows how complicated the NHS is, because it has so many sectors. The commission has gone into each of those sectors in depth. So, whichever sector of the NHS one looks at—I am not talking here about geographical regions—it has been studied in depth by the commission. The report will be a valuable source of information for action by all Governments of the future.
The course has to be followed by the Government. Priorities for action have to be selected by them and the responsibility is theirs. Nevertheless, the Merrison report will go down in history and could well shape what happens during the next two decades. The most important aspect of the NHS with which the commission dealt, which overshadowed even the reorganisation and almost every other aspect of the Service, was resources. This has again emerged in the debate in practically every contribution.
The value of the Merrison report is that it shoots down a lot of the fallacies, false dawns and things that were thought possible. What the report does so effectively is to show why such matters were peripheral and did not deal with the basic problem. There is no other alternative than that a public service such as the NHS should be paid for by the public. Whatever form of semantic labels we may choose, whatever pattern we like to put forward, it boils down to a system—or systems—of taxation. The Government have no money. They have only the money given to them by the taxpayers. If the NHS is to be a comprehensive service, the public must provide the money.
Present funding, under which 87¾ per cent. of the cost of the NHS comes from rates and taxes in the year 1977–78, is social justice. The higher taxes a person pays, the more he pays for the NHS for the benefit of his fellow man. The poor and the elderly pay nothing at all. Surely there is not a more humane way of funding NHS resources. However, a massive increase in funds is now urgent and vital. Unless the Government do something to

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provide additional finance, many of the recommendations of the report will be impossible to fulfil, even with the best of intentions.
The Secretary of State might consider approaching Saatchi and Saatchi, which has some fame in the selling of products. The NHS needs to be sold to the general public instead of being denigrated in the newspapers day after day. It is about time someone started shouting about what is right with the NHS. If the public are to be asked to pay more, they must know what they are paying for. The NHS is the best bargain in the world for a family. It is worth paying for.
I recently had the opportunity to study the health service in France. I know that the Minister of State is keen on that country's system. I can assure the Minister that we are still head and shoulders above the French when it comes to health care.
The Minister for Health (Dr. Gerard Vaughan): Does the hon. Member for Brent, South (Mr. Pavitt) accept that in France there are no waiting lists for hospital treatment, whereas we have the longest waiting lists in Europe?
Mr. Pavitt: I looked not only at the hospital service but at domiciliary care. Additionally, the French did not have a consultants' strike as we did a few years ago, which added to the waiting list. The French do not have the same system of employment. The Minister knows that if one is seriously ill there is no waiting and one is admitted within 24 hours. As I told the House last time I spoke on the subject, there is no waiting list for an urgent case in this country any more than there is in France.
The first thing I urge the Secretary of State to do is to make a clear designation of the payment we make to the NHS through taxation as distinct from national insurance and the social security scheme. Most of my constituents are of the opinion that a deduction is made from their wages for the NHS. In fact, only a small percentage of that deduction goes to the NHS. It is almost negligible. If the public are to be expected to pay more—as I believe that they should—they will do so more generously if they know how much they are paying and what their
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payment buys. Perhaps the door may be opened to more generosity.
I have time only to touch on three of the particular points of the report. The first is one that has dominated this debate so far, and that is the question of NHS charges. Many hon. Members will remember that the greatest vote against my own Labour Government was when I divided the House on this issue some years ago and took most of my hon. Friends on the Back Benches into the Lobby with me.
Incidentally, may I put the record right on some of the dates that have been bandied about today regarding prescription charges? These charges were not imposed by a Labour Government. They were imposed by the Conservative Health Minister in 1952, the late Iain Macleod. I do not know that this is relevant, because had the Labour Government won the election they might well have done the same. However the Labour Party did not win the election. The Shadow Opposion spokesman at that time was the late Hilary Marquand, who gave a pledge on behalf of the Labour Party that when it returned to office it would do away with prescription charges. That pledge was honoured on 1 February 1965 by the then Minister, Mr. Kenneth Robinson.
There were no prescription charges for a year. Exactly a year later, on 1 February 1966—I know the date, because 1 February happens to be my birthday—under the pressure of the Treasury, as ever, they were reintroduced by Kenneth Robinson. The various changes in prescription charges since then have occurred under both Governments. The report states that there is a good case for their gradual but complete extinction, and the commission so recommends.
Prescription charges remain economic, ethical and clinical nonsense. If I had more time, I could show precisely why. I quote as my authority a previous Secretary of State, the late Dick Crossman, who declared in a Fabian lecture that the first thing he would do in 1970 was to eliminate prescription charges. I regret to say that it was not because of the eloquence of my arguments or those of my colleagues on Socialist or ethical principles that he did so. It was purely because of economic facts. He found that charges were nonsense. They cost more

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to collect than they were worth and involved a great deal of trouble. Every year that prescription charges have risen, so has the pharmaceuticals bill, for some of the reasons already given in the House. Of 296 million prescriptions last year, 63 per cent.—188 million—were free.
What is so unjust is that the charges mean double taxation. Everyone pays once, but only the sick pay twice. Only those whom a qualified doctor declares to be in need of medication pay a second tax. The average taxpayer pays 80p a week, year in and year out, for medicines whether he consumes them or not.
Let us take a hardy and healthy group, such as the Lobby correspondents, who are probably rarely ill and who probably pay higher taxation than most. They are paying all the time, but if their wives or children want medicine they pay a second time. That is unjust in terms of taxation, because the whole purpose of the Health Service is that the healthy pay for the sick. The prescription charges and other Health Service charges mean that those who are sick contribute to the healthy.
The greatest sin of the Secretary of State and this Government was their Scrooge act of last July, when they decided that all those under 60 who suffered from Parkinson's disease, congestive cardiac complaints, hypertension, arthritics, thyroid sufferers, those with emphysema and all other chronically sick people entitled to a season ticket should pay an additional charge. The six-month season ticket was doubled in price, by £2·50, and the 12-month season ticket went up by £4·50.
Do the Government really need to tax the chronically sick to raise a total of £670,000? Do thy need to tax the sick to the extent of 0·007 per cent. of the NHS finances in order to find more money to give away for tax relief for the wealthy? I cannot conceive that that is in any way compatible with a humane society.
My second point has also been covered by the hon. Member for Carshalton (Mr. Forman). I refer to the holy grail that we are everlastingly pursuing, and on which the Royal Commission has a first-class chapter—prevention rather than cure. Paragraph 22.14 of the report says:
"government action could produce rapid and certain results: a much tougher attitude towards
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smoking…a clear commitment to fluoridation and a programme to combat alcoholism".
The Secretary of State has already told us that the negotiations with the tobacco industry will be completed by March. I urge him to be really tough. If he wants further factual information about the way in which he could get tough, I ask him to look at the article in the Financial Times of 17 January.
We assume that when the present negotiations with the tobacco industry finish we shall have a statement. I urge that it should be made not on a Friday but when hon. Members have a chance to discuss it.
The right hon. Gentleman has backed down on fluoridation. I do not believe that he wants to introduce it. As it is a controversial issue, and as hon. Members on both sides of the House may have reservations about it, would it not he possible for the Leader of the House to find time for a Private Member's Bill on the subject, letting the House decide? If the Government cannot, and if the Opposition have no right to decide, why not let the House decide?
My third comment is mixed with gratification, in that the evidence that I submitted on possible radical changes within the dental service has been the basis of many of the recommendations in the report. Paragraph 9.73 says:
"The prevention policies which we recommend for the future offer a real and attainable—perhaps unique—improvement in public health."
The country spends £238 million a year on dental treatment, yet toothache, caries and the use of dentures could be as extinct as the dodo by the end of the century. We now know how to prevent dental decay, yet, in spite of the comprehensive dental service, the incidence of oral diseases has risen dramatically. In 1969 there were 19,430,000 courses of treatment. In 1976 the figure had risen to 26,277,000. We know how to stop putting china into people's mouths and how to preserve their teeth, but it means spending a little more money. It means an increase in public expenditure, but services for the people in need can be increased only if that is done communally, by the country at large. Public expenditure on these matters means a long-term saving. It is an investment. It does not mean that we are throwing money away.

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The second paragraph on the dental services to which I draw attention is paragraph 9.75(b), which responds to some of the suggestions made to the Royal Commission that there should be an experiment
"with alternative methods of paying general dental practitioners".
I believe that dental graduates could be given a choice of two kinds of career structure. One would be precisely as it is now, with a Dental Estimates Board and all the present complications.
If a graduate wished to keep to the present old-fashioned system, he should be allowed to do so. But he should be offered the alternative of a more rational approach, in which prevention takes its full part in the service that he gives. Unlike the present system, under which he earns his maximum income at the age of 30 and receives less the older he becomes, this approach would make it more likely that his experience would be well rewarded, as it is in every other profession, including the medical professions, the older he became. The Secretary of State could well experiment with other systems which could overcome the difficulty that the more teeth the dentist fills, the more money he receives—the greater the incidence of illness, the higher the income. That leads to all kinds of problems.
I offer the Secretary of State and the Minister of State my sympathy. Thinking voters will add to their judgment of this Tory Government an assessment of their compassion and humanity. I believe that the right hon. Gentleman is a lone voice crying in the icy wastes of the Cabinet against all the economic, financial and selfish interest that seem to motivate the present Government. I wish him well in what he is trying to do but feel sure that he will be outgunned. I look to the next Labour Government to use the Merrison report—paragraph 22.2—it is invigorate the NHS and to restore morale, particularly of nurses, doctors, ancillary workers and those to whom all of us owe such a great debt.
7.50 pm
Mr. Den Dover: In the conclusions and recommendations of the Merrison report to re-enliven and restated that
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"no matter what the topic",
the commission examined it and asked itself
"Will our recommendations help the patient, and help those who serve him to do so more effectively?"
It is against that background that I shall speak for a few minutes.
Is the Health Service responding in too much of a big brother manner, a bureaucratic manner, to local demands? The Secretary of State and the Minister for Health have made it clear on many occasions that the Government want to respond to local demands to provide a local service.
I shall describe briefly some local matters in Chorley that raise doubts in my mind whether we are providing a locally responsive service. I have written to and spoken to my hon. Friend the Minister for Health about the casualty service at Chorley hospital. It has been the subject of a petition containing 20,000 names and a march by 7,000 people in pouring rain. There is tremendous local demand. All that is wanted is one senior registrar, one consultant or one house officer to supervise the extension of casualty hours beyond the nine-to-five five-day service that is now provided. Surely that is not asking too much.
I direct my remarks, secondly, to the local ambulance service. A few years ago the casualty service was restricted. A Lives in Danger organisation was established. It ran an ambulance service by means of voluntary help. It operated a car that carried specialist equipment. The car was used to take people to hospital. Among other things, it carried resuscitation equipment.
We were supposed to have an extension of two ambulance bays as a step towards an expansion of the hospital service. That has now been turned down. Did we respond to the show of voluntary service? I do not believe that we did. Has the National Health Service taken advantage of that voluntary effort?
Pat Seed has been present in the Strangers' Gallery for most of the debate. In the North-West she has raised about £2 million towards the provision of an all-body scanner at the Christie hospital, Manchester. Within that funding she has paid for 10 years of its operation. My hon. and learned Friend the Member for

531
South Fylde (Mr. Gardner) and I have been pressing the Minister to ensure that the unit will operate. It has taken several weeks or months for the regional health authority chairman to urge that on the Minister. It has been necessary to make those representations even though funding has been available. I am pleased to announce that in the past 24 hours the Minister has relented. It has been made possible to man the scanner outside the NHS by something to do with the University of Manchester medical school. That is the first sign of a chink of light. It is the first sign that perhaps we are not too much of a bureaucracy.
I sympathise with the Minister for Health and the Secretary of State because they are responsible for a huge number of people throughout the country. However, I ask them to ensure that we carry out our policies of responding to local demands and combining the best of voluntary help and funding with the provision of the NHS. Surely it is best to carry both forward and thereby improve the NHS.
7.53 pm
Mr. Lewis Carter-Jones: I shall be brief, because I hope that all my colleagues will have a chance to participate in the debate. I identify myself with the hope that has been expressed by several hon. Members that the deprived areas will be given much greater resources. If greater resources had been made available to such areas, the appeal made by the hon. Member for Chorley (Mr. Dover) would not have been necessary on behalf of the North-West. I commend Pat Seed on her wonderful and valuable efforts.
I was delighted to hear the Secretary of State say that the Government would be giving priority to perinatal care. The campaign was led by the Spastics Society. I have been actively involved. Since the campaign was launched, the figures have tended to improve. I feel that they have improved primarily because people have become aware of the problem. It is significant that those who now occupy the Front Benches are among those whom I have plagued over the past two and a half years on the issue of perinatal care. The first results are appearing, but they are the results of awareness and not so much those of extra funding.
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I give notice that I intend to make the Minister aware of another problem. However, with his background the hon. Gentleman does not need me to do so. We should devote much more time to the rehabilitation services. In the decade that has recently ended, we had four reports on rehabilitation, namely, the Tunbridge, Mair, Sharp and Snowden reports. In the commission's report there is an appendix on rehabilitation.
I shall speak briefly on rehabilitation and its impact upon the elderly. There is an assumption that we grow old and that there is not much that can be done for us. It is assumed that at the end of the day we shall be tucked away in a geriatric ward to absorb vast quantities of National Health resources. That is a fallacy. I ask the Minister to consider allocating extra funds to the rehabilitation of the elderly.
We make an assumption that as we grow old there is not much that can be done for us. That is unfair to those who work to rehabilitate, such as the staff at the Lady well hospital, in my constituency, and Dr. John Wedgwood, the consultant physician in geriatric medicine at the Middlesex hospital. These people prove conclusively that there is a tremendous amount of rehabilitation that can be done. It requires team work and the efforts of those in the medical profession who want to specialise in that sector. It requires the efforts of nurses and those in the remedial profession, such as occupational therapists, physiotherapists and social workers.
Much has been said about queues. When considering the elderly, the problem that we must face is the immobilisation syndrome. I shall give a classic example of the syndrome as an illustration before returning to the elderly. Dr. Wedgwood, in an illuminating address to NAIDEX, referred to the man aged40 who, at the request of his parents, was visited by a geriatrician. The geriatrician found that the man had had his appendix removed when he was 19. Apparently he had been told to go to bed. He did so, and he stayed there until he was 40. The geriatrician and the rehabilitation staff worked hard on that man, and after five years they succeeded in making him only partially mobile.
That is an unusual and exaggerated case, but I am sure that it falls within

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the experience of the Minister that an elderly person in need of treatment for a disease who has to wait for treatment and has to stay within his home, or in bed, quickly becomes highly immobile. The initial cause of the immobility, coupled with the delay in treatment, leads to a person going into a geriatric ward much earlier than would otherwise be necessary.
On the evidence that I have, tens of thousands of NHS beds are occupied by elderly people who have not received treatment early enough and are suffering from the immobilisation syndrome. If resources could be devoted to intelligent rehabilitation in our society within the NHS, I am sure that many of those now in hospital would not be there. That would result in substantial savings to the Health Service, better living conditions and better standards for those involved, and fewer demands being made upon our social services. It is right to do that. To use a phrase that is often quoted,
"The intelligent use of rehabilitation will not of necessity add years to the life of people, but will add life to their years."
That is the function of the National Health Service when caring for the elderly.
7.59 pm
Mr. Anthony Grant: I hope that the hon. Member for Eccles (Mr. Carter-Jones) will forgive me if, in view of the time, I do not take up his speech.
The Royal Commission was charged with the task of finding better uses for the financial and manpower resources of the National Health Service. The Government were elected—and pledged in their manifesto—to find a better use for existing resources. I can suggest one way in which millions of pounds might be saved each year for our hard-pressed National Health Service. My suggestion does not involve recourse to the taxpayer. I suggest the greater use of private contractors and private enterprise in the ancillary services that hospitals require.
I declare an interest in the Pritchard Services Group, which is a large company operating in a number of fields all over the world. Until recently the company was sited within the boundaries of my constituency. The Crothall company is a subsidiary of that group and it offers
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domestic and ancillary services to hospitals throughout the world. Most of that company's work is carried out abroad, where there is a much greater use of private contractors, who compete with each other within the health services.
According to figures that I obtained from the Ministry under the previous Labour Government, about £250 million a year is spent by the Health Service on domestic cleaning services. That figure may be higher now because of inflation. Of that sum, about 1½ per cent. is undertaken by private contractors.
I approach the issue in three ways. First, there is a question of standards. Some people believe that the standards rendered by private contractors would be lower than those of direct labour. However, that is fallacious. The right hon. Member for Lewisham, East (Mr. Moyle) is on record as saying that the services rendered in one particular hospital—where services had been criticised—were of the highest order. In 1980 the standards in the hospitals where direct cleaning labour is involved are deplorable.
Close to the boundaries of my constituency lies Northwick Park hospital, which was built in 1971 and was opened by Her Majesty the Queen. It was intended that it should be one of the best hospitals in Europe. However, some time ago I went to visit constituents in that hospital. I got into the modern lift, which had been built only in 1971, and I found graffiti all over the walls, cigarette ends in the door runners and stale food on the floor. Months later, I visited the hospital again and I used the same lift. The food had gone but the graffiti remained. As far as I know, the same cigarette ends were there. I was told that it was almost impossible to keep such places clean and to remove such dirt. If that is the standard in our hospitals, something must be done.
Secondly, it has been suggested that industrial relations are worse in hospitals where private contractors undertake ancillary work. However, that can be disproved by the last winter of discontent. During that period, industrial unrest was worst where labour was carried out directly by the hospitals. There was virtually no trouble in hospitals that had used private contractors.

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Finally, I turn to the question of saving resources. Where private contractors have been used for ancillary services, it has been found that a saving of nearly 10 per cent. has been achieved without any diminution in standards. I have given documentary evidence of that to the Minister and his Department is aware of it.
Let us assume that, without any reduction in the labour force and without any reduction in wages—because the same firms and unions are involved and the same negotiations take place—savings are achieved by skilled management. If private contractors were used throughout the whole of the Health Service—as other countries use them—on the basis of a cost of at least £250 million each year and on the basis that a 10 per cent. saving can be achieved, there would be a saving to the National Health Service of about £25 million a year. An even greater saving might be achieved if greater competition were allowed.
Mr. Ronald W. Brown: A new hospital is being built in Ealing by private contractors. Its cost has increased because of delays and the absurdity of the contracts that were made. As a result, the district has lost a lot of money.
Mr. Grant: I am not concerned with that, because it concerns the building of a hospital and does not involve the supply of ancillary services. I am not associated with any firm involved with that hospital, and my constituents do not go into that area.
It would be possible to achieve savings of £25 million on the basis of figures that I have given to the Minister. I urged the Labour Government to encourage the use of private enterprise, but the answer was always that this was a matter for the health authorities. That is fair enough, but it does not go far enough. In November. I asked the Minister what action he had taken to encourage greater competition in the supply of ancillary services. He replied:
"Health authorities have discretion to put a wide range of services out to contract, and it is for them to decide in the light of local needs and circumstances whether services can be provided more effectively and cheaply by this means. I should be glad to see them use this discretion more freely"—[Official Report, 5 November 1979; Vol. 973, c. 52.]
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That is progress in the right direction, but it does not go far enough.
What can the Minister do to push the authorities—I am not suggesting legislation—into the greater use of private enterprise? Private enterprise would lead to higher standards and to a substantial saving of money. It would be possible to buy a lot of kidney machines and essential medical equipment with that money.
8.8 pm
Mr. Ronald W. Brown: In many regions private contractors are used for a whole range of work, and their track record shows why their work is poor. They have to undertake fixed contract prices, and the Minister knows that. As long as fixed contract prices remain, there will be a problem. When hospitals employ labour to do a job, that labour is under better control. The building management may be wrong. It is up to the hospitals to find better building management. That does not alter the fact that it is not correct to say that private contractors would bring about an improvement in the Health Service. That does not accord with the facts.
I support the general theme of the commission's report. The reorganisation of the Health Service in 1974 produced the chaos and difficulties that we are now in. We opposed the reorganisation and tried to point out to the "Mad Mullah" who is now the Secretary of State for Industry that he was on a mistaken course, as he was in 1962 when he destroyed London, but he would not listen. We tried to explain that, with his restructuring, unless the Health Service continued to be funded on a growth rate of 4 per cent. it was bound to be destroyed. He would not listen and argued that as long as the structure was changed the money would take care of itself. We are now in the position that we warned him about many years ago. It was an inevitable consequence. The previous Conservative Government caused the problem, and they are now trying to tell us that they do not want to put it right but want to bring in private enterprise as an alternative.
Between 1956 and 1974 the National Health Service enjoyed an annual growth rate of about 4 per cent., whereas it now absorbs only about 5·5 per cent. of the gross national product, compared with 5·6 per cent. in 1975 and 1976. It is

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clear that the proportion of the nation's wealth spent on the National Health Service has been effectively frozen for five years.
It is impossible to freeze the NHS. It moves backwards. It cannot stand still. The Secretary of State talked about increasing problems. He mentioned the burden that elderly people put on the Service. To countenance a freeze is to say that the Health Service will grind to a halt.
It was the limit when the Secretary of State said that the problem with the Service was the patients. In identifying the problems of the Health Service, he said that it was all down to the patients. That was his first point. He did not go on to say "By the way, we shall have to re-educate patients." The main thrust of his argument was that the patients were the real problem. If the Government could get rid of the patients and their demands, they would have a wonderful Health Service. It is scandalous that that was the sum total of the Secretary of State's contribution.
The Secretary of State's skill was that he enunciated that fact as if it were some new dream—this is the millennium. It was in the Conservatives' manifesto. He is right, but it was their nineteenth century manifesto. That was what they did in those days. Even after the war we had the HSA, the HSF and the Manor House hospital. People could not afford to pay for hospitals and doctors, and because they could not afford to buy them they used to make up their own treatments for coughs. That was how it was. It would seem that the Government would like to wipe the slate clean and return to that position. When people were poor, the Tories were compassionate. They built a home and called it a workhouse.
In my constituency the other day I was delighted to see one of the DHSS buildings being painted. I thought that rather strange. It looked as if it needed pulling down, but it was being painted. I suddenly realised why. Over the entrance it said "Office for the relief of the poor". Having listened to the Secretary of State this afternoon, I am sure that the order has gone out to repaint those offices. The right hon. Gentleman will not get a very
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good reception from the people in Hackney for the idea of having an office for the relief of the poor. No doubt he calls that forward planning, but he is arguing to turn the clock back.
Patients are demanding. The Secretary of State claims that old people do not visit a doctor so often. They are more discriminatory. It is the young people who use the Health Service more frequently. However, the young people are told by the medical profession that they would rather they came to see them earlier, before it was too late. If a young mother worries about her baby and does not go to see a doctor for a long time, when she eventually goes and the doctor finds that there is nothing wrong he does not tell her that it is marvellous that she has saved the Service a bit of money. He tells her that she is a silly girl and should have come earlier. He tells her that he is there to give advice. The Secretary of State is wrong to suggest that the young mother is a disgrace to society because she takes her child to see the doctor when she is unsure about what is wrong. Young mothers should not listen to the Secretary of State. They should go to their doctor and see that their child is properly cared for. It is outrageous for the Secretary of State to argue that it is an exercise to save tax.
The right hon. Gentleman mentioned drugs but said not a word about the pharmaceutical industry and the vast sums of money that it milks from the Health Service. He appeared only to be saying to doctors that they should not prescribe these drugs because they were too good for the workers; they should be saved for those cared for by private enterprise. I hope that he will produce a circular that can be handed to all my constituents by their doctors. It will say to the patients that they should have a certain drug to help them get better but that the Secretary of State says that it is too expensive. The right hon. Gentleman cannot leave it to the doctors. If he gives that instruction and takes away a doctor's clinical judgment, he must put it in writing so that we know at whose door the blame rests.
The right hon. Gentleman's advice to doctors is that under the National Health Service they must not prescribe drugs

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that ought to be prescribed. He says that they are too expensive. If people have sufficient money for private medicine, he will allow them to have whatever drugs are available and the necessary help. People can have good help if they pay for it, but if they cannot pay for it it is the knacker's yard for them. That is the point made by the Secretary of State.
Years ago, before he was Secretary of State, I told the right hon. Gentleman that one of the greatest problems in the Health Service was that the largest part of the bill in a teaching hospital in London was for drugs. No matter what measures are taken, the pharmaceutical industry will always get round them. The Secretary of State should have told us what his proposals are to cope with that problem.
The Secretary of State, as a London Member, acknowledged that London had problems, but he went no further than that. He leaves it to three highly specialist inquiries, one of them by a university and not even by his Department. He said that he would examine the London problems in the light of those specialist investigations. He knows that that is wrong. Until we have an independent inquiry to examine all the facts, we shall never get it right.
As I have said before, the hospital service in my constituency is in a chaotic state, and we shall not solve the problem unless we have an investigation. A teaching hospital in the district covering my constituency takes about 65 per cent. of the district money. To find that money, four hospitals in my constituency are being closed. That would not be so bad if all the people in that hospital came from my constituency, but only 15 per cent. of the patients in that teaching hospital come from the district, even though they pay 65 per cent. of the charges. The other 85 per cent. come from all over the country—from the North-West, the North-East, the South and Scotland. Therefore, it is quite unreasonable to close all these hospitals in my constituency simply because of the money needed for the teaching hospital. I underline the fact that these hospitals are not being closed for medical reasons. They are being closed on a financial basis, namely, that £1·5
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million must be found, and the only way that this can be done is through closures.
I am staggered to hear the Secretary of State gloss over the London problem. The Royal Commission felt that the problem was too big even for it to handle. That was why it recommended an urgent inquiry. There is a definite problem here which must be resolved. Certainly the funding of teaching hospitals is an issue which must be resolved. It is not sufficient for the Secretary of State to leave it alone.
Mr. Moyle: I have been following my hon. Friend's remarks very closely. I wish to inform him that we accept the Royal Commission report and the recommendation that there should be an inquiry into the Health Service in London, for the very reasons that he is advancing.
Mr. Brown: I am grateful for that assurance. I should like to discuss this matter in depth. It is a tragedy that we have so short a time in which to make our contributions on this excellent report. My right hon. Friend the Member for Lewisham, East (Mr. Moyle) has just thrown down a challenge to the Secretary of State. If we are prepared to do it, why will the Secretary of State not review his position and undertake an urgent look at the London situation—not because the Government are bureaucrats, but because people are suffering?
In my constituency, people are not getting treatment. I was assured by the Minister for Health, who was kind enough to come to my area, that Hackney people would have prior rights to go into the teaching hospital. That assurance was given in front of the consultants of the teaching hospital. Last week one of my constituents was referred to the teaching hospital by her doctor, but when she was seen at the hospital the doctor there told her that she was not really serious enough to be in that hospital and he suggested that she should go elsewhere. Therefore, there is clear evidence that the teaching hospital will not be used as a district hospital.
I hope that the Secretary of State will really pull his socks up. He was a pretty poor performer today. A real difficulty faces us, and we want a man-sized answer to the problem.
8.24 pm
Mr. David Crouch: The hon. Member for Hackney, South and Shoreditch (Mr. Brown) knows much more about the Health Service than he has revealed tonight. He ranted and raved in a way that really does not become his expert knowledge about the Service. He and I are the only two hon. Members who for the past five years have served on regional health authorities. I am sorry that he injected so much politics into his otherwise sober and sensible reflection of the real problems facing the Health Service. The real problems are not political but economic. There is a shortage of money. The real problem is finding enough money by some means or another. That is really what my right hon. Friend the Secretary of State has tried to do, and the Opposition, for quite good and fundamental reasons, object to it. I do not blame them for arguing on that score.
The hon. Member for Hackney, South and Shoreditch spoke about people coming into his area to go to one of the London teaching hospitals. In the jargon of the Health Service, this is called "cross-boundary flow". There is an advantage in being able to go to hospitals in my area, for example. I have an interest to declare in that I am a member of my regional health authority. Also, I have an interest in the pharmaceutical industry. That would come out—it always does—but am not worried about it because everyone knows. I believe that there is a real advantage in being able to go to one's GP and say "I want to go to Bart's" or King's or Guy's. There is a great advantage in the GP being able to say to a patient who lives 70 miles from London "The best man for you is at Guy's".
Mr. Ronald W. Brown: Yes, but it should not be paid for in that way. That is the problem.
Mr. Crouch: I do not want to dwell too long on that point. I agree that there is a case for the teaching hospitals, whether they are in London or in any other great city. Merrison did not spend long enough looking at the problems of these hospitals. He quite properly described the teaching hospitals as "centres of excellence". That is true.
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They are seen to be such, not only in this country but abroad as well. I am glad that they sustain and maintain their excellence. But that costs money. I liked Merrison's suggestion that there should be an inquiry—at least in London.
I go along with the hon. Member for Hackney, South and Shoreditch in believing that there is a strong case for an inquiry into the situation in which the 12 teaching hospitals are concentrated—unnaturally in this day and age—in a small area around London with its diminishing population in the centre. Nevertheless, to let these hospitals wither in any way at all would be a disaster. Also, to let them become so involved with other NHS responsibilities of primary healthcare that their specialist provision was diminished in some way would be a tragedy. These hospitals are in such a special position that they merit a further inquiry.
The House knows that I have never descended to the argument about the sale of drugs in the Health Service. It would be almost improper for me to do so. However, as the matter has been raised, I should like to comment on the cost of drugs. Let us get this in perspective. Out of a total cost of the NHS of £8,000 million, the total cost of drugs is £500 million. The real cost of the Health Service which comes from taxpayers' money is the 70 per cent. of £8,000 million which goes in wages and salary.
Merrison mentioned drugs in his very thorough report. He examined health services around the world and ways in which we could keep down the cost of drugs. He pointed out that in some countries—in Australia, New Zealand and Denmark—there is a limited list of drugs recommended produced by the Governments of those countries. The drugs that are recommended by bureaucrats and officials are prescribed free. If a consultant thinks that there is another drug which is an advance on the limited list, that drug must be paid for at the going rate. I do not deny that drugs are very expensive. I think that the limited list idea is appallingly bad—not for any vested interest of mine, but because some people might be denied the best drugs and the best developments in medical science. That would be terrible. The Health Service was set up in 1948, and

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ever since it has maintained the free availability of the very best—of surgery, medical treatment and drugs. We must never lose that in this country, because it is important. I mention it only because it is mentioned in the report.
Mr. Haynes: The hon. Member has ranged across the spectrum concerning drugs, and he has mentioned particularly the high cost of wages and salaries, but he forgot to mention something very important—the massive profit that is being made by the pharmaceutical industry.
Mr. Crouch: In a way, it is almost helpful that the hon. Member has mentioned that, because all of us in this House have to learn that the profits are determined by the Minister. They were determined by the hon. Gentleman's right hon. Friends until a few months ago. Now it is the turn of my right hon. Friends on the Front Bench. The profits of the industry and its costs are determined. No industry in Britain is more closely controlled by the Government than the drugs industry. I would be the first to support that Government action in so controlling profits. It is absolutely right.
I say one special thing to my right hon. Friend. This afternoon he talked about regional health authorities, saying that they would remain and would have a strategic planning role. It is important that they continue to have that role rather than lean over the backs of the stronger district authorities that are to be established, telling them what to do in the tactical sense. They are allocating their resources and letting district authorities get on with the job, and the delivery of the health care and the decision on the spot is up to the people nearest the point of delivery of health care.
As regards membership of the authorities, here I speak with a vested interest. My right hon. Friend should look very carefully into his thought that he might seek to pack RHAs in future with district membership, and no more than district membership. Certainly let us have representation on the RHAs of the district team view, but let us also have some other voices there that are not at the district level and are thinking strategically as well. In that way, I think that my right hon. Friend would get what he really wants—the best decisions.
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I want to speak on only one subject that arises from Merrison. Merrison has commented that the NHS is a service for consumers and that we must always start by considering the patient that it is intended to serve. But for once I want to speak not of patients but of the workers in the industry—1 million of them. I want to deal with one aspect of the report which is very important indeed. That is chapter 12 concerning the industrial relations problem.
We have seen emerging in the last few years, particularly since 1973, strangely—although perhaps it is not so strange—an industrial relations problem in the NHS which was almost foreign to the Service hitherto. We have not expected to see certain reactions on the part of people in a dedicated Service. Be they consultants, nurses, ancillary workers, porters or whatever, we have expected them to be so dedicated that they would not react in a way which would do anything to injure their own dedication to their patients. Yet that situation has arisen. In the NHS, industrial relations are as important for the patients as they are for the workers.
We should also be reading, in conjunction with Merrison, Lord McCarthy's report on the working of the Whitley Councils. It is absolutely essential reading, together with the report we are debating. Lord McCarthy carried out a review of the work of the Whitley Council system. He then said that what the Government needed to do was to ensure that the review recommendations were carried out. It is one thing to write a report; it is another to see that a review—and that means a change—takes place.
Another thing which arises from the Merrison report is appendix H to chapter 12—the evidence of ACAS. I go along with every word of that evidence. I quote from paragraph 39 of the ACAS evidence:
"Unless effective remedies are introduced urgently, we can see little prospect of avoiding continued deterioration in industrial relations…and noticeably poorer quality patient care."
ACAS has been called in far too much to put out the fires in the Health Service in recent years to treat the symptoms. But no one has got down to treating the causes of the problem. Where we have industrial relations problems in the NHS

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and disgraceful occasions such as we saw at the Charing Cross hospital—behaviour which we all condemn—there is something more than a symptom; there is always a cause. We must find out the cause and devise policies to put matters right.
A better system of industrial relations management is needed. Is the Whitley Council system good enough? Lord McCarthy asked this question. Are the reforms that he suggested good enough? Lord McCarthy, like the Merrison report, suggests that the Whitley Councils are never independent of the Government. The commission says in its report:
"the government apparently acts as both judge and prosecuting counsel in such disputes".
The question arises whether an independent commission should be established to help solve industrial disputes in the Health Service. Should there be a review helped them very much. What about body? One element, the doctors and the dentists, have a review body. It has others who work in the Health Service? Do they need help from someone like Clegg? Or must they rely on a rather antediluvian Whitley Council system? The commission says:
"We hope that Lord McCarthy's review will lead to improvements. As pay negotiating bodies, the Whitley Councils are weakened by being insufficiently independent of government."
Health workers, like anyone else, are affected by the disastrous impact of inflation. They are also affected as employees of the biggest employer in Britain, a massive, impersonal organisation called the National Health Service. Those workers—whether they are consultants or porters—have grievances from time to time. They feel that the system for dealing with such grievances is, to say the least, a bit sluggish. It does not always appear to hear them, let alone understand them. In short, the system for coping with their problems is inadequate. ACAS has found this to be so. Its report referred to a lack of industrial relations expertise in management. It found that personnel officers had no past experience in industrial relations. Even more startlingly, it found that there is no statutory duty for personnel officers to be appointed, let alone have a voice in the decisions of the district management teams. Those personnel officers tend to be non-committal. They tend to have little effect.
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Management must show its readiness to listen and its competence to make decisions in industrial relations matters. Another fault in the management structure is failure to operate effective line management. Decisions in industrial relations are all too often passed upwards. That is a sure recipe for dissatisfaction and frustration. Problems should be settled at the point where they arise—on the shop floor, at the point of delivery. There must be more delegation and decentralisation. There also needs to be clarification of who manages whom.
There are too many separate organisations within the Health Service. The man or woman with a grievance does not know who can settle the question. Lord McCarthy was concerned about the absence of professionalism in industrial relations at the grass roots. So am I. Lord McCarthy thought that Whitley Councils could still do a useful job if they were reviewed. I believe that they should be reviewed. I am not sure that they should not be replaced by something better.
8.40 pm
Mr. Reg Race: I should be glad to take up the remarks of the hon. Member for Canterbury (Mr. Crouch) on industrial relations if I had more time, but in the circumstances I shall concentrate on certain specific questions to the Minister and raise one matter which, I believe, was not covered by the Royal Commission in any satisfactory fashion.
First, I put my questions to the Minister. In the so-called trade-off between the level of service which the patient can expect and the level of wages which employees in the National Health Service can expect, what absolute level of wages is he prepared to allow the employees to sink to in order to preserve the structure of the NHS? That question arises at once from the logic of what Ministers are saying, and I shall be grateful if the hon. Gentleman will be more specific about it in his reply tonight.
Second—very much on the same issue—there is the financing of the nurses' pay settlement arising out of the Clegg recommendation. Will the Minister give a specific assurance that the Government will finance every penny of whatever settlement is negotiated on the Nurses and

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Midwives Council and give that money to the area health authorities to pay out? The answers on that question which we have had so far have not been entirely clear.
I come now to the big problem with which the Royal Commission did not deal, namely, the problem of control and of power within the National Health Service. Who controls the National Health Service? Is it Parliament? We vote the money for the Service, but in no sense do we control the day-to-day delivery of the services. Nor do we control the level of aggregate spending, since that is the job of the Executive and, in particular, of the Treasury.
Does the DHSS itself control the National Health Service? Again, I think that the answer must be "No" because of the way in which the Treasury dominates macro-decisions about the level of health spending. The DHSS has some power over internal relativities and over internal methods of allocating resources to different sections of the Service, but again there is no real power over day-to-day delivery of health services.
Is the Treasury in control? This is the crunch question in the context of public expenditure. The Treasury controls in direct fashion all the spending in the NHS, and hon. Members need no reminding of that.
Are the area health authorities and regional health authorities in control? I argue that they, too, have no direct control over delivery of services, which are primarily the responsibility of doctors, whether in hospital or in the community, and aggregate spending at that level is determined by, so to speak, social factors through RAWP and other mechanisms.
Is it the doctors who control the NHS? My answer is "Yes, partly it is", because they control the day-to-day delivery of services through key aspects such as prescribing habits.
Is it the public who determine policy in the National Health Service? Again, I say that it is not, since the public have no direct control over the membership of the area and regional health authorities as they are at present constituted.
Finally, one must put a big negative against the possibility that control is exer-
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cised by workers employed in the National Health Service, whatever their level or responsibility may be.
The real power structure of the National Health Service is therefore poly-centric, with power being exercised by the Treasury on macro-issues, by the doctors on day-to-day delivery aspects of the Service, and by Civil Service mandarins in the DHSS and elsewhere over the internal shares of the NHS cake.
The distribution of power within the Service is profoundly unsatisfactory, and the Royal Commission did not address itself to this issue in a realistic fashion. There are no recommendations for democratising our National Health Service, and I regard that as a deplorable failure on the part of the Royal Commission.
In company with many hon. Members—the point was made by the hon. Member for Rochdale (Mr. Smith) earlier in an intervention—I believe that there should be a more direct method of election by which people at the community level could determine for themselves who would sit and represent them at district health authority level and regional health authority level. Only in that way will the system really serve the purposes of the NHS by reflecting the needs and aspirations of the public as a whole in the 1980s.
From the point of view of a Labour Back Bencher, therefore, I believe that we must do more than just regard Merrison as defending the National Health Service at this time and defending it against the iniquities of the present Government's policy. We have to strike out in advance of the Merrison proposals and argue for fundamental democratic changes within the NHS to make possible greater control by the public, by health workers and by the House of Commons. These changes are necessary because of the manner in which the Treasury, the Civil Service mandarins and the doctors presently control the NHS.
There is another argument to support my belief that the Royal Commission is important but not crucial. What would happen if all the commission's proposals were implemented overnight? There would be high public expenditure and a great improvement in the Service in many areas. However, the crucial test is that

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the implementation of the report would not protect the NHS one iota from monetarism, control by the Treasury or domination by the doctors.
The debate, important though it is, has to be set in that wider political context. The implementation of the report's recommendations would not protect the NHS from the problems foisted on it by the policies of the Treasury, the Prime Minister and the Conservative Party.
When discussing the need for fundamental changes of that character in the scope of the NHS, it is important to recognise that the NHS will never be the same again. Following reorganisation in 1974 and the imposition of public expenditure cuts by successive Governments, in no way would the public or the workers in the NHS accept continued domination of the Service by those presently in control. Nor will they accept, on a continuing basis, the method of financing that is presently ruining the Service. I am referring not to the basic principle of financing by general taxation but to Treasury control.
We need to open out decision making to a broader, democratic group of elected representatives. We must return to the House a number of important decisions about aggregate spending in the NHS that are currently glossed over.
The position is clear. As the hon. Member for Canterbury intimated, in no way can the industrial relations position return to what it was before 1973. We must determine that there will be better industrial relations within the NHS based on clear integration of ancillary and nursing staff in decision making. If we ignore that, we will be putting forward a prescription for total disaster inside the NHS, which is something that no hon. Member would wish to see.
8.48 pm
Mr. Ivan Lawrence: The saddest part of the Merrison report is its unequivocal endorsement of compulsory fluoridation of the public water supply. I wish to devote my short speech to that subject because, as hon. Members will know, I am chairman of the all-party Anti-Fluoridation Committee.
We are committed to stopping the artificial fluoridation of public drinking water, and 83 hon. Members have signed early-day motion 93 to that effect. No
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doubt a number of my right hon. and hon. Friends who are in the Government would sign the motion but for the rule of practice which prohibits the signing of early-day motions. I hope that a number of hon. Members will still sign it.
It is well known that the reason why no Government have legislated for fluoridation is that such legislation would not get through the House. The majority of hon. Members on both sides feel strongly that, whatever the medical argument for or against fluoridation, to force every citizen to drink water that has been medicated in accordance with the wishes of so-called experts, whether or not they need it and wish for it, would be a gross deprivation of personal liberty. It would be a betrayal of one of the fundamental justifications of our presence in this place, namely, to protect the individual against the insidious incursions of the collective State and its bureaucracy, especially since that State's record of being right in things medical is not entirely without blemish.
Those who advocate mass medication do so in contempt of individual freedom. I can understand why some people in power or influence think that freedom is less important than saving life, which is why I can understand the argument for stopping cigarette smoking or making seat belt wearing compulsory. But I find great difficulty in understanding their preoccupation with fluoridation, which does no more than delay the onset of dental caries in children's teeth by a year or two. It does little or nothing to stop the decay once it has started. A reduction of dental decay in one tooth for a year or two is no solution to the problem of tooth decay and is certainly not worth mass medicating for. The authority for that is the Department of Health's own report in 1969 on "Fluoridation studies in the United Kingdom and the results achieved after 11 years". That report is available from Her Majesty's Stationery Office.
Quite simply, I want to demonstrate to the House not the question of freedom but the scientific aspect of fluoridation. I want to show how grossly irresponsible and misleading the Merrison report is in recommending fluoridation on the assurance that it is completely safe. I do not know whether it is endorsing fluoridation safety in ignorance of the evidence or with knowledge of it and in order to

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deceive. Of course, I prefer to believe the former, although I fail to understand how the Merrison Commission can possibly be ignorant of the evidence as it is now receiving such widespread circulation.
Either way, no credit is due to that body for its irresponsible judgment in that regard. The apt slogan is perhaps that none are so blind as those who will not see. The commission relies upon the 1976 report of the Royal College of Physicians, which said that there was no relationship between cancer mortality or cancer incidence and fluoride levels in water supplies. To ordinary people, those words mean that no one has come forward with any evidence. If that is too narrow an interpretalion of the phrase, at any rate ordinary people would understand it to mean that there is no reputable evidence of any harm from fluoridation. Either way, that assertion is bogus and it is quite terrifying, as the evidence is that many people may be dying from drinking artificially fluoridated water.
Let me present some of the evidence. My point is merely to show that there is a doubt about its safety so that the House can consider whether that is so and whether there is justification in the sentence in the Merrison report on page 119, paragraph 9.59, that
"the safety of fluoridation in recommended quantities is no longer in doubt."
To begin with, there is the evidence and studies of Dr. Aly Mohammed, professor of biology at Missouri university, that sodium fluoride in a concentration of one part per million produces genetic damage to mice. There is the evidence of Dr. Donald Taves, associate professor of toxicology at Rochester university, that if it is shown that fluoride is a mutagen, it would increase the probability that there is a causal connection between it and cancer.
There are the studies of Drs. Hershkowitz and Norton, of the department of St. Louis university, that fluoride induces tumours in fruit flies. There is the evidence of Dr. Marvin Schneider man, chief statistician of the National Cancer Institute in America, that a substance tending to cause tumours would probably be a "red flag" for cancer. There are the studies of Drs. Taylor
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and Taylor of Texas university showing an increase in tumour growth rate in mice fed on one part per million of fluoridated drinking water.
There is the evidence of Dr. George Waldbott, an eminent United States physician, who has personally examined 400 patients suffering from fluoride poisoning, that fluoride in drinking water at one part per million gradually causes cancer death in sensitive individuals. There are the studies of Okanura and Matsuhisa showing positive correlations between food fluoride levels and stomach cancer. There are the studies of Litvinov and others, showing a possible correlation between airborne fluoride and lung cancer. There are the studies of Klein and others indicating that fluoride at one part per million interferes with the repair of DNA and the availability of the chemical-building blocks of DNA and RNA.
There is the evidence in 1975 and 1976 of Messrs Burke and Yiamouyiannis in the United States that the 10 largest fluoridated cities in America compared with the 10 largest unfluoridated cities show such a sharp increase in cancer mortality after a period of fluoridation that between 10,000 and 35,000 people may be dying each year as a result of drinking artificially fluoridated watered. Yiamouyiannis has compiled a collection of studies, 12 of which show a possible relationship between fluoridation and cancer once they have been corrected for errors and omissions.
Most of that evidence was considered in a court case in the United States last year. The decision of the judge, after hearing five months' evidence, was:
"Point by point, every criticism that the defendants made of the Burke Yiamouyiannis study was met and explained by the plaintiffs."
The plaintiffs were the citizens of the town trying to stop the fluoridation. The judge went on to say that
"often the point was turned round against defendants. In short, this court was compellingly convinced of the evidence in favour of the plaintiffs".
He went on to refer to significant evidence. The climax of that evidence was the answer by one of the witnesses, Dr. Taves, on behalf of the defendants, to the question whether it was his testimony that he would recommend fluoridation in public water supplies. He said:
"I do not want to state on that."

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How can it possibly be said, by any stretch of reasonable analytical objectivity, that there is no evidence? That there is evidence that is disputed is one thing, that there is no evidence at all is quite another. But when a court of law considers both sides of the evidence—witnesses giving evidence on oath—and reaches the conclusion that, point by point, all the anti-fluoridation arguments have been upheld, how can it still be said that there is no evidence?
When the Sub-Committee on Social Services and Employment considered the question of preventive medicine, we received a letter from a university lecturer who said that he had been growing watercress in fluoridated water. He said that the fluoride concentrated in the watercress, putting man at the end of a poisoned food chain. There is much evidence, stretched across the continents of the world, to the effect that fluoridation is a dangerous way of curing anything.
A professor of chemistry at Kansas university, having reviewed the evidence of fluoride's contribution towards kidney disease and bone disease, concluded:
"Despite whatever reduction in tooth decay can be achieved by fluoridation, there is a steadily growing amount of solid evidence showing that fluoride in drinking water at the officially recommended concentration of 0·7 to 1·2 parts per million causes serious harmful effects to its users."
That is not all. In 1977 the government of Quebec, before fluoridating their water compulsorily, set up a high-powered committee to look into the subject. It was not made up of cranks. It was made up of high-powered scientists, upon whom the government of Quebec placed their reliance. On the question of the effects of fluoride upon the ecology, the committee concluded:
"Although there is a lack of information regarding the effects of accumulation of fluorides along the food chains, there is enough evidence to conclude that the actual presence of fluorides above certain levels in the aquatic environment is causing important biological damage to both the plant and animal systems."
On the question of cancer it concluded:
"What is implicit in this study is that fluoridated organic compounds and the fluoride ion may be as potent carcinogens as chlorinated organic compounds."
It went on to say:
"The possibility of formation of fluoridated organic compounds either during the water
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treatment process in public waterworks or during later use by industry…should be of utmost concern to all who are interested in public health."
The decision of the Quebec government was to recommend an indefinite moratorium on water fluoridation for the province, that there should be basic and applied research in the area of fluoride intoxication, that the fluoride levels in the environment should be monitored, and that fluoride levels in food should be monitored to determine the exact level that is digested by people. It is no use adding one part per million to the water supply if one has not the faintest idea how many parts per million the ordinary individual has in his system already.
Recently the figures for Birmingham and Manchester have been published. An analysis shows that for the period 1953 to 1963, before fluoride was added to Birmingham water, the cancer death rate had risen more slowly in Birmingham than in Manchester. But Birmingham water was fluoridated in 1964, whereas Manchester water was not fluoridated, and during the period from 1965 to 1967 there was an 8·2-fold increase in the cancer death rate in Birmingham as against only a 1·5-fold increase in Manchester.
How can it possibly be said that there is no evidence and no doubt? If responsible scientists are in dispute, there is a doubt, regardless of which side is right. It is, therefore, of small wonder that practically every other country in Europe, with the exception of Ireland, has either stopped fluoridating its water or has never fluoridated.
For goodness sake, let the Government stop saying that they support fluoridation. For goodness sake, let them remove from their mind any possibility of legislation. For goodness sake, let us have a moratorium on fluoridation until the matter has been more thoroughly investigated. If we cannot trust the scientists to make an unbiased judgment, let us have a proper committee, supervised by a High Court judge.
The British people do not want fluoridation. They can remember how they were betrayed on numerous occasions, and most significantly on the question of thalidomide, by the scientists. I earnestly ask the Government to reconsider their whole attitude to this subject, whatever their scientific advisers may say.
9.2 pm
Mr. Clinton Davis: I want to return to the problem of the inner city, because it was that which the Royal Commission report described as deserving of the most immediate and urgent attention.
As an inner city Member, I am dismayed by the Government's indifference to the problem, as revealed by the Secretary of State's speech today and in their document "Patients First". Perhaps they spelt "patients" wrongly, because what they are asking us to do is to wait and wait and wait. My feeling is not just one of dismay; it is one of great disappointment that I express on behalf of people in an area such as mine who are having to face tremendous misfortune and hardship.
I should like to illustrate, as quickly as I can, some of the problems as they have been presented by the community health council in my area. The Secretary of State has put great emphasis on the need to develop community care. I agree with that, but we need more than words.
There should be 66 health visitors in Hackney; there are 41, and 10 students. There should be 79 district nurses; there are 46, plus six in training. There should be 17 community midwives; there are only 11. General practitioners are expected to maintain in Hackney a list size of 2,500, so technically Hackney is over-doctored. It is, therefore, extremely difficult for new GPs to work in Hackney and no allowance is made for the fact that in a district of high morbidity and poor social conditions 2,500 may be too big a list.
I ask the Minister whether he will consider trying to work out a system of payments which takes account of the difficulties of inner city areas. It is one very good reason why urgent attention should be given to the problems of London.
When we turn to the maternity service, we find another sad and sorry state of affairs in Hackney. I illustrate it by reference to a submission made by the community health council to the area health authority and to the regional health authority about the inadequacies of the maternity service. At the Mothers' hospital, clinics are grossly overcrowded. There is no privacy in the booking clinics. Mothers, many of them suffering from high blood pressure, must wait far too
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long. Indeed, a two-hour wait is common at the antenatal clinic.
The district management team considers that seven minutes is adequate for first appointments and five minutes for follow-up appointments. Doctors must see between 80 and 100 women in a morning, and no effort is made to ensure that patients see the same doctor on each visit. Those problems are faced not only in Hackney. They are faced in many inner city areas but particularly in London. There is need for an urgent inquiry into these matters.
The Minister should know that Hackney has a poorly developed community midwifery service and that there is a particular problem affecting Asian mothers. There are no facilities for interpretation, although almost 25 per cent. of births are to Asian mothers at the Mothers' hospital. It is not good enough to tell those mothers that they must bring an interpreter with them. It is often the husband, who has to take time off work, or an older child who has to interpret. How embarrassing that must be for those Asian mothers. I believe that interpreters should be made available at clinics at certain times. Those are some of the practical problems.
The members of the community health councils are dedicated and caring people who express great concern for our problems and have done an enormous amount of valuable work in alerting our communities to these problems. They have tried to find solutions. Yet there is a guillotine poised over the heads of community health councils, as we note from the document "Patients First". The Government say that authority members will be less remote from local services than many of them necessarily are today and that the need for separate consumer representations in these circumstances is less clear.
There is no evidence to support the proposition that community health councils should go. They are an invaluable watch-dog, and that has been proved in practice. I believe that, although this Government may be afraid of the role played by community health councils, the case for keeping them is overwhelming.
9.7 pm
Mrs. Elaine Kellett-Bowman: I was pleased to hear my right hon. Friend the Secretary of State say

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that he will continue with the redistribution of health care resources and that he will give twice those increases to the less-well-off than to the better-off. That is of tremendous help to the North-West. Our region is at the bottom of the poll if we consider all health items together and has been so for many years.
At the rate of redistribution of resources under the last Government, it would have taken the North-West a quarter of a century to catch up with the South-East. The announcement, in July, of a £172 million hopsital—the biggest hospital programme ever undertaken in the North-West—will accelerate our rate of catch-up.
I always believed that coterminosity in health care anywhere was a mistake, but in my area it was a disaster. Until 1974, hospital services in Kendal and Lancaster were integrated, and despite reorganisation nobody has succeeded in reversing that happy relationship. Senior medical staff in Kendal are appointed to the Lancaster group of hospitals and the majority of their contracts oblige them to work both in Kendal and in Lancaster. There has been a history of affiliation between our hospitals for many years and the flow of patients is naturally between Kendal and Lancaster. There has been a close relationship between the hospitals, and even the plan for a new 300-bed hospital in Kendal—costing £11 million—still envisages that 50 beds will be provided in the Lancaster hospital for the treatment of patients from Kendal.
The towns are only 22 miles apart, which in rural terms is not much, and it is, therefore, quite easy to live between them and be within reasonable reach of either. Many of the consultants from Lancaster live across the Cumbrian border.
The Lancaster hospital pathology department provides a range of services unequalled anywhere in the North-West that is fully available to patients from Kendal. The Kendal service is completely integrated with that of Lancaster, and it is absolutely vital that this is considered when decisions about the structure are made. That is the natural patient flow, and we hope that the Secretary of State will take that into consideration when making his decision.
9.10 pm
Mr. Roland Moyle: I welcome back to our debates the hon.
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Member for Reading, South (Dr. Vaughan), who missed the Second Reading of the Health Services Bill because of ill health. I am pleased to see him back on the Front Bench.
I shall not deal with organisation or pay beds, because we gave those issues a good run when we discussed the Health Services Bill. We shall press for a debate on London's health services as demanded by my hon. Friends the Members for Hackney, South and Shoreditch (Mr. Brown) and Hackney, Central (Mr. Davis) and the hon. Member for Canterbury (Mr. Crouch), not only on teaching hospitals, but on the shape of the London regions and the inner city and other problems which must be discussed.
The Royal Commission did a first-class job. Most hon. Members agree with that. I thank Sir Alec Merrison and his colleagues. They have served the nation well. That does not mean that we agree with everything that they said. Their views on mental illness hospitals are controversial. I agree with my right hon. Friend the Member for Salford, West (Mr. Orme) and my hon. Friend the Member for Wood Green (Mr. Race), who said that the commission produced an "on the one hand, and on the other" approach to local democratic control. The idea of making regional health authorities responsible to a Select Committee is a little wide of the mark. The two Front Benches agree about that.
To the extent that Ministers agree with the Royal Commission, they will forge a health service which is of inestimable value to the British people. To the extent that they depart from it, they will run the risk of inflicting damage on one of our most highly regarded institutions.
I am pleased that the opportunity has been taken by hon. Members on both sides of the House to refer to prevention. The Royal Commission was clear about that. In chapter 5, paragraph 3, on page 41 of its report the commission states:
"it must be understood that many of the main improvements in the health of the nation have come not from advances in medical treatment, but from public health measures, better nutrition and improvements in the economic, social and natural environments."
One of our most important tools in prevention is the immunisation programme. For years children and others have been immunised with increasingly

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beneficial results. The trouble is that a decreasing number of children are being immunised because of parental anxiety about the possible detrimental effects of immunisation in a few cases. That anxiety applies in particular to the whooping cough vaccine. We should sympathise with and help to allay those parental anxieties.
There is little doubt that a proper compensation scheme has a part to play in restoring health and improving our immunisation programme. However, the Government have said that they will not introduce a proper compensation scheme for vaccine damage. That is appalling and regrettable. We support the sentiments of early-day motion 325.
[That this House deplores the Government's refusal to establish a compensation scheme for vaccine-damaged children; endorses the view of the Pearson Royal Commission that there is a special case for paying compensation for vaccine damage where vaccination is recommended by public authority and is undertaken to protect the community; recognises that the Vaccine Damage Payments Act does not purport to provide a compensation scheme; and calls upon the Government to introduce a compensation scheme as favourable to vaccine-damaged children as the industrial injuries and war pension schemes are to the industrially injured and war disabled.] We urge the Government to think again.
The Vaccine Damage Payments Act provides £10,000 compensation for vaccine damage to children as an interim measure.
Mr. Patrick Jenkin: I have checked carefully the exchanges between the right hon. Member for Norwich, North (Mr. Ennals) and myself, and he was most explicit and careful to say that he was talking not of compensation but of an interim measure.
Mr. Moyle: I am in total agreement with the Secretary of State. He must have misunderstood me. The £10,000 was an interim payment.
If the Government are not now to introduce a full vaccine compensation scheme, another issue arises. All those children who have been considered for the £10,000 scheme will have to have
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their cases reopened and reconsidered with a view to the possibility of their receiving more compensation.
The honour of the Government, irrespective of party, is involved in this issue, and I hope that the Government will look into it. We believe that Mrs. Fox, in her campaign for justice, is entirely right and her case must be conceded.
The Secretary of State made a fairly pathetic contribution on the subject of fluoridation. He is obviously not going to do anything. This is a serious matter, and if we had been returned to office we would have legislated by now because there is a gap in the law. My right hon. Friend the Member for Norwich, North (Mr. Ennals) explained clearly that the law allows water authorities to fluoridate the water if the area health authority wants it done. The difficulty is that few water authorities believe that they have the power to do this without legislation. So legislation is required to solve this problem.
The Minister will find that if he does not legislate he will get nowhere. The minority represented by the hon. Member for Burton (Mr. Lawrence) will have won, once again, during another Parliament. I sincerely ask the Minister to take that matter in hand or to take up the idea of my hon. Friend the Member for Brent, South (Mr. Pavitt) and support a Private Member's Bill.
Smoking is another important issue. I accept that there are two major constraints on smoking policy. First, a number of people, in good faith, have put their skill into the industry in times past and they must be allowed to adjust to new Government policies. Secondly, smoking is a difficult habit to break, as I know, having been a smoker myself. This fact imposes its own restraints on any action. As the Secretary of State said, the biggest avoidable cause of ill health today is smoking.
The Government are now embarked on further negotiations with the tobacco industry aimed at restricting further the possibility of damage to the nation's health from this cause. As the Minister who negotiated the current agreement, I have no hesitation in saying that the new agreement must be tougher than the last, and each succeeding agreement should form part of a continuing progression of toughness in the future. I shall put for-

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ward five principles on which I suggest the new agreement should be based.
First, cigarette advertising should be restricted as close to the point of sale as possible and should be aimed at giving information about tar content and other such matters.
Secondly, the health warning should be placed on the front of the packet and it should be tougher. What about "Danger. Government Department Health Warning. Cigarettes cause bronchitis, heart disease and lung cancer"?
Thirdly, no new brand of cigarette should be introduced with a tar content in excess of 15 milligrammes and a special tar-related tax should come in at that level. This means extending the two-year derogation from the EEC on tobacco taxation and increasing its scope. I believe that the Government must do this because the lives of our people are at stake. In this area, as in so many others, Common Market regulation is becoming the enemy of good government in this country.
Fourthly, why not make it compulsory to record on the packet the carbon monoxide emission of a cigarette? After all, we all want freedom of information these days, and that would be a contribution.
Fifthly, should not the same principles inspire the whole of Government policy, whether it be the Department of Industry's grants, the Department of Trade's attitude to exports, the Department of the Environment's sponsorship of sports, the Chancellor of the Exchequer's level of taxation or even the Prime Minister's attitude to recommending people for honours?
If we could get all this into the new agreement, there would be advantages in allowing it to extend to four years rather than the three years of the current agreement. This is a concession I would be prepared to make.
Dr. M. S. Miller: Would my right hon. Friend add one more principle, which is to make non-smoking the norm and smoking abnormal?
Mr. Moyle: That is so at present because only a minority of adults smoke.
I turn now to the question of the social services. So far this issue has not been mentioned in the debate, although it is crucial to any discussion of the Health
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Service. The Royal Commission said at page 258 of its report at the beginning of chapter 16:
"it is essential to have the easiest and most efficient collaboration between the NHS and local authorities."
But perhaps we have a straw in the wind. The Secretary of State is to close down the Personal Social Services Council from 31 March. I do not know why. It consists of eminent and respected people in the social services. Who on earth would not want the advice of Mia Kellmer Pringle, for example, on children in such a context? The council always gave me and my right hon. Friend the Member for Norwich, North very good advice. The Association of County Councils and the Association of Metropolitan Authorities both gave substantial support to the continuation of the council's work.
Is the council to be closed because it was monitoring social service cuts? If that is the object, it is a busted flush from the beginning, because the Social Priorities Alliance will be monitoring them. I imagine that the Association of Directors of Social Services will. In any case, we shall.
I hope that, as with the Central Health Services Council, much of the valuable work will be continued. I think of work on such matters as ageing in later life, collaboration in community care, intermediate treatment on which a consultative group has been set up, a code of practice for voluntary private boarding houses and fire precaution problems in the same sort of institutions.
Why should we look for the straws in the wind when the gale is already blowing? I have already said, when I spoke in the Budget debate last year, that the NHS was probably being undermined by cuts in the social services which were looming. Now, the Secretary of State for Social Services has made his own contribution. In a press statement of 1 November last year, he called for a 5 per cent. cut in the personal social services. He has been trying since to repair the damage done by that statement, saying that it is entirely up to local authorities where they cut.
But the message has gone out, and all the other departments in local authorities now realise that there will be no penalties to pay to the Government if they cut the social services budget by 5 per cent.

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or more. So, when the NHS is under greater pressure than it has been under for years from the financial point of view, it is being put under increasing pressure again because the social service budget, which takes a great deal of the load off it, is also being savagely cut, more savagely than any other aspect of Government expenditure.
What will this mean? Elderly people will be unable to leave hospital—they will be left bed-blocking, which is more expense for the NHS—because there will be a lack of support for them in the community. There will be a lack of meals on wheels, or they will be more expensive, and a lack of home helps, or they will be more expensive. There will be a continuing dearth of day centres, my hon. Friend the Member for Eccles (Mr. Carter-Jones) might like to note. There will be a lack of home visiting support. Elderly people will also be retained in the community, unsupported, when they should be in hospital.
What is to happen to the mentally ill, left in the big isolated mental hospitals? That will be more expensive for the NHS. The hon. Member for Carshalton (Mr. Forman) mentioned the large mental hospitals. They will be around longer and will be under more strain. There will be less care of the mentally ill in the community.
What is to happen to the Jay report, with its carefully postulated scheme of community care?
I am sure that it is politically astute to cut social services. Their clients are the most inarticulate section of the community. That will also mute the people who speak on their behalf in social services departments. That is what the Government's policy will lead to.
I turn to the problem of charges. All the Opposition Members who took part in the debate referred to it. The hon. Member for Canterbury thought that it was not politics to talk about it. Of course it is. Raising money is bound to be politics. We are still left with the following problem. Will prescription charges be increased yet again beyond 75p in the coming year, and will the exemptions be restricted? The Financial Secretary to the Treasury has said that he would contemplate that. The Secretary
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of State has not denied it, nor has the Prime Minister.
Why is this happening? The Royal Commission and the Government part company here. The Royal Commission has already said that it recommends the abolition of charges. Nevertheless, prescription charges are going up, by about 300 per cent.
On top of that, the road accident charges are going up by between 500 and 600 per cent. I have never heard of anyone volunteering to take part in a road accident.
Why are charges going up? Is it to educate the public on the matter of costs? It cannot be that, because the public use the Health Service only on the basis of professional judgment. If professional people do not recommend the public to use the Health Service, the public, generally speaking, will not make use of it. Is it a means of raising more money? It cannot be that, because we all know that to the extent that money is raised in that way the Treasury will reduce its central grant.
These are all reasons why I contend that charges are totally inappropriate. In addition, charges breach the principle of taking care of people free at the point of use. So long as we have a charge, that charge can be increased. We are receiving a first-class demonstration of that by the Government. The charge that was levied by the Labour Government, which was being phased out by inflation for over five years, has increased twice. There is a threat that it will increase a third time. It is proposed to levy a road accident charge. Once a charge exists, there is no argument in principle for not increasing it until the pips squeak. That is what the Government are doing.
The Secretary of State is advocating an insurance scheme. I do not have time to make detailed criticism. The right hon. Gentleman thought that he had pulled out a brilliant rabbit from the hat when he talked about going to a Belgian hospital and finding only two people in charge of issuing bills.
The Minister for Health (Dr. Gerard Vaughan): There were only two people in charge of the accounting.
Mr. Moyle: If there were two such people employed in every hospital in

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England, there would be an extra 5,000 Health Service employees at a time when we are trying to cut the cost of administration. If the right hon. Gentleman's example were implemented throughout the United Kingdom, there would be more people employed in Scotland, Wales and Northern Ireland on the same basis. That would add between £25 million and £35 million to the National Health Service's wage bill.
There is no point in commisioning a study of insurance funding of the NHS, because all the information is available to the Secretary of State. It is readily understood by even the simplest intellect. There are only two conclusions that the right hon. Gentleman can reach. He can reach them now without more ado.
If a patient is a drag on the economy—that is what the Government seem to be coming more and more to accept—he is no less a drag if the money for his treatment is raised by a source other than general taxation. If the country is to continue to care for the sick—no one has suggested that it should not—the economic burden must be met. If it is not met by general taxation, the cost must be met in some other haphazard and inefficient way. I take it that no one is arguing that we should stop looking after the sick.
On the basis of morality and efficiency, the best course for the NHS is to raise money by general taxation and to spend it comprehensively on a service for the nation that is free at the point of use.
For the reasons that I have outlined, I ask my right hon. and hon. Friends to vote in favour of the Opposition's amendment.
9.28 pm
The Minister for Health (Dr. Gerard Vaughan): First, I thank the right hon. Member for Lewisham, East (Mr. Moyle) for his kind remarks. It is good to be back in the Chamber again and good to be able to listen to the right hon. Gentleman's thoughtful comments. It will cause him no surprise when I say that I do not agree with the mojority of them.
The debate has ranged extremely wide. It is right that it should have done so. As the hon. Member for Brent, South (Mr. Pavitt) said, it is difficult to think of any aspect of health care that has not
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been commented on in the report of the Royal Commission.
I add my tribute to that of my right hon. Friend the Secretary of State to Sir Alec Merrison and his colleagues for the work that they have done that went into the report. I do not think that our appreciation of the devoted work that is carried on day after day by NHS staff has come through in the debate to the extent that I know it is felt in the House.
My right hon. Friend the Secretary of State opened the debate with characteristic authority. He gave the Government's overall view on the Royal Commission's report, and particularly the Government's overall view of the financial situation. Therefore, I do not propose to go into that in detail again.
I shall concentrate almost entirely on the points that have been raised by hon. Members. I find it extraordinary that the Opposition have put down any amendment. It has at once introduced, once again, a quite unnecessary party conflict on the subject of the Health Service. We deeply regret that. I should have thought that we could have at least one debate on this subject without such an amendment. There is no escaping the fact that the Labour Party has used the Royal Commission as an excuse. Year after year it has used the Royal Commission as a cover for drift. It has regularly criticised the reorganisation of 1974, but it did absolutely nothing about those things that it criticised. When it was in power—
Mr. Moyle: Does not the Minister think that the Royal Commission gave a lot better advice than that which the Minister and his hon. Friends took from management consultants?
Dr. Vaughan: Not at all. We have had five years of drift and uncertainty, and that has been immensely damaging to health care. It is not surprising that the recommendations of the Royal Commission have come to us amidst a background of almost unbelievable mismanagement.
Mr. Ennals: Has the Minister met anyone within the Health Service who thinks that we should have made a snap change two or three years after the introduction of the monstrosity for which his predecessor was responsible? Does he not think that it was right to set up a Royal Commission? Was it not right to wait for its

567
report? We would have acted on that report. Has he met anyone who thinks that we should have plunged suddenly and irresponsibly, as his predecessor did?
Dr. Vaughan: The right hon. Gentleman must defend his previous inaction as he thinks best. However, we have seen five years during which capital investment was reduced by no less than £193 million a year—that is, by nearly 35 per cent. Capital investment was reduced from £559·3 million in 1973–74 to £366 million in 1978–79. That cannot have been good. We have also had five years during which the total number of beds available was reduced.
Mr. Pavitt: Does the Minister recall that from 1974 to 1976 the Government undertook that, as a matter of deliberate policy, because of nurses' pay, and so on priority should be given to people rather than to buildings and similar capital equipment?
Several Hon. Members rose—
Mr. Speaker: Order.
Dr. Vaughan: I know that it is unpleasant and uncomfortable, but I am putting the facts as we have found them. Labour Members know that these facts are true. They are the unpalatable features that have led us to receive the recommendations of the Royal Commission. We have had five years during which waiting lists have risen by 170,000. We all know what that means in terms of personal tragedy for thousands of sick people. Nearly 750,000 people are on our waiting lists. That is the highest figure on record in this country. It is the highest figure for any part of Western Europe or for any civilised country. Those are the problems.
While the numbers of general staff within the National Health Service rose by about 12 to 13 per cent., the administrative staff were increased, under the previous Labour Government, by just on 30 per cent., from 90,712 to 117,743.
Mr. Ennals: Will the hon. Gentleman give way?
Dr. Vaughan: No.
Mr. Ennals rose—
Mr. Speaker: Order. It appears that the Minister will not give way any more.
Dr. Vaughan: Many hon. Members have spoken and, as I said, I wish to take up the individual points that have been made.
During that period, morale in the National Health Service throughout the country fell to a level that we had never known before. That is so much so that various professional bodies find it necessary to draw special attention to it in their reports. We have had five years of a series of the most damaging industrial actions against patients, culminating in the appalling strikes of last winter. More recently, who can forget the horrifying spectacle outside Charing Cross hospital?
I hope that instead of scoring party political points Labour Members will recognise that health care should not be a battleground for political parties. We should work together to raise standards and bring about the kind of Service that we all want.
I was reminded just now that one in20 of our working people are employed within the National Health field. It is therefore not surprising that, as my right hon. Friend reminded us, even a 1 per cent. wage increase costs £37 million, which is equivalent to the treatment of 80,000 patients, 2,000 hospital beds or the dialysis machines that my right hon. Friend mentioned.
I was also astonished, on coming to office, to realise that over the past few years there have been procrastination, dither and delay in making decisions. I know it can be explained why that occurred, but it has been extremely damaging to the Service. That is why one of our first actions, for example, has been to issue a clear guide to management for handling industrial upsets. It is available to management and staff. We have sent it out with a request that all people working within the health field should have it available to them. It is most important for all the staff to know exactly where they stand. Unashamedly, we have said in that document that patients must be safeguarded at all times. That must come first.
That is the background against which we have received and examined the Royal Commission's recommendations. It is one reason why we have not come forward with detailed proposals for action on every one of the 117 recommendations,

569
even if we agreed with them all. We do not believe that at this stage the National Health Service can stand changes other than those that are essential. That is why in "Patients First" we have gone for a philosophy of making the Service more local—more responsible to local authorities within each individual unit.
The right hon. Member for Salford, West (Mr. Orme), in a rather passionate opening, made great play of prescription charges. He knows that every, time the Labour Party has been in Opposition it has promised to abolish those charges. Every time it has been in Government it has reintroduced them or put them up. We have already had information on that.
Mr. Moyle: Will the hon. Gentleman give way?
Dr. Vaughan: I have the figures here.
Mr. Moyle: Will the hon. Gentleman give way?
Mr. Speaker: Order. When I get to my feet I must say something, even if it is only to tell the right hon. Member for Lewisham, East (Mr. Moyle) that the Minister is quite clearly not giving way.
Dr. Vaughan: We have been accused of increasing—
Mr. David Stoddart: On a point of order, Mr. Speaker. Is it in order for the Minister to mislead the House by saying that the Labour Party put up prescription charges every time it was in Government? The Labour Government did not put up prescription charges between 1974 and 1979.
Mr. Speaker: Order. I suggest that we find out what the Minister is about to say.
Dr. Vaughan: Of course, it has never been my intention to mislead the House. We have been accused of having plans to introduce new charges—charges for visits to general practitioners, "hotel" charges. That is quite untrue, yet we seem to be accused of it over and over again. We have always made clear that
"When the service is short of funds for priority tasks, there is no case for holding down prescription and other charges."
That is a direct quote from "The Right Approach" in 1976. Let us hear no
570
more about all these hypothetical charges which people throw at us for party political purposes.
Let us recognise that there is a finite limit to the amount of money that any nation can make available for a health service. That has been said by Aneurin Bevan, by the right hon. Member for Huyton (Sir H. Wilson) when he was Prime Minister, and by the right hon. Member for Norwich, North (Mr. Ennals). It makes me very sad—
Mr. Ennals: Since the Minister has quoted me, perhaps he will tell us who has done most of the talking about new charges during the past few days? He knows as well as we do that it has been one of the Ministers on the Treasury Bench.
Dr. Vaughan: That is why I was so sad when I listened to the remarks of the right hon. Member for Norwich, North about private practice. Labour Members are still obsessed by the private practice aspect of health, even though the Royal Commission said that it is an insignificant part of health care in this country.
I make no apology for the fact that, although we see a need for a thriving and viable NHS which is available to everybody who needs it, we also feel that we must look at health care in this country generally. We see a need to bring extra resources into health from whatever source is willing to make them available. That is why we talk of developing the private sector in partnership, and not in conflict, with the NHS. That is why this morning at Stoke Mandeville I was with Jimmy Savile in his appeal for money to rebuilld that special centre for spinal injuries.
Dr. M. S. Miller: I have noted very carefully what the hon. Member, for whom I have a high regard, has said about the resources that a nation can spend on health being finite. He may believe that as a politician, but what does he believe as a doctor?
Dr. Vaughan: I quote from a speech made by the right hon. Member for Huyton in this House in October 1975 when the Royal Commission was being set up. He said that it was inevitable that there

571
were limits to what the taxpayers could provide, and later he said:
"I must also make it clear, as my right hon. Friends have already made clear, that the Government are equally committed to the maintenance of private medical practice in this country and we intend to guarantee this in the legislation we propose."—[Official Report, 20 October, 1975; Vol. 898, c. 36]
The right hon. Member was quite clear on that, and so are we.
A number of hon. Members have spoken, quite rightly, of the problems of inner city areas, and the hon. Member for Hackney, South and Shoreditch (Mr. Brown) said that patients had suffered. This is something to which we are giving great thought.
The Royal Commission, while supporting, in a slightly lukewarm way, the concept of health centres, also said that it would be quite wrong to press doctors into working in health centres against their wishes. I would agree that that is wrong. It also pointed out that it is possible for doctors, nurses, health visitors and so on working in a community to work in close conjunction with each other—not in local authority planned centres but in group practices and the like.
Therefore, we have been looking very carefully at the way in which the health centre programme has been developing in this country. We have concluded that health centres should continue to be developed—for example, in some inner city areas in places where there is a clear benefit to the community by having a health centre—but not in the face of opposition by the local general practitioners. It is a disgraceful waste of resources to have, as we have now, at least two health centres which areempty because doctors will not work in them. That makes no sense to anyone.
We are, therefore, looking at the other tack. In the Health Services Bill, which is about to be considered in Committee, there are proposals for increasing the amount of money which can be loaned to doctors through the General Practitioner Finance Corporation, increasing the borrowing power by four times, to £100 million, and at the same time, for the first time—this is very important—enabling the General Practitioner Finance Corporation to lease premises to general practitioners. We are looking at the possibilities of extending the opportunities
572
to undertake some private practice from health centres—which is permitted at present but is not always easily available.
Finally, the right hon. Gentleman referred again to the problem of industrial relations. I was glad to hear what he said about the subject of industrial disputes holding back the regional secure units. This is something about which we, too, are very concerned. I am glad that there is agreement between the two sides of the House.
My hon. Friend the Member for Putney (Mr. Mellor) made a very constructive speech.
Mr. Clinton Davis: Adolescent idiocy.
Dr. Vaughan: I happen to know that my hon. Friend is deeply concerned with a number of problems of health care in his constituency. No one could accuse him of not having a genuine anxiety to do what he can to help in the health field. He was talking about the value of insurance. We recognise this. My right hon. Friend has already referred to it.
I must be honest. It was very good indeed to see the right hon. Member for Norwich, North so obviously in better health these days. However, I was disappointed that he did not face more squarely the very difficult situation which developed under his hands. He talked about the need for better industrial relations. He asked what progress was being made on procedures at local level for handling industrial disputes. This matter is being pursued. The General Whitley Council is well advanced in its discussions between the management side and the staff side. We are looking forward to receiving agreed conclusions very soon. No doubt the right hon. Member will make comments on them when they come.
The right hon. Member also asked what effect on the NHS any increase in gas prices would have. All that I can say is that he has obviously forgotten the words in "The Way Forward", where the problems of fuel, fuel costs and the likely difficulties are examined on page 41, as are the difficulties ahead that we may well face. It is not only gas prices but increases in the prices of all kinds of fuel that have to be taken into account. It is sad for me to find these days the number of hospitals, newly built, that are costing over £1 million to heat and ventilate

573
because they were not designed in a way that is economic in fuel use.
Mr. Ennals:I was obviously referring to the recent Government announcement under which gas prices are to go up dramatically. The document to which the hon. Gentleman referred was published two and a half years ago. I am talking about decisions taken by this Government dramatically to increase gas prices.
Dr. Vaughan:That is a brave attempt to correct the situation. My hon. Friend the Member for Carshalton (Mr. Forman)—
Mr. Ennals: What is the answer?
Dr. Vaughan: I will make my speech in my own way.
Mr. Ennals rose—
Mr. Speaker: Order. It is clear that the Minister is not giving way.
Dr. Vaughan: I must move on rather rapidly. My hon. Friend the Member for Carshalton, in a most effective speech, talked about the value and importance of preventive medicine and the Health Education Council. We have been having discussions with Dr. Lloyd, chairman of the Health Education Council, to see how the council's work can be made more effective and whether it might be advisable to reduce the range of work it devotes to health education in order to increase its work in other areas. My hon. Friend also mentioned the question of vaccination. This was also raised by the right hon. Member for Lewisham, East. I shall return to the matter in a moment.
While on the question of preventive medicine, I believe that we could totally eradicate in this country the problem of rickets. It is a disease that is extremely damaging to young children and also presents a major problem to certain mothers when they are feeding their babies. This condition was virtually eradicated until the late 1960s and the early 1970s. At the moment, it is almost entirely a problem of immigrants. I shall not go into details. We are having meetings with the leaders of the immigrant community to see how best we can bring the education aspects of this matter to the attention of members of immigrant groups. I believe that this will be success-
574
ful and that we shall see the end of rickets in this country once again.
My hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) made an important comment when he referred to the use of the media in carrying out this kind of health education. That, again, is a matter that we have been discussing.
My hon. Friend the Member for Carshalton also mentioned the subject of mental illness. We give it great priority. We hope to bring to the House shortly the long-awaited updating of the 1959 Mental Health Act. We hope to place provisions for the mentally handicapped in a separate section.
Mr. Moyle: What about the Jay committee report?
Dr. Vaughan: We are also working rapidly on that.
The hon. Member for Antrim, South (Mr. Molyneaux) made a short and constructive speech. My hon. Friend the Minister of State, Northern Ireland Office came into the Chamber to hear the speech and asked me to say that he will take up the points that were put. I cannot resist the comment that the hon. Member made on the importance of small hospitals, but I will not pursue that now.
Mr. Cyril Smith: What about the North-West?
Dr. Vaughan: I shall write to the hon. Gentleman.
My hon. Friend the Member for Newark (Mr. Alexander) referred to the problem of mixed sex wards. This practice has been spreading steadily throughout the Health Service. It is not a desirable practice. It is forced on hospitals by the difficulty which they sometimes have in making the best use of their beds. We are having discussions about it.
One thing that has been made clear to me—it is understandable—is that patients will come into hospital, they will not comment on what happens, but they resent it very much and will comment afterwards. We have been receiving a number of letters from patients who were apparently happily looked after in hospital but who were not in fact so happy. It is particularly the lavatory and bathroom provision which worries them. I assure my hon. Friend the Member for

575
Newark that we have taken the matter very much on board.
Mr. Cyril Smith: Has the Minister any message for the millions who live in the North-West, on whose behalf I spoke for over 20 minutes, pleading for an allocation of resources?
Dr. Vaughan: I should like to reply to the important points raised by the hon. Member in a written answer. I say that because they raise the whole question of RAWP and resource allocation and the way we propose to see that a larger allocation—not a very big one; I do not want to raise the hon. Gentleman's hopes—goes to the parts of the country which are in greatest need.
The hon. Member for Brent, South spoke about fluoridation, and I hope to come to that in a moment.
My hon. Friend the Member for Chorley (Mr. Dover)—I must refer to this in passing—spoke of what is happening in the constituency of my hon. Friend the Member for North Fylde (Sir W. Clegg). I pay tribute to the work which Pat Seed does there. It took a little while to arrange, but through the local health authority we have now managed to arrange for the staffing—that was the difficulty; the extra member of staff needed—to supervise the running of that important scanner.
A number of hon. Members have spoken about London, and I respond to them in this way. We have had a series of inquiries on London. What we need is some action. There are at present two inquiries in progress—the university inquiry under Lord Flowers and the
departmental inquiry, the London Planning Consortium—and they will be reporting within a few weeks.
Our view is that, rather than have yet another inquiry, we ought to examine those two reports and then, through a powerful London committee, put something into rapid and effective action. That is what the Government propose.
The right hon. Member for Lewisham, East made a very thoughtful speech, although I could not agree with all that he said. Without doubt, there is some misunderstanding over the vaccine damage scheme. I should prefer to deal with this on another occasion, but I must make clear now that at no time has the £10,000 payment been regarded by the Labour Government or by ourselves as compensation. In my view, that would be quite wrong. But the right hon. Gentleman is quite right in saying that this is a matter which we cannot brush on one side, and we are looking at it. More important, I think, is to ensure that the assessments and payments are made more rapidly than they are at present.
There is no escaping that a service free at the time of use is of little benefit if it is not an available service, and under the Labour Government we were moving steadily towards a service which was neither free nor available. That is why I ask my right hon. and hon. Friends to support the motion and firmly to reject the Opposition amendment.
Question put, That the amendment be made:—
The House divided: Ayes 159, Noes 191.

Division No. 144]

AYES

[10 pm

Adams, Allen

Crowther, J. S.

Evans, John (Newton)

Allaun, Frank

Cryer, Bob

Ewing, Harry

Alton, David

Cunliffe, Lawrence

Field, Frank

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

Dalyell, Tam

Flannery, Martin

Barnett, Guy (Greenwich)

Davidson, Arthur

Fletcher, Ted (Darlington)

Beith, A. J.

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

Foot, Rt Hon Michael

Bennett, Andrew (Stockport N)

Dean, Joseph (Leeds West)

Ford, Ben

Bidwell, Sydney

Dempsey, James

Foster, Derek

Booth, Rt Hon Albert

Dixon, Donald

Foulkes, George

Bradford, Rev. R.

Dormand, Jack

Freeson, Rt Hon Reginald

Brown, Hugh D. (Provan)

Douglas, Dick

Freud, Clement

Brown, Ronald W. (Hackney S)

Dubs, Alfred

Garrett, W. E. (Wallsend)

Brown, Ron (Edinburgh, Leith)

Dunn, James A. (Liverpool, Kirkdale)

George, Bruce

Callaghan, Jim (Middleton & P)

Dunwoody, Mrs Gwyneth

Ginsburg, David

Campbell-Savours, Dale

Eastham, Ken

Golding, John

Carmichael, Neil

Edwards, Robert (Wolv SE)

Grant, George (Morpeth)

Carter-Jones, Lewis

Ellis, Raymond (NE Derbyshire)

Grant, John (Islington C)

Clark, Dr David (South Shields)

Ellis, Tom (Wrexham)

Hamilton, W. W. (Central Fife)

Cocks, Rt Hon Michael (Bristol S)

English, Michael

Haynes, Frank

Coleman, Donald

Ennals, Rt Hon David

Heffer, Eric S.

Concannon, Rt Hon J. D.

Evans, loan (Aberdare)

Holland, Stuart (L'beth, Vauxhall)

Home Robertson, John

Millan, Rt Hon Bruce

Silverman, Julius

Homewood, William

Miller, Dr M. S. (East Kilbride)

Smith, Cyril (Rochdale)

Hooley, Frank

Mitchell, Austin (Grimsby)

Smith, Rt Hon J. (North Lanarkshire)

Horam, John

Molyneaux, James

Soley, Clive

Howells, Geraint

Morton, George

Spearing, Nigel

Hughes, Mark (Durham)

Moyle, Rt Hon Roland

Spriggs, Leslie

Hughes, Robert (Aberdeen North)

Mulley, Rt Hon Frederick

Steel, Rt Hon David

Hughes, Roy (Newport)

Newens, Stanley

Stewart, Rt Hon Donald (W Isles)

Janner, Hon Greville

Oakes, Rt Hon Gordon

Stoddart, David

Jay, Rt Hon Douglas

Ogden, Eric

Strang, Gavin

Johnson, James (Hull West)

O'Neill, Martin

Summerskill, Hon Dr Shirley

Johnston, Russell (Inverness)

Orme, Rt Hon Stanley

Thomas, Dafydd (Merioneth)

Jones, Rt Hon Alec(Rhondda)

Palmer, Arthur

Thomas, Dr Roger (Carmarthen)

Jones, Dan (Burnley)

Pavitt, Laurie

Thorne, Stan (Preston South)

Lamborn, Harry

Pendry, Tom

Tinn, James

Lamond, James

Powell, Rt Hon J. Enoch (S Down)

Urwin, Rt Hon Tom

Leadbitter, Ted

Powell, Raymond (Ogmore)

Wainwright, Edwin (Dearne Valley)

Leighton, Ronald

Prescott, John

Wainwright, Richard (Colne Valley)

Lewis, Arthur (Newham North West)

Race, Reg

Walker, Rt Hon Harold (Doncaster)

Litherland, Robert

Radice, Giles

Welsh, Michael

Lofthouse, Geoffrey

Roberts, Albert (Normanton)

White, Frank R. (Bury & Radcliffe)

McCusker, H.

Roberts, Allan (Bootle)

Whitehead, Phillip

McDonald, Dr Oonagh

Roberts, Ernest (Hackney North)

Whitlock, William

McElhone, Frank

Rodgers, Rt Hon William

Willey, Rt Hon Frederick

McGuire, Michael (Ince)

Rooker, J. W.

Williams, Rt Hon Alan (Swansea W)

McKay, Allen (Penistone)

Roper, John

Wilson, Gordon (Dundee East)

McKelvey, William

Ross, Ernest (Dundee West)

Woodall, Alec

McMillan, Tom (Glasgow, Central)

Ross, Stephen (Isle of Wight)

Woolmer, Kenneth

McWilliam, John

Ross, Wm. (Londonderry)

Young, David (Bolton East)

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

Rowlands, Ted

Marshall, Dr Edmund (Goole)

Sheerman, Barry

TELLERS FOR THE AYES:

Mason, Rt Hon Roy

Short, Mrs Renée

Mr. James Hamilton and

Maxton, John

Silkin, Rt Hon S. C. (Dulwich)

Mr. Walter Harrison.

Maynard, Miss Joan

NOES

Aitken, Jonathan

Emery, Peter

Lester, Jim (Beeston)

Alexander, Richard

Eyre, Reginald

Lloyd, Ian (Havant & Waterloo)

Alison, Michael

Fairgrieve, Russell

Lloyd, Peter (Fareham)

Ancram, Michael

Faith, Mrs Shella

Luce, Richard

Aspinwall, Jack

Fenner, Mrs Peggy

Lyell, Nicholas

Atkins, Robert (Preston North)

Fletcher, Alexander (Edinburgh N)

McCrindle, Robert

Atkinson, David (B'mouth East)

Fookes, Miss Janet

Macfarlane, Neil

Baker, Nicholas (North Dorset)

Forman, Nigel

MacGregor, John

Bell, Sir Ronald

Fowler, Rt Hon Norman

MacKay, John (Argyll)

Benyon, Thomas (Abingdon)

Garel-Jones, Tristan

McNair-Wilson, Michael (Newbury)

Benyon, W. (Buckingham)

Glyn, Dr Alan

McQuarrie, Albert

Best, Keith

Goodhew, Victor

Major, John

Bevan, David Gilroy

Gorst, John

Marland, Paul

Biggs-Davison, John

Gray, Hamish

Marlow, Tony

Body, Richard

Greenway, Harry

Marshall, Michael (Arundel)

Bonsor, Sir Nicholas

Grieve, Percy

Mawby, Ray

Boscawen, Hon Robert

Griffiths, Peter (Portsmouth N)

Maxwell-Hyslop, Robin

Bottomley, Peter (Woolwich West)

Grist, Ian

Mellor, David

Boyson, Dr Rhodes

Gummer, John Selwyn

Meyer, Sir Anthony

Braine, Sir Bernard

Hamilton, Michael (Salisbury)

Miller, Hal (Bromsgrove & Redditch)

Bright, Graham

Hawksley, Warren

Mills, Iain (Meriden)

Brinton, Tim

Heath, Rt Hon Edward

Mills, Peter (West Devon)

Brotherton, Michael

Heddle, John

Miscampbell, Norman

Brown, Michael (Brigg & Sc'thorpe)

Henderson, Barry

Mitchell, David (Basingstoke)

Bruce-Gardyne, John

Hicks, Robert

Moate, Roger

Buck, Antony

Higgins, Rt Hon Terence L.

Morris,Michael (Northampton, Sth)

Bulmer, Esmond

Hogg, Hon Douglas (Grantham)

Morrison, Hon Peter (City of Chester)

Burden, F. A.

Holland, Philip (Carlton)

Mudd, David

Butcher, John

Hooson, Tom

Murphy, Christopher

Carlisle, John (Luton West)

Howell, Ralph (North Norfolk)

Myles, David

Carlisle, Kenneth (Lincoln)

Hunt, David (Wirral)

Neale, Gerrard

Chalker, Mrs. Lynda

Hunt, John (Ravensbourne)

Needham, Richard

Chapman, Sydney

Jenkin, Rt Hon Patrick

Nelson, Anthony

Clark, Hon Alan (Plymouth, Sutton)

Jessel, Toby

Neubert, Michael

Clark, Sir William (Croydon South)

Johnson Smith, Geoffrey

Newton, Tony

Clarke, Kenneth (Rushcliffe)

Jopling, Rt Hon Michael

Normanton, Tom

Clegg, Sir Walter

Kaberry, Sir Donald

Onslow, Cranley

Cope, John

Kellett-Bowman, Mrs Elaine

Page, Richard (SW Hertfordshire)

Corrie, John

Kershaw, Anthony

Parkinson, Cecil

Cranborne, Viscount

Kimball, Marcus

Parris, Matthew

Critchley, Julian

Knight, Mrs Jill

Patten, Christopher (Bath)

Crouch, David

Knox, David

Patten, John (Oxford)

Dean, Paul (North Somerset)

Lamont, Norman

Percival, Sir Ian

Dorrell, Stephen

Lang, Ian

Pollock, Alexander

Dover, Denshore

Lawrence, Ivan

Porter, George

Dunn, Robert (Dartford)

Lawson, Nigel

Prentice, Rt Hon Reg

Dykes, Hugh

Lee, John

Price, David (Eastleigh)

Elliott, Sir William

Le Merchant, Spencer

Proctor, K. Harvey

578

579

Rathbone, Tim

Squire, Robin

Waldegrave, Hon William

Rhodes James, Robert

Stainton, Keith

Walker, Bill (Perth & E Perthshire)

Ridley, Hon Nicholas

Stanbrook, Ivor

Waller, Gary

Rossi, Hugh

Stanley, John

Ward, John

Sainsbury, Hon Timothy

Stevens, Martin

Watson, John

St. John-Stevas, Rt Hon Norman

Stradling Thomas, J.

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

Shelton, William (Streatham)

Tebbit, Norman

Wheeler, John

Shepherd, Colin (Hereford)

Temple-Morris, Peter

Wickenden, Keith

Shepherd, Richard(Aldridge-Br'hills)

Thompson, Donald

Wilkinson, John

Shersby, Michael

Thorne, Neil (llford South)

Williams, Delwyn (Montgomery)

Sims, Roger

Thornton, Malcolm

Winterton, Nicholas

Smith, Dudley (War. and Leam'ton)

Townend, John (Bridlington)

Wolfson, Mark

Speed, Keith

Trippier, David

Young, Sir George (Acton)

Speller, Tony

Vaughan, Dr Gerard

Spence, John

Viggers, Peter

TELLERS FOR THE NOES:

Spicer, Jim (West Dorset)

Waddington, David

Lord James Douglas Hamilton and

Sproat, Iain

Wakeham, John

Mr. Peter Brooke.

Question accordingly negatived.
Main Question put and agreed to.
Resolved,
That this House takes note of the Report of the Royal Commission on the National Health Service [Cmnd. 7615].

EUROPEAN COMMUNITIES (TRADE TREATIES)
10.12 pm
The Minister for Trade (Mr. Cecil Parkinson): I beg to move,
That the draft European Communities (Definition of Treaties) (Multilateral Trade Negotiations) Order 1980, which was laid before this House on 15 January, be approved.
This order, laid under section 1(3) of the European Communities Act 1972, constitutes an important step in the implementation of the agreement reached in the Tokyo round of the multilateral trade negotiations. The negotiations started in 1973. There can seldom have been less promising circumstances for the world's trading nations to be discussing the reduction of barriers to trade and the reduction of tariffs than during the last six difficult years.
It is a matter of pleasure that the negotiations were brought to a successful conclusion when participants from the main developed nations signed an understanding in April 1979. Subsequently, in July, the detailed results of the tariff negotiations were set out in a tariff protocol. Taken together, the Tokyo round agreements constitute the first general revision of the principles governing the conduct of international trade since the General Agreement on Tariffs and Trade came into force 30 years ago.
The House debated the Tokyo round package on 29 June 1979, and I explained then the Government's support for the agreements which have been negotiated. The period since 1973, following the Middle East war and oil price rises, has not been a good time for this type of negotiation. But both the present Government and their predecessor have, nevertheless, sought a positive and successful outcome to the Tokyo round.
A country as dependent on exports as is the United Kingdom would have been very ill placed indeed to cope with a general increase in protectionism which. I believe, could well have been the outcome of a failure in the Tokyo round negotiations. The positive outcome which has been achieved should, on the other hand, provide increased opportunities for export sales of which competitive United Kingdom firms will be able to take advantage.
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When the negotiations were concluded last summer, the focus turned from negotiating to the implementation of the results of those negotiations. I think it would be true to say that the United States implementing legislation, to fairly widespread surprise, was passed quickly into law in July 1979. On 20 November last year, the EEC Foreign Affairs Council accepted a proposal by the Commission—which had been examined by the Scrutiny Committee of this House in the usual way—that it should agree to conclude the agreements on behalf of the Community. The Government supported this decision; indeed, we would have preferred the decision to be taken earlier. Following the Council's decision in November, the Community was able to join with the other main industrialised participants in signing the negotiated agreements.
Signature took place in Geneva on 17 December, that is, shortly before most of the agreements came into force on 1 January 1980. Countries which, like ourselves, had not completed their parliamentary procedures signed the agreements subject to their subsequent approval through their various constitutional processes.
Mr. Nigel Spearing(Newham, South): Precisely who was involved in the negotiations on behalf of the EEC? Was it officials of the Commission, or did the Commission recruit a team of persons from the Governments of the member States?
Mr. Parkinson: As the hon. Gentleman knows, the Commission negotiates on behalf of the member States, but I think it would be true to say that at every single stage of the negotiation the Commission was being watched and guided by representatives of the member States. The United Kingdom Government were very well represented at every stage of those negotiations and at both official and at ministerial level the direction of the Community's negotiations was settled by the member States.
The bulk of the implementing action is being undertaken through Community legislation—for example, new regulations on countervailing and anti-dumping, new customs valuation regulations, the new Community tariff for 1980, and so on. The drafts of all these, and the Government explanations of them, are being

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brought before the Scrutiny Committee in the usual way, and the necessary action has been completed on the agreements which came into force at the beginning of this year. The House has therefore had several opportunities to consider these documents.
In the White Paper we put forward the Government's view on the agreements. In the debate tonight, the House will have a chance to comment. But every agreement listed in the order will be translated into Community legislation. The draft directive will be brought before the Scrutiny Committee. The Government have been very anxious to make sure that the House has had a chance to consider these measures. The House, rather unusually, will have had no fewer than three separate opportunities to do so.
Mr. Julius Silverman(Birmingham, Erdington): Is is correct to say that these treaties will be brought before the Scrutiny Committee? The position of the Scrutiny Committee at present in relation to the definition of treaties is indeterminate. As the House knows, there was a resolution of the Procedure Committee which has not yet been carried out.
Mr. Parkinson: May I say to the hon. Member, who has taken on one of the most important jobs in the House in chairing the Scrutiny Committee, that tonight we will approve the agreements in this order as they were signed on behalf of the Community and its member countries. However, each of those agreements in detail will have to be translated, by directives, into Community law. Each of them, in turn, will come before the Scrutiny Committee—a number have already done so—so that that Committee may examine them and decide whether it is happy to see them adopted by this House.
Within the United Kingdom, an order under section 1(3) of the European Communities Act 1972 is necessary so that multilateral trade negotiations agreements should have full effect in United Kingdom law. Last year there was only a short time in which to do this between the approval of the negotiated agreements by the Foreign Affairs Council at the end of the year.
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This House approved a draft order similar to the present one on 10 December, but the Joint Committee on Statutory Instruments was unable, for very good reasons, to complete its consideration of the order in time for it to be approved by the House of Lords and made in 1979. So the Government withdrew the draft 1979 order and have instead brought forward the present draft I am glad to say that the 1980 draft order was cleared by the Joint Committee on Statutory Instruments at its meeting yesterday.
No practical difficulties will result from the short delay necessary for Parliament to give proper scrutiny to this order. However, it is important that the present draft order be made reasonably soon so that the United Kingdom's reserve on its signature can be removed.
Three agreements in the MTN package are not proposed for specification in the order. The supplementary tariff protocol and the two agreements relating specifically to the agricultural sector do not need to be specified in the order either because they have been signed by the Community alone, and not by the United Kingdom, or because they are not of such a nature as to have a direct effect.
All the other agreements negotiated in the Tokyo round have been specified for the reasons set out in the explanatory memorandum. In general, these reasons are that the agreements concerned have been signed both by the Community and by the United Kingdom and they contain provisions which we judge might be held to have a direct effect. The nine agreements are covered in one order since they are closely related in their subject matter and have been negotiated as one package.
The various agreements specified in the order have been described in detail in the White Paper on the Tokyo round, Cmnd. 7724, which was published in October and their texts have been published as Command Papers. Tonight I can touch only briefly on each agreement and shall concentrate on their effects in the United Kingdom.
The tariff negotiations, whilst not necessarily the most important part of the package, were amongst the most difficult to conclude. No firm, for understandable reasons, likes to see the tariff protecting its home market being reduced. Each

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party to the negotiations naturally tailored its cuts to the circumstances of its own industry so that the cuts are balanced overall, though not necessarily product by product.
Nevertheless, I believe that the Community's tariff cuts are being implemented in an acceptable way for United Kingdom industry. That was an important part of the objectives of the United Kingdom in settling the negotiating mandate for the Community. The EEC's common external tariff on manufactured goods is being reduced in annual stages between 1980 and 1987 from an average level of 9·8 per cent. to an average level of 7·5 per cent. That represents an average reduction of about 0·3 per cent. a year.
Mr. Nigel Forman: Has the Department studied the comparative effects on the protection available to firms of tariff barriers, non-tariff barriers and currency movements? If it has made such a study, what is the result?
Mr. Parkinson: If my hon. Friend introduces an Adjournment debate on that interesting range of subjects, which demands much homework and time, I shall be happy to take part. Of course, we constantly examine the basis of our trade performance and the effect on our performance of tariffs, other countries' tariffs, non-tariff barriers and technical tariffs. Those are debated regularly in the Department. As usual, my hon. Friend the Member for Carshalton (Mr. Forman) has mentioned an important issue. I hope that he will write to me. I shall welcome the opportunity of debating the issue with him.
Additional assurances have been provided to the textile and paper sectors which were particularly anxious about the prospects of increased competition from imports. The Community has reserved its right to stop the tariff-cutting process after five years if the economic circumstances require it. The reciprocal tariff cuts of other participants in the negotiations will yield worthwhile export opportunities for a range of industries. That will apply particularly to our producers of chemicals, ceramics, wool textiles and various types of engineering products. The distinctive feature of the Tokyo round was its emphasis on tackling the non-tariff obstacles to trade which have
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caused much anxiety to our exporters and have been reflected often in our discussions in the House.
Mr. Bob Cryer: I thought that the Minister said that the Community reserves its right to withdraw from the textile tariff concessions after five years. The White Paper, Cmnd. 7724, states that the Community has reserved its right to withdraw its textile tariff concessions when the present multi-fibre arrangement expires at the end of 1981. Has the position changed since the publication of the White Paper?
Mr. Parkinson: I shall be straightforward with the hon. Member. After five years we have the right to review the tariff-cutting process. If I am wrong, I shall deal with the question later.
The distinctive feature of the present round—and the achievement of it—is not the tariff cuts but the attempt to re-create a new set of rules for world trade and to tackle some of the non-tariff problems which have become a more obvious barrier to trade in some areas than tariffs. A number of agreements are aimed at dealing with those problems.
The customs valuation agreement and its protocol lay down detailed rules on the valuation of imports for duty purposes. Valuation is normally to be based on the price paid, or payable, for goods. Certain alternative methods are specified in order of precedence, for use in circumstances where this criterion cannot be applied. The agreement will require some changes in our Customs valuation methods, which will result in small decreases in duty paid in some cases, though in most—the overwhelming majority—the duty paid will be the same as at present. Our exporters will, however, gain a greater predictability and fairness in the valuation applied to their products, and hence in the duty paid, in some foreign markets.
The agreement on subsidies and countervailing duties elaborates the existing GATT rules on the imposition of countervailing duties against subsidised imports. As a result of the agreement, the Community has made some changes in its regulations on the imposition of such duties, designed to make them more precise. These changes will not impede the Community's ability to take action in defence of its industry. Signatories are

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also committed to certain general principles about seeking to avoid subsidies that cause adverse effects for the trades of other countries with them.
Mrs. Elaine Kellett-Bowman: Will the new rule that my hon. Friend is speaking about make it easier to take rapid action on such matters as dual pricing in America so that we do not have that tremendous drag on our trade?
Mr. Parkinson: What the agreements should do is to establish a set of rules and a way of enforcing them, or monitoring them, which I believe should benefit the United Kingdom. I believe—and it is a widely held belief in this country—that there are non-tariff barriers erected by other people to an extent that we do not erect them. Therefore, a fairer set of rules, cleaning up the rules of world trade, making sure that non-tariff barriers are in effect outlawed, and that there is a system for monitoring the agreements that countries will have signed of their own accord, must benefit us.
Mr. Douglas Jay: Does the fair set of rules that the Minister mentioned for controlling export subsidies apply to export subsidies on food exported by the EEC?
Mr. Parkinson: I can see myself ending the debate with a set of the parliamentary equivalent of IOUs. I should love to debate that subject again with the right hon. Gentleman.
I believe that the Community has been a force for liberalisation in the Tokyo round negotiations, but that it is an Achilles heel of the Community that we maintain the common agricultural policy in its present form, because it rather smudges our credentials as a force for liberalisation in world trade.
I should like to conclude what I was saying about the agreement on subsidies and countervailing duties. Under the agreements, we have gained the acceptance of all participants—including for the first time and most importantly the United States Government—of the GATT material injury criterion under which countervailing duties can be imposed only if the subsidised imports can be shown to be causing material injury to a domestic industry as a result of the subsidy. That is a major gain from the negotiations.
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The existing GATT anti-dumping code, which dates from 1968, has been updated to bring its provisions into line with those of the subsidies and countervailing duties agreement. The Community will continue to be able to take the necessary action to protect British industry against dumped goods.
The agreement on import licensing procedures is designed to ensure that the ways in which import licensing schemes are administered do not cause unnecessary difficulties for traders. It requires no change in our practice, but it might require changes in some other countries' practices.
The agreement on technical barriers to trade is concerned to alleviate the difficulties that exporters can face from product standards and certification systems in force in the importing country. Under the agreement, an authority establishing a new or revised standard is encouraged to adopt an international standard where that is appropriate and to follow certain notification procedures before laying down a national standard when no suitable international standard exists.
The agreement also provides for improved information for exporters on existing standards, and improved access to certification schemes. The British Standards Institution and other bodies concerned with standards in the United Kingdom are encouraged to follow these practices, while our exporters should benefit from similar practices in other countries participating in the agreement.
An agreement has also been reached on the liberalisation of Government purchasing other than the defence purchasing of warlike stores. The agreement does not apply to nationalised industries. After the agreement comes into force in 1981, the procedures under which tenders are invited must be made public. Most contracts over £100,000 must be advertised in advance in specified journals. These and other provisions are designed to ensure that the purchasing authorities within the agreement's scope do not discriminate in their award of contracts.
Many of the procedures to be established by the agreement are similar to those contained in the EEC supplies directive 77/62, which came into force in July 1978. As a result, it is expected that the existing departmental arrangements under the supplies directive will largely be able

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to continue on much the same basis as before.
Mr. Cryer: Is it not a fact that the United Kingdom was following the rules laid down in the directive and advertising public contracts throughout the EEC, and that in stark contrast the other EEC members were making only nominal gestures? Does the Minister agree that there were about 250 United Kingdom advertisements as opposed to 20 or 30 from the other member States?
Mr. Parkinson: The hon. Gentleman is right. In the initial stages the United Kingdom adopted the directive and implemented it earlier than other member States. I am pleased to say that there has been a change. There is a growing proportion of advertisements from other countries and a diminishing proportion of advertisements from Britain. The figures for the last month that I checked revealed that France had an overwhelming number of advertisements. I accept what the hon. Gentleman said. The directive was slow to get off the ground in other countries. Britain's implementation was quicker. It now seems to be operating more fairly. A growing proportion of the advertisements is from countries other than the United Kingdom.
Mr. Ron Leighton: What contracts have we obtained as a result of the directive?
Mr. Parkinson: The hon. Gentleman might ask himself another question. How many contracts have other member States obtained as a result of it? I suspect that the answer in both instances is not dissimilar.
Mr. Leighton: I understand that the Metropolitan Police are being uniformed by German manufacturers.
Mr. Parkinson: I had lunch yesterday with a United Kingdom supplier who is providing uniforms for staff of the Paris Metro. We might both ask ourselves, so what?
Finally, the section 1(3) order that is before the House specifies the agreement on trade in civil aircraft. The agreement provides for duty-free trade between signatory countries in aircraft, aero engines and some aerospace equipment. It also lays down certain general principles relating to Government support for pro-
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jects, purchasing of aircraft by airlines, and other matters. The elimination of tariffs has not affected the Community's tariff on large aircraft, which is already suspended at zero, while the general principles are designed to help establish a modus vivendi with the United States, which is of major importance as a producer and increasingly, in a welcome fashion, as a purchaser of civil aircraft.
I hope that hon. Members will be able to see from that brief explanation, and from the extremely detailed documents that have been provided for the debate, that none of the obligations that the United Kingdom is assuming under the Tokyo round agreements is unduly onerous. The main agreements provide for a committee of signatories to oversee the operation of the agreement concerned and ensure that its provisions are complied with. I believe that we and the Community have sufficient influence to use that machinery effectively to make sure that the agreements are implemented in a balanced way between ourselves and the other participants.
Before concluding, I should say a brief word about one matter that is still outstanding in the negotiations and which the right hon. Member for Lanark shire, North (Mr. Smith) and I discussed in the debate in June. I then reported that the Government were committed to a successful outcome to the negotiations for a safeguards agreement. Unfortunately it was not possible to reach agreement within the time scale of the remainder of the negotiations. Negotiations on a code are, however, to continue within the GATT. The working party that will undertake these discussions is required to report back by the end of June 1980. I regret the delay, but I welcome the general willingness among participating countries to seek an agreed solution of the difficult issues involved.
In the meantime, our ability to protect the interests of United Kingdom industries remains as it was. While negotiations continue, article 19 action remains fully available to the Community, and the Government, while rejecting policies of general import controls, are, as in the past, prepared to consider the possibility of import restrictions where excessive imports are, in particular cases, threatening otherwise viable industries. As for selectivity, the EEC Commission has

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indicated a willingness to consider requests for future safeguard action on the same basis as they have done in the past. That history includes the fact that article 19 has been used selectively by the EEC.
Apart from the outstanding issue on safeguards, the main aspects of the Tokyo round negotiations have been brought to a successful conclusion, and, I would suggest, a conclusion broader in scope than at one time seemed possible. I believe that the Tokyo round has been a most ambitious venture by the world's trading nations. At a time of great difficulty, they have turned their backs on protectionism and decided that the way to improve the standard of living of the people of the world is to expand world trade and liberalise the system.
In the agreements listed in the order we have set out to deal with problems such as technical barriers to trade, which are of themselves extremely difficulty to pin down. However, I feel that a worthwhile attempt has been made. We must now begin the big job—that of implementing these agreements. We must make sure that the ambitions and objectives that the world's trading nations have defined for themselves are carried through in practice. These new rules, as defined, must be implemented and made to work. I believe that we shall all be the better for it, if we are successful in that large and difficult venture.
10.45 pm
Mr. John Smith: The House is grateful to the Minister for his explanation of the conclusions of the Tokyo round. We discussed the matter fully in June last year, and there is only one point in the hon. Gentleman's analysis on which I take slight issue.
I am flattered by the idealism that the Minister injects into the conclusions negotiated by the Labour Government. Those, like myself, who participated heavily in the negotiations would be wary of injecting too much idealism into them. The Tokyo round was a success because adjustments were made between a number of the negotiating parties. It was not always done in the idealistic spirit of liberalising world trade and the negotiations were certainly not always conducted idealistically.
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I do not want to traverse the ground covered in June. It is important that the Tokyo round negotiations did not fail. A failure to agree the proposals set out as a result of the round would have set world trade back considerably, but we did not achieve a tremendous amount and some of the difficult issues, such as safeguards, have been put to one side.
I was pleased to note that the Government are adhering to the selectivity that the Labour Government argued was inherent in article 19. That view is not shared by all the rest of the world—the developing countries would certainly dispute it—but I hope that the Government will adhere to that view.
I wish to refer to the problem of textiles and dual pricing. I wrote to the Secretary of State some weeks ago and have not yet had a reply.
Mr. Parkinson: The right hon. Gentleman knows that my right hon. Friend is abroad, but I signed his reply today.
Mr. Smith: I just hope that it is a good reply.
Mr. Parkinson: It is better than the letter.
Mr. Smith: I hope that it is better than the draft that was probably put before the Secretary of State. It is not a joking matter, because it is of major importance to our man-made fibre industry.
The facts are simple. The United States gets an enormous price advantage out of the fact that its man-made fibre producers get their energy feedstocks at much lower than the world price. That deliberate policy of the United States gives a great advantage to its manufacturers.
During the multilateral trade negotiations the previous Labour Government were alive to the problem and the Council of Ministers decided on 3 April last year that, in the event of the dual pricing system giving rise to disruptive effects on Community trade, the EEC would not hesitate to take appropriate action by way of quotas or countervailing duties. Since then there has been a signal lack of action by the Community. The Government drew the matter to the attention of the Council of Ministers too late and the matter has been postponed, month after

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month, to the February meeting of the Council of Foreign Ministers.
Not only can the Council of Ministers take action, but the British Government can act to deal with the problem, and I suggested in my letter to the Secretary of State that they should not hesitate to take action. It would strengthen their negotiating hand within the Community and would make clear to our EEC partners and to the United States that we mean business.
There are a number of rumours from the Community that the United States is deliberately stalling. Every month in which the Community does not take action is another month in which the British market is penetrated by the unfair trading advantage of the United States'man-made fibre producers. It is time that effective action was taken. It has nothing to do with free trading, but a lot to do with fair trading.
I hope that the Government will not hesitate to take action. I understand that they are waiting for the February meeting of the Council of Foreign Ministers. I hope that the result is not some feeble application of countervailing duty of a few percentage points to make it look as if the Community is taking some token action. Nothing less than effective action will do to protect the man-made fibre industry in this country. We link this matter to the tariff-cutting process. As my hon. Friend the Member for Keighley (Mr. Cryer) rightly pointed out, the tariff-cutting process has a break at the end of five years. The whole process can be linked to progress on other matters. I hope that the Government will take much firmer action. This can be taken collectively. But if there is no action collectively, the capacity exists within the rules of the European Community for a sovereign Government to take action, at least on an interim basis, on their own account. I hope that the Government will take action and that the Minister will say that he expects real progress at the meetings on 4 and 5 February.
We have asked previously how these negotiations were proceeding. The report that the House received was in the form of an omnibus report from one of the Foreign Office Ministers. That was not satisfactory. I put the Minister on notice that, after the 4–5 February meeting of the Council of Ministers we shall expect
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the Secretary of State for Trade or himself to give a full report to the House on what has happened in the negotiations. These are of fundamental importance to the man-made fibre industry in this country. I hope that the hon. Gentleman will be able to announce some success in the negotiations. If not, he can expect round criticism not only from the Opposition but from some of his hon. Friends.
10.51 pm
Mr. Donald Thompson: This is an ideal document. In an ideal world it would be just what many manufacturers are looking for. It is a first-class package. I am sure that it will be welcomed by all. The background supplied to the Joint Committee on Statutory Instruments in paragraph 3 says that the idea is
"to provide a more secure framework of rules and procedures to encourage the continued expansion of world trade."
My constituents and I agree, but we realise that an expansion of world trade does not necessarily mean an expansion of trade in the United Kingdom, especially in textiles. I am glad that the Minister had so much to say about textiles, especially wool textiles. I hope that he is certain that our share of world trade will expand. I think that it will if all EEC members and the other signatories stick to the agreement.
Paragraph 9 of the same briefing document, in a sentence which I do not fully understand, says:
"It is considered that each agreement contains provisions which may be directly applicable within the United Kingdom, although such questions can only ultimately be decided by the European Court."
Are we to infer from that sentence that EEC countries, anxious not to abide by parts of the agreement when it suits them, can kick back the whole matter to the European Court and waste time? Will we be in a French lamb situation? The old GATT rules had no authority to impose sanctions. Nor were there any sanctions to impose. Has that changed?
I have read the documents carefully. I should like to refer to those on countervailing duties and anti-dumping. I understand that under the last GATT regulations on dumping and subsidisation it had to be proved that dumping was taking place, that the action was causing material injury to Community industry,

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not simply to our industry, and that the imposition of duties would be in the Community interest and not just ours. Do the new rules change that situation? Are we the signatories? Or is the EEC? A footnote says that "signatories" means parties to this agreement. Is that the United Kingdom? Or is it the EEC? If it is the United Kingdom, so much the better.
The first few articles in each agreement, while setting out procedures, highlight the built-in delays. For instance, article 2.14 of agreement 7658 says that one year may be taken to reach an agreement. Although article 2.10 mentions provisional measures, no time scale is laid down in that article, or in the article contained in the anti-dumping measures, that gives us a hint of how quickly we or the Community can act. Throughout that article the term "speedy action" is used. But how speedy is "speedy"? If I have read the documents aright, we cannot interfere with goods already in Customs.
The definitions laid down defining injuries caused through subsidisation and dumping are clear. However, may we be told whether damage to domestic producers covers not only their loss of trade in this country but the knock-on effect and the subsequent damage to their export potential? May we also be given clarification of exactly how a third non-signatory country is involved? For example, when clothing is imported into this country from Hong Kong via Italy, how do we intend to deal with the third country? We cannot do it at present. Perhaps the Minister will explain how that can be done.
Somewhere in the document I read that we have to discover and prove our competitors' manufacturing costs. Is any information forthcoming from the Government to assist private firms to cost their competitors' textile goods? The Wool, Textile and Clothing Action Committee is at present investigating the cost of imported suits, which will cost £75,000.
Finally on these two agreements, what are the Minister's thoughts about how he will deal with a cargo of, say, yarn or golf balls that has been dumped and which is far outside an equitable share of world trade by any yardstick? Such a cargo having been dumped, the trade cannot be retrieved. Once the toothpaste
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is out of the tube, how do we get it back? Will industry be allowed to exclude cargoes that have been dumped until the damage done to trade can be repaired?
I want to say a word about the technical barriers code, contained in agreement 7657. It is industry's opinion that the opposite of what is laid down in that code happens. Others will be able to quote examples from their own constituencies. I shall mention only fire extinguishers.
In Sowerby there is a firm called Nu-Swift, which exports fire extinguishers that are produced to a high technical standard. The experience of that firm is that there is manipulation of technical standards in Community and other countries. I believe that the experience of that company is common
I am told that the technical department of Nu-Swift has been negotiating with the French for five years, seeking approval for the company's products, and has met with delays and deliberate procrastination. The Danes have apparently carefully written a new technical standard which is different from any other in the world to protect that country's industry. The Germans, Italians and French; who voted in favour of a defined EEC standard, have as yet given no indication of adopting that standard and that code.
If article 5 is accepted by all Governments many of the troubles will be swept away, but will foreign industry allow foreign Governments to adopt this code? Will other countries besides Canada, the United States of America and Japan accept the tariff protocol?
My correspondent quotes Australia, Brazil, Malaysia, Equador, Venezuela, New Zealand, Kenya and South Africa as countries with negligible tariffs against goods coming to this country but punitive tariffs and restrictive licences in the other direction. If these measures do not work, manufacturers in this country will press for counteraction of the sort that I know the Minister deplores.
My last point relates to Government procurement agreements. The hon. Member for Keighley (Mr. Cryer), who carefully read the speech that I made on 13 November, has made some of the points that I wanted to make. I am glad to hear that the situation with regard to advertising has improved. What happens when our manufacturers reply

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to those advertisements? In one case, where a manufacturer replied to a German police tender he was told curtly not even to send representatives. In other cases, manufacturers have deliberately been misled and messed about.
These documents would be first class if we could be sure that they will be implemented in other EEC countries as fairly as we know they will be in this country.
11.1 pm
Mr. Douglas Jay: I agree with the Minister that we must welcome the successful result of the Tokyo round. I also agree that it has to be launched at a remarkably unfavourable moment in world trade as a whole.
However, there are some points which the Minister did not make entirely clear. I asked whether the subsidy rules applied to food exported from the EEC, and I take it that the answer is "No". If I am incorrect, perhaps the Minister will let me know later. Secondly, although he spoke on the legal aspects of this order, which, after all, is a definition of treaties order, I was not exactly clear whether he was saying that these tariff changes are already in force in the United Kingdom, whether this order brings them into operation in the commercial as well as the legal sphere or whether some further step is to come. May we know exactly when the changes are to be made?
Thirdly, the Minister did not say much about some of the wider applications of the results of the Tokyo round. Presumably, the changes generally will lower United Kingdom tariffs on imports from sources outside the EEC. I presume that that is one part of the operation. However, apart from Japan, it is not so much imports of manufactured goods from outside the EEC but rather imports from within the EEC that are now causing so much trouble to British industry.
In 1979 our deficit in visible trade in manufactured goods with the EEC Six was nearly £4 billion, and any discussion of our present trading situation which ignores that fact is a little unreal. The fact is that something must be done to correct it if British industry is to survive.
I have recently heard a good deal of discussion in all sorts of quarters about the economic and trading consequences if the United Kingdom were to withdraw
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from the EEC. There is no harm in having a little discussion about that. It seems to me that the tariff reductions and, indeed, the other changes made in the Tokyo round should enable us to examine this issue rather more clearly.
Some people imagine that United Kingdom trade has been so drastically switched and redistributed by EEC membership that if we withdrew there would be a major upheaval and all sorts of markets would be closed to us. But, interestingly enough, the figures—which the Minister did not quote, and I do not complain of that—show that that is almost totally untrue. Although our membership has imposed an enormous balance of payments burden on this country, it has not switched our trade geographically nearly so far as many people seem to believe.
Figures quoted in The Economist on 17 November 1979 show that whereas in 1972, before entry, Britain took 68 per cent. of its total imports from the non-EEC world, in 1978 it still took 62 per cent. That was no violent switch. In 1972 exports to non-EEC countries accounted for 70 per cent. of total exports, and the figure was still 62 per cent. in 1978. We are still doing over 60 per cent. of our trade with the non-EEC world. That should be the background to the debate.
It is rather surprising that we still took 75 per cent. of our total food imports by value in 1979 from sources other than the old EEC Six. It follows that withdrawal from the EEC would not mean as major an unheaval as some seem to think, but a gradual shift back of the percentages to the more natural and less distorted figure that prevailed in the 1950s and 1960s.
Withdrawal would do something more important in the trading sphere. It would give us the option of imposing these new and more moderate Tokyo round tariffs on manufactured imports from the rest of the EEC, as well as from the rest of the world, if we so wished to do. It would not compel us to do so, but it would give us that option.
I hear much talk in the Palace of Westminster and elsewhere about import controls. I would have more sympathy with those who advocate import controls if they frankly advocated outright withdrawal of Britain from the EEC. We cannot impose import controls on EEC goods

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unless we withdraw from the EEC. It is no good putting import controls on Japan without putting import controls on the EEC, because Japanese imports would, in many cases, be replaced from the Continent.
Three or four years ago I would have advocated that if we withdrew from the EEC we should rejoin the EFTA group—which has done remarkably well outside the EEC—and practise, as Sweden, Norway, Switzerland and Austria now do, industrial free trade with the rest of the EEC as well as EFTA. We could have done that in the early 1970s.
In view of our trade deficit in manufactured goods, and because EEC membership has done so much damage to British industry, especially the motor car and steel industries, I am afraid that for a time we would have to adopt the alternative of imposing these new Tokyo round tariffs on manufactured imports from the EEC if we were to withdraw from it. That would not be such a terrible reversal of policy, considering how low the tariffs are at present. It would mean that the other EEC countries would impose corresponding tariffs on Britain. I believe that we have reached the stage where we would gain by that double operation.
We also hear talk from time to time about a siege economy for this country as the alternative to EEC membership. That sort of philosophy seems to spring from a certain amount of ignorance about the facts of international trade, because to impose the now very moderate Tokyo tariffs on manufactured imports from Germany, France and Italy—the same tariffs that we are imposing anyway on imports from Japan, the United States, Canada and many other countries—would be to adopt not a siege economy but a very moderate policy for this country, and would indeed extend the normal way of conducting international trade.
As an illustration of what this sort of change would involve I should like to ask the Minister one concrete question. Can he tell us what is the present EEC common external tariff, after the Tokyo round, on motor cars on the one hand and on manufactured steel goods on the other? That would show the sort of changes that would be involved.
All that I want to do, apropos the order, is to ask hon. Members to start
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examining these options seriously in the light of the changes now being made, so that we may have some intelligent view of what would be the economic consequences of withdrawal, because we shall never have any real economic recovery in this country until we free ourselves from these restrictions.
11.12 pm
Mr. Ivor Stanbrook: It seems that no matter what subject the right hon. Member for Battersea, North (Mr. Jay) discusses he always comes to the same conclusion. This subject is far wider than the EEC. It is a pity—and to some extent I go along with those Labour Members who are not great friends of the EEC—that we do not have sufficient opportunity to discuss these matters, and these agreements in particular, before they are enacted or passed into our law. After all, the Tokyo round staggered to a conclusion last year after six years. It was because it came to a conclusion that, as the right hon. Member for Lanarkshire, North (Mr. Smith) said, it was a success.
If all the agreements are implemented there will be a degree of greater liberalisation of trade, and to that extent we can congratulate those who were responsible. They comprised a great many people on a world scale, and this country was represented at the negotiations by the representatives of the Commission, albeit with assistance from us.
It means that we are discussing a harmonisation of a harmonisation.
Mr. Spearing: Yes.
Mr. Stan brook: By the time the subject comes to this Chamber we are in the difficulty that the experts have worked it out in two arenas, and the Government must surely be satisfied that what has been obtained is the best that could possibly be obtained. Perhaps the better Committee to discuss the merits of these agreements and their implications for British trade and industry would be the Select Committee on Industry and Trade rather than the Scrutiny Committee. The agreements represent a degree of progress in the area of international trade, and I welcome that.
With regard to the anti-dumping provisions, there are notable improvements in the system that will apply henceforth.

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There are greater powers on the part of the Commission. The fact that to institute a dumping complaint one does not need to show even a prima facie case, but merely sufficient evidence to be accepted by the Commission, is a great advantage to British industry, because as from that point the Commission takes over and has a duty to investigate, get at the facts, and pursue the case.
Mr. Leighton: Is it not a fact that this Parliament now has no anti-dumping powers against the EEC in terms of Community obligations? As far as the rest of the world is concerned, we are obliged to ask the Commission to do something for Britain. We have abdicated all our powers. We have no powers against dumping.
Mr. Stan brook: That is not true. In its wisdom this Parliament decided that the best way of tackling this problem was by concerted action with the other members of the EEC. By that concerted action we expect to get better results, and I am sure that that will be the case. It is a good thing that the Commission should, in future, be responsible for pursuing anti-dumping complaints and carrying, one hopes, its action to a logical conclusion.
The point has been made concerning Government procurements that there should be a fair balance and that the list which the Government have as a result of the agreement—there is provision for adding to it—should be such that we are not at a disadvantage compared with those industries on lists submitted by other countries. I am sure that the Minister will keep a close eye on that to ensure that there is reciprocity and a fair balance.
This is a complicated subject and the issues involved are extremely important to trade and industry in this country. Because we now have additional powers, additional opportunities for trade and additional weapons to defeat the scheming of foreign competitors outside the EEC who do not observe the rules, it is important that our industries should be well advised about the tools available.
I hope, therefore, that the Department will make sure that there is wide propagation of information about the opportunities now available as a result of our adoption of these provisions.
11.17 pm
Mr. Bob Cryer: I am delighted that as a result of the careful scrutiny of the Select Committee on Statutory Instruments this instrument is once more back on the Floor of the House of Commons for examination. It is a slight document, covering a massive range of negotiations. It cannot be faulted technically, but it behoves all Committees of the House to look at every document with great care, otherwise things which are far more important than hon. Members realise will slip through.
I want to speak briefly about the textile industry. As a background to the present condition of the industry, the draft annual report of the Bradford chamber of commerce states:
"Nowhere are these problems more acute than in the wool textile industry, which still comprises a very important proportion of the membership of the Chamber. That this industry is basically a well equipped, modern and efficient industry is beyond doubt, but the adverse factors enumerated above, sharpened by the difficulties caused by subsidised and dumped imports, are causing serious concern."
It is natural, therefore, that when we examine something as wide-ranging as this instrument—which involves a reduction in tariffs—we should do so with a close and critical eye
Can the Minister say how, under the subsidies and countervailing duties agreement, the Commission will determine the principles for deciding injury? Can duties be imposed only when subsidised imports cause injury to domestic industry? Some people would argue that the textile industry has already suffered a significant degree of injury, and that often the Commission delays action until the damage has been done and cannot be remedied
As has been mentioned already, the idea of having technical regulations and standards is all very well when it is universally applied. Britain does not apply technical regulations and standards to imports to a significant degree. For example, the Health and Safety Executive does not examine imports. I asked a question about that some time ago. We have those powers under section 6 of the Health and Safety at Work etc. Act. Safety standards are specifically exempt from the non-discriminatory arrangements. I ask the Minister to consider the universal application of safety standards to imports of manufactured goods.

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I turn now to the anti-dumping agreement. We have no anti-dumping powers. I hope that the anti-dumping arrangements will be applied effectively and that the Minister will bring pressure on the Commission to apply those powers. An anti-dumping unit is maintained by the Department of Trade. It was originally maintained by the previous Labour Government. However, it is virtually impossible to prove dumping. There is no reason why the Government should not consider changing the onus of proof. The importer should have to prove that the goods that he is importing are not being sold at dumped prices. The industry should not have to prove that they are. It is difficult for a manufacturer to gain access to the documents which may prove dumping.
Mr. Spearing: The issue is more complex than that. Anti-dumping does not have to affect any one place, such as Sowerby, but damage to the industry in the Community must be proved. Therefore, an industry in one part of the nation can be wiped out so long as production continues in another part of the Community. In that case, anti-dumping orders are irrelevant.
Mr. Cryer: The wide definition of "industry" creates the difficulty. By virtue of our membership of the Community we are not able to take effective action against other members or the Community. If we suffer from any blemishes in the Tokyo round, we shall be at a further disadvantage because of opposition within the EEC.
I have reservations about Government procurement. The agreement's aim is to ensure the principle of non-discrimination between domestic and foreign supplies. That is nonsense. It is a waste of energy for uniforms for the Paris Metro staff to be manufactured in Britain and taken to France, and for a French manufacturer to make uniforms for the London police and cart them here. That is an absurd waste of energy. That is called trading, but we must understand that thousands of jobs are lost in the textile industries every month. Preferential procurement by the Government and local authorities by massive contracts for all types of services can save those jobs. It seems daft to put people on the dole in York-
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shire while contracts for uniforms go to other Western European countries, such as Germany, which do not depend on the textile industry as much as we do.
This is not simply a matter of saying that it is trade. We must discriminate. The view of the Labour Party and the TUC is that if we are to solve the problem of deindustrialisation we must exercise discrimination through quota and import controls, and that is right.
I entreat the Minister to clear up a consequential matter that has been raised tonight. The basis of the debate is also Cmnd. 7724—the White Paper on the multilateral trade negotiations 1973 to 1979. Paragraph 22, entitled "Staging of Tariff Cuts", states:
"The Community has reserved its right to stop the tariff cuts after five stages in 1984 without proceeding to the last three stages, if it judges that the economic or other circumstances at the time require this."
That is straightforward, but paragraph 18, which I quoted earlier, under the general heading "Textiles", states:
"In addition, the Community has reserved its right to withdraw its textile tariff concessions in the absence of a mutually acceptable arrangement regarding international trade in textiles. This relates to the continuance of acceptable arrangements after the present Multi-Fibre Arrangement expires at the end of 1981, and parallels a similar reservation in the US textile offer."
That seems specifically to spell out that there is a reservation in the tariff concessions applicable at the end of 1981. Will the Minister confirm that that is so? Will he also confirm that the Government are committed to a renewal of the multi-fibre arrangement? If so—this is an opportunity to do that and it is relevant to the debate because it is in the White Paper—the industry will have some element of improved confidence. The industry is in need of a fresh injection of confidence. The Minister's earlier remarks and the remarks of the Secretary of State have not injected confidence about the future of the textile industry, which is facing a number of problems. If the hon. Gentleman could answer those questions and affirm clearly and unequivocally that the Government are committed to extend and improve the multi-fibre arrangement. it would be very useful.
11.28 pm
Mr. John Butcher: I am concerned about the remarks made by the hon. Member for

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Keighley (Mr. Cryer) vis-a-vis uniforms crossing the Channel in each direction. If I interpreted his remarks correctly, he was implying that we should be self-sufficient in all products. This country has always had to export or die. In order to export, surely we must specialise. That is the basis of our international trade and of our successes in latter years.
Mr. Cryer: By "specialise", does the hon. Gentleman mean that we should have a permanent massive balance of payments deficit with virtually every Western European country? By "specialize", does he mean that he is prepared to discard our textile industry because other countries regard their textile industries as more important?
Mr. Butcher: I think that the opposite has been implied. I should like to come back to this point and tie it in with the need for greater efficiency in many of our industries, which protection does not help in many instances.
I welcome the Minister's statement in the context of the interests of the Midlands, Coventry, the South-West in particular, and almost anywhere where engineering takes place in the United Kingdom.
Engineering is a harassed and beleaguered industry and it has often felt that, while this country has played the game in terms of international trade, other countries have not. Therefore, measures on anti-dumping, on the harmonisation of international or national standards, on Government purchases, and particularly on non-tariff barriers, are to be welcomed.
If, in current circumstances, I were to look at the main candidate for antidumping treatment, I should look to the COMECON bloc. In particular, I should look at the Lada car, which many people strongly suspect is supplied to purchasers in this country at a price which, by no stretch of the imagination, can cover the costs of manufacture and transportation. In the current political climate, at which the very top of this Administration is looking, this may be an economic measure which has a political as well as a fair trading basis. I should record that 22,000 Lada cars are imported into this country each year. This is more than the number of cars imported into this country by companies such as Mercedes
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or Lancia, which operate from Common Market countries.
Turning to national standards, I am reminded of an amusing, if not farcical, situation which arose inside the EEC. Manufacturers of fork-lift trucks in this country were amazed to discover that the European standard for this vehicle had been changed to incorporate a detachable fuel tank, a feature in which French manufacturers specialise. It happened that the French lobbying inside the EEC had been exceedingly effective, to the disadvantage of British, German and Scandinavian manufacturers. I hope that the measures announced tonight, dealing with national standards and the harmonisation of international standards. will have the desired effect.
When we consider the measures concerning Government purchases, we have to remember that no agreement can deal with the "nods and winks" factor. I suppose that if I were looking for a villain here I would have to cite the Germans who are very clever at nods and winks, as any prisoner of war during the last war will know. The "Buy German" policy does not need description in legislation. It does not need abolition by agreement. It simply occurs. As someone who, commercially speaking, was weaned in the computer industry, I wonder whether we are as tough as the Germans when it comes to buying our own products. Consequently, I welcome the clearer phrasing in the provisions dealing with Government purchases.
The part of my hon. Friend's speech which will delight people all over the West Midlands was that in which he said that he would be prepared to consider the possibility of import restrictions where excessive imports were threatening the viability of indigenous industry. That will be interpreted in engineering companies all over the country as at least a declaration of intent that the Government will not be messed around and will not be hoodwinked, as their predecessors were.
11.33 pm
Mr. Parkinson: A number of points have been raised in this relatively short debate, and I hope that the House will forgive me if I am unable to reply to all of them. If I miss any major points I shall write to the hon. Members concerned.

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I begin by referring to the remarks of the right hon. Member for Lanarkshire, North (Mr. Smith). He talked of the dangers of idealism. Perhaps if we described the motivating force behind our negotiations as enlightened self-interest some of the difficulties would disappear. The truth is that it is not because of idealism that we want to see the world trading system kept open. It is simply because we export 33 per cent. of everything that we manufacture. We have a vested interest in having access to other people's markets for our goods. That is why the Government, and the right hon. Gentleman, supported the move to keep the world's trading system as open and fair as possible.
The right hon. Gentleman asked about textiles, in particular synthetic fibres. I have a sad piece of news to impart to him. He seems to be the only person who remembers that statement in Brussels in April. Every time I mention it people look slightly baffled. Certainly none of those whom I have met left that April meeting feeling in any way committed to taking action.
Mr. John Smith: May I suggest that those who have difficulty in recalling this matter read the official record of the Community? I have checked it. The Minister will find that that was the decision reached. If he was doing his job he would have pointed this out to the other countries a little more emphatically than he seems to have done.
Mr. Parkinson: We have been pointing it out very emphatically. One of our problems is that the right hon. Gentleman and his colleagues cried wolf so often that they rather devalued Britain's complaints. Britain established a reputation as a full-time bleater, and when we have a real problem now we find it difficult to get proper recognition of it.
The Commission is committed to bringing forward specific proposals for action which will be decided at the February Council. As the right hon. Gentleman knows, these Councils are officially Foreign Affairs Councils. A wide range of subjects is discussed, and the Lord Privy Seal normally reports to the House on behalf of all Ministers about the results of those meetings. At the last meeting textiles, steel and a wide variety
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of things were discussed. That is why one departmental Minister, namely, the senior Minister from the Foreign and Commonwealth Office, reports on the proceedings.
My hon. Friend the Member for Sowerby (Mr. Thompson)raised a range of specific and detailed problems, and I shall write to him about them. He asked two questions. The first was whether we would be in a position to take effective and speedy action against dumping. We were not satisfied with the arrangements that we found when we were appointed to office. My right hon. Friend and I went to Brussels. We pressed the Commission. The anti-dumping unit has been strengthened, and I believe that it is now more effective. We have retained an anti-dumping unit here. We have issued an advisory document on how to take advantage of the procedures. We remain available to back up British industry if it feels that it has a complaint, and we shall do what we can to speed up the procedures.
My hon. Friend then asked whether we could reckon on the rest of the world implementing the various codes as we will. A committee of signatories on each code has been established to monitor how the code works. We shall take advantage of those committees and press to make sure that other people, who have voluntarily signed these agreements and committed themselves to implementing them, and have established the procedure for monitoring that implementation, do the same.
The right hon. Member for Battersea, North (Mr. Jay) raised a number of interesting points. He asked about agricultural subsidies. I am advised that the rules have been refined, but there has been no major change in them. I shall write to the right hon. Gentleman on the other details of his question.
The right hon. Gentleman also asked when the tariff cuts come into effect. With the exception of textiles and steel, which will take effect in 1982, they came into effect on 1 January of this year.
Mr. Jay: So they came into effect before the order came before the House?
Mr. Parkinson: The agreements were signed by the Commission and by the Government, but, for the reasons that I

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have explained to the right hon. Gentleman, because of a procedural snag there was a delay in their being approved by the House. The agreements came into effect, and were signed to come into effect, from 1 January.
The right hon. Gentleman, in a persuasive fashion, developed his theme that the answer to our problems is to leave the EEC. I do not share that view. I think that it would be wrong to raise artificial barriers against people with whom we do 50 per cent. of our trade. Whichever way the right hon. Gentleman tries to talk, the fact is that the figure is edging towards 50 per cent. Let me give the right hon. Gentleman some details. Germany has overtaken America as our major trading partner. France is our third, Holland our fourth, Benelux our fifth, Denmark our ninth and Ireland is our sixth. The right hon. Gentleman is saying "Raise tariffs against all our major trading partners" as an answer to our trading problems. It is nonsense.
Mr. Jay rose—
Mr. Parkinson: I shall not give way. The sooner the right hon. Gentleman faces up to the fact that he has been backing a loser for a very long time, the happier we shall all be, and the earlier, perhaps, some of us will get to bed.
The right hon. Gentleman said that the EEC had damaged our motor car industry. That is absolute rubbish. What has damaged our motor car industry is our own inability to perform and to compete. The sooner the right hon. Gentleman and his friends start telling their friends the truth, and stop misleading them into thinking that there is an easy way out of our problems, the better for all of us.
The right hon. Gentleman asked what the tariffs on steel and cars were. An exact figure is not available, but the answer is between 8 per cent. and 11 per cent. It is a range of tariffs.
The hon. Member for Keighley (Mr. Cryer) raised a number of subjects and repeated a number of his deeply held and totally misguided beliefs. The answer to one of his questions is that there are two specific let-outs on the textile tariff cuts. First, if there is not an MFA—
It being one and a half hours after the commencement of Proceedings on the
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Motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted Business).
Question agreed to.
Resolved,
That the draft European Communities (Definition of Treaties) (Multilateral Trade Negotiations) Order 1980, which was laid before this House on 15th January, be approved.

ORDNANCE SURVEY
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]
11.42 pm
Mr. Andrew F. Bennett: I am delighted to have a chance tonight to start a short debate on the report of the Ordnance Survey review committee. I realise that this does not appear to interest many of my constituents, nor millions of people in the country. However, I stress that good maps are important to a large number of people.
Administering a modern State would be almost impossible without good maps. Equally, a steadily increasing number of people use maps to increase the pleasure they obtain from their sport or recreation. Therefore, it is unfortunate that there has not been much more debate and public discussion of the report. It is particularly unfortunate since Sir David Serpell and his committee did such a first-class job and produced such a good report. I congratulate them. However, why the report had to be priced at £20 I do not know, unless the Government wanted to discourage debate on it.
Tonight, my main concern is to ask the Government to make clear their attitude to the recommendations in the report and to tell us when they will give the Ordnance Survey, a clear remit for what it is expected to do in the next 20 years. The first question to which I should like to refer is one that is raised in considerable detail in the report—that of digital mapping. It has become fashionable to suggest that microprocessors or computers will take over increasing areas of our life, but it is clear that they could have far-reaching effects on map making.
The review looks very carefully at the Ordnance Survey development of digital

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mapping and notes that so far it has had few advantages over conventional methods. It may have been an interesting experiment, out the costs are often higher and often it takes just as long to produce a map. However, it looks as though there is the possibility that future developments will bring substantial advantages and that digital mapping may very well be very attractive, particularly for such bodies as the Land Registry. the local authorities and the public utilities. There are possibilities that a digital system can offer specialist leisure users, particularly walkers, climbers and similar groups, much better maps.
The report suggests that there should be two data bases, one for small-scale and one for large-scale maps. It suggests that the Ordnance Survey should approach this task in two stages. First, it should have from the Government over the next two years perhaps £600,000 so that it can investigate which is the best approach and which of the many systems that are being offered has most attractions. The second stage, which would probably take 10 years to complete and perhaps cost £15 million to £16 million, should by 1984 produce a computer data base for the 1:50,000 scale maps and then by 1993 for the larger-scale maps. Will the Government encourage the Ordnance Survey in that initiative? Will they authorise the first stage—namely, to decide which systems to go for? Is it hoped to introduce the long-term objective of getting digital bases for both small—and large-scale maps?
Much concern has been expressed by many charitable organisations and other leisure groups about the attitude of the Ordnance Survey to copyright over recent years. They have felt that the Ordnance Survey has increased its copyright charges too quickly and has discouraged many groups from reprinting all or parts of maps. I have received representations from groups which want to promote orienteering. They claim that it is increasingly difficult to cover the costs of reproducing bits of map for their purposes. I have also received representations from groups which are trying to encourage nature trails. They say that they have found it difficult to meet the costs of publishing booklets as well as providing other information.
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The report makes some good recommendations to the effect that the copyright provisions for the sort of group to which I have referred should be eased. It will be helpful to quote the "Summary of main recommendations". It states:
"OS should continue to seek substantial revenue from copyright fees but should adopt a more flexible approach to certain categories of user; in particular, (a) copyright charges should be waived on the publication of research findings; (b) in addition to the existing arrangements for educational users, OS should adopt HMSO's policy of giving a 50 per cent. discount on the normal copyright fee payable by educational publishers in cases where the primary purpose of a publication is use in an educational institution."
The last recommendation states:
"OS should waive fees on copying by charitable organisations, up to a specified volume per year (within the size limits permitted by current OS copyright regulations) for a trial period to assess the effect on sales revenue. OS should consider also ways of extending waivers in this area once the effects of the concessions to charitable organisations have been assessed."
Those seem to be sensible recommendations that meet many of the arguments that have been put to me by many of those who want to use maps for recreational and leisure purposes.
I stress that there are problems concerning charitable organisations. I understand that some organisations which exist merely to promote interest in sport are barred from holding charitable status. I hope that the Minister will indicate that the Ordnance Survey will treat the term "charitable" in a wider context than merely organisations recognised by the Charity Commissioners.
I turn to the future of the 1:25,000 series. It is often referred to as the old 2½-in map. I understand that it is to be renamed by the Ordnance Survey the Pathfinder map. The report makes a good comment:
"OS should continue to produce the 1:25,000 series, as a core activity. OS should market it actively while investigating the scope for less costly ways of meeting user needs, and attempt to increase the proportion of costs covered by revenue while increasing use of the series."
That is a helpful section in the report, and it is worrying that the press release from the Department of the Environment used the phrase "if resources are available". It drew attention to a small section in the report which said that

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if resources were not available there were three options that should be considered—namely, a reduced rate of provision of the second series, suspension of the second series or an attempt to increase revenue from the 1:50,000 national series to cover the costs.
Mr. Nigel Spearing: Does my hon. Friend agree that any one of the three options would be unfortunate in its effect? Does he accept that the 1:25,000 is a useful map because it is the smallest scale on which field boundaries are easily visible? It is useful for a wide range of purposes because of that facility.
Mr. Bennett: My hon. Friend takes me on to the point that I was about to develop. It is the essential map for the walker, who does not want to run the risk of being slightly off his path and causing nuisance to farmers by cutting across hedges and fields in the wrong place. For 10 years there have been arguments about this map. Fortunately, on every occasion the Government have come to the conclusion that the series should be continued. We are now approaching the situation where about 80 per cent. of the country is covered by these maps. Having come so close to national coverage, it would be an appalling decision to stop there. It is analogous to building a house with almost everything in it but saying that because the front door is not on it cannot be used.
The big problem for the Ordnance Survey has been that until it has national coverage it is difficult to run a major publicity campaign, because if someone asks in a local shop for a map of the one part of the country that is still not covered, that results in a backlash. There have, therefore, been great difficulties in marketing. If national coverage can be achieved, many of the problems will be overcome.
It is also clear from the report that if digitisation is developed we may be able to produce the maps much more cheaply. I therefore hope that the Minister can assure us that the 1:25,000 map will continue to be a core activity of the Ordnance Survey.
I believe that the sheets should cover rather larger areas, which would cut down cost. I should also like to see the Ordnance Survey develop the policy of
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printing sheets on the back and front, as it has done with one or two of the leisure maps.
I stress that the map is essential for walkers and climbers and is particularly important for mountain safety. It also has great value to farmers. It helps those who use the countryside to make sure that they are in the right place.
If the Ordnance Survey could improve-its marketing, groups such as the Ramblers' Association and the YHA would do their bit to promote the maps. I hope that the Minister can guarantee that those maps will be available.
The report suggests that much better survey of coastal—bathymetric—information would be helpful, particularly for those concerned with coastal or deep sea diving. There have recently been complaints about the way in which the large-scale maps are produced from microfilm. There could be improvements there.
The report also stresses that the consultative machinery is not as good as it might be and suggests ways to improve it. Finally, it stresses that it believes that the Ordnance Survey could do a great deal to improve marketing. I hope that the Minister can assure us that the report will be implemented.
The introduction to the report's conclusions says:
"OS will be faced during the next twenty years with four major tasks:
to keep the archive up-to-date by a thorough and economic process of revision
to make the information from the up-dated archive available to users promptly"—
I stress promptly—
"and in forms acceptable to them
in an era of technological change, to take advantage of progress (especially in the provision of data in digital form) which enables it to maintain or improve its performance
to continue to transform itself from being a rather inward-looking and conservatively-run organisation into one that looks to the future and is responsive to the change and to developments elsewhere."
That is a useful comment, and I hope that the Minister can tell us that the Ordnance Survey will be given clear guidance to implement the suggestions in the report and also that the Government will guarantee the resources to carry out those suggestions.
11.54 pm
The Under-Secretary of State for the Environment (Mr. Marcus Fox): I am sure that the House is grateful to the hon. Member for Stockport, North (Mr. Bennett) for providing an opportunity for views to be expressed on the report of the Ordnance Survey review committee. The hon. Member has long displayed a friendly, constructive and knowledgeable interest in Ordnance Survey matters from the map users' standpoint. Indeed, I have read afresh the contribution that he made to the earlier debate on the organisation that he initiated in July 1977, when the study undertaken by the review committee was first being mooted. What he had to say on that occasion was as pertinent as his speech tonight.
I have taken careful note of the many interesting points that he has made and will certainly bring them to the attention of my right hon. Friend, who is at present considering the review committee's report and the views that have been expressed on it.
The hon. Member asked me to give a number of assurances. Bearing in mind that consideration of the report is still taking place, there is a limit to what I can say to him. However, I can say immediately that the Ordnance Survey is widely respected in this country, and most of us, at some time or other, have had cause to be grateful for the maps that it provides. The hon. Member is especially concerned with ramblers and walkers, but the list of those who benefit is endless.
My recent visit to OS headquarters at Southampton unquestionably reinforced my own high regard for the institution and the quality of its work. I have seen the people who work there and the complexities of the job they do. I was particularly struck by the corporate spirit of the department, their pride in their long tradition of service to the community and the pains they have taken to co-operate with the review committee in its examination of their future tasks and how they must adapt themselves to deal with them.
The OS has been playing a key role in the provision of essential information for the management of this country for nearly 200 years, and I can certainly assure the hon. Member that it is here to stay. Indeed, as the review committee points out, in many modern develop-
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ments its future role may be even greater. Of course, the OS will need to adapt to changing needs and fast-developing technologies, and in that respect the report of the review committee has made a most valuable contribution.
There can be little doubt that the review committee, which was asked to consider and make recommendations on the longer-term policies of OS and ways of financing them, was given an important and formidable task. Those who have studied the report will have noted the thoroughness and care with which it was carried out—and the speed with which it was completed. The hon. Gentleman will be glad to know that it has produced a comprehensive document from which the Government can proceed to reach their conclusions, and I should like to take this opportunity to express the Government's gratitude to Sir David Serpell, as chairman, as well as to his colleagues on the committee for the work they have done.
It is clear from his contribution tonight how much importance the hon. Member for Stockport, North attaches to the services and products of the Ordnance Survey. He referred in particular to the matters raised in evidence given to the review committee by the Ramblers' Association and the Central Council for Physical Recreation. They are two of 450 organisations and individuals who gave evidence to the committee, which shows how important the OS and its future is to many people.
Both the association and the council covered a wide range of issues of interest and concern to their members, ranging from the availability and coverage of maps—and the amount of detail shown on them—to broader issues such as the extent to which the OS should be required to pay its way or be treated as a public service. Those were among the questions to which the review committee addressed itself, and it made a number of recommendations on them. The hon. Member will understand that since consideration of the report is in progress it would not be proper for me to anticipate what the Government's conclusions will be.
Mr. Andrew F. Bennett: Can the Minister give us some idea of the time scale in which the report is being considered and how soon he will be able to

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give us answers? I am sure that he appreciates that on the digital side the report recommends that action should be taken during this and the next financial year.
Mr. Fox: That is a fair point. I assure the hon. Member that we are close to arriving at conclusions. Our immediate aim is to settle as quickly as possible the framework of basic decisions from which the OS can proceed. It is my right hon. Friend's intention to make a statement fairly soon.
The hon. Gentleman and the hon. Member for Newham, South (Mr. Spearing) talked about the 1:25,000 map series. I think that the press release of 30 October 1979 was claimed to be misleading in stating that the review committee had recommended retaining the 1:25,000 map series as a core activity if resources were available. I am sorry if anyone gained the wrong impression. The press release was intended to reflect, in brief, the content of paragraphs 7.28 and 15.30 of the report. Paragraph 7.28, having stated that the committee classified the series as core activity, goes on to point out that it is a costly series, that the value of the series is a long way from being matched by revenue from its users but that it is largely because of the alternatives provided by the 1:50,000 series and the 1:10,000 series that the 1:25,000 must be considered vulnerable. Paragraph 15.31 also makes clear that if, contrary to the committee's assumptions and recommendations, the Ordnance Survey was required to reduce its call on the Exchequer, the committee would expect action in such areas as a reduced rate of provision of the second series of the 1:25,000 series and suspension of the 1:25,000 scale series as a national series. I shall take note of the interesting points made on this matter.
The hon. Gentleman raised one or two other matters, including the fact that the report costs £20. I assure him that it was not our intention to raise the cost to such a figure that debate would be stifled. This was the minimum amount needed to
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recover estimated costs for an edition of 1,500 copies. We thought it right that a proportion should make a contribution towards overheads. I am sure that the hon. Gentleman has read the report. It was not a straightforward printing job. It was a complex production that included five colour maps. It could not, therefore, be priced at Her Majesty's Stationery Office standard scales. The basic production cost of the colour cover was about 25p a copy.
The hon. Gentleman mentioned copyright charges. Looking at the copyright figures, which vary from 0·5p to lop, I hardly find those charges exorbitant. I shall, however, bear in mind the points made by the hon. Gentleman, especially those relating to charities, accepting that word in its widest context.
The hon. Gentleman raised the question of digital data development. The committee said that there was a strong case, on financial grounds, for authorising the Ordnance Survey to proceed with its pioneering work on the development and introduction of digital methods of map production. I am sure that my right hon. Friend will take this into account when considering what logical extension of the Ordnance Survey's present programme is appropriate. In the meantime, I should like to assure hon. Members that there has been no standstill in the preparatory activity in this area.
This has been an interesting and useful debate, and I am grateful to the hon. Gentleman for the points that he has made. I hope that hon. Members will appreciate that the reason why I have not been able to respond on certain matters is that these bear heavily upon the Government's conclusions, shortly to be announced, on the review committee's report. But, as I said, I can certainly give an assurance that what has been said will be taken into account.
Question put and agreed to.
Adjourned accordingly at three 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 Derby.
The Lord Butler of Saffron Walden—Took the
Oath.

DISARMAMENT:GENEVA COMMITTEE
Lord BROCKWAY:My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been made by the Geneva Committee to implement the recommendations of the United Nations Special Assembly on disarmament.
Lord TREFGARNE:My Lords, the committee has not met since July last year, although the disarmament debate has continued in the United Nations General Assembly. I therefore have nothing to add to the Answer I gave to my noble friend on 23rd October last year.
Lord BROCKWAY:My Lords, is the noble Lord aware that some of us have been able to obtain greater details than he has been able to give us? Is it not the case that the Geneva Committee has been unable to discuss the test ban; nuclear weapons; chemical weapons and verification, because those matters are already being discussed by the two super-powers? Is it not desirable that those matters should be discussed, for two reasons? The first is that there has been a long delay—the test ban has been discussed for 10 years. Secondly, is it not important to have the views of the 40 members of the committee, and not only those of the two super-powers?
Lord TREFGARNE:My Lords, yes, it is important to have the views of all the members of the committee. I can
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tell the noble Lord that the next session of the committee will begin on 5th February. We expect that it will continue its discussions of the important issues mentioned by the noble Lord—such as, the bans on nuclear testing as regards chemical weapons—and indeed get down to actual negotiations on the draft treaty to ban radiological weapons. It will also consider elements for a comprehensive negotiating programme drawn up last year by the United Nations Disarmament Commission
Lord BROCKWAY:My Lords, I thank the noble Lord for that reply. Is it the case that the Soviet Union proposed halting the manufacture of all nuclear weapons and proposed their gradual reduction until ultimate destruction, and that the West's delegates declined to discuss that? Will the Government in the discussions this year support the proposals of the unaligned 21 Governments that that resolution should be considered?
Lord TREFGARNE:My Lords, we shall certainly consider all the proposals put forward by the USSR and anyone else. But the most important feature of any proposal that we consider must be its capability of proper vertification.
Lord GORONWY-ROBERTS:My Lords, I should like to ask the noble Lord to confirm two or three facts about the so-called disarmament negotiations. The first matter is that the Vienna talks are practically all concentrated on what we call conventional arms, with certain overtones of tactical nuclear weapon discussions; and nuclear discussions are substantially confined to the SALT talks. Therefore, Vienna tackles the conventional side. Secondly, on the important point raised by my noble friend about chemical weapons, is it not a fact that on British initiative a draft treaty on the banning of chemical weapons was prepared for the Geneva Committee, and it was then that the two super-powers undertook to consider that draft treaty and to return it with their observations to Geneva, where in fact the enlarged committee of 40 members—again the result of British initiative last year or the year before—will look at the treaty plus the comments of the two super-powers?
Lord TREFGARNE:My Lords, I should like to make two points. On the question of the MBFR talks in Vienna, yes, it is certainly right that they are principally, but not exclusively, concerned with conventional weapons although, as I mentioned in the House last week, I think, those talks are now more or less stalled, although not dead. As for the chemical weapons treaty, it is now, as the noble Lord rightly says, principally a matter between the two super-powers, but we shall continue to play our part in the discussions. However, as in the other proposals in the area of disarmament, verification remains an important matter.
Lord SHINWELL:My Lords, if the Russians are represented at the next Geneva conference on disarmament, could they be asked whether their invasion of Afghanistan is one of their contributions to disarmament?
Lord TREFGARNE:My Lords, that might be a very useful question.
Lord AVEBURY:My Lords, as regards verification, does it not appear from the development of nuclear weapons by countries such as Pakistan that, if any nation is sufficiently determined to divert nuclear materials from a civilian programme, it can, with the minimum technical competence, manufacture useable nuclear bombs? In view of those developments, would the disarmament conference take on hoard the need to tighten up the safeguards on the use of civil nuclear technologies, to ensure that very large numbers of developing countries do not obtain nuclear weapons in unstable parts of the world?
Lord TREFGARNE:My Lords, yes, we attach considerable importance to non-proliferation. As a depositary power for the Non-Proliferation Treaty, we shall work hard to ensure a successful outcome of the Second Review Conference of the treaty in August 1980. A successful conference would strengthen a non-proliferation regime and assist the development of a new and wider consensus on non-proliferation and nuclear trade for peaceful purposes in the 1980s.
On the question of Pakistan, which was very properly raised by the noble Lord, the Pakistan authorities have repeatedly
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said that their nuclear programme is for peaceful purposes. We very much hope that no country in the Indian subcontinent would build nuclear weapons. It would be a development which would have the most serious implications for the stability of the area and for the future of international non-proliferation arrangements.
Lord GORONWY-ROBERTS:My Lords, with the leave of the House, I should like to return to one very important point made by my noble friend Lord Brockway when he referred to the future of the chemical weapons ban treaty. I hope that the Minister is in a position to confirm that, while that treaty and its provisions have been given to the superpowers for their study and comments, it is understood that they will return it to the Geneva Committee, which has now been enlarged, so that there will be final participation by a wide range of countries about the ultimate proposals of a chemical warfare ban treaty. It will return to Geneva, will it not?
Lord TREFGARNE:Yes, my Lords. We expect the matter to be raised when the Geneva Conference resumes in February.

SCHOOL FUND-RAISING SCHEMES: CONTRIBUTIONS
2.46 p.m.
Lord GRIDLEY:My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware that members of the National Association of Head Teachers are being urged not to back fund-raising schemes by parents and industry which aim to provide classroom books and equipment to offset the effects of economies by local authorities.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Baroness Young):My Lords, I am aware of the advice given by the National Association of Head Teachers to its members. This is an issue on which the association is, of course, free to express its opinion,

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but in my view it is very regrettable: it would be a most retrograde step if parents and others wishing to make voluntary contributions to school funds were prevented or discouraged from doing so.
Lord GRIDLEY:My Lords, I thank my noble friend for her Answer. However, is not this instruction rather hard to understand? If public-spirited people, such as the parents of children in schools and in industry, out of their own pockets are prepared to offset cuts in grants in these difficult times in order to purchase books and school equipment, should not they be praised and thanked rather than discouraged?
Baroness YOUNG:My Lords, as I hope my original Answer made clear, the association is, of course, perfectly free to express what opinion it chooses. I merely give our opinion. We believe that, if parents wish to contribute to school funds, it is perfectly right for them to do so. Indeed, it has been a practice that has gone on for many years.
Baroness DAVID:My Lords, will not the Minister distinguish between parents making gifts to school funds for amenities and things of that sort, and making gifts for the basic essentials of education, such as books and equipment? Surely under the Education Act 1944 it is the duty of local education authorities to provide efficient education. Will the Minister not agree that there is this very sharp difference?
Baroness YOUNG:My Lords, the noble Baroness is quite right in saying that the Education Act 1944 lays a duty on local education authorities to make provision for sufficient and efficient education in their areas. I should also explain that in the Government's financial proposals relating to the rate support grant settlement for 1980–81 they have provided for real standards of provision in the broad expenditure category, which includes capitation allowances—that is, amounts allowable for books and other teaching materials required—to be 2 per cent. higher than they were in 1978–79. This in no way alters the fact that where parents wish to contribute voluntarily to school funds it is helpful for them to do so. I would entirely accept that it would be quite wrong if any pressure were brought on a parent to
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contribute. That would be another matter; but voluntary contributions have existed for many years.
Baroness DAVID:My Lords, while welcoming what the Minister said about the extra money for capitation in the rate support grant, may I ask how she explains that, so far as the information goes, so far, apparently, the cuts in local authorities average about 10 per cent. for capitation?
Baroness YOUNG:My Lords, the fact is that we have no firm information on what is happening; there is quite a bit of impressionistic information around. But the truth of the matter is that, when having to make economies, local authorities find it easier to make them on matters such as capitation grants rather than on other matters which, of course, would require a much longer period of time.
Lord ORR-EWING:My Lords, despite the present restrictions, has my noble friend observed that local authorities increased their staff by over 30,000 in 1979? Will she continue to urge that wastage in the number of local authority officers is a better solution, for it reduces the number of employees, than taking this out on the education service and the children '?
Baroness YOUNG:My Lords, I would entirely support the remarks made by my noble friend. We believe that the education service, and particularly the supply of books, is an extremely important matter.
Lord MURRAY of GRAVESEND:My Lords, in view of the Government's exhortations that the cuts should be fairly spread, would the noble Baroness agree that it is now about time that the Government abandoned their ludicrous scheme to subsidise independent schools under the guise of buying places?
Baroness YOUNG:My Lords, I think that that is rather wide of the original Question.

THE RHINOCEROS IN AFRICA
2.51 p.m.
The EARL of SELKIRK:My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action they have been able to take under the Convention on International Trade on Endangered Species to prevent the imminent extermination of the rhinoceros in Africa.
Lord MOWBRAY and STOURTON:My Lords, the rhinoceros is already listed on Appendix I of the convention as being in danger of extinction. Commercial trade in it and its readily recognisable parts and derivatives should therefore have stopped in and between states party to the convention. Since not all party states enforce controls on by-products to the same degree, usually due to differing views on what is readily recognisable, the United Kingdom, with Switzerland and the Federal Republic of Germany, prepared a list of parts and derivatives, including rhinoceros horn, which all parties would be expected to control. This was considered by the convention at its meeting in Costa Rica last March, but was not adopted. The United Kingdom has prohibited imports and exports of rhinoceros and their horns since 1976, except where otherwise permitted under the convention.
The EARL of SEKLIRK:My Lords, are the Government aware that in Kenya, as one example, in the last decade something in the order of 90 per cent. of the rhinoceros population has been killed by human agency, and this is directly due to international trade? Is the noble Lord saying that the convention is not much more than a facade? Can the noble Lord not arouse interest among Commonwealth members and members of the European Economic Community to recognise the significance of this development?
Lord MOWBRAY and STOURTON:My Lords, my noble friend is quite right; there has been an increase. The legal trade from Kenya in rhinoceros is believed to be less than the illegal trade. However, in fairness to our Commonwealth colleague, Kenya, I must say that the Government there has not only signed the convention but has ratified it. I have every belief that they are doing their best to stamp out this illegal trade. Furthermore, I should like to tell my noble friend and
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the House that the Minister for Overseas Development discussed this problem also with the Ugandan and Tanzanian authorities during his recent visit to East Africa, and made clear the concern felt in this country. They also shared our concern, and indicated that this trade should be stamped out. We are continuing to take every advantage of appropriate opportunities to encourage adherence to the Washington Convention. Perhaps your Lordships might like to be told that next week the standing committee of the Washington Convention, and the technical experts of the countries party to the convention, are both meeting in Bonn.
Lord MELCHETT:My Lords, while welcoming, as I am sure all noble Lords do, the action that the Government have taken, may I ask whether the noble Lord would agree that the list of readily recognisable parts and derivatives which he mentioned was drawn up very largely with the help of the voluntary bodies in this country? Will the Government now take note of the widespread concern of the voluntary bodies that the Customs are not giving the priority in this country that they should to controlling the import of parts of endangered species? Would the noble Lord agree that, while the developed countries, and this country in particular, do not give a sufficient priority to controlling such imports, it is a little unfair to point the finger at developing countries such as Kenya and say that they ought to take further steps to control illegal trade?
Lord MOWBRAY and STOURTON:My Lords, I am not clear that I understood the noble Lord. Did I hear him say that it was the Customs in this country which were partly at fault?
Lord MELCHETT:Yes, my Lords. Is the noble Lord aware that the voluntary bodies have been saying to his department, the Department of the Environment, for many years that the Customs in this country have not been giving the priority to controlling this illegal trade that they should?
Lord MOWBRAY and STOURTON:My Lords, I hear what the noble Lord says, and I have every respect for his intelligence and knowledge. I must confess that it is contrary to what I am

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given to understand. I am given to understand that the Customs and Excise here check that the appropriate documentation is always available at the time of import and export and do inspect consignments. Further checks and documentation are also made by the Department of the Environment, as management authority—as the noble Lord well knows—responsible for our import and export licensing. I detect in our Department of the Environment no looseness of feeling on this. There seems to be a general agreement everywhere with everyone I have talked to that they want to do their best, but we have the feeling that the main looseness in operation is not in this country either in the selling or the buying.
Lord BLYTON:My Lords, does not the noble Lord think that the Government ought to be engaged in preventing the rhinoceros of unemployment, inflation, high prices, trade union activism, and the whole of the rest of it that is creating havoc in this country?
Lord MOWBRAY and STOURTON:My Lords, I can only suggest that if there is any remaining rhinoceros powder left in this country the noble Lord should take a good dose of it.
Lord GRIDLEY:My Lords, in further support of my noble friend Lord Selkirk, may I ask the noble Lord whether he is aware that there is widespread public concern in this country about the danger of the extinction of the rhinoceros, and that this is being made manifest by the large amount of public subscriptions which are being made to a charity, the People's Trust for Endangered Species, in order to save the rhinoceros from extinction?
Lord MOWBRAY and STOURTON:My Lords, there is every worry about the rhinoceros. Live ones have only been licensed for import for breeding purposes in this country in accordance with the terms of the Washington Convention on International Trade in Endangered Species. Rhinoceros horns and skulls have only been allowed in for non-commercial purposes where they were already in ownership before 1976.
Lord MELCHETT:My Lords, is the noble Lord aware that I was not suggesting that the Department of the Environment were showing anything less than extreme enthusiasm for implementing these international controls? I welcome the lead which this country has taken in the negotiations over international conventions. However, in view of the widespread concern about the problems of the rhinoceros, I wonder whether the noble Lord would agree to look again at the priority which the Customs and Excise give to controlling the import of endangered species and their products.
Lord MOWBRAY and STOURTON:My Lords, I am glad to hear the noble Lord, Lord Melchett, say what he has about what the Department of the Environment is doing. As the noble Lord is probably aware, we are already having arrangements in Europe. The EEC is going to make the convention binding on all countries in the EEC. This is an educational matter for other countries as well as ourselves. It is not in Europe where we are primarily dealing with the prime offenders. Next year in 1981 when the full convention meets in New Delhi there will be really a full high court judgment given on any offenders. As I pointed out to my noble friend Lord Selkirk a moment ago, these meetings—the next one is next week in Bonn—deal with matters as they come up. Our experts and the standing committee are well aware of where the offenders lie, and are doing their damndest to stop the thing.
The Earl of SELKIRK:My Lords, I thank the noble Lord for the trouble he is taking in answering the points which have been raised. Is he aware that in the last century something like 100 mammal species have disappeared from the world? This is a critical moment in the life of the rhinoceros, who has been with us for something like 60 million years.
Lord MOWBRAY and STOURTON:My Lords, my noble friend is quite right, but with Kenya, Uganda, and Tanzania all now pledged to help, there should be an improvement in this situation.

RHODESIA: ASSASSINATION OF MR. OLIVER SAUNYAMA
3 p.m.
Lord GORONWY-ROBERTS:My Lords, I beg to ask Her Majesty's Government the Question of which I have given Private Notice, namely:
"To ask Her Majesty's Government whether, following the assassination last night in Salisbury of a candidate of one of the main political parties, they will make a statement on the progress of the cease-fire and the preparation for the elections".
Lord DENHAM:My Lords, with the leave of the House my noble friend Lord Trefgarne will answer that Question in the form of a Statement at a convenient moment after 3.30.

NEW HEBRIDES BILL [H.L.]
Lord TREFGARNE: My Lords, I beg to introduce a Bill to make provision in connection with the attainment by the New Hebrides of independence within the Commonwealth. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Trefgarne.)
On Question, Bill read 1a, and to be printed.

COMPETITION BILL
Brought from the Commons; read 1a, and to be printed.

SCIENCE AND TECHNOLOGY
The MINISTER of STATE, MINISTRY of AGRICULTURE, FISHERIES and FOOD (Earl Ferrers): My Lords, I beg to move the Motion which stands in my name on the Order Paper.
Moved, That a Select Committee be appointed to consider Science and Technology.—(Earl Ferrers.)
On Question, Motion agreed to.

SMALL BUSINESSES: CURRENT PROBLEMS
3.2 p.m.
Baroness SHARPLES Baroness SHARPLES rose to call attention to the problems facing small businesses; and to move for Papers. The noble Baroness said: My Lords, I wish at the outset to thank those noble Lords who intend taking part in this debate. Owing to the interest shown in this subject, it would seem, if I may presume to say so, that a maximum of five to six minutes each would be appropriate within the time limit to which we are committed.
Though I have asked for a debate about the problems facing small businesses, I shall in fact be referring to independent businesses because the word "small" has no precise meaning and has led to much misunderstanding. An independent business means any business which is not a public company, whether it be a little shop employing a couple of assistants or a factory with 1,000 employees. Their problems will be similar, but for the most part quite different from the problems of public companies and nationalised industries. I know the Government intend to carry out their undertaking to improve the environment for independent businesses and are considering various ways of helping them, but time is running out and the matter is so urgent that there is no time for experimental measures.
The situation was very similar in America after the last war; industry was depressed and independent businesses were going bankrupt in large numbers, partly because they found it so difficult to obtain enough equity capital or even long-term loan capital. Although bank deposits were rising and the banks declared that they were willing to finance the needs of independent businesses, they did not do so. Immediately after President Eisenhower came to office, he investigated the situation and finally solved the problem in 1953 by amalgamating several agencies into the American Small Business Administration, ESBA, which changed the whole climate for independent businesses in America. Since then, their independent business sector has prospered. It has made an outstanding contribution to the huge growth of American wealth by developing a mass of new applications for advanced technology.
I repeat, there is no time for us to experiment, so why should we not use those measures which have been tried and proved successful in America since the Small Business Administration was set up for the express purpose of overcoming the very difficulties which face independent businesses in Britain today? I would remind noble Lords that a few years ago many Americans were predicting that the new technology in the form of microelectronics would lead to an intolerable increase in their unemployment. Indeed, this has now been predicted in Britain today.
However, the American prophets of gloom have been proved wrong because independent businesses, particularly those engaged in the micro-electronic industry in America, created a vast number of entirely new jobs which were actually more attractive to workers than the jobs in heavy industry from which they were displaced. I quote from page 31 of the American BIRCH Report of 1979:
"Small firms, despite their difficulties in obtaining capital and their inherent high death rate, are still, on balance, the major generators of new jobs in our economy and, in slow growing areas, the only significant provider of new jobs".
Of course, some of the measures introduced by the American Small Business Administration were less successful than others, but those which have proved outstandingly successful in America should, I submit, be copied here without delay.
I therefore suggest, first, that Members of Her Majesty's Government should encourage those enterprising individuals who start and develop independent businesses by continually stressing in public their value to the community. Secondly, the Government should set up a special department to promote the interests of independent businesses, similar in all respects to the American Small Business Administration. It might well be staffed—and here I know that there will be many people who disagree with me—by combining, into one streamlined administration, the Council for Small Industries in Rural Areas (CoSIRA), the National Research Development Commission and various other development commissions and hoards.
Thirdly, it must be in our national interest to copy the American policy of
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specifically charging its Small Business Administration with the task of securing that contracts for a substantial part of all Government civil and military purchases are placed directly with independent businesses. Fourthly, it is often asserted that the financial needs of independent businesses can be met by loans from banks and financial institutions. But this is not the best way to finance independent businesses, particularly in the early stages of their growth, because independent businesses need equity capital rather than loan capital, and they need intimate links with their financiers.
Independent businesses are, by their very nature, risky. They cannot cope with a heavy load of loan capital on which they are obliged to pay interest each year. They should be financed by risk capital. To overcome these problems, the Americans devised the Small Business Investment Company, known as an SBIC. Provided an SBIC complies with rules laid down by the Small Business Administration, it can borrow three dollars from a bank for every one dollar of its equity capital. These bank loans to SBICs are then guaranteed by the Government, so the interest rate is only slightly above the Government borrowing rate.
The merit of this scheme is that the banks lend their money to SBICs, and so their loans, quite apart from the Government guarantee, are protected because the SBICs must lose all their equity capital before the money which they have borrowed from banks is lost. It is interesting to note that the total losses sustained by the American Government as a result of guaranteeing loans to SBICs have dropped from 5 per cent. at the end of 1976 to 3.3 per cent. at the end of 1978; but these losses have been more than offset by the extra taxes paid by expanding independent businesses and by the reduction in payments to the unemployed.
The results which have been achieved by the SBIC scheme have been remarkable, not so much because of the actual funds they have made available to industry, but because their existence has shown the banks and institutions, as well as private individuals, the advantages of providing equity capital to independent businesses and has given them a better understanding of the needs of independent businesses.

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The outcome has been that in America today there is a large pool of private capital available for investment in the equity of small and developing independent businesses.
Fifthly, I urge the Government to make it clear that they would like our Stock Exchange to provide a genuine over-the-counter market similar to that which operates in America. It is said that our independent businesses are reluctant to come forward and ask for help from institutions like ICFC. The reason is that they do not like to be dependent on loan capital supplied by banks or institutions on which interest must be paid whether they make a profit or loss; and, worse still, the institution can threaten to withdraw the loan at the end of a few years.
American independent businesses are not reluctant to seek loans from institutions after they have passed the earlier stage of development which has been financed by "risk" capital. This is because they know that institutions do not want to tie up their money indefinitely, and so in due course will help the independent business to repay the loan by obtaining equity capital from the public through the American over-the-counter market. Our Stock Exchange has so far been unwilling to help unless at least £1 million is required and the company has been earning £400,000 a year. Thus, there is a serious gap in our financial structure between the early stages of an independent business, which can be financed by the founder and his friends, and the stage when the independent business can earn £400,000 a year and seek equity capital from the public through the Stock Exchange. Indeed, many independent businesses will never earn £400,000 a year.
The financial ladder is easier in America. At the first step, their independent businesses are generally financed by the founder and his friends, as in the United Kingdom. The second step in America is when equity capital, supported by loans, is made available by an SBIC. At the third step, the SBIC will obtain a loan from an institution for an independent business which it has fostered.
The gap comes at the fourth step, when the business expands and requires still more equity capital. In America, this is obtained through the over-the-counter
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market. In Britain it is not yet easily available through the Stock Exchange until the business has become very large indeed.
There is one more American practice that we could, with advantage, copy. We should change the law so as to allow companies to buy back their own shares. The original reason why this was made illegal is no longer relevant. In America, it is legal and it has not been abused, but has attracted a great deal of private capital into American independent businesses. This is because so many people who now earn large incomes and so can accumulate savings, are still nervous of the Stock Exchange, and so are inclined to invest their savings in property, even at inflated prices. In America, such individuals are inclined to invest at least a part of their savings in the equity of expanding independent businesses. They are well aware of the risks. They do not need dividends from such investments. The attraction is that they can take a real interest in the business and, if it is successful, the business will some years later be able to buy back their shares, at assets value, which often shows very handsome profits. This arrangement enables the investor to help an independent business, with the prospect of making a capital gain himself.
I should now like to mention three points which are peculiar to the British scene. The first point is that there are a number of public companies which are entrusted with main contracts for civil and military equipment by Government agencies and can, therefore, rely on regular progress payments. However, they can exploit their buying power by extracting between 90 and a hundred days' credit from their component suppliers, who, for the most part, are relatively small independent businesses. Some of these companies have large credit balances at their banks earning handsome interest, made possible by extracting long credit from their suppliers and so forcing them to borrow from their banks and pay high interest.
This abuse of near-monopoly can be exerted by main contractors on their component suppliers, and it has a most damaging chain reaction. The Government may well claim that they have no power to intervene in private business, but our Government purchasing agencies

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have the right, as well as the power, to insist that, as a condition of a contract, main contractors shall pay their suppliers within 30 days of invoice, which is normal trading practice. I can supply my noble friend the Minister with examples, should he wish for them.
The second point is that the training levy system should be abolished because it proves a hardship to independent businesses which are obliged to pay, while it is no burden to big businesses which enjoy the benefit without paying. The training levy is I per cent. of the wage bill, and if this proves to be less than, say, £5,000 to £6,000 a year it is not worthwhile for a small business to pay the salary of a man, and a secretary, in order to fill in the paperwork necessary to avoid paying the levy, even though the business probably trains operators, which would entitle it to exemption. On the other hand, a big company with a personnel department can take this work in its stride, and so does not pay the levy.
The third point is that the last Government declared their intention of fostering the expansion of the British electronic industry in order to take advantage of the micro-electronic age. However, according to the Press, a Post Office contract has lately been placed with a Canadian company for £30 million-worth of equipment (known as the CDSS). Bearing in mind that the last Government handed out cash grants to encourage the development of electronic components, and that the prototype of this particular equipment was developed in Britain for the Post Office with the help of many component manufacturers who developed special parts, our electronic component manufacturers have been most discouraged by this news, because the Canadians are more likely to buy their components from America than from England.
Here I should like to pay a tribute to the noble Lord, Lord Lever of Manchester—who will be speaking later in the debate—who understood the points I have tried to make and who in the last Government did so much to improve conditions for independent businesses.
I have attempted to highlight some ways in which the Government could assist independent businesses, but I should also like to suggest an overall objective at
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which they should aim. For many years it has been said that the Government should encourage a property-owning democracy. This was a grand project, but it has now virtually been achieved. It requires very little further special attention from the Government. I suggest that today it is more important for the Government to concentrate on promoting an equity-owning democracy. A very large part of our population is now able to save money, but the bulk of these savings is, by various fiscal devices, syphoned off into savings funds, insurance companies and building societies where they have, for the most part, been used as loan capital to finance excess Government expenditure, or to finance big business. Very little of these savings has been used to finance independent businesses. Without going into detail, I suggest that the time has come for the Government to adjust the fiscal incentives so as to encourage equity investment in independent businesses, which would promote a more stable equity-owning democracy in which every family could look forward to owning an equity interest in some business activity. My Lords, I beg to move for Papers.
3.18 p.m.
Lord BYERS: My Lords, the House is indebted to the noble Baroness, Lady Sharples, for introducing this very important Motion. I am only sorry that it is not the subject of a long debate and that we are constrained to two and a half hours. There has been an increasing, if slow, recognition over the past three years of the important part which the small firm can play in job creation, in the reduction of unemployment, and in the development of new and profitable ideas. It is also coming to be recognised that a small firm, starting up from scratch or expanding in size, can make an important contribution to the regeneration of our derelict inner cities. It is remarkable, I think, how one or two people with a bright idea, good advice and adequate resources can develop an innovation whose production, packaging, marketing and dispatch gives employment to unskilled workers as the firm develops; and there are many examples of that.
There is no shortage of talent in this country. In fact, there is almost a new Parkinson's Law, which is that if premises

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are provided at a suitably low rent, they will be filled by a man, or a girl, or both, to create a new business venture. The application of this can be seen in the numerous workshop ventures in London and elsewhere: the Barley Mow at Clerkenwell, the Rotherhithe co-operative, and many others.
However, we should not delude ourselves into thinking that everything is going smoothly. The proper encouragement of the small firm is a complex problem in which many agencies have an increasing part to play, and a great deal more to learn. I think that it was one of the bonuses of the Lib-Lab Pact that we were able, without any difficulty, to secure from Mr. Callaghan the appointment of Mr. Harold Lever, as he then was—now Lord Lever; and we welcome him to our House—as the Minister with primary responsibility for small businesses; and he did an extraordinarily good job. Much impetus was given to the better understanding, and the importance, of the small firm in the regeneration of the inner cities by the leadership shown by Mr. Peter Shore.
There is, however, a great deal which remains to be done if the small firm is to make its maximum contribution to the well-being of our economy. I cannot possibly list all the things which I believe should be done, but let me mention just a few. From the Government, I think that first of all there ought to be a Minister in the Cabinet responsible for ensuring that policies are developed to help the small firm and that other policies, particularly those emanating from the Treasury and the Department of Employment, do not impede or undermine the viability of the small firm. This, as the noble Baroness said, is very much in line with American thinking.
Next, I believe, is the need to make it easier to acquire and develop unused land. There are acres and acres of land in the big cities owned or leased mainly by the public sector—in particular, the railways—and this land would be developed by developers or local authorities if it could be made available without too much fuss and too much bureaucracy. One of the principal needs of the small business is finance. The high level of the minimum lending rate has exacerbated this problem, and, unlike the United States, we are lacking the
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individual investor—the Aunt Agathas of the world.
The most important action I think the Government could take in this field, and at very little cost, would be to create a climate of incentive for the individual investor to take part of the equity in small firms. That should be an aim of the Treasury policy in this country. One scheme which has been put forward by the London Chamber of Commerce would use the profit-sharing tax legislation as a model, so that individuals would get tax relief according to the length of time they held the shares, with full relief after, say, 10 years. Finally so far as the Government are concerned, may I ask this: What is happening to the money which was to be made available under the Inner Urban Areas Act? Is it achieving results? If so, what are those results, and how are they being achieved?
That brings me to the role of the local authorities. At a time of public expenditure cuts I believe some authorities are reluctant to use this Act, since they have to find 25 per cent. of any money they seek from the Government under the Act; and this, I believe, also applies to individuals. I think it is time, after 18 months' working of the Act, that we had an authoritative statement of what it is achieving at the present time. There are two other ways in which local authorities could help small firms. Rent and rates relief is one. If such a policy were to lead, as I think it would, to more start-ups and to expansions, then the income forfeited in the short term would be very easily recouped in the longer term by the income from the rates. The second method which the local authorities could use to help is to cut out red tape and to increase the tempo of dealing with applications, particularly those in the planning field.
Apart from central and local government, there are two other areas with an important part to play in helping the small firm. There are the voluntary agencies. I am not going to name them all, but a good example is the Action Resource Centre, which, in addition to its other activities—and they are manifold—has developed a small business counselling service in Islington; and already, in a few months, it has dealt with something like 150 cases. It looks like a potential success. It is manned by people seconded

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from big business, and it helps small companies with advice. It does not manage and it does not provide finance, but it steers applicants in the right direction and deals with them objectively and with candour; and this service is much appreciated in the community.
I would not be doing justice to the private sector if I did not refer to the real contribution which some of our leading companies are making to the combined task of aiding the small firm and helping with the inner city problems. I have been closely associated over the last three years with the development of the concept of an enterprise agency through which large companies can help small companies to start up and to expand, and, working closely with central Government, local government and the other, voluntary agencies, make advice available and give help speedily and effectively. The enterprise agency with which I am most closely associated is the London one, and this has served as a pilot model. There are plans, I am glad to say, for several other cities to adopt a similar pattern. It was launched on 11th April 1979 with the object of identifying projects worthy of support, to provide a link with central and local government and to give help and advice to existing firms and start-ups. It is already helping firms to find premises. While it does not provide finance, it will put firms in touch with financial sources and help them in the preparation of their cases and their applications. It also has an important research function.
Already it has become clear that big business can not only help small business but, in the process, help themselves. They help themselves by broadening the horizons of the employees they second. It is quite remarkable the effect on a seconded employee when he is given responsibility for running or helping in a counselling service. But it is not only that. In this way big business obtains a clearer view of the problems of the community. The problems of the small business, my Lords, are not just the responsibility of Government. They can be solved only if all the relevant agencies, public and private, make a positive contribution.
3.26 p.m.
Lord GRAM: My Lords, I join the
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noble Lord, Lord Byers, in thanking the noble Baroness, Lady Sharples, for giving us the opportunity of this debate, because it enables us to recall that increasingly today in business—and, indeed, in public affairs generally, not least in local government—we have all become the victims of bigness. Economists have rightly taught us about the economies of scale, and those economies are of course real and important. But the economies of scale are by no means universal. Even when they can be clearly identified by accountants there are countervailing factors on the other side—factors of bureaucracy and of imperfect communication, which seem to bedevil large organisations and very often result in human frustrations. It is especially true that where the market is local and personal the big organisation tends to fail, and it is here, therefore, that in my view the need for the small business is most obvious. Increasingly, when something in the home goes wrong and needs repair, the housewife finds it more and more difficult to get prompt service; and it is the small firm, and perhaps only the small firm, which can benefit from what I would call economies of small scale. The small firm benefits from being small because it can respond more effectively than a big firm to the local and personal needs of its customers.
We have heard from the noble Baroness, Lady Sharples, and from the noble Lord, Lord Byers, however, that small firms suffer from handicaps in comparison with large organisations. I think those handicaps really fall under two headings: handicaps in relation to finance and handicaps in relation to know-how, particularly when a small firm is starting up. At that time it has no financial record, and perhaps little collateral, with which to impress the bank manager; and, as to business know-how, even the best of small businessmen cannot be expected to have all the knowledge that modern business life requires. He may be first-class in organising the manufacture of an excellent product, but he may not have the knowledge (or, if he has the knowledge, he may not have the time) to deal effectively with marketing and publicity, with taxation or legal matters, with the form-filling to which the noble Baroness referred, or, indeed, with detailed accountancy. He has to try to be a kind of Poo-bah, covering all these things, or else buy in

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professional services, and this puts him at a costly disadvantage compared with the big firm, which can provide such services for itself internally. In other words, the small firm, because it is small, is faced with what I would call an "organisational minus" by comparison with its larger competitors. Therefore, what we have to look for, I suggest, on behalf of the small firm, is an "organisational plus" to counterbalance that minus factor.
I believe—and it is my own personal philosophy in my public life—that that plus would be found if small businesses would organise themselves as co-operative societies. They can do so either under the Companies Act or, preferably, under the special legislative framework provided by the Industrial and Provident Societies Act. There are several hundreds of examples in this country of this having been done successfully and many hundreds more in Europe. I have in mind, for example, a group of workers made redundant when a Courtaulds factory closed at Skelmersdale, who had the initiative to set up their own wood-working co-operative. A more local example is that across the river in Lambeth where a group of ladies have successfully organised an office-cleaning co-operative. These people are finding what I suggested they need, an organisational plus". Working in a co-operative team, they know that they can join in making business decisions and that they will benefit personally from the greater productivity of the team as a whole.
This industrial co-operative movement is growing at an encouraging rate. It is a movement which can be acceptable and welcome to people of different political ideologies. I am glad that the present Secretary of State for Industry, Sir Keith Joseph, is on record in another place as favouring the growth of a producer co-operative sector; and he and I had a constructive exchange recently when I had a talk with him in my capacity as chairman of the Co-operative Development Agency. Co-operative societies can take many forms. I believe that they could help overcome many of the problems towards which today's debate is directed. It is not just the business itself which can be a co-operative; there can also be a co-operative of small businesses which can greatly benefit the individual enter-
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prises by providing them with common services. I know, for instance, of a co-operative society, the members of which are the proprietors of independent toy shops. Their co-operative provides them with a central warehouse and, by bulking their purchases, gives them the benefit of discount terms which would otherwise not be available to them.
What all this means, I suggest—and one could give many examples all over the country—is that by using the method of mutual aid, which is at the heart of the recognised code of co-operative principles, small businesses can get the best of both worlds. They can have the benefits that I have described of the individual enterprise in meeting the personal needs of their customers; that is, they can get the benefit of what I call the economies of small scale; but by working together and supplying themselves co-operatively with their common needs they can also get the benefits, the economies, of large-scale operations. I believe that, because of these considerations, this method of co-operative working, which is very flexible in its application, deserves greater attention in this country than it has had so far.

RHODESIA: ASSASSINATION OF MR. OLIVER SAUNYAMA
3.34 p.m.
Lord TREFGARNE: My Lords, with the leave of the House I will now repeat a Statement being made in another place in answer to a Private Notice Question on Rhodesia. The Statement is as follows:
"We naturally greatly regret the incident to which the right honourable gentleman refers. I understand that police investigations are in hand. My right honourable friend the Lord Privy Seal gave a full account of progress on the cease-fire and preparations for the elections in this House on Wednesday, 16th of January. I have nothing to add to that and to the remarks I made during the debate on the two Southern Rhodesia orders the following day".
My Lords, that is the end of the Statement.
Lord GORONWY-ROBERTS: My Lords, may I first thank the Minister for

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repeating that Statement and join with him in expressing not only concern about this tragic and dangerous incident but also sympathy for the relatives of Mr. Saunyama, an accredited parliamentary candidate taking part in what we all hope will be free and fair elections in Zimbabwe. May I also welcome what the noble Lord has said about the police investigation being in hand and, implicitly, that this terrible incident, this crime, will be dealt with by due process of law. Would the Minister further agree that whoever is found to be responsible it is now more than ever necessary that the Governor should continue to be empowered, and, indeed, encouraged, to keep a very tight hold on the so-called auxiliaries and to use only the proper statutory and disciplined armed forces for the maintenance of law and order in Zimbabwe?
Finally, may I refer him to what Mr. Nkomo and Mr. Mugabe have said about the auxiliaries over the past few days and ask the Government to pay attention to what they have said; so that incidents of this kind, which are tragic in themselves and potentially of very great danger to the kind of future that we are all trying to build for Zimbabwe, can be averted? As to the statements of his right honourable friend in another place the day before yesterday and his own yesterday, for the moment we shall not pursue any further questions arising from the two orders; but, of course, the Government will understand that we may return to the question of the progress of the cease-fire in the next few days or, certainly, in the next few weeks.
Lord GLADWYN: My Lords, naturally we on these Benches associate ourselves with the expressions of regret made by the noble Lord, Lord Goronwy-Roberts, at this regrettable incident and should like to express our sympathy for the family. But if we look at things from the practical point of view, I should imagine that it is only too likely that some kind of incident of this sort may take place again before the elections next month and I should doubt whether on every occasion on which a similar incident occurs it is necessary to put down a Private Notice Question and interrogate the Government. We must assume, and I think we can assume, that the Governor is doing all he can within his means and powers to
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suppress such incidents and that that is all he can do at the present.
Lord TREFGARNE: My Lords, I am obliged to both noble Lords for their response. To take up the point made by the noble Lord, Lord Goronwy-Roberts, about the auxiliaries, they are part of the Rhodesian forces and are equally obliged to observe the cease-fire. Any complaints against their activities will be investigated and dealt with appropriately. This has already happened in a small number of cases.
Lord WIGG: My Lords, I must refer to the statement made by the spokesman for the Liberal Party today and similar kinds of statement from the Liberal Party spokesman yesterday. The Liberal Party are quite a small, uninfluential and, in my judgment, unimportant section of the community. They take upon themselves the role not of schoolmaster—for that would be a reflection on my ex-schoolmaster—but of schoolmistress, which is much more likely, and so far as I am concerned, I am not wearing it.
Lord NUGENT of GUILDFORD: My Lords, is my noble friend aware that the view of every noble Member of this House is of equal value?

SMALL BUSINESSES: CURRENT PROBLEMS
Debate resumed.
3.40 p.m.
Lord SPENS: My Lords, reverting to the subject of the debate so ably introduced by the noble Baroness Lady Sharples, and so well supported by the two previous speakers, I shall try to keep myself within the time limit laid down by the noble Baroness. Therefore, I want to confine myself to making only one point. That point T made, in fact, in a debate on 7th November. It was a long debate running to a fairly late hour and I was not able to stay until the end of it so that the noble Lord the Minister (who is not the Minister down to reply to us this afternoon) was able to avoid giving me an answer.
I want to raise the point again and look at it from another angle. It is the problem

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of VAT for the small business. I do not think that many of us realise how small a business can be to be involved in having to collect and pay over VAT to the Customs and Excise authorities. At the moment, the turnover of that business has to be less than £10,000 to avoid paying or getting involved in this exercise. Just to give you an example, I look after the accounts of a small corner shop which now has a turnover of just over £100,000 in a year. But I should be surprised if the profit that comes out of the turnover of that shop is more than £5,000. A profit of £5,000 for a sole proprietor is less than that of a wage-earner earning £100 a week. So we are really looking at very, very small businesses which are involved in the collection and payment of VAT.
The total number of those businesses from the last statistics that are available, which was in the Customs and Excise annual report for 1977–78, amounted to just over 1¼ million. The Revenue obtained a net collection of some £4,200 million from those one and a quarter million businesses. Of those businesses, over one million had a turnover then of less than £100,000 a year. Between them they raised only a net revenue of some £320 million. I realise that to raise the lower limit of the VAT threshold too high is going to change the nature of the tax; but it is a nonsense that this situation should apply at the moment. I am speaking of 1978 which was before VAT was increased to 15 per cent.
At the lower limit of the businesses with less than £20,000 turnover in the year—and that is a very small business indeed—there are some later figures which were given in a Written Answer in another place last October. That showed that there are some 375,000 of such businesses which between them raised a net £25 million for the Revenue. The cost of collecting that revenue from those businesses appears to be £25¼ million, so that there are 375,000 businesses contributing a net loss of a quarter of a million pounds to the Government. My Lords, that surely is a complete nonsense and if the Government are unable to raise the threshold for VAT too high, I ask them to consider raising that threshold to at least £20,000 so that they do not continue to make a loss out of collecting this tax.
3.45 p.m.
Baroness MACLEOD of BORVE: My Lords, like other noble Lords, I should like to thank my noble friend Lady Sharples for introducing a very important debate. That is already apparent. I for one am sorry that it is only a short debate because in such a short time it is difficult to draw attention to more than one or two of the problems which arise for a small shopkeeper. There are two distinct categories of small shopkeepers; the one which struggles to keep going in a town where every year more of the big stores are expanding and taking business and customers. His main worry is competition, the increased costs of employing a few staff, the increase in rates, the increase in National Insurance contributions and often the failure of wholesalers to deliver the goods.
The second category is the village shopkeeper. He is often the centre of the village. He performs an invaluable service for the community. In my local village the one shop stocks groceries, toys and stationery. The owner also stocks and delivers newspapers. He is also a sub-postmaster. Every week he, aided by his wife, works more than 70 hours. At the moment all sub-postmasters are worried about the possibility that social security benefits might be paid through banks. In the country districts this would not only he an inconvenience to the consumers, giving them extra expense in travelling to the bank, but it would deprive the shopkeeper of valued customers in that those who collect social security benefits often buy goods from that shop.
The problem that is common to both these categories is the failure of both Governments to implement their policy of metrication. Whatever our views on the metric system, it is a fact that since 1964 Governments have accepted that the country shall go metric in the interests of our survival in the world markets. Until, by order, the Government complete the change, small shopkeepers will continue to face the time-consuming and unnecessary work which is involved when dealing in both imperial and metric systems. The shopkeeper has to be constantly on his guard to check delivery documents from his suppliers. Some operate in metric, but some still operate in imperial. Some sizes and prices of packs are metric and

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some are imperial. I do not suggest for one moment that a shopkeeper cannot cope with this problem; but it is an extra burden of work which adds to costs which will eventually be borne by the consumer. Until orders are laid to complete the procedure, consumers will be worried in case they are not getting value for money, and the small shopkeeper might be discouraged from continuing his valuable service to the community. It was Napoleon who said that England is a nation of shopkeepers. I hope that the Government will do all in their power to encourage these shopkeepers.
3.49 p.m.
Baroness PHILLIPS: My Lords, I should like to follow the noble Baroness. Lady Macleod of Borve, and refer to the question of the small retailer. I consider that we have the best shops in the world, whether we are speaking about large or small ones. It is not by accident that people travel both from the West and from the Continent in great numbers to come to our shops. We should be very proud of them. As the noble Baroness said, Napoleon, wishing to insult us, called us a nation of shopkeepers. In my travels I find that invariably the small shopkeeper is the backbone of the community where he has his small shop. I meet them all the time in social clubs, from youth groups to cultural groups. One realises the great contribution, mainly unsung, that they make to the community.
Various Governments have encouraged businesses of all kinds to take on more staff and then, when the employers take on more staff, they add an extra surcharge on the staff they already employ. The National Insurance surcharge, it seems to me, is really more like a poll tax so far as the small trader is concerned. It seems to me, too, that it is nonsense to suggest that small businesses, and particularly small retailers, should have to conform to the same legislative processes as the large public companies and the large public undertakings.
I happen to have the privilege of being one of the vice-presidents of the National Chamber of Trade, who put forward a very reasoned argument for the introduction of a different type of company, which would be known as "an incorporated limited partnership". I believe
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they have already approached the Government on this and have had an audience. I hope very much that the Government are looking into it. I personally had the opportunity to set up a small trade association; and one observes how nonsensical it is that with a staff of three, one still has to employ someone to do the high-powered accountancy which would be exactly the same, I suspect, as that for the very much larger businesses.
Many of the small shops, in providing this service to the community, do, as we have heard, work on a profit which is so low that it is definitely less than the average wage taken home by a worker; and to pay rates of £500 a small shopkeeper would need certainly to take something like £3,000 worth of business. There must be some way in which we can get through the rating jungle. In my own high street in a London borough, I have watched, sadly, one after another, the small shops disappear, closing because of high rents, high rates, theft and all the other attendant problems. It is very sad to go along a high street in a London borough and see that each of the small shops now has to have steel shutters in front of its windows because of constant pilferage.
If the Government will put money, as they do, into large concerns to encourage greater efficiency, that in my book means a smaller number of people employed. The only sector left which can take up the mass of the unemployed is that concerned with small businesses, and particularly small retailers. They need all the encouragement that any Government can give them. It will be a sad day if the small man disappears. There will always be the elderly, the handicapped and mothers with small children who need desperately to use the small shop.
I would hope that we will remember that the United Kingdom is not a mass of conurbations. The more I move about the more I realise that, happily, it is still composed of a number of small towns; and small is beautiful. We create so many of our problems by our bigness; and I would therefore put in a very keen plea to the Government that they will look to the interests of the small retailer.
3.54 p.m.
Lord ROBERTHALL: My Lords, I was at one time economic adviser to the

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Government, and when I gave up that job I became adviser to a number of very large firms. But recently I have become the accountant to a one-man firm which is just going into business. If your Lordships will forgive this somewhat personal account, I give it because I think that anecdotal evidence—evidence from direct experience—is often more useful than a mass of statistics or generalisations.
The young man in question came from an academic background; all his relations had gone to school and university and then into academic or professional jobs. He did not care for that at all. He was very difficult. He got some casual work and then was on social security for a while. However, it transpired that he really wanted to run his own affairs if he could. He took a short technical course and then set up his own little busines to fill a gap which he thought could be filled. I ought to declare an interest: he is a connection of mine and I put up some of the capital, though I may say I do not expect any return on it. However, I am concerned.
The transformation in this man was very striking indeed. He became self-reliant, anxious to stand on his own feet—not like some of the people he knew, sitting around, drawing social security and expecting the Government to do something for them. He worked all night if that was necessary. He showed a great deal of enterprise and energy, and indeed all the qualities which I think this country wants so much. He lost money in his first year but is now beginning to build up his turnover and is just about in the black. But of course he has got to expand.
In front of him are a great many hurdles, the first of which the noble Lord, Lord Spens, has mentioned. He has to get his turnover up. He will soon be at the £10,000 level and at that stage he will need a more professional accountant and much more detailed records. Perhaps I should say at this stage that the only department he has seen so far has been the Inland Revenue. They were extremely kind and helpful to him, and I think it is a very good thing that that is the line the Revenue takes, because if it goes on like this he will begin to think of the department as a friend and not as an
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enemy. I give full marks there to the Inland Revenue.
But the VAT people will not be able to do that. They are tied down and have to keep very rigid records; and a very great burden will be imposed on him. He will probably need professional accountancy and, as the noble Lord, Lord Spens, has pointed out in detail, it is probably at this level an expense to the Government: the present allowance has not even kept pace with inflation. This must be true of a lot of virtuous and industrious young people in the country who are in the same situation as this particular young man I am talking about. The next thing will be to employ somebody, and then he will get a fresh load of responsibilities to take care of. He will have to stamp cards, deduct PAYE, and so on. If one looks at the ladder going upwards in front of the small businessman, one finds a succession of things imposed on him by Government requirements.
I do feel so strongly in favour of what the noble Baroness, Lady Sharples, said—I think one or two other speakers have also said this. In other words, it would be a very good thing if there were a department, as they have in the United States, which is concerned with small business. It would be very good if one of the things they did was to examine these problems encountered by a young man or young woman in rising up, and see whether things could not be made as simple as possible with as little red tape as possible. It would be very helpful to see that the departments concerned with this sort of thing keep a lenient an friendly eye on them and give them the sort of help which I think the Inland Revenue was trying to give to the man I am talking about.
4 p.m.
Baroness VICKERS: My Lords, I am delighted to have the opportunity of supporting the noble Baroness, Lady Sharples, who moved this Motion so well. I am also pleased to see that the noble Lord, Lord Lever, is in his place, because he stated:
"We must he careful that the Employment Protection Act is not turned into an Employment Destruction Act. If something is to be done for the pool of a million and a half unemployed, then small businesses are one of our best hopes … It is vital that we help small businesses to expand".

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He stated that in November, 1977, in the Sunday Times, and I think that he was right. This Act has done a great deal of harm to small businesses.
I want to talk about the decline of the rural areas, because this is a very important matter for this country. A survey was undertaken by the Standing Committee of Rural Community Councils in 1978, and it stated:
"Village shops are doomed and village life is dying".
This echoes what the National Chamber of Trade has been forecasting for many years. It also stated that the quality of life in our villages, and also in town centres and suburban areas, will deteriorate if nothing is done.
In another report by the National Chamber of Trade, the Director-General said:
"The sorrow will be all the more poignant for knowing that we all share the responsibility, including reporters and feature writers".
He added:
"If you wish to retain the services and the community interest of the remaining smaller businesses, what is needed is a bit more genuine support now by local people".
In 1977, between one quarter and one-third of all the villages in Avon, Gloucestershire, Wiltshire and Somerset had no village shop. One of the difficulties is in getting adequate supplies, and another is the increased number of weekenders who, unfortunately, bring all their food and drink with them.
A leading political and economic planning research scientist, Dr. Hillman, said publicly that hypermarkets are a serious danger to local communities and should be opposed by planning authorities. Action can be taken. For example, it was suddenly announced that a wet fish shop had to close down and it was reported to me that there were then queues for fish. The owner stated that if only half the people had been regular customers, it could have been a thriving business.
I understand that there will soon be a difficulty in regard to sub-post offices. I believe that payment is made according to the number of units. For example, if pensions are paid weekly, there are four units per month. But now they are being paid fortnightly, so that there are only two units per month. The sub-postmaster
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in one post office recently lost £8, while another made 50p profit in a month. I gather that there is now talk of paying through banks. How many villages have banks and how many villagers have bank accounts? Recently—and I agree with the noble Lord, Lord Oram, here—we in Wiltshire have managed to get a number of shops to collaborate with each other. For example, one shop will deliver for the butcher and bring all the other groceries. Furthermore, an off-licence has now been opened, so that instead of going 16 miles to get a bottle of whisky you can now get it delivered to your house, if you require one. This is a very great service.
I should also like to support the noble Lord, Lord Byers, in suggesting that local authorities should assist in providing adequate accommodation. They have quite a lot of empty shops, which they could easily let and make a slight profit. Also, it seems very unnecessary that electricity boards should have large shops in villages. They are not open all the time, they use a great deal of electricity and they take business away from local shops which are doing the same job. If you want anything done to your house it is no good ringing up the electricity board; you have to go to the local people to get it done. I suggest that careers officers in schools should be more helpful. In other words, there should be more teaching in thatching, plumbing, car maintenance and gardening for nurseries and interest should be stimulated in farming, carpentry, nursing and home helps. This would create more employment.
My final point is on tourism. The countryside is very much less expensive, as well as being very beautiful. But, regrettably, people come to London and very seldom have enough time to spend in the country. As prices in London have gone up tremendously, I should like to suggest that the Tourist Board makes a great effort to get people to go and stay in the countryside. From a great many places, you can get to London in a day, see the sights and then go back. This would give a better understanding of the British people, because London does not represent the British people and countryside. England, Scotland and Wales do.
Lord PARRY: My Lords, as the noble Baroness is about to sit down, may I

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ask whether she is aware that the Minister for Wales made a very welcome Statement on the importance of tourism? It is essentially an industry which attracts the activities of the small businessman and, in fact, the big businesses in tourism are small businesses in the Government terms.
Baroness VICKERS: My Lords, I am very glad to hear that there is Government support.
4.5 p.m.
Lord LEVER of MANCHESTER: My Lords, we are all very grateful go the noble Baroness, Lady Sharples, for enabling us to have this most rewarding debate. I am a little embarrassed to pay that tribute, in view of her overgenerous comment about the small amount of work that I did in trying to overcome the lethargy and indifference in Government Departments, which over a long period has been their habit.
One thing is absolutely clear. This country is missing out in the small business area. Until recently, the view was widely held that the small business area was some residual, unimportant relic of olden days which would finally be squeezed out of existence altogether. In fact, the small business area is potentially the most rewardingly dynamic area in the whole economy, in a period of accelerating world economic change. They have the adaptability, versatility and tendency to innovate which meets the challenges and responds to that change. No small part of our failure in Britain to be sufficiently responsive to the remarkable economic changes that have come about in the world in the postwar period, is due to our neglect of small businesses and our attitude, and the attitude of Governments, towards those businesses. At the heart of that attitude of Government is the kind of absurd notion, when Governments are legislating, that they are legislating for GEC, ICI and concerns of that kind. They virtually never, in their administrative and fiscal legislation, take into account that there are hundreds of thousands of small businesses and millions of their employees who have to work complicated legislation which has been imposed upon them, without the financial and departmental resources of those vast
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concerns. That is why you get problems in all fields and some have been mentioned today. I know that VAT was mentioned, and I am sorry that I missed part of the noble Lord's speech.
I was able, during my period, to persuade them to halve the number of questions that had to be filled in, and triumphantly announced this advance in the other place. Of course, nobody was alert enough to point out that what I was announcing was that for several years we had been asking twice as many questions as were really necessary, since we have survived with great fortitude the diminution of questions that was then inaugurated. That goes along the whole field. Idiot requirements to provide mines of useless statistical information at ludicrously over-frequent intervals are imposed upon the ordinary small businessman, and he is even more bewildered when he gets some of those forms than he is when he tries to fill in his football coupons. You have to see those forms to realise the total absurdity of many of them. This has to be cut down.
I accept the gentle tease of the noble Baroness, Lady Vickers, about the Employment Protection Act. I did, in fact, warn that the splendid purposes of that Act, which I fully endorse, must be tailored to the needs of small business as well as big business and, without diminishing from our purposes, let us make it possible for small businesses to maintain high standards in employment protection, without deterring them from taking on labour. I am sure that this is possible, though within the confines of this debate—and the speakers so far have a devastatingly good track record in keeping to the timetable—I do not want to go into too much detail. But we can do more in advisory services and in simplification of legislation, without prejudicing the very fine purposes behind it.
One of the great difficulties which has arisen from this indifference of Governments is that they have, without intending it, choked-off the flow of the crucial investment funds which are required for small businesses, because the crucial investment funds are the equity capital, and those come from people with local knowledge, family connections and association of interest. They are not forthcoming, mainly because the Government

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have given tax advantages to the institutions and, I may add, to themselves, in the form of tax-free gilt edged bonds which make it far more attractive for people to put their savings into Government bonds or into institutional arrangements of varying types of ingenuity, through insurance companies and the like. I do not want to take these away, but I insist that if you want a healthy small business sector, properly supported in its equity capital, you must give it the equivalent of the tax advantages which have been given to the flow of funds into Government and into the large institutions. That is not difficult, and strangely enough it is not very expensive. One could relieve small businesses of all capital taxation, which produces a trifling amount of money.
For example, there need be no capital gains tax on equity investments in small trading firms and no capital transfer tax on shares in small businesses, certainly not until the businesses are sold so that this could not in any circumstances he a burden on those businesses. It would be no burden upon ICI if I happened to die, leaving a great number of ICI shares, and if the Inland Revenue seized an excessive share of those funds. ICI could not care less; at least, I do not suppose that they would care very much about it. It would not trouble the business. If, however, I died leaving shares in a small family business, it would matter a lot to that business. This has never been recognised, and I am sorry to say that it is less recognised by some of the spokesmen for the present Government than it was by their predecessors. So we can deal with that, too.
Turning to the loan fund question, our branch banking services are remarkable, compared with those of any other country in the world. They are led by the Governor of the Bank of England who has encouraged them greatly in this area. In many respects they are trying to bring their attitudes up-to-date. I said that they are led by the Governor of the Bank of England, but in fact they are led by his eyebrows. He has no power over our joint stock banks, but he has a great deal of influence.
The Governor of the Bank of England has encouraged the banks and they have responded by increasing their interest advisory services and loan facilities to
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small businesses. This is not always received with total admiration by all applicants. Creditors are notoriously less avant garde in their monetary notions than debtors. Therefore the banks sometimes fall short in their response to the more romantic expectations of their customers. However, I believe that they are doing a very good service. The weakness is not so much at the loan end but at the equity end, and that weakness can be remedied only by a fiscal change.
Some of the existing public agencies are doing a very good job. In particular, I would cite CoSIRA. On a little money CoSIRA has provided great numbers of jobs, with negligible loss. I should like to see that experiment extended. CoSIRA might very well be asked to do a prototype effort in the town areas. They are restricted at present to the country areas. We might give them encouragement.
On the question of the more generous subsidised lending schemes. I am sorry to depart a little from the noble Baroness; she is somewhat to the left of me on this question of grandiose schemes using public funds. Alas! we have a shortage of public funds, and we have to make sure that where we give them they are effective and good value for money.
I must confess, too, that I am of the Macaulay school. I prefer an acre in Middlesex to a principality in Utopia. Incidentally, it is a pity that Lord Macaulay did not say this: I think it is harder to come by that particular acre than by the great principalities in Utopia.
I myself, therefore, favour very practical, immediate, pragmatic efforts to encourage our small business people. I think that the reward will be not only an economic reward but also a political reward—not in the party political sense but in the fibre of our nation. It means that you have hundreds of thousands of small businessmen—sturdy, reliant, independent and creative—and millions of their employees in an intimate relationship with them. This is not always possible in our great factories. I believe that from that you have a seedbed of great talent not only in the service of industry, not only in the service of our economy but also in the service of the Government and the people of our country.
4.15 p.m.
Lord ENERGLYN: My Lords, I do not think that we can extend too strong praise to the noble Baroness for bringing this subject into your Lordships' House at a time when the country is being bewildered by political warfare and also smothered by the blankets which we have heard so vividly described by the noble Lord, Lord Spens—for example, the paperwork invented by the bureaucrats. It is in this kind of arena, as I see it, that from an embryonic condition the small businesses have to try to emerge and come to life.
I should like to deal with one point which the noble Baroness made; namely, that these firms—as the noble Lord, Lord Lever of Manchester, pointed out—have not received adequate credit for what they do to the economy of this country. Small businesses have always underpinned, and always will underpin, the economy of any country. Before the war, this used to be the case in Britain.
It was customary then to see "Made in Birmingham", "Made in Sheffield". What do we see now? We see "Made in Bangladesh", "Made in Austria", "Made in Germany", or wherever it may be. Small businesses have emerged from these countries and they have planted their products upon us. Therefore I should like to say two or three words about recognition of these small enterprises.
Small enterprises have to fight their way into the market. We ought to recognise this. Also, we ought to recognise that in doing so they are taking their courage in both hands. Therefore should we not extend to them honours—for instance, through the wonderful Queen's Award to Industry and through the awards of the Association of Independent Businesses? Why should we not go further and denude the Honours List of the names of civil servants who are being rewarded only for doing jobs which they are adequately paid to do?
These apparently flippant observations have great commercial value. A person or firm who has had one of these awards from his country is recognised abroad as someone of substance. Therefore, his entrée into the market is made much easier. So it is not really a flippant point
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of view; it has substantial commercial value.
The second point I should like to pick up is entry into the marketplace. It is easy enough to manufacture a product from a bright idea, but without resources it is difficult to market it. No small business can hope to expand overseas if it has not got its feet firmly planted in the home market. To illustrate my point, I have in my hand two empty matchboxes. One of them is entitled "England's Glory"; the other is entitled "Traveller's Fare", and it has upon it the insignia of British Rail. Every match in the "England's Glory" box ignited first time, and not one of the 49 traditional matches broke. But not one of the matches in the "Traveller's Fare" box ignited first time, and one in eight snapped, which clearly indicates that British Rail are selling boxes of inferior matches Where does this box come from? It is printed, made and filled in Austria. This is just one example. I could recount dozens of examples where this simple act is denying the market to British manufacturers.
My point is that in every facet of our life we should try to convince—you cannot pass laws to do it—the public that the quality of British goods can once again resound throughout the world. We used to say quite safely and confidently "British is best".
4.20 p.m.
Viscount ROCHDALE: My Lords, like every other noble Lord who has spoken, I should like to thank my noble friend sincerely for introducing this very important debate, which I have found extremely interesting, particularly the noble Baroness's own speech and what she had to say about the United States of America. I want to confine my few remarks to the small manufacturing firm; and I take as my criterion the definition that was given it by the Bolton Committee on Small Businesses when they reported in 1971, which was a firm of fewer than 200 employees, a firm directed and managed by the owner and with little equity capital.
If we look at this field of manufacturing industry we find that it and the large industries are absolutely interdependent.

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That is a very important matter. After all, the small firm can be much more adventurous and aggressive in its innovation, in its design and in its competition. It is a very important source of high technology specialised goods for the major industries themselves. They rely upon such firms. It is very much better able to have short runs in its production and therefore it can have greater variety in what it produces, to the benefit of its customers. It has more intimate labour relations because, of course, the small firm is much more labour intensive and the evidence is quite clear that with small firms there are far fewer disputes and therefore there is more steady working.
With those advantages, where do we go from there? The noble Lord, Lord Byers, referred to its value in the inner city problem. I entirely agree with him, but I believe also that the small manufacturing firm has tremendous value in the rural areas because today we have here excellent schools producing highly skilled and ambitious young people. Where are they to find work'? Unless we have something that will exercise and challenge them in the country they will drift away and in time the local rural communities will disintegrate, which would obviously be a disadvantage to all of us.
With all those advantages for the small business firm, how is it that we and our Western competitors have had such a reduction in the number of our small firms? The noble Lord, Lord Lever of Manchester, referred to this, but, to give a figure, between the mid 1930s and the mid 1960s our small firms in the categories I am speaking about were more than halved—much more of a reduction than in other firms in West Germany, Japan, the United States, France and so on. But, fortunately—and I have no doubt that the noble Lord, Lord Lever, has great responsibility for this—the climate is greatly improving and there is a recognition of their importance. Today this field of industry represents something like 20 per cent. of our gross national product, and it is of interest that, so far as I can see, they have earned some 50 per cent. of the Queen's awards for export, which is tremendously encouraging.
So what are the problems? The two areas of problems that I have identified
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are similar to those identified by other noble Lords—one, finance, and the other, regulations. I will say very little about the provision of finance because other noble Lords have covered the matter very well and I can support everything that has been said, but I should like to say a word about taxation and particularly capital taxation, because that is important. I say that it is important not in the way that one often criticises high taxation and wants it to be reduced in order that one may place a carrot in front of the individual concerned. I say it not for that reason, but because what we need in these small firms is continuity—continuity for planning, continuity for direction, and therefore greater confidence for the future in the small companies.
I shall not say any more about finance but I want to say a few words on the question of regulation. Industry as a whole has to work, may be rightly, under a great many regulations: health and safety at work, employment protection, planning statistics, and so on. Small firms simply do not have the specialists to deal with these matters. There are agencies which help. I think the Department of Industry has a small firms division counselling service, but what we want the small firms to direct their specialising ability to is not these ministry matters, but to put their efforts into design, into invention, into research and into production. That effort on their part must on no account be blunted because, if it is blunted, then half the reason for their very existence would be done away with.
Therefore, I make two suggestions. As regards regulations under existing legislation I would suggest that perhaps there may be room for a more sympathetic application of some regulations. As regards new legislation, I should like to see a more penetrating look at the cost involved. When most Bills come to Parliament the Explanatory Memorandum at the beginning says that the cost to the Exchequer will be little or nothing, or so much. I should like to see some reference as to what is the likely cost of compliance with the regulations to the firms which are going to be affected. I do not know how difficult that would be, but I think it is an important matter which should be looked into. I believe that many of us are preaching to the converted—at

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least I hope we are—and I look forward to hearing what my noble friend has to say in reply.
4.28 p.m.
Lord GISBOROUGH: My Lords, there is a strong relationship between the financial strength of countries and the number of small businesses per thousand of the population. Yet Britain has some 30 or 40 per cent. fewer firms than France and West Germany and the rate of new firm starts per thousand of the population of Britain is one of the lowest among the developed nations and only a third of that in America. The rate of decline of small firms exceeds that of other countries where Government action has reduced that decline. In America 88 per cent. of new jobs between 1969 and 1976 were provided by small firms: new firms created 80 per cent. of those jobs. The capital employed per worker in big business averages perhaps £400,000 against £20,000 in small firms, so that a given capital provides 20 times more jobs if structured to a small firm than to a large firm. Also these small firms have proved to be more efficient, to have better labour relations and to have been more competitive than their larger counterparts. Small firms employ 6 million people and involve hard work, long hours and great financial risk to their owners, who deserve high rewards after tax and every encouragement and the thanks of the nation.
At a time when large industries are shedding labour, new ventures must provide the base for the creation of wealth and the provision of extra employment which is needed, and nowhere is that more important than in the North of England. Small firms have many special difficulties, both in formation and running, which have already been mentioned. They are at a considerable disadvantage in raising equity and venture capital has become even harder to find, as in the past taxation has reduced potential providers of equity, which is the best means of finance for new businesses. Also, loans are more expensive and security requirements stringent.
In America there is the Small Businesses Administration Department, which guarantees loans for the financing of venture capital. Indeed Britain is one of the very few countries with no direct government guarantee scheme. For example,
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Japan currently has £10,000 million lent to small firms. It is true that there is one British new town which is offering a guarantee scheme in conjunction with two of the clearing banks. Without adequate venture capital available a guarantee scheme of some sort is quite essential for this country. While some new firms will fail, those that succeed will become the medium firms of the next decade, providing the employment of the future. Otherwise, banks, if they will lend at all in start-up situations, naturally require their loans to be serviced even during the early period before sales and profits start to materialise. Furthermore, in the United Kingdom loans are made on the security of the value of the venturer's house and assets, which he will lose if the venture fails. It is surely better in the long run to finance a good venture than finance one just because it has the backing of a good home to lose. In Germany interest-free grants and loans have led to a healthy small firm sector of the economy and business failures have been offset by the successes.
Skill is one of the limiting factors in the growth of small firms in many parts of the country, and until the supply of skilled men can be vastly increased there must be restraint on growth in small and medium companies. No fewer than two-thirds of the companies interviewed in one study complained of shortage of skilled workers, and this is a field where the Government can help even further with training centres. The queston of skills is of course vital to firms large and small.
After skills comes the problem of business know-how. It is one thing to get a product made, another to organise the business side. The small trader often does not understand financial jargon and has little opportunity to learn. Yet where courses are run, such as the one at the polytechnic at Teesside in October, the course was overwhelmed with applicants. Schools should teach more business management and must help to break down the potential distrust felt by some sections of the public towards the enterprising entrepreneur.
Above all, the Government should set up an advisory service to help small firms in exactly the same way as A DAS helps farmers. The problems of large firms are soon known to the Government, but those of small firms can be undetected

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until too late, but they would soon be brought to the notice of the Government by an advisory service. If Government cannot do this they could get the financial institutions to do the job, but it is not an effective alternative just to give out cash grants without increasing competence. Banks do have advisory services to help small firms, but the sense of urgency can be judged by the fact that one particular clearing bank has only one man to cover this field for the whole of the North of England and the whole of Scotland.
Time is a big factor for small firms. The bureaucratic delay in paying a grant may be enough to kill off the tender shoot of a new venture while large firms can finance that delay. Small firms need quick money and quick solutions. Banks can move quickly, if Government cannot, and it might be quicker and cheaper for the Government to use the banks rather than their own departments as a vehicle for helping small firms, backed by a Government guarantee scheme.
There is the matter of legislation and of form filling, and a reduction in forms has already been made. They are often difficult for company lawyers to complete and they are a nightmare to the small trader. Little wonder then that the take-up of grants which are available is small as people are just not aware of them and do not understand how or what to claim. There is room for more positive advice in simpler language. Perhaps a parallel may be drawn with the way some companies now present their accounts in simple diagrammatic form.
A further penalty imposed on the venturer into self-employment is that he gives up his pension rights, and a United Kingdom small business man cannot use foreign social services as an employee can. Why should a businessman bear this penalty for his initiative and his creation of jobs? Could this not be overcome by the Government?
There are other factors for study, such as allowing companies to buy back their own shares to encourage temporary equity holdings, elimination of capital gains tax on lifetime transfers, decrease of capital transfer tax, and revision of employment legislation. How often I have heard, particularly in the North
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where I live, builders say that they could take on more labour and expand but prefer to stay small to avoid all the problems of employment protection legislation, dismissal legislation, unions and so on. Abolition of all that legislation would boost employment overnight. Also, product liability threatens to impose a severe strain on all companies and could do vast damage to growth and employment.
Finally, I turn to the North-East region, with its constant unemployment problem. There is compelling evidence that new firms are formed mainly by people who work in other small firms. Large manufacturing industry which predominates in the North-East has created its own problems in this respect, creating a low potential for the spawning of new firms by employees. Centralised management tends to remove management staff who might otherwise set up their own firms. In the short run large factories help employment but in the long term they tend to depress the rate of self-sustaining growth of small firms.
In conclusion, if these firms are to be encouraged, if wealth is to be created, and if unemployment is to be licked, the solutions must be radical, not marginal.
4.36 p.m.
Lord DAVIES of LEEK: My Lords, the track record, as the noble Lord, Lord Lever, said, has been excellent. I will try, reluctantly, to keep to it. I wish this debate had been a full debate rather than a short one. Nevertheless, we are all grateful to the noble Baroness, Lady Sharples, for having raised this issue. With that quick sentence I have to leave the praise.
I would certainly agree with the noble Baroness, Lady Vickers, when she pointed to post offices and old-age pensioners in rural areas. I know of a beautiful village near Macclesfield called Wincle, where 90 people used to collect their pension. In this particular hamlet it was from the village shop, with a sub-post office. It has closed down and there is only a bus service twice a week to Macclesfield, and the difficulty for these old people in collecting their pensions has been increased. An organisation that makes £400 million in general profit should not worry too much when a rural sub-post

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office is not quite making the grade on profit but is serving people who have served the country in rural industry and agriculture. I regret that nobody seems to check on this. I think the Government should look into the matter before sub-post offices in rural areas are closed clown.
Having said that, I would recall that under the leadership of the noble Lord, Lord Lever of Manchester, and Sir Harold Wilson, a committee was specially set up to report on the financing of small firms (Cmnd. 7503). Without going into that as deeply as I should like, this is of importance, and I would ask in passing if the spirit of that research is to be kept up by the Government now in power. The inquiry was set up in January 1977, to inquire into the role and functioning at home and abroad of financial institutions in the United Kingdom and their value to the economy; and one specific report, the one I have just mentioned, particularly spiked down the vital importance to small businesses of the financial institutions.
Then comes the reference made by the noble Baroness, Lady Sharples, to a change in the functioning of the Stock Exchange, making it simpler for investment into smaller businesses. With that overall broad canvas expression, I cannot go into details, but this is a well-informed House and noble Lords know exactly what I mean. Fifteen recommendations were made by that report, all of which are worthy of note. With that brief reference, regretfully, I have to pass on from that point.
I want now, in passing, to come to one favourite love of mine, and that is the Council for Small Industries in Rural Areas. This organisation was set up and it is a child of the Development Commission. There is a new report just about due, but I am quoting from the report of 31st March 1978. In speaking of the Council for Small Industries in Rural Areas we use the acronym CoSIRA. The Development Commission was appointed as long ago as 1909–10, so please do not think that we have dropped on a brilliant idea. It was brought in by that Welshman, David Lloyd George—my father knew him! The Development Commissions were appointed by Royal Warrant under the Development Road Improvement Funds between 1909 and 1910. Since those days people of all stations of the community have served upon them. Recently the Marquess of
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Bute retired after doing marvellous work in aid of Scottish rural industry and Sir Jack Longland and others have done great work in that respect.
The constituency of Leek, which I used to represent, had nearly 3,000 farms—1,430 acres. It is well and assiduously represented, I am pleased to say, by a Tory Member at present. In Leek CoSIRA's role is, in the main, that of agent of the Development Commission which has set up various industries in the Moorlands. It has been done with the co-operation of the Leek and Moorlands' local council, plus an intelligent and constructive approach by Staffordshire County Council.
I am watching the clock and, regrettably, I must sit down in the next half minute. I hope that the Government will look closely at the work of the Development Commission, and I should like to mention the number of jobs that it has found in that area. Although the Government have threatened to cut back this work, which is being done under the chairmanship of my noble friend Lord Northfield, I hope that they will think again before they do so. Regrettably, five minutes have passed. I hope that the Government will ensure that CoSIRA gets a square deal.
4.43 p.m.
Lord MONK BRETTON: My Lords, I put my name down on the list of speakers today because I happen to have served for a long time on one of CoSIRA's small industries committees—namely; the one in Sussex. In speaking today I am expressing my own views and not necessarily those of that committee. I also have a strong desire to encourage the Government as regards small business. So far they have made a good attempt to improve the general climate for business, which includes small business. All that I can say further—and I want to be encouraging—is that I trust that, if they go ahead as regards small business in the way that they have said that they would in their original election manifesto, then so much the better.
Having only four or five minutes in which to speak, first, I wish to convey that I believe, as a matter of urgency, that we should deal with the question of the express intervention in aid of small

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business which is necessary. It simply must be dealt with urgently because otherwise there will be a long delay in getting it going. Too much water has gone under the bridge already and no more than can be helped should go under it now. I am absolutely behind what my noble friend Lady Sharples has said and what the noble Lord, Lord Lever of Manchester, said by way of support of my noble friend.
I wish to make a few comments about CoSIRA. Presumably CoSIRA, the Development Commission, and the whole gamut of small business support will already be under review by Government, and therefore change is contemplated. I wish to emphasise from my experience how important it is that CoSIRA's role should remain a rural one. It should not become an urban agency: if possible, it should be retained as a rural agency because it is vital that the countryside should have specific consideration. In these days local government is more urbanised than it used to be and it does not give that consideration as fully as perhaps is necessary. In that light it is worth bearing in mind what my noble friend Lady Vickers said about country areas—they have their difficulties indeed. CoSIRA under the wing of the Development Commission, which also looks after the rural community councils, has a very important role to play, and I think it would be a great pity to see it upset.
The other anxiety which I have at present concerns the current use of CoSIRA's resources. I am afraid that all business support organisations—wherever in the world—have their critics as regards this matter. However, the position at present is that CoSIRA loans are currently available for the CoSIRA development areas, Government assisted areas, and elsewhere only in what are known as "established pockets of need." That situation has applied since the cutback that was announced in December 1978, which produced a considerable amount of alarm and despondency in the approximate two-thirds of the country which were not in the CoSIRA development areas or the Government assisted areas.
Those areas which were excluded had never been excluded since the setting up of the Rural Loan Fund. I believe that
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it was caused by a sudden increase in demand for loans. No doubt times were difficult, and that is why there was a sudden surge. However, I am not sure that the situation was as well managed as it might have been—it was certainly unfortunate. Therefore, there has been criticism. Of course, there is a school of thought that small business should be supported wherever it is, irrespective of other environmental considerations; in any case the impact upon employment is likely to be small until the firm becomes larger. Let the new businesses play their part in assisting employment later, as they grow, but do not deny help at the outset because the business is in the wrong area.
I think that perhaps the foregoing would not be entirely within the Development Commission's terms of reference, which are, after all, partly environmental. So, while recognising that there is increased need in the CoSIRA designated areas which would include, for instance, the hill country where matters are very difficult, nevertheless there are pockets all over rural England where there is trouble and where village communities are having difficulty in keeping going. Even in counties where employment may be fairly high overall, there may be villages within 15 or 20 miles of towns with high employment that will take a step back unless something is done. Such villages may well find that their schools have to close and that is the beginning of the disintegration of a village community. It is worrying to see this embargo. One very much hopes that it will be reviewed very shortly. I hope that Her Majesty's Government will keep a close eye on this and review it as soon as possible.
I very much hope that something will be done by way of guaranteed loans or, better still, by way of an equity scheme, to push this whole matter along, in which CoSIRA will doubtless share. Let us hope that progress will soon be possible and that the rather typically British period we have just had following the report of the Bolton Committee in 1971, of looking in one direction while progressing rather steadily in another, will now end.
4.51 p.m.
Lord MONSON: My Lords, I, too, should like to thank the noble Baroness,

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Lady Sharples, for giving us the chance to debate this extremely important subject. It is heartening to note how every quarter of the House, irrespective of politics, has been of one mind in this matter. I shall be brief as I want to concentrate upon only one point, on which the noble Baroness touched briefly in her opening speech.
So far the debate has tended to centre upon what Government should or should not do. Certainly there are all sorts of ways in which small business are hindered by Government policies, some of which have been mentioned by noble Lords: an astronomically high minimum lending rate, outdated company law, an excess of bureaucratic form-filling, the onerous provisions regarding maternity leave and other aspects of employment protection legislation, and so on.
However, it is not only the Government, of whatever political persuasion, who are at fault. There is another guilty party. Big businesses, or to be more accurate, a segment of big business, is also to blame for some of the difficulties in which small businesses find themselves. In this context I use the term "big business" to embrace not only private enterprise firms but also nationalised industries and Government agencies. All too often nowadays big business uses small business as a source of cheap credit. It does this by deliberately delaying payment of its suppliers' or sub-contractors' bills for months on end, in some cases for as long as six months. All too often when a small firm that is hit by this sort of practice objects, as understandably they tend to, a form of intimidation is used on the lines of, "If you keep on pestering us, we will start buying our components from another firm when the current contract expires".
The consequence of all this is that the small business either has to borrow at quite exorbitant rates of interest in order to keep its head above water or it sinks straight away. I submit that this policy, in which certain large firms tacitly indulge, is not only immoral but also extremely foolish and shortsighted; because the more rapidly small businesses vanish from the scene, the more certain it is that the political consequences will ensure that big business, or at any rate the private sector of big business, will eventually follow suit. Therefore, I would urge
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the guilty firms—and thank goodness they are only a minority—to consider the implications of what they have been doing and to start behaving in a more considerate and responsible manner.
4.54 p.m.
Lord WALLACE of COSLANY: My Lords, first, I should like to congratulate the noble Baroness, Lady Sharples, for having secured first place in the ballot, which I know somewhat startled her originally, but in the end it has resulted in a first-class debate. I should also like to congratulate her on her speech, which was clear, efficient and straight to the point and which has received a great deal of support from Members both behind me and in front of me.
This is self-denial day, or something to that effect, because I want to give the Minister adequate and ample time to reply to the many pertinent points that have been made. He may take note that we are waiting for answers. Concern about the well-being and future of small businesses is not the sole prerogative of any particular Government. The previous Labour Government had a good record in this field. The firms had a Minister in the Cabinet and it is a great delight that my noble friend Lord Lever of Manchester, the Minister who was in the Cabinet, was able to speak today. All of us acknowledge and admire the work that he put in. In addition, he was assisted by a nominated junior Minister responsible solely for small businesses.
I shall not deal too much with manufacturing businesses, but the noble Baroness made a number of points with which I want to deal. The first point I want to raise has just been made by the noble Lord, Lord Monson. I refer to the action of large companies in enforcing 90 and 100 days' credit from small suppliers. In fact, it can go further than that, as the noble Lord, Lord Monson, pointed out. This applies not only to firms with Government contracts, but to many other firms as well. As I know from past experience, bureaucracy is not unknown in large-scale private enterprise. Much of it is due to inefficient office management. These delays in payment are a scandal—there is no other word for it. The CBI themselves have expressed extremely strong views on the point.

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Obviously small firms waiting for overdue payment from their larger brethren are faced with serious problems. Although the Government can take action only on their contracts, they can also express strongly-worded advice using their ample publicity resources. This is a rather difficult point, but it is true that there may be those among us who can exert influence on this matter. I shall leave the point there.
I am afraid that I cannot completely agree with the noble Baroness that the training levy scheme should be abolished because of hardships to small businesses. Some small firms are exempt anyway. A recent report by the CBI states that:
"An acute shortage of skilled workers is limiting the growth of many small and medium-sized companies… The quality of apprentices in a wide range of skills had risen over the past two years (to the beginning of 1979), but the number had been inadequate for some time and still appeared to be falling."
The exemption of small firms from paying the levy does, in turn, provide special problems regarding training provision for such firms. Training boards do help in many cases through advisory services, through grants for key training activities and through organisation of courses of management training. The Manpower Services Commission was to review the levy arrangements in 1979. I do not know whether any firm decisions have yet been reached, but, with new technologies so much in evidence these days and with the allied development of new small firms, training of key workers in particular is an absolute necessity if success and growth are to be achieved.
As I indicated to the noble Baroness before this debate, I should like now to turn to another type of small business, that of the little shopkeeper. I am glad that a number of noble Lords and Baronesses have referred to these people. Their shops are often grouped in neighbourhood shopping centres on housing estates. The amenity value of these centres must not he overlooked, particularly to the old, to women with small children and as providing the widest possible range of goods. I have such a centre near my home; it is named the Oval, but it has nothing do to with cricket. It is so named because of a small, oval-shaped, open park plentifully planted with rose bushes.
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But it is not roses all the way for the small shopkeeper there or elsewhere. This is the point, and it is a very serious matter indeed. My noble friend Lady Gaitskell, who was to have taken part in this debate but who has had to leave, was going to raise a similar point. It would seem that the speculative landlords have moved away from dwellinghouses to the small rented shop property market. As a result—and I can vouch for this—sudden increases in rents, some up to and over 300 per cent., have taken place, imposing real hardship to many in a way that would not be tolerated in a housing situation. As a customer, I have been in touch with my local shopkeepers and also with the Sidcup section of the Chamber of Trade executive, and they have suggested that the powers of the fair rents officer could be widened to include small shops, sonic with small flats above. A limit, possibly based on rateable value, could be set and could be subject to annual review.
This is a serious situation. I do not like to see people who have given value and service being forced out of business and away from their livelihood. I plead with the Minister to give an undertaking that he will at least look into this particular problem of small retail businesses which is so widespread and still spreading.
I was not surprised when the shopkeepers and the Chamber of Trade asked for a reform of the rating system—long overdue—which they say should be based on ability to pay. In that, their customers heartily joined them. As with many other small businesses, the present massive interest rates may well prove to be the final straw. The cost of bank overdrafts needed to finance stocks may be just bearable if a price war is avoided, but a reduction in margins will drastically reduce the viability of small retailers who trade on a range rather than volume. They suggest the reintroduction of some form of price maintenance as a small price to pay for protecting so valuable an asset to local communities.
I pay tribute to the small shopkeeper. To many of us in these days of mass manufacture of foodstuffs they are a great necessity. I am lucky. In my little shopping area I have a baker who bakes his own bread. What a contrast to the wrapped plastic monstrosities that we buy

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elsewhere in supermarkets. I am lucky again in that I have a butcher who does not sell pre-packed meats from refrigerators as they do in the supermarkets. He cuts his joint according to the customer's requirement—and often tells me, when my wife sends me shopping, to tell my wife how to cook it. They render a personal service. They know us and we know them, and yet they are being kicked around in the fashion that I have stated. They do not want much, but they want to survive, and Britain needs them to survive if we are to preserve our community life.
To return to the type of businesses that form in the main the subject of this debate, and certainly in the mind of the noble Baroness. The noble Baroness mentioned that the infant mortality rate amongst them is high. Success and growth can also induce mortality with Big Brother's takeover (often by a multi-national) bringing redundancy, unemployment and despair to those workers who have played their part in building up the business. I knew a Mr. Morphy and a Mr. Richards many years ago. Only last week, under unfortunate circumstances, I met a lady from the United States who had been one of the eight original workers who started that little firm. She came back to the Cray Valley and the factory had gone, and a lot of the workers have had to find work elsewhere. They have been taken over, and one enterprise with a well-known name has disappeared.
Britain's small businesses have, over the years, pioneered many new developments. I carry on from the noble Lord who flourished matchboxes in the Chamber; fortunately they were empty, or he would have been arrested by Black Rod. Where today are British motor-cycles, weaving machinery, typewriters, sewing machines, radio equipment, and many other items now ranking as major imports? This, alas, is not a new process. It has been going on for years. I commend to the House the series of articles on the subject appearing in the Guardian newspaper this week.
My Lords, "Buy British" is re-emerging as a slogan. One noble Lord has already uttered the words. That is all very well in itself, but what we have to ensure is that our newly emerging small businesses, when they develop and grow in a highly competitive world, remain British and
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sell to the world. That, in a nutshell, is Britain's greatest industrial and economic problem.
Viscount BARRINGTON: My Lords, before the noble Lord sits down, may I say that he mentioned very truly that the noble Baroness's remarks had received substantial support from speakers both in front of him and behind him. Would it not be fair to add to the record that they also received support from those on the right and the left'' I would refer to both the second speech, that of the noble Lord. Lord Byers, and, I think, the seventh speech, that of the noble Lord, Lord Roberthall. I think that is worth noticing. It is something rather unique about this debate.
Lord WALLACE of COSLANY: My Lords, I would immediately insert "the whole House".
5.7 p.m.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard): My Lords, may I join those who have already thanked my noble friend Lady Sharples for introducing this debate at this time and for the way in which she introduced it. It was a speech full of knowledge and information, and the timing was excellent so far as Her Majesty's Administration are concerned. So many of these matters are currently under review. If I may, I shall leave the urgency in the tone of her speech and the way that she recommended her specific measures until the end of my remarks.
I too had noticed that we had apparently complete, all-party, whole-House agreement on the importance of this subject. Such total agreement on the overriding importance of small businesses, together with the tributes that have been paid to British talent, made me wonder how it can be that we can be sitting here, when we are all agreed, recording that far too few British small businesses exist, which is true. My right honourable friend the Parliamentary Secretary, David Mitchell, who has continued the deep studies to which the noble Lord, Lord Lever, made a major contribution, is convinced that we probably have 40 per cent. fewer small businesses on a pro rata basis than Germany, which he thinks is about the

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average for Europe. How can this be with all-party agreement about their enormous importance?
My right honourable friend has also tried to compare the birthrate of new businesses in this country. As noble Lords will know, this is difficult but it is certainly much less than in some other countries. I believe that the birthrate is more important than the point which the noble Lord, Lord Wallace, has just raised in relation to takeovers. Small businesses, as usually defined by the Government, include businesses with under 200 employees in manufacturing, and similar definitions elsewhere. As the noble Lord, Lord Gisborough, pointed out, they employ 6 million people, which is a quarter of the working population. But I believe that the birthrate is more important than the natural evolution which, as some of them get bigger, leads to some of them deciding rather than go public on the market and raising their money that way, to join another business which they believe will promote their expansion in the most efficient and congenial way.
There is no doubt about our past poor record and the need for improvement, and there is no need to convince this Administration. I shall during the course of my remarks list some of the things we have already done which underline the fact that we believe this is an area of major need. It is not, as many noble Lords have said, that the large businesses of this country are not very important and have not got a major contribution to make to the economy, but in the area of employment, and new employment particularly, the small business has a disproportionately good role to play. It also has always been responsible, outside major scientific breakthroughs, for a very high proportion of innovation and therefore it is vital for the future.
I cannot possibly deal with all the many valuable contributions that have been made in this debate. I will ensure that where I have been asked specific questions and do not have time to deal with them—and there will be some of those—I will write to the noble Lords concerned. I also assure the House that all the points mentioned will be taken into careful consideration by my right honourable friend. Noble Lords also know that,
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speaking from this Dispatch Box, particularly on matters which concern the future of our fiscal arrangements, a Government spokesman cannot go into the degree of detail that he would perhaps like to do in relation to many of the suggestions which have been made.
I shall leave out of my remarks a very important area; I shall come back to some of the points which the noble Lord, Lord Wallace of Coslany, just made, but in the main I shall have to leave on one side the wider implications of the social problems in the rural areas of the small village shops and, to a degree, of the small corner shops. All of these areas are being studied either by my right honourable friend the Secretary of State for the Environment or by my right honourable friend the Secretary of State for Agriculture, Fisheries and Food. These are vitally important questions, but I think the main thrust of my noble friend's Motion is along the lines of the main contribution to the British economy that small businesses can make.
I say straight away that I know of no threat that my colleagues in any department have made to CoSIRA in the way that the noble Lord, Lord Davies of Leek, suggested. We have reviews in all areas,—new Governments always do—but no threat has been made at any time, and as I go through the various important parts of this question I shall refer to the part that CoSIRA is playing.
While looking, as I shall try to do, at the many special aids which already exist for small businesses and at the possibilities for more special aids for them, I should start by saying that I am a little nervous of the phrase which I and some of my colleagues have used in the past—the word "package"—and I am a little frightened of the idea of the all-embracing organisation for small businesses because so many of the measures that can encourage small businesses are measures which affect the general industrial climate and they are therefore vital to all the main departments of Government, as I am sure the noble Lord, Lord Lever of Manchester, would agree. Therefore, one cannot look at them totally separately and, for the same reason, it is extremely hard, as it were, to look at this as a once and for all problem and produce a complete, comprehensive wonder package with a department with absolute powers to

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put in it. I prefer to think of it as the continuing, steady implementation of steps, some of which have been taken by our predecessors; some have already been taken by my Administration, and more are under consideration and will be brought in as appropriate and by the appropriate department.
The great dependence of small business on overall conditions is therefore something on which I should like to comment. I think it is clear from what my noble friend Lady Sharples said at the outset that the special American arrangements started at a period of many American bankruptcies, and there is no doubt that the special arrangements played a major part in triggering other attention from private institutions to be given to this problem. There is equally no doubt that, these general conditions having changed, we find that the major portion of the financing of American small business is now done by the institutions, which are doing a fine job.
It is hardly surprising, with the United Kingdom profitability of recent years, and with the controls we have had on industry as a whole—and the United Kingdom profitability of business as a whole has been less than that of our major competitors by a long way—that the normal institutions have not financed to the degree they should have the new business area where risk is also a factor. Would you put up equity, if you had equity, when income tax has been running at 83 per cent., or 98 per cent. on unearned income, in small businesses that you happened to know quite well and knew the proprietor whom you would have liked to back?
We cannot divorce the general conditions from the plight of small business now, and to a large degree it is the general conditions in which this country's industry has been placed in recent years that account for the fact that our small businesses are so far behind other people's; yet there is all-party, all-House agreement about their importance. One cannot divorce the position of small business from capital taxation as well as income tax, and I cannot add to what my right honourable friend the Chancellor of the Exchequer said at Budget time last year, that he is studying the problems of capital taxation. One
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cannot divorce small business from planning generally. There are particular problems for small business which we understand and are studying.
I now come to special measures which have been taken and to deal with some of the suggestions about new special measures, and I start with the question of organisation. We have of course studied from the Bolton Committee what those in the past have said who have considered this subject, and what they have said about organisation on the part of the Government to encourage small business. We believe that a Minister reporting to an important Cabinet Minister—reporting to my right honourable friend the Secretary of State—so that there is representation at Cabinet level, is the best way to co-ordinate all the important steps that need to be taken by all the main departments of Government. Because of this overlap with the general conditions as they affect business, whoever is appointed, it is in fact not possible to divorce many of the ideas mentioned today from the normal departments of Government. It is perfectly possible to have one Minister and a small staff, with a Secretary of State who is vitally interested in the regeneration of industry, responsible for co-ordinating all the areas. I have taken note of what the noble Baroness has said and of her clear description of the American situation; and reply that it has been studied in depth by my right honourable friend. I believe that exact copies are seldom very effective.
Let me turn to some of the measures that have been taken but have not been mentioned. On 7th November my right honourable friend announced a scheme in the Eastern Region involving the Small Business Counselling Service—which is his responsibility—and the Post Office Staff Superannuation Fund. This is a pilot scheme putting together the expertise and knowledge of small firms held by expert counsellors and the cash of a large pension fund. I believe that putting together expertise and cash is the key to providing finance for small business with small risk of loss. We very much hope that this experiment will prove successful, and if it does, we have every intention of expanding both it and the counselling service.
At this moment I should mention CoSIRA. They, too, have vetted many

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small businesses and then persuaded many large banks to advance money against their vetting of the risk area. These schemes are carried out without guarantee. We are looking at the whole question of guarantees and at many other possible fiscal measures; but guarantees are always costly, and inevitably guarantees will be given in areas where loans would have been advanced without them; and we have very little money. So while we acknowledge that there is a financial gap and that all will not come right, even after industrial conditions in this country have returned to the degree of profitability to which we hope they ultimately will, we believe that there is more than one way to be considered as to how to fill that gap.
On 24th July we announced that we were amending by order the Employment Protection Act—a subject raised by several noble Lords—and there are also measures incorporated in the Employment Bill. Between them these cover the qualifying period for unfair dismissal complaints, which was increased from 26 to 52 weeks for small businesses, and a compulsory period of notification of redundancies affecting less than a hundred people, which was reduced from 60 to 30 days. In the Employment Bill there are four provisions of considerable importance to small businesses, and in view of the lack of time I do not propose to record them all, as they will probably come up when that Bill comes into the House; but a very considerable amount of action has been taken in that area.
With regard to form filling and statistical returns, rather than take up the time of the House—which I have not got—I would refer your Lordships to Hansard of this House of 15th November, columns 1381–82, relating to my Answer to a Starred Question and to my supplementary answers, which showed that this Administration had taken decisions cutting out a million statistical forms out of some four and a bit million.
At this stage I must rebut a suggestion by the noble Lord, Lord Lever of Manchester—and I do not in any way want to detract from the many important matters that he brought to our attention, nor from the action that he had carried out on small businesses. For the reasons that I have already outlined I believe that
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this Administration have kept the good work going at a rather faster rate.
I shall write to the two noble Lords who have raised points regarding VAT. Of course we are fully aware of the impact of inflation on the limit of turnover at which VAT becomes payable. There already exist what are called special schemes which have been devised by Customs and Excise to try to simplify the matter by avoiding work for small businesses on every transaction. There are EEC constraints overall on exemption levels concerned.
I should like for a few moments to deal with factory building. We have introduced a new pilot scheme by the EIEC to build small factory units ranging from 500 to 1,000 square feet, and this is being carried out in the North. It means that, together with the excellent work of the Development Commission and the local authorities, we shall keep the small factory building going. It is a very good sign that all these small factory buildings are taken up so quickly. Indeed, the speed at which all offers are taken up is a sign that perhaps at last small business in this country is moving. If the experiment under the EIEC is successful, we shall certainly consider extending it.
In the time remaining I shall end my speech by saying that much is being done by private agencies, by private firms, large firms and banks—and this is more than was the case. I have in mind the London Enterprise Agency, the St. Helens Enterprise Trust, and the Birmingham Venture. All these consist of large firms working in partnership with small firms to help develop inner cities. I shall give a detailed answer in writing to those noble Lords who asked how far the Inner Urban Areas Act has yet been used in relation to loans and improvement areas.
So, my Lords, to wind up, let me return——
Lord DAVIES of LEEK: My Lords, will the noble Viscount translate the initials EIEC? I do not know what they mean.
Viscount TRENCHARD: My Lords, they stand for English Industrial Estates Corporation, which I think most noble Lords will know about and which undertakes the Government factory building programme in the assisted areas. I am sorry; I have got into the jargon habit.

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The urgency of the situation is understood, and I very much thank the noble Baroness for her timely introduction of this debate. I believe that we shall not answer her request for an immediate package or a copy package, hut that, as time goes by, she will not be disappointed by the degree of attention that this Government and their main departments will give to the small business area.
5.30 p.m.
Baroness SHARPLES: My Lords, I am extremely grateful for having had the opportunity to initiate this debate, and I am even more grateful for what has happened during the course of the afternoon. The speeches from all sides of the House have been varied and extremely interesting. My noble friend the Minister has dealt with nearly all the points noble Lords have put to him, and has assured us that, otherwise, he will write to us. Our time has been very short, for so much needed to be said, but it has been a wonderful and informative afternoon. My Lords, I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

SCOTTISH FRESHWATER FISHERIES: LEGISLATION
5.31 p.m.
The DUKE of ATHOLL The DUKE of ATHOLL rose to call attention to the existing state of legislation relating to freshwater fisheries in Scotland; and to move for Papers. The noble Duke said: My Lords, we now turn to the more limited subject of freshwater fishing in Scotland. Although I have worded my Motion to draw attention to existing legislation, I strongly suspect that many noble Lords will draw attention to what they feel is lacking in the present legislation, and I may even be guilty of that myself. This should ensure a wide debate, which I welcome as much as I am sure my noble kinsman the Minister of State does.
My Lords, perhaps I may deal with a few preliminaries. I must declare an interest, as I am the owner of some very modest salmon fishings—rod and line only, no netting—and some quite good trout lochs and potentially good trout fishing in the Rivers Tummel and Garry. I hardly ever fish myself; I think it is a sport which
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does not quite suit my somewhat impulsive temperament. So most of my fishing is let: the salmon usually by the week to the normal sort of tenants, the trout fishing by the season—in the case of two of the lochs to individuals, and the rest to the Pitlochry Angling Club, who I might say welcome both day visitors and weekly visitors, as well as seasonal members, who of course live locally. This therefore enables tourists to obtain some trout fishing when they visit our part of Scotland. I should also like to say how pleased I am that my noble friend Lord Seafield has descended from his northern fastness to make his maiden speech on this Motion. I regard this as a great honour. I am sure we shall all benefit from listening to him; his experience of this subject is far greater than mine.
My Lords, I propose to deal mainly with trout fishing—I know other noble Lords are going to cover salmon—but before embarking on the former I should like to make one observation on the latter. The Scottish salmon is threatened by English drift-netting. While drift-netting is banned off Scotland, it is still allowed, under licence, off the North-East of England. Few of the fish caught (or, even worse, damaged) off Northumberland are heading for English rivers; they are making for the Tweed, the Tay, the North Esk, the South Esk or the Scottish Dee. This is a waste of potential, of much more valuable rod-caught fish, and it causes great resentment among Scottish fishermen, who are not permitted to drift-net—a law which I am afraid is not always obeyed. They cannot understand why it is permissible to drift-net out of Alnmouth but not out of Eyemouth. I hope my noble kinsman will be able to tell us that Northumberland drift-netting will be phased out over a few years. Incidentally, this would make our position much easier internationally. I have one further point on salmon. I hope the Government will revise the scale of fines urgently. With inflation, they have become much too low.
Now may I return to trout fishing. The last Conservative Administration, in 1971, produced a White Paper on freshwater fishing, off which I hope my noble kinsman will blow the dust. This was in many ways an excellent paper. It was better than the report of the committee chaired by Lord Hunter, in that it was

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much more practical. It was also infinitely better than the last Government's rather limited 1976 Act, which has proved almost impossible to operate. When it was first introduced into another place it had much to recommend it, but it was severely mutilated during its passage there and emerged in a form which made it extremely difficult for any river to obtain a protection order, due, first, to the cost of getting such an order; secondly, to the machinations of the Secretary of State's consultative committee—a Quango which we can surely do without—and, thirdly, to the impossibility of giving greater access when a river is already being fished almost to the limit of its capacity. The Act is aimed at increasing access without any reference to the importance of improving fishing. In addition, this Act does nothing for the reorganisation of fishing—something which has remained unaltered for over 110 years.
Incidentally, the 1971 White Paper is, I believe, unobtainable and out of print, and I would very much hope that the Government might consider republishing it with minor alterations, if that is the right word, because it was a very interesting White Paper and I think must be the basis for any future legislation on trout fishing in Scotland. The 1971 White Paper suggested that area boards should be set up to run freshwater fishing in Scotland. These area boards, which would be, according to the White Paper, about 14 in number, would be responsible for all aspects of freshwater fishing, particularly the development of trout and freshwater fisheries. The only aspect of river use for which they would not be responsible (other than purification and that sort of thing, for which they would not be responsible) was, I think, fish farming, because obviously the Ministry of Agriculture must be concerned with fish farming; and, while area boards should have the right to say yea or nay to whether a place is suitable for a fish farm, I do not think we could ever hold them responsible for controlling things like disease in fish farms.
Personally, I think 14 rather too few area boards. I feel 20 would have been a more suitable number, because some of the areas were going to be extremely large. For instance, I think that members of the
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area board who came from the far west of Argyll would have very little idea about fishing conditions on the Ness. Also, the cost of getting such boards together is obviously considerably greater when people have very long distances to come. So I would hope that in the revised version of this White Paper there might be rather more area boards. The composition of these boards I think should cover fishing interests, both rod and net, fortified (if that is the right word) by several nominees of the Secretary of State. I do not think local authorities should be represented on these boards unless those authorities are also riparian owners, which of course in many cases they are.
As to the financing of these boards, in the White Paper it was suggested that initially the Government might make available some money to cover them, or partially to cover them, for the first two or three years, but that after that they woud have to be self-supporting. The money suggested in 1971 was, I think, a quarter of a million pounds, and obviously, considerably more would now be needed. But they would eventually be financed partly by a licence fee—and perhaps I could go into that later—partly by the local authority rates levied on fishing, and partly by a fishing assessment, which most salmon fisheries, although not trout fisheries, already pay. It is interesting to consider the sums needed to make these boards work satisfactorily. The only figure I have been able to obtain is that, if the whole of the Highland region came under one board, as I believe has been suggested, it would cost something like half a million pounds per annum at present-day prices to run that board; and this, of course, is a formidable amount of money to raise in the Highland region.
The protection for trout and freshwater fishing as proposed in the 1971 White Paper seemed to me to be very adequate, except that, personally, I feel that blanket protection over the whole of Scotland is desirable. It is obviously going to be much more difficult to enforce protection where you have little bits of rivers here and there which are protected and other rivers nearby which are not. Therefore, I think that blanket protection would be highly desirable and that some system must be instituted so that area boards can force people who do not want to give

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great access to their water to do so. I fully recognise that, in a country where the right to fish for trout has been almost immortalised for anyone who wishes to do so, it would be difficult to deprive them of that right and not to offer an alternative. However, I think that the area board must have the power to insist that riparian owners give sufficient access to people, on suitable payment, to fish for trout.
Another power that I suggest for area boards—and it is much the most controversial one—is the possibility of changing annual closed seasons and weekly times. At the moment, you are not allowed to fish for salmon or sea trout on Sundays in Scotland although I believe you are allowed to do so in England and Wales. As a result, the brown trout fishermen descend in enormous numbers and throw everything into the river on a Sunday. If they capture a salmon, naturally, they do not throw it back and you cannot blame them. But it means that the river is more or less totally unprotected on Sundays. There are no two ways about it, the best people to look after a river are those who have an interest in it—and this means the other fishermen. Therefore, I would hope that in this legislation the Government would permit salmon fishing and sea trout fishing on Sundays.
The changing of the annual close seasons is also important. At the moment, to get a close season changed, you must apply it to the whole river system. This means that you cannot have different dates for various tributaries. The only exception to this—and I do not know how this arose—is that the Earn is different from the Tay. In many cases you can go on fishing much later in some rivers than in others, but at the moment all rivers in one particular area of one particular system have to have similar opening and closing times.
Area boards would also, I hope, have the right to remove obstructions by compulsion if necessary. Many waters could be improved if obstructions could be removed. Obstructions also frequently cause salmon to congregate below and this makes it easy for the poachers. The boards should also have the right to restrict, or prohibit by by-law, fishing at or near obstructions. They should have available the power to agree to
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traps, as suggested in the Hunter Report—although I am glad that the Government did not adopt this in the 1971 White Paper for I think that the cost would be absolutely astronomical. I am told that it would be difficult to make traps on many East coast rivers, but where, particularly in the West, an owner wished to put in a trap, the area board should be able to agree to this. At the moment, there is no way that you could put a trap in a river, however good your intentions.
The boards should have the right to introduce fish or eggs into their river systems and should have the right artificially to strip salmon and sea-trout. They should be consulted on water abstraction and should have right of access to statistics of the numbers of fish caught by various owners in their area. At the moment, these are sent to the Secretary of State where they appear to get buried and can only be published, anyway, for a whole river. This means that it is hard to run a river efficiently because you do not have all the facts. Obviously, there would have to be special measures in relation to the Tweed, which is on the borders of England, the Solway for the same reason and, probably, for Orkney and Shetland. I should like to see these area boards thought about again. They have a great part to play. The organisation of freshwater fisheries in Scotland has not been revised since 1868. It is obviously time it was revised and I hope that the Government will find time to do this.
My Lords, I said that one way of financing this would be by fishing licences. It is a moot point whether these should be national for the whole of Scotland or whether you should have a different licence for each area board area that you fish in. I should be prepared to accept either. I think also that it is a moot point whether they should be cheap so that there will be no incentive for people not to buy them or expensive so as to produce revenue. These licences would not entitle you to fish anywhere. All that they would do would be to entitle you to be in possession of fishing equipment, in the same way as a game licence entitles you to shoot game provided you have asked the owner of the shooting rights over the land on which you do it.
I should have liked to mention the international control of salmon fishing in the North Atlantic. This is very important. I hope very much that the Government will support the draft United States International Atlantic Salmon Convention and also Article 66 of the United Nations Law of the Sea Conference. I have tried to cover the ground as I see it. I am sure that many other noble Lords who are going to speak in this debate will make much more interesting points, but I should like to emphasise to the Government that if we want Scotland's salmon and trout fishing to remain the great assets that they are something must be done quickly to preserve them. I beg to move for Papers.
5.47 p.m.
Viscount THURSO: My Lords, I am grateful to the noble Duke, the Duke of Atholl, for introducing this subject into the House. I am always glad to talk about salmon and it is always a fascinating subject. As the noble Duke rightly pointed out, it is time that we returned to this subject and returned with an intention to legislate. It is also good to see that this short debate tonight has produced, or will produce, at least one maiden speech—to which I shall listen with great interest. I ought to start by declaring a number of interests. I am the chairman and principal shareholder of a company which owns a salmon river from source to sea, which operates the hatchery and sea net; and I own and let for various purposes, tourist and local, trout fisheries. I am chairman of the Thurso and District River Fisheries Board and the District Salmon Fisheries Board and I am president of the Association of Scottish District Salmon Fishery Boards, so I have a lot of interest in this subject in all senses of the word. I hope that I shall be able to keep my remarks suitably short for a short debate.
Probably the principal reason why the law relating to salmon and freshwater fisheries in Scotland has remained almost totally unchanged for over a century is that it has worked extremely well. Over a period of 100 years the rises and falls of catches in Scotland's major salmon rivers have been attributable more to natural causes such as weather cycles and disease cycles than to any cause arising
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out of defects or omissions in the law. Certainly I can show that the average annual catches to rod and line on the Thurso over the last half century have risen rather than fallen and that, in fact, annual catches in the last 25 years have averaged almost twice what they did in the previous 25-year period on the Thurso. This is not to say that the existing law relating to salmon and freshwater fisheries is perfect—far from it—but it does demonstrate the difficulty which legislators and their advisers have come up against in seeking to up-date this law: that of finding "a better 'ole to go to", to put it in the words of Old Bill.
We should ask ourselves, therefore, why and in what respects the law needs to be changed if it is working reasonably well. To say merely that changes are overdue is to talk rubbish. Need for change has to be clearly demonstrated and the changes proposed properly justified.
Let us set out therefore the requirements to be met by the laws governing freshwater fisheries in Scotland. First, they must safeguard the natural assets which exist in our rivers and lochs and in our coastal waters in the shape of populations of native freshwater and anadromous fish. Secondly, they must allow a proper exploitation of these assets, both as a food supply and as a source of recreation, alike for Scotsmen and for tourists. In doing so, they must reconcile the competing claims of commercial fishermen, local anglers and the tourist industry. Thirdly, they must not only allow but encourage the development of freshwater fisheries, for both food and recreation—both in natural waters and in the more artificial farming waters. These developments must be reconciled, of course, with the primary objective of conservation of the natural asset. In the fourth place, the laws must provide for the introduction of new methods and techniques of fishery management. Finally, the law must safeguard people's rights, property and jobs—not necessarily in that order, or any order.
If we accept these objectives, and examine the existing law in the light of them, what has happened in recent times—or even over the past century—to make alterations to the law desirable in order to achieve them? What are the dangers with which our fish stocks are threatened and which might make legislation to guard against

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them vital? What new discoveries make new forms of fishery management desirable but require new legislation to allow them to be put into effect? Let us look first at existing fish stocks. Here the threat, if one exists, is always greater when it is aimed at the breeding and rearing ground of the fish stock. The old law has dealt with this by imposing close seasons, and close times on coastal nets, by banning obstructions and phasing out cruives. No longer can one leister a fish on the redds to pickle for winter use. No longer can one block the salmon pool on the Thurso river and, in the presence of some astonished baillies, net out 2,000 or more salmon at a draught, as was once legally done. However, it still needs vigilance to keep the rivers clean enough for the breeding stocks to be able to reproduce, and river purification boards still have their work cut out to keep our waters fit for fish to live and grow in. However, the threat now to our fish stocks lies in the sea.
The use of monofilament hang nets or drift nets poses the new danger. Over-fishing on a massive scale by fishermen or fishing fleets that have killed off their traditional shoals of herring, haddock and cod, is a very real danger. It is happening now. It must be stopped and conservation of salmon stocks at sea must be sought by international agreement. Drift net and hang net fishing should be permanently banned off Scottish coasts. We should seek to phase it out of all fisheries in the United Kingdom and ultimately it should be outlawed throughout the whole Atlantic.
If the survival of Salmo Salar is to be assured, before we pass any laws or alter any legislation relating to salmon in this country, we must seek international agreement about the protection of salmon in the North Atlantic. Before we think about how to manage our salmon stocks, we must establish that they are our salmon stocks. In other words, we must reaffirm Article 66 of the United Nations Law of the Sea Conference which recognises,
"that the state in whose rivers an anadromous stock of fish originates has the primary interest in, and responsibility for, such stock".
If then we get our returning stock safely back from the sea we must be prepared to accept our responsibilities and manage it properly. To do this we must look at the administrative structure
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which will regulate our fisheries; in other words, our river board structure.
On the larger and medium sized rivers district fishery boards have, on the whole, worked well. But on many small rivers they do not have the "muscle" to function properly or they simply do not exist at all. Although in my evidence to the Hunter Committee I advised against amalgamating district fishery boards, I must confess that I now see that it is necessary for the sake of the smaller boards to amalgamate groups of rivers into area boards. Nevertheless, I should be much against an unnecessary and bureaucratic enlargement of such boards to unwieldy proportions. It should be possible for the principal officers of a board to travel from their headquarters to any part of a board's area, investigate a problem and then return home within a day. Board areas so big that this could not be done would be too unwieldy to be efficient. Therefore, even areas as big as the 14 in the appendix of the 1971 White Paper are too big in my view—and I was glad to hear the noble Duke, the Duke of Atholl, make this point and I support him strongly—especially if they are to take on the responsibility for brown trout and other kinds of freshwater fishes as well as salmon and sea trout. Sixteen boards would be a better number. But to cut the number of boards, as has been suggested in some quarters, to seven, would be a bureaucratic disaster. Do we never learn? Have we not had the pinch already with some of our local government reorganisations?
The way in which boards are to be composed will be most important. At the moment boards are elected by owners of either rod or net fishings. I accept that membership for area boards will have to be widened, especially if trout interests are also to be represented; but I regard it as important that the democratic principle should be maintained. Members of area boards should be elected and not appointed. The people who will pay for the boards should elect them. This means the people who will pay the licence fees and the rates should elect the members. Then one can fairly ask the boards to become independent of financial support from Government sources. If one appoints the members of the boards, one will be bringing to birth a whole new shoal of local Quangos. I am sure that the present Government would not wish to be seen as Quango

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breeders, and I therefore suggest to them that the principle of the triennial election should be kept—adding to the number of qualified electors those who pay rates, licence fees for trout fishing or for fish farming.
This brings me to the question of trout. The Freshwater and Salmon Fisheries (Scotland) Act 1976 was, in my opinion, an ill-thought-out mess from the start. What no one seems to have recognised is that where a protection order is made, trout fishings change their legal status, in that catchment area, into that of being heritable property, and the mind boggles at the complications which would arise if a protection order needed to be revoked in order to enforce conditions on someone. What should be done about trout fishings is that they should be given the same status as salmon fishings enjoy—that of heritable property. They could then be rated for the benefit of area boards, and responsibility for trout fishings should then be shouldered by the boards exactly as they will be expected to shoulder the responsibility for salmon fishings.
Your Lordships may ask me how boards could tackle the question of access for trout fishing, and I hope you will allow me to take a little time to explain my thinking on this question, bearing in mind that this is a short debate. Access to any water for any form of fishing has to be limited—limited, that is, to what the fishing can bear. The exercise of judgment on this matter is part of fishery management and may well become one of the tasks of area boards. In cases where one fishery is shared by several proprietors or used by several different users it may be necessary to lay down limits to each one's use in order to protect the fishing for the use of all.
A technical judgment on such a matter could probably best be made by an area board. An area board therefore should be in a position to define the optimum use which could or should be made of any piece of water. This would allow water to be rated as though it was being offered for public use at the full optimum intensity. The only way that a proprietor would then be able to seek reduction of his rates would be by demonstrating that his water was freely on offer for the full optimum amount of fishing
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but that the public were not availing themselves of the offer. I could develop this theme in greater detail and would be glad to do so to Her Majesty's Government or their advisers, but I think I have said enough to illustrate my point within the scope of a short debate.
In accepting area boards as the unit of administration of all freshwater fisheries in an area, I assume that they will be given responsibility and powers over all matters affecting fisheries excepting only those powers already being exercised by the river purification boards. It is essential that they be given power over and responsibility for fish farms within their area. In this sphere I disagree with the noble Duke, the Duke of Atholl. It think it is vital that area boards should have control over the disease problems within their catchment. It is something they would regard as one of their first and most important duties, to keep their catchment healthy and free of disease; and the operation of a fish farm within an area board's area could be a considerable embarrassment if that area board had no powers whatever over operations. The fish farms could be licensed in order to ensure standards of fishery hygiene and could contribute to area boards by paying rates to them rather than to local authorities. I am sure that if they have to pay rates at all they would rather the money went to a fishery board than to anyone else.
One of the main reasons why the Hunter Report was not immediately followed by legislation was that it took a gigantic leap into the future—a leap so vast and unexpected that it left legislators and fishery administrators alike gasping. The caution which legislators showed in not following the Hunter Committee has, I believe, been shown by the passage of time to be correct. The fact is that techniques and equipment, even today, are not yet sufficiently well developed to make the single trap fishery, which was the basis of the Hunter Report, feasible. Nevertheless, it is now desirable to legalise trap fishing if the new techniques of salmon ranching at sea are to be developed. Once again, in a short debate, I do not have time to develop the theme of salmon ranching, but suffice it to say that it appears to offer a means of supplying the public's demand for salmon for the table without increasing the pressure on the stocks of fish which run up our rivers.

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There is a need for protection of our fisheries. There is also scope for their further development, and to carry out both of these tasks requires further legislation. This legislation should not seek to turn everything upside down, however. Rather it should build on the structures which we already have, keeping those parts which have worked well and discarding only the outdated or archaic. Let me therefore suggest priorities and summarise what should be done to build upon the successful work performed for over a century by Scottish district fishery boards.
First, Her Majesty's Government must commit themselves to full support of the United States initiative in seeking to set up an international Atlantic salmon convention. At home they must give a lead by placing a permanent ban on hang and drift-net fishing. This will require legislation. Next, at home, area boards should be set up taking over from district boards and taking under their aegis brown trout and coarse fisheries and fish farming. Boards should have powers over methods of fishing, intensity of fishing effort, introduction or removal of fish or their eggs and the granting of rod, net and fish farming licences. They should be self-financing from rates and licence fees. They should have powers to alter annual close seasons or weekly close times. Boards should be democratically elected by those who pay the licence fees and those who pay the rates. Though the Secretary of State might be given overriding powers over some of the functions of boards, he should not have the power to appoint members to a board. Area boards should not be combined with the river purification organisation and there should preferably be 16 of them to cover Scotland.
Eventually I envisage that it would be desirable to place brown trout and coarse fishings on the same legal footing as salmon fishing, but in the meantime we shall have to work away with the 1976 Act. Once a protection order has been made under this Act, however, area boards should be empowered to administer, enforce or even vary the terms on which an order has been made. The trout fishings covered by such an order should become rateable and the rates should go to the area board concerned.
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Finally, my Lords, let us not forget that the Scottish district fishery board story is a success story. It has given to Scotland the best salmon fishery management in the world—with only the possible exception of Iceland. District fishery boards are still doing a serviceable job after a century of existence. So let us learn from them; let us build on them; let us use their experience to go forward into a new century of fishery management.
6.5 p.m.
The Earl of SEAFIELD: My Lords, I should like first to thank my noble friend the Duke of Atholl for his kind introduction, which is most appreciated. I should like also to declare my interest as being the owner of coastal nets, in the first instance; a member of the Spey District Fishery Board, in the second; and their representative to the Association of Scottish Salmon Fishery Boards, in the third.
My purpose in speaking this afternoon is not to argue for specific laws to be changed—or to be made, for that matter—but to stress the need to improve the existing legislation by looking at the economic aspects, and the tourist aspects for that matter, of freshwater fishery and everything that goes with it. Many of these facts I am sure many of your Lordships will be fully aware of. As a member of the Spey District Fishery Board, I have to treat the Spey as an example. There are no doubt parallels which can be drawn with other rivers, and I sincerely hope these will become apparent.
In 1963 the Hunter Committee issued an invitation to the Spey District Fishery Board to come and give evidence when they were looking into the whole question of drift netting. We went with one intention, which was—and I quote:
"to look at the economy of the Spey Valley in relation to salmon and sea trout fishing, with special reference to hotels and associations".
This meant that we were going to give evidence to show what income came into the Spey Valley and we included rates, direct employment, the drawings of hotels, garages, filling stations and tackle-makers. In 1963 we came out with a figure of £252,777. We also found that there were six associations and some 4,500 people enjoyed the salmon fishings, either through leasing them or throughfishing associations. In fact, the figure for people who enjoyed

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those benefits through fishing associations was 3,174.
There are no doubt certain aspects of the income coming into the Spey Valley area which we omitted to mention, so of late I have trial to up-date these figures by approaching the people who had been approached before, and also approaching some of the newer operators. Having done that, I have tried to use a common multiplier to reach some acceptable figure. I accept there are some discrepancies here, but in 1979 I found out that possibly there could be a figure in excess of 2 million coming into the Spey Valley on the same basis as before, and some 14,000 people enjoyed fishing there, with over 12,500 enjoying the facilities afforded by fishing associations. This probably shows that the Spey, anyway, has had a vast increase in the membership of associations, and instead of there being six associations, as there were in 1963, there were 12 in 1979.
I have tried to calculate the figure for Scotland as a whole, and I used the method of assessment that is applied to all the district salmon fishery boards by the Association of Scottish Salmon District Fishery Boards. Using that proportion, which is based on rates, I came up with £37 million which might be applicable to the whole of Scotland for salmon in rivers. I am told by many people that this figure is very low, but for the time being I cannot do any better than that with the method which I used.
Therefore, one must stress the importance of effective legislation to protect these assets which contribute so much to the rural economies in which they are present. There are controversial issues, such as seals, drift-netting and canoeing, and I hope that the economic importance and compatibilities of these will be looked at in relation to the economic importance of fresh waters and fisheries. I also hope that changes are not made for change's sake. If it works, leave it. Lastly, I trust that international agreement in legislative form is achieved in order to protect over-fishing on the high seas. This is one of the aspects which cause us all great alarm.
6.13 p.m.
Lord BALFOUR of INCHRYE: My Lords, it falls to me to have the privilege
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of thanking the noble Earl, Lord Seafield, for his maiden speech, of congratulating him on its execution and of paying tribute to the deep knowledge—which I know from experience he has—which he has given to your Lordships' House on the subject of the debate this evening. I sincerely hope that we shall hear him in the future, not only on fishing but on many other subjects. I should also like to thank the noble Duke, the Duke of Atholl, for giving us the opportunity of debating this fascinating subject of salmon. But I do not intend to detain your Lordships for more than a very few minutes, because I wish to deal with only one aspect of this problem, which was touched on by the noble Viscount, Lord Thurso.
The debate is on means to protect Scottish salmon—a great national asset. But beyond the much needed legislative measures to restrict damage and the depletion of our salmon stocks, there is a great international menace. The North Atlantic salmon stocks of Scotland and other countries remain wide open to international depletion on the high seas. So long as the EEC ignores the dangers of steady and swift depletion, so long will this state of affairs continue. So long as the EEC chooses to ignore the menace from Members who produce no salmon and have no rivers of their own, but continue to extract salmon for commercial reasons, so long will that menace continue.
In a very few sentences, I should like to summarise how the present open position of great danger to salmon has arisen. There have been attempts at international control of the North Atlantic, but these have come to nothing except words. The United States prepared a draft Convention, which included what became Article 66 of the United Nations Law of the Sea and which was quoted by the noble Viscount, Lord Thurso. In case any of your Lordships did not hear what that article said, I must remind your Lordships that it stated:
"that the state in whose rivers a stock of fish originates has the primary interest in, and responsibility for, such stock".
The EEC totally disregards Article 66. It is not interested. There are only three Members of the EEC who have rivers which produce salmon—Great Britain, including Scotland, Ireland and France. Therefore, the remaining Members are interested not in conservation in the long-term, but in

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stock commercial exploitation for short-term gain. In every debate on the common fishing policy, in Brussels and elsewhere, there has not been a mention of salmon stock preservation: herrings, yes; cod, yes; but salmon, no.
Then there was the Conference on Fishing in European Waters, which was recently held in London. There was not a mention of salmon. I cannot help wondering what the United Kingdom Members of the Commission are doing: why so silent on the United Kingdom's particular interest? I have a fear, which I hope the Minister will be able to remove from my mind. Is it possible that the EEC foresee trouble if they accept the principles of national responsibility in Article 66 for stock originations in national rivers? Do they expect trouble from the provisions of the Treaty of Rome covering accessibility and no discrimination?
Dr. Booss of the EEC recently gave a terrifying definition at the Fishing in European Waters Conference, when he said:
"Legal situation clear. Free access up to the beaches, no discrimination, 6–12 miles only, temporary derogations, which might be extended after 19732".
I wonder whether those fears bring the EEC into possible conflict with the provisions of the Treaty of Rome. I do not know, hut I hope that we shall hear something from the Government.
Finally, I appeal to the United Kingdom Members of the Assembly—and, after all, if they had the courage to upset a budget they will no doubt have the courage to do this—to use their influence to bring forward this issue and have it discussed and clarified in the EEC.
6.20 p.m.
Lord TRYON: My Lords, I, too, should like to thank the noble Duke, the Duke of Atholl, for introducing this most interesting subject, and to add my congratulations to the noble Earl on his most interesting maiden speech. It is clearly a subject about which he knows a great deal and, indeed, he has done very thorough and interesting homework, particularly in his attempts to cost the value of salmon to Scotland.
I make no apology for stepping in among so many kilted noble Lords.
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Possibly the only exception in this debate is the noble Lord, Lord Peart. For once, I have no particular interest to own up to other than that of being a keen fisher of salmon and other fish in Scotland, whenever I get the chance. The whole subject of salmon is one in which I am most keenly interested. It transcends national boundaries. I shall deal with this point in a minute. In recent years, plenty of interest has been shown by Scottish Peers in English subjects of a similar nature. Indeed, most of those who have spoken in tonight's debate have joined in debates on English game matters. I remember in particular that the noble Viscount, Lord Thurso, joined in the debate on the Deer Bill, a Bill which we tried several times to get passed in the last Parliament.
I am going to concentrate on salmon and I shall be brief, since the subject has been covered very fully. Indeed, to a large extent my thunder has been stolen by the noble Lord, Lord Balfour of Inchrye. I, too, was going to concentrate on Article 66 and the North Atlantic. However, may I stress that the management of salmon, which is so important to Scotland, completely transcends national boundaries.
During its time in the sea the salmon may pass through the territorial waters of several different nations as well as through completely international waters. The catching of salmon, other than in the estuaries and river systems in which it spawns, makes a complete mockery of any attempts at proper management. It is no use the authorities in any country—the river board or those responsible for any individual river system—carefully working out an acceptable harvest of fish in order to leave an adequate spawning stock, and then finding that half the fish fail to appear because they have fallen prey to a trawler or drift net hundreds or, maybe, thousands of miles away. This is a vitally important point. I am therefore looking forward very much to hearing from the Minister that the Government are taking every possible step to monitor the stocks and catches of salmon and to press for proper international agreements under Article 66.
Turning to the subject of monitoring, I agree with what was said by the noble Duke, the Duke of Atholl, about the

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difficulty of obtaining statistics. I hope that they are available to the Government; it is very hard for lesser mortals who try to follow this subject to come by them. When they do appear they are invariably two or three years out of date. If a serious decline in salmon stocks were to begin, I think that people ought to know about it sooner than they do now.
There is one other small matter which I should like to raise. I appeal to the Government to make a plea to riparian owners to exercise restraint. I have the impression that beats are being split into smaller lengths and that more rods are being put on. On top of the other threats about which we have heard so much tonight, there is quite serious pressure now from rod fishermen. Again may I thank the noble Duke for giving us this chance to debate the subject.
6.25 p.m.
Lord PEART: My Lords, I intervene in the debate as an Englishman because I know that this is a matter which is dear to the heart of Scotland; it is so important to Scotland. I have always taken an interest in fisheries. I thought that I would look up Criminal Law of Scotland, Gordon, second edition, which reminds me in one paragraph about fishing in the Tweed, the Solway and the Esk. It says:
"These waters, being partly in England and partly in Scotland, are regulated to some extent by their own private Acts. The Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951 applies to the whole Tweed, as do the Freshwater Fish (Scotland) Act 1902 …".
So in the past there has been a great deal of legislation. English fishermen were also affected. Fishermen in Cumbria were certainly affected, and also the fishermen who fish in the Solway. So we have an interest in the problem, although I recognise that basically it is of major interest to Scotland.
I should like to congratulate the noble Earl, Lord Seafield, upon his very informative speech. He dealt with the Hunter Committee and cogently argued the point of view which he put forward. He has had long experience as a member of a board. He suggested that there should be 12 associations. I think that the noble Duke, the Duke of Atholl, had in mind a similar figure. I hope that we shall hear the noble Earl speak again in our debates.
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I was interested in what the noble Earl had to say about seals. When I was Minister of Agriculture and went to the North, particularly to the North-East, I was often lobbied about the culling of seals. I got into more trouble over seals with the people who wanted to protect them than I did with the farmers. I believe, however, that there has to be culling of seals.
The noble Earl also argued that there should be international action. Indeed, most of the speakers on this subject, including the noble Duke, the Duke of Atholl, argued strongly in favour of international action and conservation. The noble Duke argued that the law is not always obeyed. He mentioned many incidents and said that the Acts have been defied. The noble Duke asked that there should be 14 area boards, but he also mentioned the figure of 40. I am not, therefore, sure how many area boards the noble Duke wants.
The DUKE of ATHOLL: My Lords, if I may correct the noble Lord, the 1971 White Paper suggested that there should be 14 area boards. I believe that the present Government are thinking of reducing that number to seven. I—and I think the noble Viscount, Lord Thurso, agrees with me—believe that it would be undesirable to reduce the number below 14. I believe the noble Viscount suggested that there should be 16 area boards. I personally opted for about 20, without being absolutely wedded to that figure.
Lord PEART: My Lords, I am grateful to the noble Duke for clearing up that point, because it is a very important matter. So far as the administrative structure which will monitor the industry and the activities affecting sport as well as food is concerned, it is important to have the right number and not a bureaucratic organisation. I think this was stressed by the noble Lord, Lord Tryon. I do not think that there is this bureaucracy. I read carefully the debates in this house on the Bills which became Acts, and the noble Lord, Lord Kirkhill, steered this legislation through this Chamber with great skill and I think they got it right. On the other hand, there are still problems, and these have been mentioned in the debate today.

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The noble Viscount, Lord Thurso, spoke about the Atlantic Salmon Convention and he said that we should ban drift-netting. This is a matter for the Government and I hope there will be a reply. He also said that the board should be democratically elected and the Secretary of State should have overriding powers. I think he mentioned 16 boards, but that does not matter. The noble Viscount also said that we must work away at the 1976 Act. I think that is right; it is too early to bring in any major legislation. Certainly it should be looked at most carefully, and naturally people who have interests in this matter will prod Ministers from time to time. That is right.
Other interests were also mentioned. The noble Lord argued about catches and he mentioned a remarkable figure, that today our annual catches are twice what they used to be many years ago. He said how important it was that we should safeguard our national assets, not only for food but for recreational interests and tourism. He said that it was essential to have commercial fishing. After all, fish farming is now with us. He also took the view that we should look at our fish stocks and should recognise that there are many abuses.
There is one example in the South of England, concerning the fishing of mackerel. Fishermen would fish mackerel and then go over to a Russian industrial trawler which was virtually a factory ship. I believe that to be a terrible thing to do in the present circumstances. I know that it has been raised with Ministers in another place from time to time. I always thought that it was wrong of us to do that within our own territorial waters, because if we did that, how could we criticise others in Europe?
I agree with the noble Lord about Europe, and I must confess that we really did not do enough when I was Minister, except when I attended with the noble Lord, Lord Ross of Marnock. I remember that he always took a great interest in the fishing side, and I believe he felt that we should have done more in that direction in connection with negotiations. I am not afraid to say that we ought to have done more. I was very busy on one section, and I know that although he took an interest in agriculture he also had a
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very deep interest in fishing, which is so important to Scotland. So I think what the noble Lord, Lord Balfour of Inchrye, said is perfectly right. I agree with him and I hope there will be a reply on that from the Government. We need international control; but he must know also that discussions are still going on with regard to the international law of the sea. I accept that there have been long delays. I took part in some of those discussions, but there has been no real progress, and from the point of view of the conservation of our own fisheries, little has happened.
As an Englishman I do not want to make a long speech. I believe that the noble Duke who raised this matter has done a great service. There will be a lot of Press coverage in Scotland about this debate and I hope that pressure will be put on the Government and they will recognise that they still have to look carefully at one of our most important industries, which not only gives food but gives pleasure to thousands of our citizens.
6.35 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (The Earl of Mansfield): My Lords, first I must thank my noble kinsman the Duke of Atholl for giving the House the opportunity for discussion of this subject, but before I go any further I think it right that I should declare an interest. I own a somewhat undistinguished tributary of the Tay so far as fishing is concerned, and with my noble kinsman—and I think he forgot this—we are both trustees for my son, who owns a substantial interest in the Tay.
Having got that out of the way, my second very pleasant duty is to congratulate my noble friend Lord Seafield on his maiden speech. How nice it is to welcome one more expert to your Lordships' House! We look forward to having his contributions to our deliberations in the future. I was pleased, too, that the noble Lord, Lord Peart, acknowledged the vital importance of fishing to Scotland. I am referring to all fishing, but particularly, within the terms of this debate, to salmon and freshwater fisheries. When my noble friend Lord Balfour of Inchrye asked a question on the first day back after Christmas a noble Lord sitting behind the noble Lord, Lord Peart, whom I shall not name, asked whether it was suitable for the

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House of Lords to discuss such matters and we did not deign to answer. It is very important, as my noble friend Lord Seafield has said.
The EARL of LONGFORD: My Lords, I hope the noble Earl was not referring to me. I hope he did not mean the noble Lord sitting behind the noble Lord, Lord Peart, now.
The EARL of MANSFIELD: No, my Lords, I said "a noble Lord sitting behind the noble Lord, Lord Peart". The noble Lord was in the same geographical position as the noble Earl, but it was not in fact the noble Earl.
I asked my department, because I wanted to know for my own information, whether they could get out any statistics for me on the commercial values of fishing in Scotland. They did their best, in a rather different way from my noble friend. Perhaps I may illustrate it in this way. So far as net fishings are concerned, the recorded commercial catch of salmon, grilse and sea trout in Scotland in 1978—which is the latest available date for figures—amounted to a total of 1,050 tonnes and the gross value of that catch at first sale was estimated, at 1979 prices, at about £5 million. One can add extra value by the various sectors of processors, distributors, retailers and so on who lie between the netter and the final consumer, and it would be safe to say that the extra value would amount to at least another £5 million. Persons employed in commercial catching are believed to number about 1,250, but of course there are no estimates available of salmon-related employment in processing, and so on.
That is netting. But if one then goes on to sporting fisheries, a proper estimate of their value would have to take account, for instance, of the rents paid to the proprietors of fishings, the value added by hotel, tourist and transport sectors in so far as these relate to salmon. No comprehensive data are available, but in 1978 a departmental estimate was made to the effect that sporting fisheries for salmon had a current economic value of some £10 million to £15 million. So that is a guess and no more at the commercial value to Scotland of fishing, so far as salmon are concerned. It is quite impossible
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to put a value on trout fisheries but there is no doubt that they are of considerable actual and potential value.
The point that I want to make is that the economic benefits from salmon and freshwater fisheries are not evenly spread over Scotland but are of particular importance in rural areas. Where some small communities depend to a significant extent on the benefits derived directly and indirectly from the existence of the fisheries one can see the important place of fisheries in general.
I think the time is ripe for a discussion on this whole subject, partly because of the way in which the 1976 Act dealing with the protection of trout fishing has been operating, and also because I think it is time that the existing law relating to salmon and freshwater fisheries—much of which, as has been pointed out, relates to the last century—was reviewed. We have had the Hunter Committee which reported in 1965, but no substantial changes took place thereafter. In 1971 the previous Conservative Government published proposals for comprehensive legislation, as we have also heard, and a series of consultations subsequently took place but no progress was made because of pressure on parliamentary time.
Noble Lords will be aware from the reply that I gave to the noble Lord, Lord Glenarthur, on 22nd November last year that the Government have decided to review the existing administration of and legislation relating to salmon and freshwater fisheries in Scotland, and to that end a consultation paper was issued and circulated at the end of last year. A lot of the suggestions made this evening, I am glad to say, are on the lines of that consultation paper.
There is room for difference, quite obviously, on the number of area boards that there should be. I was, and at the moment am, attracted to the view that the number might follow the number of river pollution boards, but I think that much room for discussion and deliberation exists over this. What I think we are agreed about is that to a very large extent the area boards could take over the functions of the district salmon boards, and some others, including possibly fish farming. I think that requires very considerable thought. What I think they could not

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take over is the control of disease, because that, under the Diseases of Fish Act 1937, which relates to notifiable diseases, is the responsibility of my right honourable friend the Secretary of State, and I feel it would probably be inappropriate and certainly expensive if these responsibilities were delegated to area boards. But again, like everything else, this is something which is very much open for discussion.
I am sure your Lordships will appreciate that it would not be appropriate nor indeed proper for me to prejudge the outcome of this review which we are undertaking, which will take into account the principal issues raised in the 1971 White Paper and the various points which have been discussed since. What I would do is to urge all noble Lords, who have an interest in the subject in whatever way and whether or not they have taken part in this debate, to see to it that vigorous representations are made. In this way the Government will be confronted with the maximum number of views and they can be taken into account, and hopefully legislation will come forward which will be as satisfactory as possible in the circumstances.
I am going to say a few words about some of the individual contributions of noble Lords, but there are one or two matters which perhaps I could raise which were raised by several noble Lords. The first related to drift netting of salmon, which, as your Lordships will know, is banned in Scotland but is permitted within the six-mile limit off England and Wales, where it is licensed and supposed to be strictly regulated. As my noble kinsman said, and said quite rightly, a very large proportion of the harvest, if that is the word, of the main English drift nets fishery is in fact Scottish salmon homing back to Scottish rivers, and this has been a major source of contention over the years.
Enforcement of the present controls over salmon fishing off the North-East coast has been under review with the aim of closer co-ordination on both sides of the border. So far as the ban on any fishing on the Scottish side of the border is concerned, only last week I visited the headquarters of the Royal Navy Fishery Protection Squadron to have discussions on these and other matters, so it is being
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actively reviewed by the Government. So far as the English interests are concerned, what I can say is that at the moment inter-departmental discussions are going on between my department and the Ministry of Agriculture, and one hopes—and I can say no more than that at this stage—that they will eventually lead to new legislation.
A number of noble Lords took up the point of the Atlantic Salmon Convention, and it is, of course, extremely important. I do not believe that the situation is quite so bad, if I may use that word, as my noble friend Lord Balfour thought. Perhaps I can very briefly relate the history of the matter and then go on to say what is happening. Early in 1979 the United States Government proposed to the European Community and other parties an international convention on salmon in the North Atlantic Ocean, and your Lordships are well aware what the United States proposals were. The immediate reaction of this country, of course, is to favour any sound proposals which are aimed at conservation of salmon stocks and regulation of fishing for salmon at sea. Our policy is to adhere to the principles agreed in the United Nations Law of the Sea Conference, and particularly that the States of origin shall have the primary interest and responsibility for such stocks.
Being a member of the European Community, we have to negotiate through the Commission, so to speak, and in response to the American initiative the Commission have produced proposals for a negotiating mandate with the USA and the other countries involved. These proposals, which eventually will be presented for agreement in the Council of Ministers, are now the subject of discussion among the Member States of the European Community. The reason why they are not getting more publicity—and perhaps it seems that either the matter is not being attended to or is being allowed to slip—is that at the moment at any rate they are at official level, and will continue, I think at a higher level, next month. The reason for this is that so far as this country is concerned—and, as noble Lords have said, we are one of the three countries with salmon stocks—we were not satisfied and remain unsatisfied with the emphasis which the Commission wished to lay upon their negotiating stance so far as these

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negotiations are concerned. We look for substantial improvements in the mandate in the course of discussions, and finally to the fact that it will no doubt be agreed and be passed, as it were, by the Council of Ministers; and it is hoped then that substantive discussions will take place with the United States and other countries.
The United States, it is fair to say, is keen to make progress on the agreement of a convention during this year, 1980. In the meantime, it is reassuring to note that agreement has recently been reached between the European Community and the Canadian Government for the continuation into this year, 1980, of the previous agreement for the restriction of salmon catches in Greenland waters at the previous annual level of 1,190 tonnes.
I wish to turn now in a general sense to freshwater fisheries proper, and that of course really concerns trout. My noble kinsman himself raised the question of protection for trout fisheries. The 1976 Act—and as the noble Lord, Lord Kirkhill, is in his place, I must be careful what I say—provides for the Secretary of State to make a protection order for freshwater fisheries in a river system or part of a river system where he is satisfied that proposals by holders or occupiers of fishing rights to give public access to the fishings are adequate to meet public demand. Fishings for salmon and sea trout in fresh water already enjoy statutory protection and are not affected by the Act.
The first case considered under the Act, which was an application for a protection order from the proprietors of angling clubs on the Rivers Tweed and Eye, has been taken to a public inquiry in view of the large number of objections received. We are indebted to the Reporter for the careful and reasonable manner in which he examined the situation and for the positive attitude which he took in his report for developing our fishing resources in the interests of all concerned. Following the inquiry, my right honourable friend the Secretary of State has decided that a protection order should be made for an initial period of three years. That will provide a trial period in which to see whether his recommendations can be fruitfully implemented. I hope that a liaison committee will shortly be set up to monitor the operation of protection so
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that hopefully the order will come into effect in time for this season.
It is right to say that the Act has been heavily criticised by what I may term as "unattached" anglers mainly on the grounds that it provided "blanket" protection without comprehensive public access and the fact that the only sanction against breaches of the terms of the proposals in respect of which a protection order may have been made, is the revoking of the whole order. Whether or not those criticisms may be overstated, we must consider them in the consultations which are to take place.
I am bound to say—and particularly as the noble Lord, Lord Kirkhill, is in his place—that when this Act, as it is now, went through your Lordships' House I was among the first and most vociferous to criticise it. However, I think that in the time that we have lived with it—and it is, in fact, all too short—the experience of the Tweed Inquiry has been valuable. I can say that if persons or organisations on other rivers are minded to make a similar application, but may be dissuaded from doing so by the thought that the Government may be going to introduce comprehensive legislation so that they could go to a whole lot of trouble and expense for nothing, my reply is, "Do not worry; continue with your application". I would envisage—and I hope that I am not going beyond what I should do in this regard—that if there is further legislation it would, as it were, embrace the 1976 provisions. Therefore, any application which takes place in the interim period would also be embraced by any new legislation which comes about.
Various noble Lords have made suggestions as to how future legislation could affect trout. As I have said, my noble kinsman, I think, with the exception of what he said as regards the number of area boards—and other noble Lords, especially the noble Viscount, Lord Thurso, agreed with him—very much suggested something along the lines of the consultative document. Of course, it will be for the area boards to make provision for such matters as night fishing, Sunday fishing and the type of fishing which may be indulged in. One must remember that very many folk have different ideas and attitudes on the subject and that what be denigrated as a totally unsporting method of fishing by one section of the

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populace is regarded as being fair and enjoyable by another which has equal rights to state its view. It is a very difficult matter.
Similarly, I am not sure that I am in total agreement as to how the members of the area boards should find themselves in their positions. I am quite sure that a form of election will have to be the major way in which they find themselves there. I think that one must pay attention to the very large numbers of unattached anglers and, whether or not they become attached in some way, the public interest must recognise that they have, or should have, some say in what happens. Otherwise there will be a recipe for continual trouble because they will say that they are not represented and they do not see why they should not indulge in the free fishing which they have, in effect, enjoyed since time immemorial. That is a matter that we must face.
The noble Lord, Lord Tryon, referred to the decline of salmon stocks. I can tell him that that was a matter which I also tried to inquire into. It is extremely difficult and complicated partly because statistics are kept, if they are kept at all, in different ways; and partly because in the last few years the results on different rivers have been varying all too much. However, the inadequacy of the arrangements for obtaining data on changes in the Scottish salmon catch was recognized by many of the various committees and commissions that have reported on Scottish salmon fisheries since 1836. Provision for the collection and publication of comprehensive catch statistics on a district basis was eventually included in the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951. Such statistics have been collected by my department since 1952, but there has been no regular publication of those statistics except for the annual total Scottish catch of salmon, grilse and sea trout made by each of three main fishing methods. Therefore, we now have no less than 26 years of comprehensive data on salmon catches on file in my department and it is now proposed to publish a detailed summary for those years and to make detailed catch statistics available on a regular basis. So I hope that a position which is admittedly now not very satisfactory will become rather more so in the future.
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I hope that your Lordships will appreciate from what I have said that the Government are anxious to review the law and legislation on salmon and freshwater fisheries in Scotland and, at the same time, to ensure that our international arrangements are so conducted as to ensure that the stocks of salmon are maintained in as healthy a state as possible.
However, on domestic matters, I should like to say that, following the present round of consultations, we propose to frame new proposals for legislation which it is hoped to bring to Parliament as soon as the legislative timetable permits—and that, I know, is a time worn phrase. But, in view of the long delay in tackling the issues dealt with by the Hunter Committee, I hope that we shall be able to make progress and to help create a new framework for conserving our stocks, and not least for improving the facilities for the increasing number of people who enjoy the sport of angling, and also for developing the undoubted potential of our fisheries as a significant part of the rural economy.
6.59 p.m.
The DUKE of ATHOLL: My Lords, I do not propose to make a long reply because I feel that that would be out of place in a short debate. But I should like to congratulate my noble friend Lord Seafield on his excellent and almost non-controversial maiden speech. I thought that his figures were most interesting and I only wish that we could have the same sort of figures for other parts of Scotland, because I think that we would find that the further North and West we go the more dependent the economies of those very rural areas are on fishing in general and salmon and trout fishing in particular. I thought that his statistics were most interesting and I very much hope that my noble kinsman will be able, sometime in the future, to produce some figures for other parts of Scotland based on the same premises. I should like to thank noble Lords who have taken part in this debate. I found it a very interesting debate, largely because I agreed with almost everything that was said, which has not always been the case.
There are just one or two points with which I did not entirely agree. The noble Viscount, Lord Thurso, said that the exist-

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ing law has worked. It has worked so far as salmon and sea trout are concerned, but I think it is beginning to creak even with them, and I do not think it has worked at all as regards ordinary brown trout. When the noble Viscount made that statement he may have forgotten about brown trout. I would also point out to him that I suspect that if either the Test or the lichen were in Scotland, they would not be the good trout rivers that they are, being in Hampshire. I noted he thought that fish farms should be controlled by area boards, and my noble kinsman dealt with that. Personally, I agree with him that control of disease must be carried out by the Secretary of State. Whereas area boards should be allowed to express an opinion and possibly even license fish farms in their area, I am convinced that the control of disease should come directly under the Secretary of State.
Both my noble friends Lord Balfour of Inchrye and Lord Tryon went into the international aspects in most interesting speeches, which I greatly enjoyed. I think I agreed with everything they both said. I can assure my noble friend Lord Tryon and the noble Lord, Lord Peart, that I was delighted, even though they are English,
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that they made a contribution to this debate. They added an extra dimension to the debate which was most welcome. I should like to thank them and all other speakers very much for taking part in the debate.
Before withdrawing my Motion, I greatly welcome the news—at least it was to me—that interdepartmental discussions are taking place between the department of my noble kinsman and the Ministry of Agriculture about the drift-netting off the North-East coast of England. That is very good news and has been one of the most cheering things to come out of this debate, as indeed was the fact that statistics will be published more regularly. The ones at present are totally inadequate, as I think my noble kinsman admitted. With those few remarks, I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

COMMITTEE OF SELECTION
Third Report from the Select Committee made and to be printed.
House adjourned at two minutes past seven o'clock.