Sitting of 30 January 1980

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

  Councillors (Financial Interests)
  Mr. Terry Davisasked the Secretary of State for the Environment if he will publish in the Official Report the guidelines used for granting dispensation to members of local authorities to speak and vote on issues in which they may have an indirect financial interest.
  The Minister for Local Government and Environmental Services (Mr. Tom King): The guidelines used for deciding applications for dispensations have been published in appendix II of DOE circular 105 of 1973, copies of which are in the Library of the House.
  Mr. Davis: In view of the Secretary of State's U-turn over councillors who are parents with children at local schools, will the Minister give us an assurance that before any further similar decisions are imposed on councillors he will first make a statement to the House?
  Mr. King: There is no question of any U-turn on this matter. This is the standard procedure that has been followed by successive Governments. My right hon. Friend took no decision. It is for councillors themselves to determine whether they have a pecuniary interest and, if they have, to make application for a dispensation. However, in view of the wide interest in the matter it was thought right to issue a general dispensation.
  Mr. Oakes: Is the Minister aware that that is not generally known and that there is great confusion and anger among councillors? Will he make it absolutely clear that any councillor with children at school, or who may have children at school, will have the right to vote on
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  these issues? Will he say that from the Dispatch Box and not refer us to something in the Library?
  Mr. King:The question referred to the publication of the general rules. They have been published and copies are available in the Library. I am happy to confirm what the right hon. Gentleman said. In addition, every local authority has been or is being advised of this matter and I hope that my statement today will help clarify any further misunderstanding there might be.
  Mr. Douglas-Mann: Does not the Minister agree that it is high time we had a full review of the provisions relating to the disqualification of councillors who have an interest as council tenants or as parents? Does he not agree also that to disqualify councillors on that sort of ground from exercising the functions for which they were elected is to pervert the intentions of the provisions relating to pecuniary interest?
  Mr. King: This matter was reviewed both by the Redcliffe-Maud committee and by the Royal Commission which inquired into the standards of conduct in public life as recently as 1977. Both bodies considered that there was no need for any change in the basic provisions that exist under the Act.

  Urban Development Corporations
  Mr. Altonasked the Secretary of State for the Environment who are to be appointed as the chairmen of the two new urban development corporations and what will be the cost of their first year of operation.
  The Secretary of State for the Environment (Mr. Michael Heseltine):I hope to announce my intentions about chairmen soon. The costs of the first year of operation of the two UDCs will depend upon the range of powers afforded to them, and their exact areas and patterns of land acquisition. Decisions have yet to be taken on these.
  Mr. Alton: Does the Secretary of State agree that any local authority that behaved in this way and went ahead with a plan without even pricing it would be branded by him as financially irresponsible? Will the Secretary of State also say whether the chairmen of these two

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  urban development corporations are likely to be taken from a business or a political background?
  Mr. Heseltine: I ask the hon. Gentleman to wait until I make an announcement about the chairmen of the UDCs. The powers to establish UDCs will be examined in great detail when the legislation is considered on the Floor of the House and in Standing Committee. I think that it is right that these particular issues should be raised in that context.
  Mr. Chapman: Has my right hon. Friend given any thought to the principle of whether many, or indeed any, members of these UDCs should be members or nominees of the boroughs or local authorities in question?
  Mr. Heseltine: I have considered that matter and I believe that it would be right for certain members to be drawn from local authorities but that it would be wrong for such people to be nominees.
  Mr. Spearing: Is the Secretary of State aware that, because the chairman of the proposed London urban development corporation will displace many of the functions of the local authority over at least half of my constituency, he has been called a Tory gauleiter? Will the right hon. Gentleman explain why, when the Government are thinking about reducing central government, he is increasing it to that extent in any area?
  Mr. Heseltine: Because I think that we shall be able to do a better job for the people whom the hon. Gentleman represents than hitherto.

  Anti-waste Programme
  Mr. Michael Morrisasked the Secretary of State for the Environment what is the future of the national anti-waste programme.
  Mr. Heseltine:The Government are considering the future of the national anti-waste programme. In the meantime, the staff of the national anti-waste programme unit are carrying on with normal activities.
  Mr. Morris: I am grateful to my right hon. Friend for that answer. Is he aware of the success of the glass and textile recycling schemes, the encouraging signs in industries such as the aluminium
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  industry and the response from British housewives? Is it not about time that we got behind this programme, instead of letting it drift, as happened under the previous Government, to show that the Conservative Government are concerned about the prevention of waste?
  Mr. Heseltine: I very much share my hon. Friend's view, and I am now initiating a series of discussions, both inside my Department and, I hope, outside with those objectives very much in mind.
  Mr. Dubs:Is the right hon. Gentleman satisfied with the efforts of local authorities with regard to the collection of waste paper, bearing in mind the volume of imports of waste paper from the Continent?
  Mr. Heseltine: The difficulty is that in many areas there is no economic payoff with regard to the recycling of waste paper. That makes it very difficult to encourage local authorities to take it on as an additional burden upon their ratepayers. I do not want to appear to be dismissive or negative. Like all of my predecessors, I am concerned to help in any way, either by research projects, the dissemination of information or by encouragement, within the confines of what we can afford, to pursue the objective of using waste most effectively and of protecting the environment to the greatest possible extent.

  British Paraplegic Sports Society
  Mr. Strangasked the Secretary of State for the Environment if, following the provisions of the Gleneagles agreement, he will request the British Paraplegic Sports Society to abandon its sporting links with South Africa.
  The Under-Secretary of State for the Environment (Mr. Hector Monro):The British Paraplegic Sports Society, as a constituent member of the British Sports Association for the Disabled, can be in no doubt of the Government's position on sporting contacts with South Africa. The Sports Council sent governing bodies of sport a copy of the Commonwealth statement on sport soon after this was made in 1977.
  Mr. Strang: Does the Minister accept that the ban operated by the British Paraplegic Sports Society on my constituent, Mrs. Maggie Jones, barring her from

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  international sport as a consequence of her opposition to apartheid, is despicable and quite incompatible with the spirit of the Gleneagles agreement? While I accept that the hon. Gentleman has no more responsibility for that society than he has for the Rugby Union, can I ask him to make it clear that he expects the society to comply with the spirit of that agreement?
  Mr. Monro: The hon. Gentleman has been assiduous in pressing the claims of his constituent. However, I have no powers to intervene. The society is a charitable organisation which is independent of Government, and it is not right for me to interfere in its internal affairs.
  Mr. Budgen: Does not my hon. Friend agree that the proper position for a Government who believe in the freedom of the individual is either to introduce legislation to prevent certain actions or to offer no advice at all?
  Mr. Monro: My hon. Friend must realise that, with regard to South Africa, we are bound by the Gleneagles agreement. The Government have made their position quite clear, and until that agreement is renegotiated, that remains the position.
  Mr. Anderson:Will the Minister state clearly how many of his colleagues have supported his principled stand on the general issue? Might he not perhaps welcome the support of some of his Front Bench colleagues in his rather lonely stand on this matter?
  Mr. Monro: My right hon. Friend and the Government are bound by the doctrine of collective responsibility, and entirely support my position.

  General Development Order
  Mr. Squireasked the Secretary of State for the Environment if he will make a statement on whether he intends to introduce a town and country planning general development amendment order.
  Mr. Spellerasked the Secretary of State for the Environment what proposals he has for introducing a new general development order.
  The Under-Secretary of State for the Environment (Mr. Marcus Fox): We shall be publishing a consultation paper
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  shortly containing details of our proposals for amending the general development order.
  Mr. Squire: I thank my hon. Friend for that answer. Will he give an assurance that the GDO as proposed by the Government will reduce the number of private dwellings in need of minimal adaptations that are required to go through the cumbersome and time-consuming planning process?
  Mr. Fox:I think that I can give my hon. Friend that assurance. We shall obviously be mindful of those who are anxious that we exclude certain areas. For example, just as when the previous Government introduced their suggestions, we shall not allow houses to be split into two without planning permission, because that could have considerable consequences in our inner cities.
  Mr. Speller: When considering the protection to be granted under the new GDO, will my hon. Friend take into account the problems of areas such as the national parks—those of Exmoor are especially current—and the conservation areas, so that there is both conservation and development?
  Mr. Fox: Our consultation paper is taking rather longer than we had hoped, exactly for the reason stated by my hon. Friend. We hope to exempt the areas to which he has just referred.
  Mr. Chapman: Will my hon. Friend bear in mind that if the GDO is the same as the one introduced by the right hon. Member for Stepney and Poplar (Mr. Shore) in the previous Parliament, it will be widely welcomed, provided that it excludes areas of outstanding natural beauty and conservation areas?
  Mr. Fox: I am sure that there would be a consensus of opinion with regard to what my hon. Friend has said. However, I add the proviso that, rather than seek to emulate the previous Government, we want to bring forward something that is far better.

  Royal High School, Edinburgh
  Mr. McQuarrieasked the Secretary of State for the Environment how many staff in his Department are engaged on work in connection with the conversion work at the former Royal high school in

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  Edinburgh; and what is the cost to the taxpayer of the security services provided within the grounds of the buildings.
  The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg):At present three officials have significant tasks arising from the conversion scheme at the former Royal high school. The estimated cost of the security arrangements in 1980–81 is £59,000.
  Mr. McQuarrie: Is my hon. Friend aware that the figure he has just given conflicts with an answer that I was given to a written question on 21 January, wherein it was stated that the cost was £71,500? As that figure is a continuing one, is it not time that we found a suitable tenant for this building, at a profit to the nation, or sold it on behalf of the public purse, thus reducing the need for cutting public expenditure?
  Mr. Finsberg:The figure that I gave my hon. Friend today was the estimated cost for 1980–81. Since May of last year we have already spent £45,000 on maintenance and security. As my hon. Friend will know, we have offered the use of the building to the Convention of Scottish Local Authorities.
  Mr. Canavan:Will the Minister have the honesty to admit that that public money could have been put to better use had the Government gone along with the expressed wishes of the majority of the people of Scotland who voted in the referendum for the setting up of a Scottish Assembly?
  Mr. Finsberg: The hon. Gentleman will be aware that £3·75 million has already been spent on this project, and there is clear evidence to show that it is not wanted by the majority of people.

  Homes Insulation Act 1978
  Mr. Norman Hoggasked the Secretary of State for the Environment if he will give priority to introducing a special scheme for the elderly and disabled under the term of the Homes Insulation Act 1978.
  Mr. Geoffrey Finsberg: On 1 November last, we introduced changes to the homes insulation scheme and to its administration to help pensioners and others with low incomes. We shall be watching progress.
  Mr. Hogg: Does the Minister accept that the need to watch progress has become somewhat more acute as a consequence of the Government's failure to arrest the rising price of domestic fuels? Is not the need for such a scheme an absolute necessity?
  Mr. Finsberg: I should point out that the increases will not affect bills for this winter.
  Mr. Bowden: Will my hon. Friend be involved in consultations with his colleagues in preparing the new scheme to help the elderly with their heating bills? In that context, is it not absolutely essential, in terms of economics and savings, to have a major scheme to help the elderly insulate their homes?
  Mr. Finsberg: As my hon. Friend will know, we have made quite a few changes in the scheme which ought to help the elderly. In particular, we have given freedom to local authorities to decide their own priorities. We have asked them to pay particular attention to pensioner applicants, and we have also said that they need not require the applicant to produce receipted accounts. That ought to help pensioners and others on low incomes.
  Mr. Andrew F. Bennett:Does the Minister accept that under the existing scheme these people must still find about 50 per cent. of the cost? Will he persuade his colleagues in the DHSS to instruct supplementary benefit offices to be prepared, in exceptional cases, to meet the householders' proportion of the cost, or at least to increase the fuel allowances, so that there is no cost to them?
  Mr. Finsberg: I am sure that my colleagues at the DHSS are well aware of the hon. Gentleman's point. I ought, perhaps, to make it clear that the average grant paid between September 1978 and June 1979 was £38 and that the Contractor's cost of insulating the loft of an average three-bed roomed house is about £70. Up to now, it has not proved necessary to raise the maximum grant of £50.
  Mr. Rost: Is there not a strong case for making the scheme more flexible—along the lines of the argument that we put forward at the time that we opposed the proposals outlined and enforced by

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  the previous Government—so that those who have spent their own money on some form of insulation are not penalised?
  Mr. Finsberg: There are two points that I would make to my hon. Friend. First, we are trying to be as flexible as we can, but we cannot pay grant once work has commenced. Secondly, it is not possible to follow the line that he is suggesting because the major priority must be to ensure that uninsulated homes are insulated before we consider increasing the amount of insulation that is already installed.

  Housing Associations
  Mr. Neil Thorneasked the Secretary of State for the Environment what proportion of housing association tenants will be given the right to buy when the proposals contained in the Housing Bill are implemented.
  The Minister for Housing and Construction (Mr. John Stanley):About one-third of housing association tenants will have the right to buy, provided that the criteria set out in the Bill are met. In addition, we intend to bring forward amendments to the Housing Bill that will enable charitable, co-operative and co-ownership associations to sell to their members if they wish.
  Mr. Thorne:I thank my hon. Friend for his reply, particularly on behalf of co-owners. However, I should like to ask whether there will be a pre-emption requirement to sell back to the Housing Corporation within a five-year period or, because they have paid the full mortgage payments throughout their tenure, will co-owners be allowed to get away without having to sell back?
  Mr. Stanley:As my hon. Friend knows, co-ownership associations are self-governing bodies. The basis of their financing is different from that of the housing associations which have been in receipt of housing association grant. It will be for the members of those associations to make their own arrangements as to whether and how sales are made.

  Building Regulations and Control
  Mr. Wallerasked the Secretary of State for the Environment if he is satisfied with the progress of his consultations
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  with local authorities over the relaxation of building regulations.
  Mr. Chapmanasked the Secretary of State for the Environment how many representations he has received following his invitation on 10 December 1979, to interested parties to put forward suggestions for changes in the building regulations and control system; and what time he proposes to allow for consideration of suggestions received, further consultation and implementation of any changes.
  Mr. Geoffrey Finsberg: Consultation on possible changes to the building control system has progressed well. Over 120 responses have now been received. After the end of January, my right hon. Friend will consider all the views submitted and will decide upon the next step.
  Mr. Waller: Will my hon. Friend confirm that, in considering any proposed changes as he has described, the matter of safety will remain uppermost in his mind? Will he assure the House that there will be no relaxation of safety standards?
  Mr. Finsberg: Yes, Sir.
  Mr. Chapman: Whatever simplifications my hon. Friend finally decides to recommend to the building regulations—I hope that they are substantial—will he assure the House that he will also be seeking to have a uniform set applicable to the whole of the United Kingdom, rather than the present four different and comprehensive sets?
  Mr. Finsberg: My right hon. Friend's speech was intended to apply to England and Wales, including inner London. The responsibility for the items in Scotland and Northern Ireland rests with the appropriate Secretaries of State.
  Mr. Edwin Wainwright:Will the Minister give more strength to local authorities in cases where people engage builders who do an inferior job that costs £1,400 or more and then disappear so that no retribution can take place?
  Mr. Finsberg: I am got sure whether there is anything helpful that I can say to the hon. Gentleman. If builders are engaged who do not do a proper job it is more the fault of those who should have ensured that they picked the right builder

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  in the first place. It is also for the appropriate local authority to make certain that, at least, plans that are submitted are in accordance with the regulations.
  Mr. Latham:Will my hon. Friend confirm that the Government see the issue of building control as comingwithin the wider context of the testing of building materials generally, in the light of the recent decision of the Agrement Board? Similarly, will the Government also take decisions on the future of the building research stations, which are inextricably linked to that decision?
  Mr. Finsberg: We shall certainly take into account the important points that my hon. Friend has raised.
  Mr. Douglas-Mann:Will the Minister assure the House that any changes he introduces will not reduce the protection that is available to the house purchaser—such as my constituent, Mrs. Anns, and others, who were able to bring proceedings against the local borough council to recover the full loss of investment arising from defective housing that had been approved by the borough architect? Will the Minister assure the House that any changes will strengthen the position of the house buyer rather than weaken it?
  Mr. Finsberg: The case of Anns v Mertonis engraved upon the hearts of many. The only assurance that I can give to the hon. Gentleman at this stage is that we have carefully noted the point that he makes. I cannot see this Government introducing any proposals that will reduce the security and safety of householders.
  Mr. Marlow: I wonder whether my hon. Friend would be kindenough to look into the problem of a constituent of mine? He discovered that the staircase in his private house was defective and dangerous. He pulled it out and was in the process of putting another one in, which was adjudged by everybody to be a safer one, when a local official said that it did not meet the necessary specifications. He was required to indulge in structural work at great expense, which he could not afford. Does not that sort of nonsense put government, in general, into disrespect? Will my hon. Friend take some action to sort out this ridiculous situation?
  Mr. Finsberg: I am not unaware of my hon. Friend's constituent's problem. Indeed, it is a problem that I encountered with a twisting staircase in my own home. The solution that I adopted was not to put in a new staircase.

  Inner City Policy
  Mr. Soleyasked the Secretary of State for the Environment if he will make a statement on the future of the inner city programme authorities.
  Mr. Heseltine: My statement on inner city policy in September last year said that we proposed to continue the partnership and programme authority arrangements in simplified form but that we should be keeping under review the basis of selection of authorities and other aspects of the programme.
  Mr. Soley: Does the Minister accept that the continuation of the schemes is vital to programme and partnership areas? It is certainly vital to my constituency. Will he consider extending the principle and, where possible, increasing the amount of money available for existing partnership areas?
  Mr. Heseltine:I am looking carefully into the question of the benefit that we are getting from the particular mix of schemes which has resulted from the present urban programme. Certainly, I assure the hon. Gentleman, as I have assured the House before, of my commitment to the concept of an urban programme. However, I must be sure that local people and the taxpayers who fund a substantial part of the programme are getting real value for money.
  Mr. Michael Morris: Before my right hon. Friend commits more money to the inner city partnerships will he call for an audit of the empty properties in the London boroughs that are involved in the inner city partnerships?
  Mr. Heseltine: I cannot say that I believe that the performance of every inner London borough is of the standard that we should like. However, it is a matter for the local authorities to deal with. They are independent authorities and if there are empty houses in their areas it should be a matter for the local ratepayers, tenants and media to draw to everybody's attention.
  Mr. Straw:Does the Minister realise how important the scheme has been, particularly in my constituency of Blackburn, at a time when other Government aid has been reduced? Is the right hon. Gentleman willing to discuss with his right hon. Friend the Secretary of State for Industry the extension of the programmes to the provision of industrial units, given the cutback in the provision of advance factories that has been made by his right hon. Friend?
  Mr. Heseltine:The inner city urban programme is capable of being used as a contributor towards advance factory development, in terms of the derelict land clearance schemes and various other aids. It would be wrong for me to indicate that we have increases in public expenditure in mind. The priorities must be reviewed to ensure that money is being used as effectively as possible within the programmes.
  Mr. Parry: Will the Secretary of State say what liaison will take place between his Department, the inner city partnership schemes and the proposed development corporations. Is he aware that I strongly support the case made by my hen. Friend the Member for Hammersmith, North (Mr. Soley) that more money should be spent in areas such as Liverpool, particularly in my constituency?
  Mr. Heseltine:The hon. Gentleman would have to reconcile that suggestion with the additional taxes or interest charges that would follow. They would do much more harm to the economy of Merseyside than any benefit that would flow from the public money that he is seeking. I ask the hon. Gentleman to understand that the Government have to strike a balance. As to the relationship between my Department, the present partnership arrangements, the urban development corporation and other Government Departments, all matters that affect the policy are considered within the Government and collective decisions are taken. Therefore, a real degree of co-ordination is ensured. In addition, Ministers from other Departments attend many of the partnership committee meetings.
  Mr. Major: While I recognise the problems of the inner cities, may I ask my right hon. Friend to bear in mind that it is not simply a question of providing
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  money for them? Is he aware that in some instances there is considerable evidence that the money is not wisely spent? Before commiting more funds to the schemes will he look into the matter carefully?
  Mr. Heseltine: I have great sympathy with my hon. Friend's point of view. Indeed, I have suggested to local authorities with which we are engaged in the partnership process that we should set up a review team in the partnership programmes. That team could consist not only of people from local authorities but from a wider base, particularly an industrial base.
  Mr. Hattersley: On the subject of vacant properties within partnership areas, about which the Secretary of State has been critical, will he comment on the practice of the Birmingham council of holding properties vacant so that it may sell them in the future?
  Mr. Heseltine: Local authorities are free to make decisions, as the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) often reminds us. I am sure that he would not wish to erode local government freedom, in contradiction to all the policy statements he makes.

  Council Houses (Sale)
  Mr. Madelasked the Secretary of State for the Environment what evidence he has received as to the average time it is taking in England to complete the sale of a council house; and if he will make a statement.
  Mr. Heseltine: I have no evidence as to the average time taken by local authorities to complete council house sales. I am aware that in certain areas, including my hon. Friend's constituency, there have been substantial delays in processing applications. I am considering what more I can do to help before the Housing Bill becomes law, and I hope to make an announcement shortly.
  Mr. Madel: Can my right hon. Friend say whether he will shortly be in a position to help certain council house tenants in my constituency whose properties were valued in 1978–79, and who, through no fault of their own, have still not been able to complete the purchase of their houses?
  Mr. Heseltine: I am very much aware of the problems in my hon. Friend's constituency, and in other areas. I ask him to bear with me. I hope to make a statement shortly.
  Mr. Frank Allaun:Does the Secretary of State accept that the sale of houses involves surveying each house, valuing it, selling it, and arranging a mortgage for it? How can that he done without taking on a vast number of extra officials, or paying solicitors to do the job, both of which involve public expenditure?
  Mr. Heseltine: Of course there is a public expenditure cost. Since the gain to the people concerned is immeasurably greater I should have thought that the hon. Gentleman would welcome the fact that I am prepared to countenance this small public expenditure for the massive benefit to the tenants that will follow.
  Mr. Durant: Will the Secretary of State, in his review of the matter, consider encouraging local authorities to make more use of estate agents when selling oil council houses?
  Mr. Heseltine: I would encourage local authorities to make more use not only of estate agents but of all other private sector concerns, particularly solicitors. I go even further. I would encourage local government to adopt the opportunities of greater flexibility and economy that the use of private sector services could undoubtedly make available to them.
  Mr. R. C. Mitchell: Is the Secretary of State aware that in Southampton approximately 500 people wishing to purchase their council houses have been gazumped? Because of delays in completing contracts, partly due to the local authority, and partly due to his Department, those people, who have already spent considerable sums on arranging mortgages and so on, are now being asked to pay up to £3,000 above the originally agreed contract price. What does the Secretary of State intend to do about that?
  Mr. Heseltine: I can give the hon. Gentleman two answers. I am going to make a statement shortly on the general problem. The hon. Gentleman is drawing the attention of the House to the phenomenon of the changes in house
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  prices that took place between the time when people originally applied to buy their houses and when the valuations took place. I am the first to regret the increases which, as the hon. Gentleman will remember, took place largely under the previous Labour Government.

  House Prices
  Mr. Murphyasked the Secretary of State for the Environment what rise took place in house prices for each of the last four quarters.
  Mr. Stanley: Seasonally adjusted, the rise in average house prices in the United Kingdom in four quarters beginning October 1978 was 7 per cent., 5½ per cent., 6½ per cent. and 6½ per cent. respectively. The fourth quarter 1979 figure will be available on 4 February.
  Mr. Murphy: Bearing in mind the increase in house prices, will the Minister comment on the plight of council house tenants in Labour-controlled district councils who will have to wait upon the enactment of our legislation before they are able either to buy their council houses or gain the maximum discounts available?
  Mr. Stanley:I agree with my hon. Friend, and I hope that, in view of the fact that the House has now given its assent to the Second Reading of the Housing Bill by a substantial majority, those councils which are not now selling council houses will consider doing so. Otherwise, as my hon. Friend said, Labour authorities will be ensuring that tenants who buy in their area will have to pay substantially more as a result of their not having sold earlier.
  Mr. Alton: Does the Minister recall the promise given by his right hon. Friend the Prime Minister that mortgages would be pegged at 9½ per cent., given the election of a Conservative Government? Will he say when it is likely that the present mortgage level of 15 per cent. will be reduced? Will he also explain how people who are prospective and present owner-occupiers have any chance of finding the massive mortgage repayments which they are expected to pay?
  Mr. Stanley: The hon. Gentleman referred to prospective owner-occupiers. Any measure that would result in an artificial

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  reduction in the mortgage interest rate, by cutting the rate which is being paid to investors, would only ensure that there is less money available for the building societies to lend.
  Mr. Stoddart: Bearing in mind these massive increases in house prices, and the increases in solicitors' and estate agents' costs, will the hon. Gentleman put pressure on the Chancellor of the Exchequer to raise the exemption limit for stamp duty in his Budget?
  Mr. Stanley: As the hon. Gentleman knows, that is a matter for my right hon. and learned Friend the Chancellor. No doubt he will pursue the matter with him.

  London Docklands
  Mr. John Huntasked the Secretary of State for the Environment if he will make a statement on his visit to London Docklands on 14 January.
  Mr. Heseltine: I found it most useful to meet leaders of the Docklands boroughs to discuss with them the problems of the area and the progress that has been made towards redeveloping it. What I saw confirmed my view that a powerful single-minded development agency is needed to build on the work that is already underway in the public sector, and to attract more private investment in housing, industry and commerce.
  Mr. Hunt:Having seen the area for himself, would my right hon. Friend not agree that neglect of London's Docklands is one of the major scandals of our postwar era? As he has said, is not the setting up of the proposed development corporation the only effective way of ending the inter-borough bickering and the planning obstruction which has plagued this area for far too long? Having set up the corporation, will he ensure that adequate resources are available to it to restore and revive this decaying part of our capital city?
  Mr. Heseltine: I thank my hon. Friend for that question. I agree that the establishment of such an agency is necessary. I find it encouraging that this view is now shared widely among informed opinion on the matter in the country. I shall do my best, in the context of public expenditure restrains on the Government, to
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  provide the additional resources which I have no doubt are needed in the area.
  Mr. Guy Barnett:Is the right hon. Gentleman aware that I am particularly grateful to him for visiting my constituency on 14 January but am sorry that he could not spend longer that 20 minutes there? Was that long enough for him to discover that there is so much activity in the designated Dockland area of my constituency that there will be literally nothing for an urban development corporation to do?
  Mr. Heseltine:The hon. Gentleman has spent more time there than I have, although, judging from what he says it is difficult to know what he has been doing. It is apparent that there are vast opportunities in that area. I hope, if the House gives a Second Reading to the Local Government, Planning and Land (No. 2) Bill, that all hon. Members will realise that the Government's sole purpose is to bring more resources and a unified central purpose to bear on a problem of crucial concern to the large numbers of people who live there, and who are suffering from the deprivation in that area.
  Mr. Spearing: Is the Secretary of State aware that council members and myself were glad to meet him on the ground in my constituency? Will he now state what can be done specifically by the urban development corporation in the part of the constituency that he saw which is not already being done by the borough council?
  Mr. Heseltine: Yes. It can reconcile the conflicting attitudes of the various authorities. It can obtain the release of land which is being held up and which has been under-used for a long period, and it can bring resources to bear that are not currently available.

  Planning Procedure
  Mr. Dorrellasked the Secretary of State for the Environment what progress he has made with his proposals for streamlining planning procedures.
  Mr. King: The Local Government, Planning and Land(No. 2) Bill will end the duplication of planning functions. There is to be a code of practice, with

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  time limits, on consultations about planning applications. There will be proposals for amending the general development order and for improving the efficiency of the appeals system. We are considering publishing performance indicators both for handling planning applications and appeals.
  Mr. Darrell: Is my right hon. Friend aware that that news will be welcomed by the many people who have had to pay more than they otherwise would have done for their new houses as a result of planning delays in the existing system and particularly delays involved in the split between district and county councils over planning?
  Mr. King: We are conscious, not merely of the cost involved in the slow operation of the planning system but of the loss of employment that may result from industrial projects being held up. We are taking a number of measures that we hope will collectively help significantly to improve the operation of the system.
  Mr. Cryer:Will the Minister confirm that planning for trunk roads is not within the province of his Department but belongs to the Department of Transport? Does he agree that the Under-Secretary of State, the hon. Member for Shipley (Mr. Fox), has no right to make ex-cathedra pronouncements about the time that will elapse before a trunk road is built after the conclusion of the public inquiry? Will he confirm that that is a matter solely for the Department of Transport?
  Mr. King: The planning of trunk roads is a matter for the Department of Transport. I have no knowledge of the other matter to which the hon. Gentleman refers.
  Mr. Heddle: Does my right hon. Friend agree that the appeals procedure is cumbersome and costly for the appellant? Does he have any proposals to enable the inspectorate to give more immediate decisions?
  Mr. King: We hope shortly to introduce—probably within the next two months—a system of almost immediate decision-making by inspectors in appropriate cases, where that has been agreed with the parties concerned. It will be a
  1336
  significant contribution to improving the speed and operation of the planning system.

  Building Societies Association
  Mr. Stoddartasked the Secretary of State for the Environment if he will meet the chairman of the Building Societies Association.
  Mr. Aspinwallasked the Secretary of State for the Environment when last he met the chairman of the Building Societies Association.
  Mr. Heseltine: I met the chairman of the Building Societies Association on 18 January and we shall meet again as appropriate. My Department has close and frequent contact with BSA representatives.
  Mr. Stoddart: Is the right hon. Gentleman aware that the record 15 per cent. interest charge, which is the result of this Government's wilful and misguided monetary policy, is causing severe hardship to home owners and particularly to first-time buyers? Furthermore, statements that the rate might go up to 17 per cent. are causing fear and concern. Will he make clear to building societies that the Government will not countenance an interest rate as high as 17 per cent.? Will he also give some hope that the mortgage rate will be reduced shortly?
  Mr. Heseltine: I share the hon. Gentleman's concern about the high interest rates that prevail in the British economy. The Government are determined to do the one thing that will bring those interest rates down—reduce levels of public expenditure. Since the hon. Gentleman has shown that he shares our concern, I invite him to join us in the Lobby in support of that policy.
  Mr. McCrindle: After all due concern is expressed about the high level of mortgage interest rates, does my right hon. Friend agree that far and away the greatest difficulty presented to young first-time buyers remains finding the appropriate deposit? Will he confirm that, when circumstances permit, it remains the Government's policy to try to assist in that direction, bearing in mind the good deal being offered to sitting tenants of council houses?
  Mr. Heseltine:My hon. Friend will remember that we referred to the desirability of such a scheme in our manifesto, but we made it absolutely clear that it had to follow improvements in the overall economic climate in this country. Nothing can change that relative priority.
  Mr. Ioan Evans:In discussions with the chairman of the Building Societies Association, did the right hon. Gentleman hold out any hope that MLR would come down, and that, as a result, mortgage interest rates would decrease? Does he recall that in the election the Conservatives promised owner-occupiers that they would get a better deal from this Government?
  Mr. Heseltine: I have not the slightest doubt that they will. Owner-occupiers will get a better deal if we can improve the economic climate and bring down the rates of inflation and interest. The Government are engaged in that battle, and the House will have an opportunity to discuss these matters. I also hope that the hon. Gentleman will support us in our decisions.
  Mr. Dykes: Does my right hon. Friend welcome the fact the BSA is in favour of the limit for tax relief on mortgages being extended beyond £25,000?
  Mr. Heseltine: The Government had to consider that proposal. In all the circumstances, we felt it wrong to move beyond the measures that we have already announced.
  Mr. Winnick:Does the right hon. Gentleman agree that the Government have treated with total contempt many of the house buyers who voted for them last May?
  Mr. Heseltine: The house buyers who voted Conservative last May voted for a stable economy and the measures that are necessary to bring that about. When we come to account to them for our stewardship they will have to judge whether we have taken appropriate measures to bring that about or whether they would have done better with a party that cries for more public expenditure and which would, therefore, have forced up interest rates. The Labour Opposition have tried to renege on all the things that they were forced to do in government.

  Ingol Distributor Road
  Mr. Stan Thorneasked the Secretary of State for the Environment when he expects to give his decision following the inspector's report after the public inquiry held in Preston into the proposed Ingol distributor road.
  Mr. Geoffrey Finsberg: The inspector's report is currently being considered. I hope that a decision on this can soon be given.
  Mr. Thorne:Does the hon. Gentleman recognise that there is considerable anxiety among the people of the Ashton part of Preston about the results of the inquiry? Will he undertake to expedite the decision?
  Mr. Finsberg: Yes.

  London Docklands
  Mr. Spearingasked the Secretary of State for the Environment if he will make a further statement concerning his plans for an urban development corporation for London Docklands.
  Mr. Heseltine:I intend to make a further statement about an urban development corporation for London Docklands in the debate on the Second Reading of the Local Government, Planning and Land (No. 2) Bill.
  Mr. Spearing: Will the Secretary of State confirm that one of his objectives in the urban development corporation is to bring about the investment of private capital? Many millions of pounds of private capital have already been committed to housing and shops in the Beckton development area. Will the right hon. Gentleman now confirm either the Docklands strategic plan or that part of it relating to Beckton? Unless he does, he is frustrating his own immediate objectives.
  Mr. Heseltine:The hon. Gentleman must be fully aware that Newham has not given formal notice of its intention to adopt that plan, and the initiative remains with the local authority. There is no evidence—and I constantly ask hon. Members for it—that I am holding up anything at all in the London Docklands.

  Jobcentre (Biggleswade)
  Mr. Hastingsasked the Secretary of State for the Environment whether he

  1339
  will reconsider his decision to allow the siting of a jobcentre at 55–57 High Street, Biggleswade.
  Mr. Fox: No, Sir.
  Mr. Hastings: While no one doubts the importance of the jobcentre, does my hon. Friend agree that the flexibility of choice over a site is far greater for the DOE than for the small traders who have to find a place in this, the only shopping centre? Why does he overrule the judgment of the town council and the chamber of trade? What justification can there be for that imposition? Is my hon. Friend aware that it probably costs the public a good deal more than any other solution and provides scant proof of the Government's intention to support small businesses? Will my hon. Friend please consider the proposals again?
  Mr. Fox: My hon. Friend will be aware that the development of Crown land is in a special position. My right hon. Friend's only concern is to look at the planning merits of the proposed development. To that effect, a visit was made to the site. It is our information that there are empty premises in that town. With regard to the need, siting, and public expenditure implications, those are matters for my right hon. Friend the Secretary of State for Employment.

  Housing (Homeless Persons) Act 1977
  Mr. Dormandasked the Secretary of State for the Environment what representations he has now received about the Housing (Homeless Persons) Act 1977; whether he is satisfied with the working of the Act; and if he will make a statement.
  Mr. Stanley:The local authority associations and the voluntary organisations concerned have been asked for their views on the operation of the Act, but I have not yet received all their replies. I expect to do so shortly, and we shall complete the review as soon as practicable thereafter.
  Mr. Dormand: Is the hon. Gentleman aware of the practical difficulties that many local authorities are having in implementing the Act, not least the problem of queue-jumping? May I stress that neither I nor the local authorities in my constituency are against the principles of
  1340
  the Act, and we should not like to see them changed? I am pleased to see that the Minister is having consultations, but will he press strongly for improvements to be made in the Act as soon as possible?
  Mr. Stanley:The hon. Gentleman poses one of the central dilemmas. We have to implement the principles of the legislation and give proper statutory protection to the homeless on a basis that is fair to all, including those who have been waiting for some time for local authority accommodation. It is one of the central issues to which we shall be addressing ourselves.
  Mr. Hattersley: From the replies so far received, can the Minister say what is said about the possible effect of the Housing Bill on the working of the Housing (Homeless Persons) Act and on homeless persons generally?
  Mr. Stanley: The right hon. Gentleman is referring to shorthold. However, that will make no difference to the operation of the legislation. If someone becomes homeless after the Housing Bill is enacted, the position of local authorities as regards interpreting their responsibilities under the Housing (Homeless Persons) Act will remain unchanged.
  Mr. Hattersley: I think that the Minister has misunderstood me. He was kind availability of accommodation. The Bill That will all help to solve the problem of homelessness.
  Mr. Stanley—
  Mr. Hattersley: That was the gist of the hon. Gentleman's argument a moment ago. What have local authorities had to say about that? Will the amount of homelessness be increased? Will it not result in increased pressure on the resources of local authorities under the Housing (Homeless Persons) Act?
  Mr. Stanley: The right hon. Gentleman has misunderstood me. There is no question of the Housing Bill increasing homelessness. The provisions in the Bill relating to shorthold, resident landlords and assured tenancies will increase the availability of accommodation. The Bill will also give council tenants the statutory right to sublet and take in lodgers. That will all help to solve the problem of homelessness.

  Council Houses (Sales)
  Mr. Michael Brownasked the Secretary of State for the Environment how many inquiries he has received from the public concerning his legislative proposals relating to the sale of council houses since he took office.
  Mr. Heseltine: About 2,000 letters.
  Mr. Brown:Is my right hon. Friend aware that I receive many letters every week, and that I have done so since the general election of last year, from council house tenants in my constituency? Does he accept that he will have to consider the possibility that some local authorities—I hope that they will not include the Scunthorpe borough council—will try to defy the law if the Bill is enacted, as I hope that it will be, later this year?
  Mr. Heseltine: I am most grateful to my hon. Friend as he has drawn the attention of the House to an important point. As I have said, I have received about 2,000 letters concerning the sale of council houses. About 90 per cent. of them indicate broad support for our policy. Indeed, the policy is well accepted and popular. Resentment and opposition to that policy comes only from the entrenched bigotry of the Labour Party.
  Mr. Andrew F. Bennett:Has the Secretary of State had any representations from tenants who are in substantial rent arrears who wish to know whether they have the right to purchase their dwellings? Will the Secretary of State confirm that a tenant who is in substantial rent arrears has a right to purchase his dwelling under the proposed legislation? What powers do local authorities have to refuse a mortgage under that legislation if they have considerable evidence that the tenant will find it impossible to meet mortgage repayments?
  Mr. Heseltine: If the tenant is in rent arrears, he will not have the right to purchase. I go further. I advise such a tenant not to purchase. If he is incapable of keeping up with his rent payments it would be an act of ill-considered judgment to take on the responsibilities of home purchase. The hon. Gentleman will be aware that the overwhelming majority of council tenants are not in arrears with rent payments. Those people will have
  1342
  the right to purchase, unless the Labour Party gets its way.
  Mr. Durant: Is the Secretary of State aware that it is not only socialist councils that are blocking the Bill? In my local authority, Liberals have not permitted that authority to proceed with the Bill.
  Mr. Heseltine: I can well believe that. There are certain Liberals who do not yet know that the Lib-Lab pact is over?
  Mr. Cryer: Why does the Secretary of State adopt this jackboot attitude towards local authorities and councils, forcing them to carry out his policies? Why does he not apply the same jackboot attitude to private landlords? Is it because they are the sort of people who contribute to Tory Party funds? If it is fair for local authorities to sell off houses why is it not fair for private tenants to have the right to buy their houses?
  Mr. Heseltine:The answer is simple. The State has contributed to the cost of council houses through the revenues that it collects from the taxpayer. Therefore, the Government are entitled to make judgments about what they do with the taxpayers' assets. If I were a Labour Party Member I would concern myself with the penetration of extremists in the party before I started to talk about jackboot attitudes.

  Building Societies Association
  Mr. Heddleasked the Secretary of State for the Environment when he expects to meet the chairman of the Building Societies Association.
  Mr. Heseltine: I refer my hon. Friend to my reply earlier today to the hon. Member for Swindon (Mr. Stoddart) and to my hon. Friend the Member for Kingswood (Mr. Aspinwall).
  Mr. Heddle: When my right hon. Friend meets the chairman of the Building Societies Association will he convey to him my constituents'gratitude—and no doubt that of many others—for the flexible and compassionate way in which the member societies have dealt with applications in cases of hardship that have been brought about by the increase in mortgage interest rates? We inherited that situation. Is he aware that we are grateful for the fact that the building societies have dealt with that problem by

  1343
  freezing capital payments and allowing interest-only payments until our economy is under control?
  Mr. Heseltine:The BSA has acted with the utmost responsibility and care. It has done so under various Governments. The BSA is there to help purchasers and to protect the savings of those who invest in them. I do not believe that anyone would do anything but pay tribute to it.
  Mr. Budgen: When my right hon. Friend next meets the chairman of the BSA will he draw attention to the recent pamphlet issued by the Bow Group? It is there suggested that building societies should become limited companies, responsible to market forces and to shareholders. Might not that be better than persisting with the present situation in which a cartel in interest rates is operated? That cartel is not to the advantage of lenders or borrowers. Does my right hon. Friend agree that it makes building societies peculiarly susceptible to the advice, and sometimes even the threats, of any Government?
  Mr. Heseltine: My hon. Friend will be aware that the building societies have produced their own interim report concerning the provision of finance for the building society movement. I also have asked for a report to be made available to me. Many issues are raised. My hon. Friend has mentioned one publication that has also widened the debate. I do not accept that it works quite as my hon. Friend has said. I intend to ensure that there is a wide debate in the light of all the reports that have recently come to public attention or that will shortly do so.

  Electricity Converter Station (Sellindge)
  Mr. Costainasked the Secretary of State for the Environment when he will be in a position to announce a decision following the public inquiry in respect of the siting of the Central Electricity Generating Board proposed converter station adjoining the village of Sellindge.
  Mr. Fox: As the inspectors' report of the inquiry is not yet available, it is too early to say. However, I can assure my hon. Friend that the case will be dealt with as quickly as possible.
  Mr. Costain: In spite of that assurance is my hon. Friend aware that there is a feeling within the village of Sellindge that the Secretary of State has already made up his mind? Is my hon. Friend aware that a secret report came out during the course of the inquiries? Will he make representations and make certain that the inspectors and the public are given access to correspondence between the Secretary of State for Energy and the Minister of Transport and the CEGB in July and August?
  Mr. Fox: My hon. Friend and I have been in correspondence. The document that has been mentioned was inaccurate, but I understand that it has been corrected. Approval for an electricity link with France was given in principle in August 1978. However, no Government decision has been taken about any site in Britain for the proposed converter station. I am happy to confirm my previous words with him in writing.

  Sporting Bodies (Taxation)
  Mr. Roy Hughesasked the Secretary of State for the Environment if he has had any recent discussions with the principal sporting bodies in the United Kingdom concerning taxation matters.
  Mr. Monro: I have had no such recent discussion. I had correspondence recently with the chairmen of the British Olympic Association and of the Central Council of Physical Recreation about one specific aspect of the taxation of sport.
  I was pleased to learn that the Sports Council had instituted a general inquiry into the whole subject, and look forward to receiving its report when it is ready.
  Mr. Hughes:Considering the attitude of the Minister when he was a member of the Opposition, would it not be appropriate if he was to make a stand now in favour of these tax reductions that are called for by the sports organisations?
  Mr. Monro: When I receive the report I shall consider it and I shall inform the Chancellor of the Exchequer of its contents.

  Municipal Enterprise
  Mr. Guy Barnettasked the Secretary of State for the Environment what is his policy on the future development of municipal enterprise.
  Mr. Heseltine: I have no plans to develop municipal enterprise.
  Mr. Barnett: Now that the right hon. Member has turned his back completely on the tradition of Chamberlain, is he not prepared to encourage municipal enterprise? Why has he put legislation before the House which indicates that he thinks that central Government know more than local authorities about the running of their direct labour organisations?
  Mr. Heseltine:If Chamberlain had seen as much of municipal enterprise as I have, he might have had a rather different view from the one the hon. Member puts forward.
  Mr. Chapman:Has my right hon. Friend seen the splendid example of municipal enterprise in the proposal for the in-house architects' department of the London borough of Kensington and Chelsea to form itself into a private consultancy? Is my right hon. Friend aware that this will bring financial benefits to the ratepayers and the council, and will ensure job security for those architects?
  Mr. Heseltine: I have certainly seen the suggestion that the architects employed by that authority should have the opportunity to set themselves up as a free enterprise company. This is a very interesting initiative and one which should be considered on a much wider scale.
  Mr. Alton: In view of the Secretary of State's concern about the development of municipal enterprise, what advice is he prepared to give to the mayor and leader of his own local council at Henley, who resigned this week, and to the five Conservative councillors from Henley who have called a special meeting of the council to consider the development of the £3·5 million new office block being financed by the majority Conservative group on the local council?
  Mr. Heseltine: It is difficult for me to comment about individual decisions of individual authorities. If I dare to trespass over the dividing lines which beset every Secretary of State, I should point out that I was concerned when the local authority in South Oxfordshire decided to move forward over the building of a new headquarters. I was not Secretary of State at the time. As the hon. Mem-
  1346
  ber will remember, the council moved in that direction with the support of the Liberal vote.
  I cannot comment on anything that has happened in that authority since I became Secretary of State. I can only report the facts, on which the House may care to make a judgment. There was much widespread debate. The local Conservative Party called an emergency meeting at which, by an overwhelming majority, it was decided to advise councillors not to proceed with the decision to build a new headquarters. That matter is totally within the decision of the local councillors. Some Conservative councillors have now called an emergency meeting of the council and it will be for the council—asa result of that meeting—to decide what to do. I wish to make one other point—[Interruption]
  Mr. Speaker: Order. We really have been patient with the right hon. Gentleman. I think that he should finish answering the question.
  Mr. Heseltine: I had only one more point to make Mr. Speaker. In my opinion, in this case we can rely on the good sense of the Conservative Party.
  Later—
  Mr. Stoddart: On a point of order, Mr. Speaker. I refer to the last question answered by the Secretary of State for the Environment. The fact is that hon. Members, including myself, are often refused permission to put down questions on the grounds that responsibility for the Conservative Party is not a matter for Ministers. Indeed, recently I tried to put down a question to the Prime Minister about the document called "The Right Approach"—it is rather tattered and shabby now—but I was refused permission to do so. Today the Secretary of State for the Environment discussed the internal matters of the Conservative Party—at least in his Henley constituency. It seems as if he has set a precedent. Will you let us know in due time, Mr. Speaker, whether questions relating to Conservative Party policy can now be tabled in the House since the Secretary of State for the Environment seems to want to answer them with such alacrity.
  Mr. Speaker:I think that it is within the memory of the House that the Secretary of State for the Environment, having

  1347
  heard his constituency mentioned, reacted in the same way as any other right hon. or hon. Member would have reacted in similar circumstances. He wanted to put the record right—in that case at any rate. It is not to be taken as a precedent that the internal affairs of either of the major parties, or indeed of any of the other parties, is a responsibility—
  Mr. Winnick rose—
  Mr. Speaker:Order. The hon. Gentleman can see that. I am on my feet. I am about to conclude. Nobody here is personally responsible to this House for the internal affairs of any of the parties.
  Mr. Stoddart:Further to that point of order, Mr. Speaker. I really do need your guidance. I had understood that when a Minister is a Minister he cannot divorce himself from that fact or, indeed, adopt another entity. Are we to understand now that when the Minister answers from the Dispatch Box in his ministerial capacity he can divide himself in half?
  Mr. Speaker: The matter is quite simple. I recall that when I had the honour to be Secretary of State for Wales, if anyone mentioned Cardiff, West I was on my feet in a second. That is what happened today.

PICKETING
The Solicitor-General (Sir Ian Percival): I wish to correct a mistake. The House will recall that on Monday I gave my understanding of the reason why the judgments in the case then under discussion had not been typed more speedily. I was wrong. I have apologised to the shorthand writers and I wish to apologise to the House and to the hon. Member for Nottingham, West (Mr. English), in response to whose point of order I made this mistake.
It is ironic that I should have made this mistake in the context of advising others always to check the facts before commenting. What has happened to me is perhaps the best evidence of the soundness of that advice. I wish that I had followed it more carefully myself on this occasion.
I am glad to see that I made it clear that I was not criticising anybody. Now that I have had the chance to learn the
1348
details of what has to be done from the man in charge, I would like to tell the House that I think that those concerned, who were faced with a task for which they are simply not geared—taking at short notice the judgments of a court given late on a Saturday afternoon—did remarkably well, and deserve our thanks.
Lastly, I thank the hon. Member for Nottingham, West—whose home town I have the honour to represent—for his courtesy yesterday. As soon as I had made my inquiries I telephoned him, told him that I would come to the House immediately to correct the mistake if he wished, but that I would prefer to do so today, so that I might be absolutely sure of my facts this time. With that generosity typically shown by Members of this House to colleagues who have made a mistake, he readily agreed. I am most grateful to him.
Mr. English:I am grateful to the hon. and learned Gentleman. I thank him for his statement, which completely covers the point. I think that he will agree that the people to whom he was referring were not merely not affected by union rules; they were not even members of a trade union. In fact, they were shareholders in a private company.

GAS PRICES
Mr. Winnick: On a point of order, Mr. Speaker. Yesterday, in reply to an intervention by me, the Secretary of State for Energy denied my allegation that Members of Parliament were being refused information in their own constituencies about the numbers of people receiving the new fuel benefit. The Secretary of State said:
"There is no secret about the figures. They are available."—[Official Report, 29 January 1980; Vol. 977, c. 1150.]
On 20 December I wrote to the local offices in my constituency requesting such information. My letters were passed to the regional office in Birmingham. Later I received a reply dated 21 January from a DHSS office in London telling me that the local information that I was seeking was not available. It claimed that the information about those who would receive the benefit locally could be obtained only at disproportionate cost.

1349
On 24 January I wrote to the Secretary of State for Social Services complaining about the reply and claiming that Members of Parliament were entitled to know the number of people in their constituencies who were receiving the benefit.
There are two points of contention here. It seems to me that the Secretary of State for Energy misled the House. I do not blame him, but the Secretary of State for Social Services was sitting next to him and he may have prompted the reply. Secondly, why should we be refused information? It is all very well for the global figure to be given, but surely we are entitled to find out the number of people in our own constituencies who are claiming and receiving the benefit that the Government boast about.
Mr. Speaker: I allowed the hon. Member to make his point of order. It was not strictly a point of order, because there is nothing that I can do about it. I am concerned with the rules of order within the House. The hon. Member must pursue that matter with the Department and through the means generally available to hon. Members.
Mr. Winnick: I apologise for pursuing the matter, Mr. Speaker. I well understand that if I want information I should seek it in the normal way. Obviously, before today I did not raise the matter
1350
on the Floor of the House. I did so—rightly, according to procedure—through correspondence. However, it seems to me that if the Secretary of State gives information—indeed, if any Minister gives information—that is not true he should apologise to the House. The fact is that this House has been misled. I have already quoted from the Secretary of State's speech yesterday, when he said
"There is no secret about the figures. They are available."—[Official Report, 29 January 1980; Vol. 977, c. 1150.]
Whether they should be available or not can be pursued through correspondence, but the House has been misled.
Mr. Speaker: Order. The hon. Gentleman made his point quite clearly. I fully understood the point that he made, but there is nothing that I can do about it. It is not the first time, by any means, that people have thought that Ministers' answers are not satisfactory.

STEEL INDUSTRY (SOUTH WALES)
Mr. Roy Hughes: In view of the deteriorating situation in the picket lines in the steel dispute in South Wales, with mass arrests and many pickets being led away in handcuffs would it not be appropriate for the Home Secretary to make a statement about the matter?
Mr. Speaker: I have had no request for a statement.

EUROPEAN COMMUNITY (COUNCIL OF FISHERIES MINISTERS' MEETING)
The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker): I beg leave, Mr. Speaker, to make a statement about the meeting of the Council of Fisheries Ministers on 29 January.
My right hon. Friend the Secretary of State for Scotland, my hon. Friend the Minister of State in my Department and I represented the United Kingdom at this meeting.
Agreement was reached on total allowable catches for 1980. These are based on scientific advice, with a few minor changes to take account of arrangements with third countries and, in a very limited number of cases, other factors. The agreement takes adequate account of the vital need to conserve stocks and it will form a good basis for further decisions on an effective Community conservation policy.
Agreement was also reached on the introduction of a Community system of catch reporting. Reporting will start next month on the basis of existing procedures and a full Community system is intended to be agreed by 1 July.
The signature of the framework agreements with Norway, Spain and Guinea-Bissau were agreed. In the case of Norway, this will help strengthen the Community's links with a country whose waters provide United Kingdom fishermen with very important fishing opportunities. In the case of Spain, the Community's willingness to sign the framework agreement will, because of the reference in it to reciprocity of fishing opportunities, help the Commission in the forthcoming negotiations with the Spaniards on fishing during 1980.
Mr. Speaker, this meeting was a meeting in which significant progress was made towards agreement on a revised common fisheries policy.
Mr. Mason: First of all, may I ask the right hon. Gentleman if he does not think that he has reneged on an undertaking given by the Leader of the House in a written answer on 13 July last year, at col. 302 of the Official Report, where, on total allowable catches, the Scrutiny Committee recommended that a debate
1352
should take place before there was any agreement on TACs?
The Leader of the House confirmed that this should be so on 13 July last year. This agreement seems to be a blatant disregard of the Scrutiny Committee's request and it certainly dishonours the undertaking given by the Leader of the House. I hope that the right hon. Gentleman will clear that matter up.
On the statement on catch levels for 1980, what benefits will British fishermen receive this year compared to last year? Will the right hon. Gentleman say more about proposed monitoring of reports of unloadings, of the log books revealing catch declarations, and about the checks on unloading at sea?
Following the right hon. Gentleman's discussions on national quotas—that is, the share-out—what is his quota demand for the United Kingdom? I hope that he still stands by the united view of the industry and this House on conservation, proper protection, the 12-mile exclusive zone, and the 12–50 mile dominant preference area.
Mr. Walker:The fishing industry, with whom, as the right hon. Member for Barnsley (Mr. Mason) knows, we have been in close contact and whose representatives were with us in Brussels yesterday, will be disappointed with the rather sour attitude of the right hon. Gentleman towards the progress that has been made. The fishing industry certainly welcomes the fact that at long last the deadlock has been broken and we can now get away from the total lack of agreement that existed under the previous Government.
As far as the Scrutiny Committee is concerned, I am anxious that the debates should take place at the earliest opportunity. The position of the Opposition and the Government has been that TACs should be based upon scientific evidence. The TACs that we negotiated successfully yesterday were all based on scientific evidence.
I cannot believe that anybody in this House would dispute that the TACs were agreed yesterday and that the fishing industry was certainly delighted at the progress that we made. Quotas and access go together. The position of the Government remains as clearly stated at the general election and since that period.

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Having now agreed TACs, as a catch reporting system, we can move on to discuss quotas based not upon the rigid quota system in existence before this Government came into power but upon quotas that will take into consideration the new agreements that have been reached.
Mr. Mason: The right hon. Gentleman must explain to the House why he has reneged on an undertaking given to it by the Leader of the House on 13 July last year. The fifteenth report of the Select Committee on European legislation states specifically, on total allowable catches for 1980, that in its opinion:
"The following instrument raises questions of political importance and recommend that it should be further considered in this House together with other documents on fishing matters."
The Leader of the House stated quite clearly that Ministers should not agree to any legislative proposal recommended by the Scrutiny Committee for further consideration by the House before the House had given it that consideration. Why has the right hon. Gentleman reneged on that undertaking?
Mr. Walker: Is the right hon. Gentleman trying to say that yesterday, on proposals tabled by the Commission a week ago—which were very much in line with the policies both of the previous Government and this one—we should not have made progress and should not have tried to reach agreement? In my judgment that would have been against the interests of the fishing industry and against the wishes of the House.
Mr. J. Enoch Powell: Is the right hon. Gentleman satisfied with the existing reporting procedures? Unless they are satisfactory, the whole system of control obviously falls to the ground.
Mr. Walker: I am unable to say whether I am satisfied with existing procedures until those procedures have been put into operation and I have examined how effective they are. I agree with the right hon. Member for Down, South (Mr. Powell) that unless those procedures are properly monitored and accurate for all countries they are meaningless. One cannot judge that until one starts to see the quality and the method of starting the procedures. By starting now, with national reporting procedures, before
1354
moving on 1 July to a Community basis, we can make any judgments and express any views to the Commission to see that there is a proper system of reporting procedures.
Mr. Maxwell-Hyslop:Can my right hon. Friend tell us what the position will be under the new reporting procedures when fish are transhipped at sea to non-EEC factory ships—particularly from the Russian bloc—rather than being landed at EEC ports? Unless there are accurate records of actual catches for transhipment the whole TAC system collapses.
Mr. Walker: I agree with my hon. Friend, and within the terms of the European reporting procedures that will be adopted on 1 July we shall insist that there is proper scrutiny and check of transhipments. That already happens in this country, but perhaps not in others.
Mr. Donald Stewart: Since the expression "breaking of the deadlock" has an ominous connotation for some of us in connection with Common Market negotiations, will the right hon. Gentleman confirm that at this stage the Government are still dealing with fisheries on the basis of a single issue, and on the basis of a settlement on limits and not on quotas?
Mr. Walker:The question of fisheries has been treated as a single issue and there has been no pressure on the Government from any source for dealing with it otherwise. The agreements made yesterday were welcomed by the wide representation of the industry that was with us in Brussels. The industry recognised that the agreement represented a perfectly sane and sensible step, and it was totally in agreement with British policy.
Mr. Silverman: As Chairman of the Scrutiny Committee, may I question the Minister further about the scrutiny procedure and the Government's undertaking which has been flagrantly disregarded? In all, 18 documents relating to fisheries have been recommended for debate by the Committee. Fisheries policy was last debated in November1977. The House generally and many hon. Members with important constituency interests are affected by this issue. The Minister did not even have the courtesy to inform the Committee that he intended to agree to the proposals. Already before Christmas one of the instruments recommended for

1355
debate was passed without the Minister, under the terms of the Government's undertaking, explaining to the House why that was done. I hope that the Minister will realise that this disregards not only the Committee but the interests of the House itself.
Mr. Walker:I have no disregard for the Committee. As the hon. Gentleman knows as Chairman of the Scrutiny Committee, a large range of fishery questions were being debated long before the Government came into power. I have expressed my willingness to debate the whole range of major issues that are at stake. Certainly I would very much like to debate this one, because, as far as I know, there is no disagreement on it between any of the parties in the House.
Mr. Pollock: In view of the welcome statement by my right hon. Friend about the progress of a revised fisheries policy, may we take it that it gives the lie to those who suggest that there may be a sell-out of British fishing interests in any future general negotiations about the European Community budget?
Mr. Walker: Certainly there never has been and never would be any question of a sell-out on the basis of negotiating in other areas. I can say, in fairness, that none of the other Community countries concerned has ever suggested that if we gave way on fishing it might consider giving way on other issues. There has always been straightforward negotiation, and at yesterday's meeting and the meeting before that progress was made in total compliance with the policy on fishing that is pursued by the Government and supported by the Opposition.
Mr. Penhaligon:Does the Minister think that the present system of reporting fish catches is anything short of an absolute abject farce? Is he aware that the White Fish Authority's current paper indicates that last year Britain succeeded in exporting twice as much mackerel as it succeeded in catching, and that catch figures are provided by the Russians? Why should we believe that the European system will be 1 per cent. better than this miserable farce, which is wrecking the West Country fishing industry?
Mr. Walker: As the hon. Gentleman knows well, the only way in which we shall conserve good fishing in the South-
1356
West is to develop a sensible system of catch reporting. Without it, fishing in this country and in Europe will be finished within a short period. Therefore, unless there is an effective and properly policed system of reporting, the deterioration of fishing here and abroad will persist. Yesterday we agreed on an attempt to create such a system.
Mr. McQuarrie:Was there any discussion in Brussels about cheap fish imports into Britain? There is considerable unrest in the fishing industry about this. Yesterday 1,000 boxes of fish were left unsold on the quay at Peterhead, in my constituency, through their failure to reach a proper price as a result of cheap fish imports. Is my right hon. Friend aware that there is to be a protest meeting on Saturday, which 600 members of the fishing industry propose to attend in protest at the current position of the Scottish industry?
Mr. Walker:I am well aware of the meeting planned for Saturday and of the anxiety of the industry about imports. I have met the industry and made it perfectly clear that if there is evidence of dumping we can take appropriate measures. There have always been times, of course, when prices at markets have not reached the required levels, and that has not necessarily been as a result of dumping here of surplus foreign stocks. The fishing industry knows that I am anxious to review and examine the matter with it. I hope that in the future there will be many examples of the British industry exporting fish. If that happens and the prices paid in foreign markets for domestically caught fish are not particularly good I would not expect our industry to be accused of dumping.
Mr. Jay: As the Minister's procedure here was a clear breach of undertakings given to the House and undermines the whole Scrutiny Committee system, will he at least given an assurance that he and the Leader of the House will ensure that it does not happen again?
Mr. Walker: I am most anxious that any topic concerning my Department should be debated in the House, I would always welcome that. I have made clear that I am perfectly willing and anxious to discuss these fishing questions. Under the previous Government a whole range

1357
of issues were discussed in this way, and I hope that there will soon be discussions.
Mr. Sproat: I congratulate my right hon. Friend on what he has achieved so far. Did he tell our European partners of the deep concern felt by the British industry at the hidden subsidies and indirect support given to the fishing industries of our European competitors? If so, what did they say about it?
Mr. Walker: With the help of the fishing industry, we are currently updating information on the question of subsidies of various types. There is a range of subsidies which vary in effect. Some of them operate in this country. Our objective is to see that our fishing industry is not confronted with unfair competition from other countries. I am grateful to my hon. Friend for his congratulation. Congratulations in respect of any progress that has been made deserve to fall upon my hon. Friend the Minister of State more than on anyone else, for his having done so much of the detailed organisation.
Mr. Torney: In view of the Minister's assurance that there will be no sell-out of the British fishing industry, will he bear in mind that 60 per cent. of the Community catch is taken in British waters? Will he therefore ensure that British trawlermen get at least the 45 per cent. of that total catch that they are demanding, and not the 25 per cent. that we understand the French want us to have?
Mr. Walker: On the question of quotas and access, the fishing industry knows full well that in all these negotiations we will remain close to it and have it by us before meetings and at meetings when we discuss this matter. Our fishing industry is well aware that it is immensely to its advantage to have agreement on a common fishing policy. For conservation of the fish it hopes to catch in the future it is vital that a European conservation policy is agreed to.
Mr. Beith: It worries me that agreements with third countries that are in the interests of other member countries should go ahead before agreement on the fundamentals has been reached.
Mr. Walker: Before saying that, the hon. Gentleman should examine the agreements reached. Norway's main vested interest is the United Kingdom. On Spain, there is a massive interest for United Kingdom fishermen in having a framework agreement that would be the basis of negotiation with the Spaniards. It may be an agreement that the Spaniards reject, but whether they reject or approve it it will help in our negotiations with Spain. Guinea-Bissau is not of direct interest to United Kingdom fishermen.
On the problems of quotas and access, a further available quantity of fish—although it is not available to the United Kingdom—should be taken into consideration in the total balances. It is in the interests of the United Kingdom fishermen to come to these agreements.
Mr. Speaker: Order. I propose to call those hon. Members who have been rising. I say that to save their frustration.
Mr. Peter Fraser: I welcome my right hon. Friend's confirmation that any agreement on the common fisheries policy will be reached on its own merits, and will not be part of a wider trade-off, but is he in a position to give an assurance that the proposal for agreement is not wholly to be based on a system of quotas but will take some account of exclusive areas or limits, especially to safeguard the interests of the inshore fishing fleets?
Mr. Walker: I can give my hon. Friend that assurance.
Mr. John Home Robertson: The question that I wished to put to the Minister has already been fairly well answered.
Mr. Speaker: That is excellent. I shall remember that.
Mr. Prescott: I warn the Minister against relying too much on the warm remarks from the fishing industry, whose members welcomed our entry into the Common Market and then changed their mind. The real issue that concerns Humberside is that there is no longer a guarantee that there will be a debate on fishing matters before the negotiations are concluded. Will the Minister tell the House whether, in the negotiations, he reached any understanding that there would be a more favourable response on the proportion of fish to come to the United Kingdom, rather than agreement

1359
in respect of the total Community in such a package?
Mr. Walker: The items on which we were trying to make progress yesterday were those of the total reliable catch and catch reported. At the next meeting we shall move on to the items mentioned by the hon. Gentleman. With all of the uncertainties and difficulties faced by Humberside, I believe that people there will be pleased that we made progress yesterday and can move on, whether we agree or not, to deal with those topics of fundamental interest, and that we are not still dealing with the topics that were settled yesterday.
Mr. Henderson:Is my right hon. Friend aware that the considerable energies that he and his right hon. Friends have put into the negotiations, together with the first signs of success, will be warmly welcomed? Is he further aware that there is great hope in Scotland that their energies will be turned now to dealing with the problem of the amount of catch that is allowed to be caught but that is not being sold at the pier heads because of imported fish'? If he wishes proof of that, he will find it at Chester House in Edinburgh today, in unsold fish.
Mr. Walker:We recognise the anxieties over imports, the current price position and other problems, such as input costs of energy. The Secretary of State for Scotland, my hon. Friend the Minister of State and myself are in close consultation with the industry on these topics.
Mr. Mark Hughes: Will the Minister accept, first, that he has treated the Scrutiny Committee and the House with gross discourtesy? Secondly, does he agree that there are many who would not totally accept the marine biologist's agreement on total reliable catches? Thirdly, does he accept that the method of providing information to the member States on catches landed is wholly inadequate, unless there is an effective licensing system?
If the right hon. Gentleman goes to the next set of negotiations before there has been an effective debate in the House, he will be treating the House with gross contempt.
Mr. Walker: I have already said that I am anxious, happy and willing to debate
1360
the whole range of fishing issues at the earliest opportunity.
It is the total ignoring of modern marine biologists and scientific evidence that has resulted in the fishing industry of this country and other countries not being able to catch herring and other fish for a considerable number of years. That total ignoring and contempt of the scientific facts has been of great detriment to the fishing industry.
Mr. Gummer:Does my right hon. Friend agree that we are more likely to achieve a sensible fishing policy if the House welcomes rather than grouches at the fact that success has taken place? Does he further agree that if we wish for the support of the fishing industry in constituencies such as mine, we should ensure that the reporting techniques and the monitoring of that information is available to those fisherman so that they can see that it is fair, and properly monitored?
Mr. Walker: The fishing industry would be shocked at the reaction of some hon. Members, which is totally different from the industry's reaction to yesterday's events.
On the reporting of catches and the evidence of negotiations, I believe that no Government has ever worked closer to an industry throughout a negotiation than we have over the past few months.
Dr. David Clark:It has been the traditional argument that the quota for Britain should include not only our traditional share of the European market but a considerable allowance for our loss on third country markets. Is that still the basis of the Government's continuing negotiations?
Mr. Walker: Yes, Sir.
Mr. Strang: Does the Minister accept that the many breaches that have taken place on current quota and conservation arrangements—not only with mackerel but in connection with the ban on herring fishing in the North Sea—have totally undermined the industry's confidence in the current conservation policies?
There will not be an acceptable conservation policy in the Community unless

1361
there is a comprehensive system of licensing, with higher penalties and effective national enforcement.
Mr. Walker:The whole movement must be towards an effective system of catch reporting. National Governments should decide on a sensible system, under which they can operate effectively. If they do not, those Governments must be penalised for that failure. The nature, the degree and the method of operation must be left to the national Governments to decide. That will vary from country to country.
Mr. Mason: On a point of order, Mr. Speaker. The words of the Leader of the House have been dishonoured. The Minister has blatantly disregarded the recommendations of the Select Committee on European legislation. He has dishonoured a Government agreement.
I wish to raise the point of order in the presence of the Leader of the House. If only for his good name, he should revert to the escape clause, namely, that if there are exceptional circumstances—and there are not in this case—and he circumvents a Government undertaking, he is obliged to make a personal statement to the House explaining why he so acted. I hope that he will make that statement at the earliest opportunity.

TELEVISING OF PARLIAMENT
4.9 pm
Mr. Austin Mitchell: I beg to move,
That leave be given to bring in a Bill to provide for the televising of the proceedings of the House of Commons and its committees and to establish a Parliamentary Television Unit to control the televising, provide feeds and recordings to outside organisations and maintain an electronic Hansard.
The Bill, which proposes to set up a parliamentary television unit and provide an electronic Hansard, is a belated adjustment to two modern developments.
A modern Parliament is no longer a closed debating chamber in which Members seek to sway the opinion of other Members. In a modern mass democracy we have a system of government by party, in which a party is elected to govern—or in this case misgovern—and another party opposes. The House is, essentially, the stage on which that party battle is fought. It is the great forum of this nation in which the issues of the day, such as steel and gas, are debated and the arguments are put before the people.
Those functions make communication with the world outside essential, but we are not communicating. We are a stage which few watch and a forum which few hear. Can we wonder if there is ignorance and alienation and if our constituents have so little knowledge of what goes on and what we are doing and discussing in the House? They do not know, because we exclude them.
We put our constituents in the position of the tennis enthusiast who has to find out about Wimbledon by standing outside and hearing the plop of the ball and seeing the victors interviewed on television afterwards, but who is not allowed to see the centre court action which makes or breaks.
People are not allowed to see, because in a modern society most people rely on television for most of their news and information about current affairs. It is no good our saying that they should queue to sit in the Gallery, pay £8 a volume for Hansard, or read the garbled accounts of our proceedings in the quality papers. They will not do that. We have to go to them on the medium that they rely on for their news.

1363
It is because that medium cannot cover Parliament that it has started its own alternative political forum, which is one in which we operate on television's terms and in which it sets the framework of debate. Television decides the issues and, by a sort of Gresham's law of politics, the tele-politics drive out good politics, and people know nothing of the sort of politics that go on here because that is closed to them.
Hon. Members may argue that people have access to the radio, but that is not an appropriate medium. It is appropriate for continuous coverage, because it is cheap, but, for the rest, the microphones pick up every extraneous noise and give the impression of chaos and disorder of a sort that you, Mr. Speaker, would never allow. The listener is infuriated by radio because he cannot see what is going on. [Interruption.] If hon. Members have that low a view of the dignity of the House, it is appropriate that they should vote against the Bill.
I believe that it is appropriate that people should see what goes on in the Chamber. It would certainly show that we are not as bad as we sound on the radio, it will show the reality of the Chamber, which is impressive in most respects and certainly more than fit to be shown, and it will repair the damage that has been done by radio.
Surveys of public opinion show that the people of this country want television coverage of Parliament. It is not a burning desire, but the majority want to see it on television. We are refusing it basically because we fear the medium.
I propose that we allow television coverage, not on television's terms, but on our terms and under our control, and that we should do so by following the successful precedent of Canada where television, after being feared, is accepted. Even the opponents of television there now wonder, as we shall here, why it took so long to introduce it.
The essence of success is the setting up of a parliamentary television unit, working through half a dozen remote control cameras in various parts of the House—with no crews in the Chamber—and with minimal lighting. It would be slightly brighter than the present lighting, but the House can be unconscionably dim at times.
1364
The cameras would work on a mid-shot of the Member who has Mr. Speaker's eye and they would follow the eye of Mr. Speaker. There would be no cut aways. I appreciate that hon. Members fear cut aways as much as coverage and I recognise that all the elements of human activity and inactivity can take place on our Benches. That will not be shown. The coverage will be of the hon. Member who has Mr. Speaker's eye.
That record will be available on disc, as the technology allows, and on tape—it is surprising to note from the Canadian experience how many people want to see tapes of what goes on. It will be available full time to enable subscribers, and the medium of cable television will expand enormously in the 1980s, and as a feed to the BBC and ITV.
That will guarantee coverage and the minimum of change to the House. It is not proposed to change the Chamber into an overflow studio facility for ITV and BBC, with Mr. Speaker as the floor manager. This is, and will remain, a debating Chamber and hon. Members will be addressing the Chamber. They will succeed or fail by the techniques appropriate to addressing the Chamber and not by the different techniques and histrionics of speaking in a studio.
Television coverage on that basis will give no more encouragement to the exhibitionists in the House than the techniques of the Chamber already do. As for those hon. Members who might spend two hours applying make-up before speaking, it will make no difference to them. They will continue to do it, as they do now.
This is a serious attempt to bring the House to the people and to bring us into line with the European Parliaments that allow coverage by television and with the two-score legislatures around the world who have accepted television in their Chambers.
We cannot afford to put ourselves in the position of saying, as we sometimes appear to say—that either our proceedings are so awful that they must be kept from the people or that the people are too stupid to comprehend what goes on in the Chamber.
This is a Chamber of serious discussion of serious issues that affect our people

1365
and their lives, and in which the arguments are put on their behalf. They will be the better for seeing it.
Without television, a gulf opens up between Parliament and the nation outside. With it we would be the stronger because the people would know what we are doing and why we are doing it. We would be speaking directly to them, and that would make the legislature more relevant and stronger against the Executive.
With television coverage of our proceedings we will put the House where it belongs. Hon. Members who are laughing obviously have an odd idea of where it belongs. Perhaps they belong there too. The House belongs at the centre of this nation's attention and affairs. I commend the Bill to the House.
Mr. John Stokes rose—
Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. Does the hon. Gentleman wish to oppose the Bill?
4.17 pm
Mr. Stokes: Yes, Mr. Deputy Speaker. I do not believe that my opposition to the Bill will come as much of a surprise to hon. Members.
Television is an extension of broadcasting and in a short time we have seen what a disaster that has proved in the House, particularly in relation to Prime Minister's Question Time, which has now been dropped from the radio coverage.
We must never forget that television is essentially a branch of show business. It must entertain continuously. By its very nature, it exaggerates the sensational, the trivial and the scandalous. It must do the same here.
Imagine, Mr. Deputy Speaker, the background noise, the scenes, the angry exchanges across the House, the rows. Television is bound to emphasise all those, at the expense of the real, solid and serious work that we do in the Chamber, in Committee or outside the Palace altogether.
Hon. Members will try to hog the cameras. We saw that the hon. Member for Grimsby (Mr. Mitchell) did just that in his recent television performance when
1366
the other two hon. Members on the programme did not get a word in.
Television is obsessed with irrelevant details. It will show hon. Members' dress, behaviour, yawns and the occasional nap. The dresses and hats of our Lady Members will be featured, as will be the sartorial eccentricities of our more flamboyant male colleagues. Those hon. Members who are inclined to show off will be even more tempted to do so as a result of the cameras being in the Chamber.
Our constituents will be seen peering into the screen to see if their Member is present, not realising that much good work is done not only in the Chamber, but in the Smoking Room, in Committee and outside. If television comes here, hon. Members will have to rehearse their speeches at home in front of the mirror as a prelude to acting out their parts here. They will be judged more on their public performance as actors than on their real work.
My main objection to television is that the presence of cameras here will fundamentally alter the character of this place. The intimate atmosphere such as we are experiencing now—the cut and thrust of debate—will change into a spectacle of the hustings before an audience of 55 million people.
I notice that the Press Gallery is much fuller than it was a few minutes ago. The press consider this to be a matter of tremendous importance because it concerns them. It is not an important matter at all. In the greatest days of this country, the proceedings of Parliament were not allowed to be published. In those great days, deeds mattered more than words. Today, in our less great days, we suffer from a plethora of news and comment that goes on endlessly.
We pray each week that we may be godly, and quietly governed. I believe that if we televise our proceedings, we will be governed by catcalls, shrieks, hysteria, shouting, gestures and all manner of demonstrations. I sincerely hope that the House will have none of it.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and Nomination of Select Committees at Commencement of Public Business):—
The House divided:—Ayes 201, Noes 201.

Division No. 148

AYES

[4.22 pm

Aitken, Jonathan

Fraser, John (Lambeth, Norwood)

Needham, Richard

Alexander, Richard

Fraser, Peter (South Angus)

Nelson, Anthony

Allaun, Frank

George, Bruce

Newton, Tony

Alton, David

Golding, John

O'Neill, Martin

Amery, Rt Hon Julian

Gorst, John

Palmer, Arthur

Ancram, Michael

Grant, John (Islington C)

Parry, Robert

Archer, Rt Hon Peter

Grimond, Rt Hon J.

Patten, Christopher (Bath)

Armstrong, Rt Hon Ernest

Hamilton, W. W. (Central Fife)

Pattie, Geoffrey

Ashley, Rt Hon Jack

Hannam, John

Pendry, Tom

Aspinwall, Jack

Haselhurst, Alan

Penhaligon, David

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

Hattersley, Rt Hon Roy

Powell, Raymond (Ogmore)

Baker, Kenneth (St. Marylebone)

Hesley, Rt Hon Denis

Prescott, John

Barnett, Guy (Greenwich)

Heller, Eric S.

Race, Reg

Barnett, Rt Hon Joel (Heywood)

Henderson, Barry

Radice, Giles

Beith, A. J.

Hogg, Hon Douglas (Grantham)

Rathbone, Tim

Benn, Rt Hon Anthony Wedgwood

Hogg, Norman (E Dunbartonshire)

Rees, Rt Hon Merlyn (Leeds South)

Bennett, Andrew (Stockport N)

Home Robertson, John

Rees-Davies, W. R.

Benyon, Thomas (Abingdon)

Homewood, William

Rhodes James, Robert

Booth, Rt Hon Albert

Hooley, Frank

Richardson, Jo

Boothroyd, Miss Betty

Hooson, Tom

Ridsdale, Julian

Bottomley, Rt Hon Arthur (M'brough)

Horam, John

Robertson, George

Bray, Dr Jeremy

Howell, Rt Hon Denis (B'ham, Sm H)

Robinson, Geoffrey (Coventry NW)

Brooke, Hon Peter

Howells, Geraint

Rooker, J. W.

Brown, Hugh D. (Provan)

Huckfield, Les

Ross, Ernest (Dundee West)

Brown, Ron (Edinburgh, Leith)

Hunt, David (Wirral)

Rost, Peter

Bryan, Sir Paul

Johnson Smith, Geoffrey

Rowlands, Ted

Buchan, Norman

Johnston, Russell (Inverness)

Sainsbury, Hon Timothy

Butcher, John

Kaufman, Rt Hon Gerald

St. John-Stevas, Rt Hon Norman

Canavan, Dennis

Kinnock, Neil

Sheerman, Barry

Carlisle, Rt Hon Mark (Runcorn)

Knox, David

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

Carmichael, Neil

Lambie, David

Shepherd, Richard(Aldridge-Br'hills)

Clark, Hon Alan (Plymouth, Sutton)

Lamont, Norman

Silkin, Rt Hon John (Deptford)

Clark, Dr David (South Shields)

Lee, John

Sims, Roger

Clarke, Kenneth (Rushcliffe)

Lester, Jim (Beeston)

Smith, Cyril (Rochdale)

Colvin, Michael

Lestor, Miss Joan (Eton & Slough)

Smith, Rt Hon J. (North Lanarkshire)

Cope, John

Lewis, Kenneth (Rutland)

Soley, Clive

Cranborne, Viscount

Litherland, Robert

Speller, Tony

Critchley, Julian

Lloyd, Ian (Havant & Waterloo)

Sproat, Iain

Crouch, David

Lofthouse, Geoffrey

Squire, Robin

Dalyell, Tam

Mabon, Rt Hon Dr J. Dickson

Steel, Rt Hon David

Davis, Clinton, (Hackney Central)

McCrindle, Robert

Stewart, John (East Renfrewshire)

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

McDonald, Dr Oonagh

Strang, Gavin

Dempsey, James

McKay, Allen (Penistone)

Straw, Jack

Dewar, Donald

McKelvey, William

Taylor, Mrs Ann (Bolton West)

Dickens, Geoffrey

MacKenzie, Rt Hon Gregor

Temple-Morris, Peter

Dixon, Donald

McNally, Thomas

Thorne, Stan (Preston South)

Dobson, Frank

McQuarrie, Albert

Tinn, James

Dorrell, Stephen

McWilliam, John

Torney, Tom

Douglas-Hamilton, Lord James

Major, John

Townsend, Cyril D. (Bexleyheath)

Dubs, Alfred

Marks, Kenneth

Varley, Rt Hon Eric G.

Dunwoody, Mrs Gwyneth

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

Viggers, Peter

Dykes, Hugh

Marshall, Dr Edmund (Goole)

Wainwright, Richard (Colne Valley)

Eadle, Alex

Marshall, Michael (Arundel)

Watkins, David

Eastham, Ken

Mates, Michael

Watson, John

Edwards, Robert (Wolv SE)

Mawhinney, Dr Brian

White, Frank R. (Bury & Radcliffe)

Ellis, Raymond (NE Derbyshire)

Maxton, John

Whitney, Raymond

English, Michael

Maynard, Miss Joan

Wigley, Dafydd

Evans, Ioan (Aberdare)

Meacher, Michael

Williams, Rt Hon Alan (Swansea W)

Farr, John

Mellish, Rt Hon Robert

Wilson, Gordon (Dundee East)

Fenner, Mrs Peggy

Meyer, Sir Anthony

Wilson, Rt Hon Sir Harold (Huyton)

Field, Frank

Mikardo, Ian

Wilson, William (Coventry SE)

Flannery, Martin

Millan, Rt Hon Bruce

Woolmer, Kenneth

Fletcher, Alexander (Edinburgh N)

Miller, Hal (Bromsgrove & Redditch)

Wrigglesworth, Ian

Fletcher, L. R. (Ilkeston)

Mitchell, Austin (Grimsby)

Wright, Sheila

Fletcher, Ted (Darlington)

Morris,Michael (Northampton, Sth)

Fletcher-Cooke, Charles

Morrison, Hon Charles (Devizes)

TELLERS FOR THE AYES:

Foot, Rt Hon Michael

Moyle, Rt Hon Roland

Mr. Bob Cryer and

Foster, Derek

Neale, Gerrard

Mr. Peter Bottomley.

Foulkes, George

NOES

Abse, Leo

Berry, Hon Anthony

Brown, Michael (Brigg & Sc'thorpe)

Adley, Robert

Bevan, David Gilroy

Brown, Robert C. (Newcastle W)

Anderson, Donald

Boscawen, Hon Robert

Brown, Ronald W. (Hackney S)

Ashton, Joe

Bowden, Andrew

Bruce-Gardyne, John

Atkins, Robert (Preston North)

Boyson, Dr Rhodes

Budgen, Nick

Baker, Nicholas (North Dorset)

Braine, Sir Bernard

Burden, F. A.

Beaumont-Dark, Anthony

Bright, Graham

Cadbury, Jocelyn

Bell, Sir Ronald

Brinton, Tim

Callaghan, Jim (Middleton & P)

Benyon, W. (Buckingham)

Brotherton, Michael

Campbell, Ian

1368

1369

Cant, R. B.

Holland, Philip (Carlton)

Orme, Rt Hon Stanley

Carlisle, Kenneth (Lincoln)

Hordern, Peter

Page, John (Harrow, West)

Carter-Jones, Lewis

Howell, Rt Hon David (Guildford)

Park, George

Channon, Paul

Hudson Davies, Gwilym Ednyfed

Patten, John (Oxford)

Churchill, W. S.

Hughes, Mark (Durham)

Pavitt, Laurie

Clark, Sir William (Croydon South)

Hughes, Robert (Aberdeen North)

Pawsey, James

Cockeram, Eric

Hunt, John (Ravensbourne)

Pollock, Alexander

Cocks, Rt Hon Michael (Bristol S)

Hurd, Hon Douglas

Porter, George

Cohen, Stanley

Irving, Charles (Cheltenham)

Powell, Rt Hon J. Enoch (S Down)

Coleman, Donald

Janner, Hon Greville

Price, Christopher (Lewisham West)

Concannon, Rt Hon J. D.

John, Brynmor

Proctor, K. Harvey

Conlan, Bernard

Jones, Barry (East Flint)

Rees, Peter (Dover and Deal)

Cormack, Patrick

Jones, Dan (Burnley)

Roberts, Albert (Normanton)

Costain, A. P.

Jopling, Rt Hon Michael

Roberts, Gwilym (Cannock)

Cowans, Harry

Kellett-Bowman, Mrs Elaine

Ross, Wm. (Londonderry)

Crowther, J. S.

Kerr, Russell

Shaw, Michael (Scarborough)

Cunliffe, Lawrence

Kilroy-Silk, Robert

Shepherd, Colin (Hereford)

Cunningham, George (Islington S)

Lamond, James

Silverman, Julius

Dean, Joseph (Leeds West)

Lang, Ian

Silvester, Fred

Dormand, Jack

Langford-Holt, Sir John

Skeet, T. H. H.

Douglas-Mann, Bruce

Latham, Michael

Snape, Peter

Dunn, Robert (Dartford)

Lawrence, Ivan

Spriggs, Leslie

Eden, Rt Hon Sir John

Leadbitter, Ted

Stallard, A. W.

Elliott, Sir William

Le Marchant, Spencer

Stanley, John

Emery, Peter

Lennox-Boyd, Hon Mark

Steen, Anthony

Evans, John (Newton)

Lewis, Ron (Carlisle)

Stevens, Martin

Ewing, Harry

Lloyd, Peter (Fareham)

Stewart, Rt Hon Donald (W Isles)

Fairgrieve, Russell

Loveridge, John

Stewart, Ian (Hitchin)

Faulds, Andrew

McCartney, Hugh

Stoddart, David

Fell, Anthony

McCusker, H.

Stokes, John

Finsberg, Geoffrey

Macfarlane, Neil

Strading Thomas, J.

Ford, Ben

MacGregor, John

Summerskill, Hon Dr Shirley

Forman, Nigel

MacKay, John (Argyll)

Taylor, Robert (Croydon NW)

Forrester, John

McNair-Wilson, Michael (Newbury)

Tebbit, Norman

Freeson, Rt Hon Reginald

Madel, David

Thompson, Donald

Freud, Clement

Marland, Paul

Thorne, Neil (Ilford South)

Galbraith, Hon T. G. D.

Marlow, Tony

Thornton, Malcolm

Gardiner, George (Reigate)

Marten, Neil (Banbury)

Townend, John (Bridlington)

Garel-Jones, Tristan

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

Trotter, Neville

Garrett, John (Norwich S)

Mason, Rt Hon Roy

Wainwright, Edwin (Dearne Valley)

Garrett, W. E. (Wallsend)

Mather, Carol

Wakeham, John

Ginsburg, David

Mawby, Ray

Walker, Bill (Perth & E Perthshire)

Glyn, Dr Alan

Maxwell-Hyslop, Robin

Waller, Gary

Goodhew, Victor

Mills, Iain (Meriden)

Warren, Kenneth

Gow, Ian

Mitchell, David (Basingstoke)

Weetch, Ken

Gower, Sir Raymond

Mitchell, R. C. (Soton, Itchen)

Wellbeloved, James

Graham, Ted

Moate, Roger

Wells, John (Maidstone)

Grant, George (Morpeth)

Molyneaux, James

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

Greenway, Harry

Monro, Hector

Wheeler, John

Griffiths, Eldon (Bury St Edmunds)

Montgomery, Fergus

White, James (Glasgow, Pollok)

Griffiths, Peter (Portsmouth N)

Morris, Rt Hon Alfred (Wythenshawe)

Whitlock, William

Grist, Ian

Morris, Rt Hon Charles (Openshaw)

Wickenden, Keith

Gummer, John Selwyn

Morris, Rt Hon John (Aberavon)

Williams, Delwyn (Montgomery)

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

Morrison, Hon Peter (City of Chester)

Wolfson, Mark

Hamilton, James (Bothwell)

Mudd, David

Young, David (Bolton East)

Harrison, Rt Hon Walter

Myles, David

Hastings, Stephen

Neubert, Michael

TELLERS FOR THE NOES:

Hawksley, Warren

Oakes, Rt Hon Gordon

Mr. Ivor Stanbrook and

Heddle, John

Onslow, Cranley

Mr. Christopher Murphy.

Higgins, Rt Hon Terence L.

The numbers being equal—
Mr. Deputy Speaker: In order to give the House an opportunity to reconsider this matter, I cast my vote with the Ayes.
Question accordingly agreed to.
Bill ordered to be brought in by Mr. Austin Mitchell, Mr. A. J. Beith, Mr. Julian Critchley, Mr. Bob Cryer, Mr. Tim Rathbone, Mr. John Tilley, Mr. John Watson and Mr. Phillip Whitehead.

TELEVISING OF PARLIAMENT
Mr. Austin Mitchell accordingly presented a Bill to provide for the televising
1370
of the proceedings of the House of Commons and its committees and to establish a Parliamentary Television Unit to control the televising, provide feeds and recordings to outside organisations and maintain an electronic Hansard: And the same was read the First time; and ordered to be read a Second time upon Friday 7 March and to be printed. [Bill 134.]
Mr. Stanley Cohen: On a point of order, Mr. Deputy Speaker. Is it not the usual practice when there is a tied vote for the occupant of the Chair to cast his vote in favour of the status quo?
Mr. Deputy Speaker: On a matter of this kind—and I gave it serious thought, because it occurred to me that something like this might happen—it is right and according to precedent to give the House a further opportunity to discuss the matter again.
Mr. Michael Brotherton: Further to that point of order, Mr. Deputy Speaker. Will you not reconsider? Should you not always leave the whole matter open to the House? By casting your vote as you have, you have not left it open to the House.
Mr. Deputy Speaker:My vote does leave the matter open to the House. This is not simply a motion. The vote does not dispose of the matter finally. It dealswith the introduction of a Bill, which comes forward for further consideration by the House. It can then be approved or rejected.

SOLOMON ISLANDS, TUVALU AND KIRIBATI
4.36 pm
The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): I beg to move,
That an humble Address be presented to Her Majesty, praying that Her Majesty will give directions that there be presented on behalf of this House a gift of a clock to the National Parliament of Solomon Islands and gifts of gavel sets to the Houses of Assembly of Tuvalu and Kiribati, and assuring Her Majesty that this House will make good the expenses attending the same.
The gifts follow an established and very happy tradition that we make presentations from this House to the legislatures of newly independent Commonwealth countries. The Speakers of the respective legislatures were, of course, consulted about the form that the gifts should take. The gifts are now ready for presentation and are on display in the Upper Waiting Hall of the House, where they will remain for inspection by hon. Members until 1 February.
If the House passes the motion, as I am confident it will, I hope that arrangements will be made by Mr. Speaker to send a small delegation from the House to present the gifts.
I commend the motion to the House, in the expectation that it will be accepted as an expression of friendship and good will towards the legislatures of these sister Commonwealth countries. I know that I shall be speaking for the whole House in expressing our warmest good wishes for the future to the National Parliament of Solomon Islands and to the House of Assembly of Tuvalu and the House of Assembly of Kiribati.
4.38 pm
Mr. Edward Rowlands: We on the Opposition Benches wish to associate ourselves fully with the motion. All three territories covered by it have long and close associations with this country. Many hon. Members on both sides of the House have debated the issues involved in the territories' development towards independence. I am one of the small number of hon. Members who have actually been to all three. Tuvalu and Kiribati are probably better

1373
known to the vast majority of the British people as the Gilbert and Ellice Islands.
The motion is an important symbolic demonstration of the continued interest that the House will have in these small, independent territories. It is also a symbol of, and a tribute to, the democratic and parliamentary traditions that all three territories are maintaining and upholding. The gifts represent our support for, endorsement of, and backing for the democratic and parliamentary traditions of three small territories set in the middle of seas that are hostile at times, in conditions that are most difficult.
Kiribati was the subject of some contention and discussion in the House in relation to the Banaban people of Ocean Island—matters which are still unresolved. Nevertheless, I am sure that all Members of the House will give the motion their full support.
4.41 pm
Sir Bernard Braine: I should like to endorse the sentiments expressed in such a felicitous way by the hon. Member for Merthyr Tydfil (Mr. Rowlands). There cannot be a Member of this House who does not wish to be associated with this delightfuland traditional gesture. But, as one who has visited at least one of the territories concerned and who has been occupied in the past five years in trying to achieve justice for a small community which is now incorporated—against the will of its members, if I may say so—in that territory, may I take the opportunity of expressing the hope that, before the delegation departs for the warm waters of the Pacific on its mission of good will, the Government will strain every nerve to see that the outstanding claims of the Banaban community, which still remain undetermined, are settled. In that event, nobody will be more delighted than I to support the motion before the House.
Those peoples on the other side of the world are linked in friendship and sentiment with us for all time, and I wish them well and god-speed.
Question put and agreed to.

ORDERS OF THE DAY
  NATIONAL HERITAGE BILL
  As amended (in the Standing Committee), considered.
  NATIONAL HERITAGE BILL

    New Clause 2
    ACCEPTANCE OF OBJECTS IN CERTAIN BUILDINGS
    'In paragraph 17 of Schedule 4 to the Finance Act 1975 in sub-paragraph (3) (Buildings in relation to which objects may be accepted) there shall be inserted after paragraph (d) the following "or

    (e) if the building is one approved for the time being for the purposes of this paragraph by the Ministers".'.—[Mr. Dalyell.]

    Brought up, and read the First time.
    4.45 pm
    Mr. Tam Dalyell: I beg to move, That the clause be read a Second time.
    Mr. Deputy Speaker (Mr. Bernard Weatherill): With this new clause it will be convenient to take the following:
    New clause 7—Significance of objects in their Settings.
    New clause 8—Consultations on Acceptance and Disposal of Objects in certain circumstances.
    New clause 10—Acceptance of significant objects in certain buildings.
    Government amendment No. 50.
    Amendment No. 33, in clause 12, page 7, line 37, at end insert—
    '(bb) in sub-paragraph (4) (approval by Treasury of objects to be accepted) in paragraphs (a) and (c) after the words "artistic interest" in both places where they occur there shall be inserted the words "or is of significance in or to a setting with which it already has significant historical association;".'.
    Mr. Dalyell: Objects can be accepted in lieu of tax under powers contained in two sub-paragraphs of paragraph 4 of Schedule 6 to the Finance Act 1975.
    Under sub-paragraph (4), objects have to be of pre-eminent quality, and it is under that power that objects are accepted and go to museums and galleries. Whilst there has been plenty of arguments as to

    1375
    whether an object would be a pre-eminent addition to this or that museum, we do at least have quite a lot of experience, and, given that Ministers will take the right advice, the pre-eminence test may be the right way of reaching a decision in the museum context.
    But the other sub-paragraph, sub-paragraph (3), provides a power to accept objects in relation to certain classes of buildings, and it may be more appropriate to use that than to deal with this matter under pre-eminence where the intention is that objects are retained "in situ on loan".
    The problem which must now be faced and solved—and how glad I am to see the Minister of State, Treasury among us—and to which reference in the Bill is highly desirable is the dispersal of contents from buildings that do not fall into any of the classes already set out in sub-paragraph (3)—substantially privately owned country houses. Here, if an owner wants to pay tax by way of the surrender of, say, a picture of great quality, he can do so if it passes the preeminence test with the result that the picture is whipped away to a museum, where doubtless its pre-eminent quality will be much appreciated.
    The trouble is that the setting from which the picture has been taken will be the poorer, and the picture may even diminish in interest from being removed from its historic setting. This is particularly so with furniture designed to fit into a scheme of decoration—and I referred on Second Reading to the Hopetoun case in the West Lothian constituency.
    Of course, the previous owner will derive great pleasure from the leaving in situ of objects after he has surrendered them in satisfaction of tax—who would not be glad to keep an old friend?—but, provided that there is reasonable public access and the property is advertised, and so on, that pleasure will be shared with many thousands of visitors. I think that all of us who served on the Standing Committee were agreed on the importance of that.
    There is another aspect of leaving in situ. We have to be careful not to pull all our great pictures, and so on, into our cities, particularly into our national museums in London and Edinburgh.
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    To do so is not only to increase the magnetism of the cities for tourists—some think that there are too many tourists in London already perhaps—but is also to diminish the attractiveness of our country houses and, through them, the other parts of Britain generally. The aim here has to be to diversify tourism by leaving great works of art, and so on, in the areas of Britain where that is appropriate.
    Of course, leaving works of art in the areas outside London does not necessarily imply leaving them in country houses if they are to be surrendered in satisfaction of tax. There are local museums, and in many instances it will be appropriate to house such works of art in them. Indeed, my hon. Friend the Member for York (Mr. Lyon) stressed in Committee the importance of this in his own constituency. But, even so, it is now appreciated that country houses should be accepted almost as an extension of the local museum service.
    To come back to the amendments, the solution offered is to provide in subparagraph (3) a catch-all power under which Ministers can, when, say, a picture is offered in lieu of a tax debt, approve a specific building and so allow themselves to accept the picture with the intention of leaving it in situ. Naturally, and rightly, Ministers will not wish to use this new power except in circumstances where they want to see the picture, or whatever, kept in its setting or restored to it. In case the first new clause is thought to be too wide, a second version has been tabled with a proviso in it containing the appropriate reference to the significance of the object in or to the building with which it already has historical association.
    All this apart, it should be remembered that whatever is left in situ will be there on loan, so that it can be taken away if the situation changes. Of course, there will be security and indemnity questions to solve, but these are relatively minor problems compared with the central problem of the power to act, which is provided by the amendments.
    New clause 7 quite rightly recognises that the trustees should look most carefully at the status of objects in their settings before they assist intending purchasers with grants so that they are not removed to museums and so on when that

    1377
    would be the wrong solution. I support new clause 7.
    New clause 8 applies in the situation where Ministers are considering, first, acceptance and, second, disposal of objects accepted in satisfaction of tax, and it is right to stipulate that consultation should take place as early as is necessary: that is, the right to start negotiations. With the seal of unnecessary confidentiality thrown over negotiations at the acceptance stage, of which we heard in Committee, it will be difficult to see that the right thing is done.
    As regards Government amendment No. 50, the new Government amendment, I have already commented on its effect of bringing into consideration "leaving in situ" only at the disposal stage. I really feel that earlier consideration is most necessary and that this must be permitted, not only with experts but with the trustees of the fund, the Historic Buildings Council, the Historic Buildings Council for Scotland and other appropriate bodies, and possibly this is implied in new clause 8.
    I also refer to what is possibly a serious omission in Government amendment No. 50. There is no reference to objects being restored to the place with which they have significant association. Again, new clause 8 is the model and I ask Ministers to look at this and amend their own amendment. This issue of restoration is rather important and I hope that the Government will look at it in the later stages that remain to us.
    But I come back to consultation and confidentiality. There must be consultation at an early stage, or
    "significance in a historic setting"
    or whatever will not be properly weighed. This is all the more important because the Government have not come up with their own version of new clause 10 or with an amendment on the lines of amendment No. 33, which I also support.
    Mr. Patrick Cormack: It seems that the arguments deployed in Committee on the importance of the in situ provisions have been hand-somely recognised by the Government in amendment No. 50, which stands on the Order Paper in the name of my right hon. Friend the Chancellor of the Duchy
    1378
    of Lancaster. Although the amendment stands in my right hon. Friend's name, it is right and proper to pay tribute to my hon. Friend the Under-Secretary of State for the Environment, the hon. Member for Dumfries (Mr. Monro), who guided the Bill through Committee on behalf of the Government, listened carefully to our arguments and promised to return with answers on Report.
    It is important that objects which have a particular association with a special place, and which derive much of their interest and significance from that association, should have that factor taken into account when their final resting place is being determined. That is a factor that has been recognised by successive Governments. It was recognised by the previous Labour Government when they produced their WhitePaper in 1979. It has been recognised by the present Government. However, in Committee we did not feel that it was spelt out clearly enough. Our arguments have now been taken into account, and it will be incumbent upon the trustees to consider the historical associations of objects.
    We said in Committee that the issue of pre-eminence could be extremely misleading. That which is pre-eminent in a provincial country house is not necessarily pre-eminent in a great national institution. It is important that that should be recognised.
    It is important, too, that we should not always remove an object from its setting if it has been surrendered in lieu of tax. However, it is appropriate for certain objects of international importance to be placed in the National gallery or elsewhere. Those of us who take this line do not say that never at any time should anything go to a museum when surrendered in lieu. We argue that it is important to consider historical background and association.
    It seems that the Government are seeking to recognise that factor and to do what my hon. Friends and I are seeking to introduce in the new clauses that have been grouped with new clause 2. I rest content. I thank my right hon. Friend for his response.
    Mr. J. Grimond: I welcome Government amendments Nos. 50 and 33. I speak as an ex-secretary of the National Trust for Scotland. One of our fears was always

    1379
    that the most valuable and essential features of houses, gardens or other items offered to us would be removed from their natural position by, for example, a museum or sold by the owners. I welcome the provision contained in the new clause, as did my hon. Friend the Member for Isle of Ely (Mr. Freud) in Committee. One of my reasons for welcoming the Bill is that I hope that it will allow houses and other places where various works of art have been built up together to be preserved as a whole.
    I consider that a good deal of nonsense is talked about our national heritage. It sometimes appears to consist of Italian pictures, French furniture and German porcelain. It seems to be valued exclusively on the ground of how much it will fetch on the wholly bogus international art market.
    I take the belated opportunity of congratulating the previous Labour Government on refusing to buy the whole of Mentmore, lock, stock and barrel. It was accumulated by an eminent Austrian. It came into our heritage, if it ever came into it at all, comparatively late.
    I am campaigning against stuffing cellars in galleries with pictures and other objects. It is becoming a matter of prestige for every body of trustees and every curator to spend as much money as possible, regardless of the number of objects that are already under their control and very often, to my mind, regardless of the beauty of the objects that they are accumulating.
    The test of those who talk a great deal about our national heritage is whether they are willing to return some Canalettos to Venice. They would be extremely pleasent to look at if they were there. We need not go so far as to return the Elgin Marbles. If we really care about our national heritage and the heritage of others, we should not be so selfish as to refuse to return certain items elsewhere.
    Valuable porcelain, pictures and furniture will not be destroyed if they are not placed in the cellars of galleries. They will not be torn up or burnt. There are a great many extremely pleasant houses, churches and other buildings of various types, as well as attractive parts of towns and a great deal of pleasant countryside, that will be destroyed if we do not do
    1380
    something. Even if they are not physically destroyed, they will be broken up in such a way that they will lose their beauty and significance.
    In the Government amendments there is much reference to "significant association". In my experience as an ex-secretary of the National Trust for Scotland, there are a great many houses that are beautiful but not significant. They have rooms that are extremely pleasant as rooms. Their carpets, hangings and decorations are really all of one piece. Will such houses come within the Government amendments? I cannot say that they are especially significant. They are simply beautiful. They are pleasant to look at. A great many people enjoy them. I recognise that they may not be of great historical importance, but I hope that they will come under the heading "significant".
    I understand that power will be given to keep in their place objects that fall within the terms of the new clause and amendments. There are other objects which occasionally come on to the market. They are bought by public authorities or they are offered to them. These objects are not necessarily associated with places, but with families. Can they be returned to suitable places? For example, there are many objects associated with Marlborough and Wellington. Although certain objects may never have been in houses occupied by the two dukes, will they be offered to the appropriate houses?
    Furthermore, there are personal possessions which, to my mind, would be best kept in houses associated with those concerned, even though they may have no direct association with those houses or places.
    There is a provision that Ministers must obtain expert advice. I am extremely chary of expert advice and anything to do with aesthetics. It seems that some experts value objects according to their significance, their date and the view of other experts rather than according to their beauty. For example, I do not know how many people went to look at Rennie Mackintosh's desk, which was exhibited in London not long ago. It was bought for £80,000. It is a significant object. I find it difficult to describe it as extremely beautiful. I have the highest admiration for those who bought it for

    1381
    the under-bidder, the Louvre, and I recognise the importance that it has in the history of furniture. However, one would need the advice of a few other than experts before laying out £80,000 on it.
    Experts have a strong resemblance to magpies. They adore accumulating stuff. I took part in debates in the House on the future of the Lane pictures. It became apparent that the curator of the Tate gallery was determined to keep them. To my mind there was no doubt but that the Lanes should go back to Dublin. The curator was determined to get his handson them even though he had plenty of French pictures.
    The wretched Shetlanders once let out of their hands the treasure that had been discovered on St. Ninian's Isle. Had it not been for the surprising honesty of the British museum, the Shetlanders would have found it sucked into the Edinburgh galleries before they could say "knife". However, it ended up in those hands, and many people regret that to this day.
    I hope that when the Government consult they will include in their consultations the local people. I hope, too, that they will take steps to ascertain how much pleasure certain houses are giving and how many people visit them.
    5 pm
    Can these objects go out on loan? If so, does that open up the places in which they may ultimately be placed by the commissioners? For instance, would it be possible to lend these objects permanently to private houses which are open to the public? There are, perhaps, many objects of art which might be returned to some of the great houses in England which are not under public control. Does the Bill give power to lend those houses collections of works of art? Can such items be offered to churches? For instance, now and again it might be possible to reunite such things as screens in churches. Is that possible under the Bill, because the uniting of works of art that have been severed might greatly enhance the value and beauty of each object.
    Can such objects be given to local trusts, as has already been mentioned? Is it possible for the Government to give any assistance in relation to insurance? What prohibits many local trusts from
    1382
    keeping valuable objects is the possible cost of insurance. Will the Government insist that objects of art loaned out are insured, and, if so, is it possible that the Government will assist with the payment for insurance?
    With those questions and few remarks, I greatly welcome the clause and the Bill as a whole.
    Mr. Andrew Faulds: I am delighted that we have had a contribution from the Liberal Bench. The right hon. Member for Orkney and Shetland (Mr. Grimond) asked some interesting questions and I am sure that the Minister will answer them in due course.
    I felt that the right hon. Member was being a little provocative—perhaps that is his purpose in the debate this afternoon. Hadhe been party to the Committee proceedings, he would have known—I believe that all my colleagues will agree with me—that we were not concerned with Italian paintings, French furniture or German porcelain. We covered the whole range of the heritage and concentrated more on landscapes—the original concept of Hugh Dalton—historic houses in all parts of the United Kingdom and objects of historical significance to certain localities. The right hon. Gentleman should have read the Committee proceedings. Some of his questions might have been answered had he done so. He would have known that we were not specifically concerned with what we had managed to collect and collar from the four corners of the world.
    Mr. Grimond: The hon. Member for Warley, East (Mr. Faulds) is an extremely unprovocative man. Therefore anything that touches on controversy is no part of his nature. I am sure that he will accept that I am aware of that. I am aware of the Committee proceedings, and I took the opportunity to point out the excellence of the Committee. Of course, if the whole of the art world were loaned to geniuses such as the lion. Member and the other members of the Committee, none of us would have a moment's uneasiness. The trouble is that people outside the Committee do not always behave with the wisdom of the hon. Member.
    Mr. Faulds: I am happy to accept that. We Scots have a particularity in wanting to be specific and detailed and

    1383
    have precise answers to the questions that we raise. Therefore, I back the right hon. Gentleman very strongly on the matters that he raised and I hope that the Minister will answer him. I am delighted that he has joined us in the debate this afternoon.
    I had intended to make somewhat adverse comments on new clauses 2, 7 and 8, but I understand that those are likely to be withdrawn. I hope that they will be. We rehearsed the arguments in some detail in Committee, so I will not pursue them in the House this afternoon. I will merely point out that I think that by amendment No. 50 the Government have acted most handsomely and responsibly, by putting paid to the need to debate the new clauses.
    It has always seemed to me that the in situ question, about which so much interest in reaching a sensible solution has been expressed, should figure in some way in clause 9, which deals with the disposal of works of art in satisfaction of tax. The reason for referring to the in situ question explicitly in that clause is that the concept is a new one, in the sense that it has hitherto enjoyed no statutory status.
    The right hon. Gentleman the Chancellor of the Duchy of Lancaster fully acknowledged the desirability of dealing effectively with this important question, and he has achieved this in an exemplary way. I am happy to use the following words in reference to the right hon. Gentleman. The warmest congratulations are due to him for having come up with a form of words which takes proper account of the views of both sides of the House and which maintains a sensible balance between them. Only fanatical extremists would question the wisdom of the Chancellor of the Duchy of Lancaster's solution.
    Now that indemnities can be made available for loans of selective works of art back to their original locations, the in situ question seems well on the way to a practical solution. What has been achieved in this respect in the Bill will turn out—I have no doubt of this—to be of lasting benefit to the public.
    Having paid that encomium to the wisdom of the Chancellor of the Duchy of Lancaster and his hon. Friend the Minister, I end by asking the right hon.
    1384
    Gentleman, by way of postscript, whether he can now give the House some indication of the sources of expert advice to which Ministers propose to turn in this connection.
    The Under-Secretary of State for the Environment (Mr. Hector Monro): I am glad that we are able to continue this debate in such a constructive way. I thank my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack) for his kind words. I also welcome him to what so far has been an all-Scottish debate. My thanks are due also to the hon. Member for Warley, East (Mr. Faulds) for his kind words about the amendment that we have tabled, which I hope meets many of the points that were raised by hon. Members.
    It is right—and this is the value of these clauses—that we should recognise the association of a picture, a piece of furniture or a great family heirloom with its own home, where it has been since it was painted, constructed or brought back to from some distant battlefield, and which is therefore the hallowed pride of a family who may have looked after it for generations. That is why, in Committee, we accepted that certain objects of great eminence should, if possible, be seen in the historic homes where they have remained for generations. I hope that this policy will be developed over the years once the Bill has become an Act.
    I welcome the comments of the right hon. Member for Orkney and Shetland (Mr. Grimond). I know that for many years he has had a keen interest in the arts and the heritage. I am happy that he wished to join us in our debate today. However, he should look carefully at clause 16, which deals with indemnities, because this has changed dramatically since Second Reading. It is now possible for the type of object that we are discussing to be loaned for the purposes of exhibition where reasonable public access is available under indemnification proposals, which covers insurance. What we must look at carefully is the importance of the object to the exhibition, and security. In all probability we must rule out churches because of the great difficulties with security in churches which are open for worship throughout the day and in the evening.
    Mr. Cormack: Some cathedrals have treasuries and museums attached to them

    1385
    which are very secure. I have been asked whether they will be eligible, and I am sure that my hon. Friend will confirm that they will be.
    Mr. Monro: I should not like to give any firm answer off the top of my head. Each treasury, as my hon. Friend the Member for Staffordshire, South-West calls them, will have to be looked at carefully. I should not like to give a firm assurance at present, but I shall write to my hon. Friend about it as soon as possible.
    I think that I owe a reply to the amendment of the hon. Member for West Lothian (Mr. Dalyell), but the important thing that I wish to do shortly is to speak to amendment No. 50 and move it at the appropriate moment. As the hon. Member for West Lothian knows, we had a long discussion about leaving in situ objects that had been accepted in lieu of tax. As I said in Committee, it is the Government's policy to encourage this. We have tabled an amendment specifically to deal with disposal under clause 9.
    It is unnecessary to amend clause 12 because, as I told the Committee, when the Bill becomes law paragraph 17 (4) of schedule 4 to the Finance Act 1975 already empowers the Treasury, the Chancellor of the Duchy of Lancaster and the Secretary of State for the Environment to have regard to leaving objects in situ. We intend to discuss this fully with the expert advisers to ensure that there is no doubt about the nature of the test that we wish to see applied.
    I now turn to the new clause in the name of the hon. Member for West Lothian, who was constructive and helpful throughout our Committee proceedings. Our view is that it is unacceptable, because, in effect, it drops the pre-eminence test for certain objects. We accept that some objects can be regarded as pre-eminent only in a particular setting, but in that setting they are of pre-eminent quality. That is catered for in the Bill and in existing law.
    However, we do not think that it would be right to accept any object, because of its association with a particular building, ad hoc, case by case, at the discretion of Ministers, where the house itself was not offered in lieu of tax. That
    1386
    would devalue the currency of the quality test, which is something that we must bear in mind. It is difficult enough for the expert advisers to operate to a consistent standard, and to widen the scope of the test in those cases where the object would remain associated with a building which would remain in private hands seems both unworkable in practice and objectionable in principle. As I think hon. Members have generously accepted, Government amendment No. 50 covers the points that we discussed in Committee, and I hope that it will be accepted by the House.
    Although the Treasury has the formal responsibility for allocating objects accepted in lieu of tax, it has already de facto delegated this to the Ministers with departmental responsibility for the arts and the environment. In practice, what Ministers do is to consult the appropriate expert body—usually the Royal Commission on Historical Manuscripts or the Standing Commission on Museums and Galleries. These bodies take into account a wide range of issues on conservation, security, public access, opportunity for study, appropriate context, and so on.
    Until quite recently the Treasury took the view that it was wrong in principle for someone who had offered property in lieu of tax to be allowed to retain the benefit of it in his own house, unless the house was also offered in lieu of tax. But this is no longer the situation, and there are several cases now under consideration where items accepted in lieu of tax may be left in situ in a privately owned building.
    Thus, there really is no need to amend the law to provide for this, and, in strictness, if we mentioned one factor which should be taken into account in deciding on the disposal of property we ought to mention them all. However, our debates have shown that the question of leaving items in situ is one to which hon. Members on both sides of the House give special importance, and in those circumstances we consider that it would be right to provide a provision requiring Ministers to consider the in situ point in appropriate cases.
    I believe that amendment No. 50, which I shall move when we come to clause 9, fulfils all hopes and aspirations of hon. Members who served on the Committee and, I hope, of hon. Members

    1387
    who are present today. If the hon. Member for West Lothian withdraws the new clause, I am sure that he will find that the issues that it raises are adequately covered in amendment No. 50.
    Mr. Dalyell:The Government have made a serious attempt to meet all the points that have been raised, and I thank the Minister for his reply. I have simply one request, which is that he should look carefully at what said about objects being restored to a certain place. If the Government think that my argument is fairly convincing—incidentally, I think it is—perhaps they will consider introducing a Lords amendment at the appropriate time. May we have the promise that such an amendment will be seriously considered?
    Mr. Monro: I note the hon. Gentleman's point, and I shall look carefully at what he has said. If the object is of pre-eminent importance, or if it could be so in situ in the context of its old historical home, I should have thought that it would be possible for it to be loaned under indemnity from whichever museum or gallery in which it was residing, accepting, of course, that the historical house has some form of access for the general public. I shall look at what the hon. Gentleman has said and let him know whether there are further developments.
    Mr. Dalyell: That is good enough, and on that basis I beg to ask leave to withdraw the motion.
    Motion and clause, by leave withdrawn.
    5.51 pm

    New Clause 3
    EXEMPTION FROM STAMP DUTY ON FUND-FINANCED TRANSACTIONS
    '(1) No stamp duty shall be payable on a conveyance or transfer of property made to the Trustees of the National Heritage Memorial Fund or on a conveyance or transfer to any body or institution where a grant or loan has been made to the body or instiution with respect to their acquisition of the property so conveyed or transferred.
    (2) References in this section to conveyances or transfers include references to all occasions on which stamp duty would be chargeable but for the effects of this section.'.—[Mr. Dalyell.]
    Brought up, and read the First time.
    Mr. Deputy Speaker: With this we may take the following:
    New clause 4—Exemption from capital transfer tax on gifts to the fund.
    New clause 5—Exemption of tile Fund from all taxes and rates as a memorial.
    New clause 9—Acceptance of property in satisfaction of income tax in certain circumstances.
    Mr. Dalyell: I beg to move, That the clause be read a Second time.
    Both an amendment and a double-banking new clause were put forward during Committee and debated, and the discussion can be found in columns 210 to 216 of the Committee proceedings. The wording was defective, but the Minister correctly understood one aim, which was to exempt the recipient of grants and loans from the stamp duty that would otherwise be chargeable on conveyances and transfers of real property made with the aid of grants or loans from the fund. The Minister made it clear in Committee that relief from stamp duty is a matter for Treasury Ministers. It was heartening to hear what he said, and perhaps one can directly adduce from what he said that exemption will be forthcoming in the next Finance Bill. I wonder whether I intercept a nod and a wink from the Minister of State, Treasury. The hon. and learned Gentleman remains very silent and perhaps does not want to confirm that. Ah, good, I notice that he has nodded.
    The Minister also referred to the position of the trustees themselves, which led to a discussion on their future status not as a charity but as a body receiving the same reliefs as a charity, which brings us back to one of our old topics. The debate brought to light the extraordinary situation that will prevail if the trustees make an acquisition of real property. On that, they will pay 1 percent. stamp duty, assuming that they are granted status akin to that of a charity. They will rapidly part with that property and the recipients will also pay stamp duty, because, as the Minister made clear, even those in receipt of gifts pay stamp duty. Therefore, stamp duty will be payable twice, and it may total at least 2 per cent., if not 3 per cent., depending on the status of the recipient body.

    1389
    The first purpose of tabling the new clauses is to draw attention to the fact that, in spite of giving the trustees some relief, and in spite of the relief that recipient bodies may already have, at least 2 per cent. stamp duty may be paid in circumstances in which the trustees themselves make an acquisition and transfer it to a recipient.
    The second purpose is to draw attention to the need to extend the exemption asked for to those transfers and other transactions that also pay stamp duty, such as leases. Here it seems that the words in clause 11 give exemption to all such transactions in respect of property accepted in lieu of tax. It is to be hoped that the exemption for the activities of trustees will extend just as widely, and I put that in question form.
    It is ridiculous to vote extra money to Ministers who must then pay it to the trustees—incidentally, going through the barrier of public expenditure in the process—merely to provide the trustees with cash to pay back the money in the form of stamp duty. Will Treasury Ministers please bear that in mind and come to the sensible conclusion that total exemption should be given to the trustees from paying stamp duty, whatever they may do about recipient bodies?
    With regard to recipient bodies, the Minister pointed to the anomaly that may be created when stamp duty exemption is given on purchases assisted by grants or loans from the fund, in contrast to the situation when gifts are made to the same recipient bodies from outside, with stamp duties paid thereon. The best way of dealing with that anomaly would be totally to exempt not only the same by private treaty—be it assisted from the fund or otherwise—but also gifts made to bodies that are listed in paragraph 12 of schedule 6 to the Finance Act 1975. Stamp duty may only be 2 per cent.—1 per cent. in relation to charities—but surely it is rather petty to charge it on gifts for national purposes and on purchases made by august bodies.
    In that context, it is appropriate to look at the position of the various bodies that are listed in that paragraph of schedule 6. The position is not quite clear, but it seems that only the National Trust, the National Trust of Scotland and, strangely, the Department of the Environ-
    1390
    ment, including transport, escape paying stamp duty at the present time—be it at 2 per cent. or 1per cent. if the body is a charity. Even so, the exclusion of the two national trusts is significant. It must point the way towards total exemption being given to the fund as a body of comparable standing, at the very least. At this stage I should like to say to the Minister of State what a pity it is that we have not yet debated the Goodman report on charities. There are basic issues that should be discussed which are outside the immediate context of the heritage.
    New clause 4 also stands in my name. The subject of exemption from capital transfer tax of gifts to the fund was raised several times, both on Second Reading and during the Committee stage. One aspect has not been debated and gives rise to the probing new clause—that is, the inclusion of the name of the fund in the paragraph 12 list in schedule 6 to the Finance Act 1975. It carries with it the right to make private treaty purchases involving the inducement to the vendor of the so-called "douceur". That right is essential for the proper functioning of the fund. Without it, it will have difficulty in making acquisitions and may well have to pay more than would otherwise be the case.
    Apart from that aspect, it has to be said that the fund is not large enough. Clearly, it needs more capital and income. All that can be done to encourage the making of gifts to the fund should be carried out. That point was emphasised particularly by George Russell, the lawyer to the National Trust of Scotland. Donors are only human. To give money in the knowledge that they or their executors will have to pay CTT and any capital gains tax arising from the disposal that is inherent in the gift would be most damaging. It is urgent to put the fund into the paragraph 12 list in schedule 6.
    No firm undertaking has yet been given that the fund will be put into the list in the next Finance Bill. However, I know better than to ask the Minister of State to give clear undertakings about the nature of the Finance Bill before the Budget. Nevertheless, he may be in an expansive mood and may tell us something about that. Now that Treasury Ministers are permitted to speak, it seems appropriate to call for a direct and firm

    1391
    undertaking, although I should understand if that undertaking were vague.
    New clause 5 is grouped with my new clauses. It has my entire support. As hon. Members may know, I put up the amendment in Committee which may have sparked off the new clause, at least in relation to the reference to the recognition of the establishment of the fund as a memorial fund. I am glad to see that the pitfall of reference to Britain, as was the case with my amendment at Committee stage, has been avoided by using the words "United Kingdom". I hope that that will satisfy my hon. Friends, not least my hon. Friend on the Front Bench from Dunbartonshire, Central (Mr. McCartney).
    Whatever their secret thoughts may have been, I hope that Treasury Ministers will take the sentiments in the new clause about the fullest possible tax exemption to heart. I hope that they will come up with the necessary clauses in the Finance Bill without fail. New clause 9 is also of considerable interest and should be another guiding light for Treasury Ministers. The restriction to CTT and coincident capital gains tax, and now interest thereon, plus estate duty, is rather too restrictive. Income tax on the winding up of an estate by executors is just as destructive as the other taxes that refer to heritage properties. It does not matter which tax causes dispersal; it is the dispersal itself that matters. Here, dispersal should be taken in the wider sense of export, which could well be triggered by opposed to that prevented by acceptance in satisfaction of income tax on winding up.
    This is all a bit of a mouthful. However, I know that the Minister of State is used to dealing with mouthfuls, not least from me. I am sure that he will reply in some detail.
    Mr. Cormack: As new clause 5 touches on some similar points and stands in my name and that of two of my hon. Friends, I feel bound to say something, although little. There is a great deal of substance in what the hon. Member for West Lothian (Mr. Dalyell) has said. There is no point in my repeating it. I believe that there is a case for consideration.
    I am delighted that my hon. and learned Friend the Minister of State is taking part in the debate. We were all
    1392
    devastated when he was removed from the list of members of the Committee. A gloom fell over our deliberations on the first day following his absence, from which we never adequately recovered. Now he has a chance to tell us the exact position of the Government. I shall not delay him for a moment from doing so.
    Mr. Faulds: I should just like to put in a brief word. At this stage, in connection with new clause 9, is it not appropriate for the Minister or his colleague to comment on how the arguments would affect the taxation problems of the Seilern and Wernher collections? That is particularly so because these problems are now matters of considerable public knowledge.
    The Minister of State, Treasury (Mr. Peter Rees):I rise to intervene with a certain diffidence. As my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack) has pointed out, I did not take part in the debate in Committee.
    Mr. Dalyell: We missed the hon. and learned Gentleman.
    Mr. Rees: I am flattered. I took particular note of the kind remarks that were made. I cannot believe that my absence detracted from the quality of debate, judging from the Hansard report, which, of course, I read assiduously. I felt that my hon. Friend the Under-Secretary of State for the Environment—dare I say it in his presence—dealt with the points far more adequately than I could possibly have done. Anything that I can contribute on this occasion is only a gloss on the points that he made.
    Mr. Dalyell:Is that an invitation to send for the Under-Secretary during the Finance Bill when we have differences of opinion?
    Mr. Rees: That is a matter of discretion for the hon. Gentleman. I notice that he said in one of his interventions that it was not his normal habit to send for Law Officers but that when he sent for them they came. Perhaps my hon. Friend the Under-Secretary is an honorary Law Officer henceforth on these matters. Perhaps that is not a status that he will accept with relish.
    I address myself to the central theme of the four new clauses—the tax status of the fund. Of course, it is the fund with which we are concerned rather than

    1393
    the trustees, because it is to be given corporate status. I shall give an undertaking to the House which I hope will allay many doubts and shorten the debate. It is our firm intention to introduce provisions in the next Finance Bill which will, for tax purposes, give the fund no less than the advantages of those who enjoy charitable status.
    I say advisedly that it will be no less than that status, because, in one aspect of my response to the hon. Member for West Lothian (Mr. Dalyell), it would be our intention to give them slightly more than that status. In other words, we believe, with him—indeed,it was the almost unanimous sentiment of the Committee—that it should be added to the list in paragraph 12 of schedule 6 to the Finance Act 1975 for the purposes of capital transfer tax. In other words, there will be total exemption for CTT purposes without limit. Of course, the House will appreciate that there are certain limits on normal disposals in favour of charities.
    Mr. Cormack: That is spendid news. I am sure that we are all delighted. However, will my hon. and learned Friend confirm that the Finance Act will make the provisions apply retrospectively—in other words, that they will apply from 1 April so long as the fund comes into being on that day?
    Mr. Rees: I have addressed my mind to that point. I suspect that we are talking about a gap of only five or six days. I understand from my hon. Friend the Under-Secretary of State for the Environment that the fund will come into operation on 1 April. Of course, the financial year starts on 6 April.
    Mr. Cormack: Things can happen.
    5.30 pm
    Mr. Rees: Anything can happen. I shall certainly take the point away with me to consider, but it would not be right to enmesh myself in points of such detail now. I hope that the House will bear in mind that we are probably talking about a gap of five days.
    It would not be appropriate to give the fund or the trustees charitable status as such, because that would involve a web of other obligations outside the fiscal field. I resist the temptation to
    1394
    debate the merits or demerits of the Goodman report with the hon. Member for West Lothian. If I did so, Mr. Deputy Speaker, you would no doubt rule me out of order. I notice a frown clouding the normally cheerful visage of the hon. Member for West Lothian. We propose that for fiscal purposes the fund should have no less than the advantages enjoyed by those with charitable status. However, there is a range of other obligations and liabilities, and if it were to receive charitable status it would become subjected to the attentions and supervision of the Charity Commissioners. That was not a matter for debate in Committee. I do not think that it is a matter for debate in the House. I hope that the hon. Gentleman will not look the gift horse that I have trotted into the Chamber—if I may describe it that way—in the mouth. I hope that he will realise, on reflection, that it is as good as it appeared to be a few minutes ago.
    New clause 3 deals with the fund and any bodies aided by the fund. I have certain reservations about such an extension. Many, but not all, of the bodies to which the fund might direct transfers are charities, as the hon. Gentleman pointed out. That would be widening unduly the ambit of the relief that I propose. There might be undesirable pressures on the trustees of the fund to make grants to various bodies to enable them to claim the exemption. I shall consider that, but I think that it would be tidier, cleaner and more appropriate if we concentrated on the fund itself.
    I take the point made by the hon. Member for West Lothian in regard to subsection (2) of new clause 3. I suspect, though, that there are certain obscurities. I am not certain whether it was drafted by his deft hand or by others. I understand that he wishes to cover leases, but I am not persuaded that leases will figure largely in the kind of transactions with which the fund is likely to be involved. Perhaps I am taking too narrow a view of the question and there might be situations where people wish to enter into such transactions and the fund may wish to grant long leases. That point can be considered when we draft the relief proposal in the next Finance Bill, but I suspect at the moment that new clause 3 is a little wide.

    1395
    I hope that I have dealt with new clause 4 to the satisfaction of the House. I hope that it is amply covered by the assurance I have given for CGT purposes. The fund would be in the same position as other bodies listed in paragraph 12 of schedule 6 to the Finance Act 1975.
    I turn now to new clause 5. Dare I say to my hon. Friends in whose name it stands that I feel that total exemption from all taxes is a little too wide? Curious situations could arise. Trustees may even be exempted from Customs duties. I cannot believe that that is in the mind of my hon. Friends. I hope that they will accept that the point will be adequately covered by the assurance that I have given.
    Mr. Cormack: My hon. and learned Friend will appreciate that this is a probing clause. We hoped to bring out precisely the points that he has made.
    Mr. Rees: I thank my hon. Friend, and I shall not detain the House further on that point.
    I turn now to new clause 9, which stands in the name of my hon. Friend the Member for Eastleigh (Mr. Price). He is seeking—the point was also deployed by the hon. Member for West Lothian—to extend the acceptance of property in lieu of income tax. That is a substantial extension, and the clause is a little obscure. The acceptance of property in lieu of income tax is not simply limited to the income tax of the deceased, or even his estate. I am not certain why tax arising after death should be so exempt on the residue of the estate.
    Mr. Faulds: It should be so exempt. If it is not, in the case of the Simon collection some paintings may have to be sold to pay off outstanding tax debts and the collection will be thereby diminished.
    Mr. Rees:I hope that the hon. Gentleman will not think me ungracious if I say that it is a little inappropriate to debate the details of two particular cases. If he would like to write to me on that matter, I shall answer him in detail.
    Mr. Faulds: I am sorry to have to mention these particular cases, but they are of public knowledge. I am not raising matters improperly. The point is whether we should refer to specific cases.
    Mr. Rees: My point is that it would be inappropriate for any hon. Member at this Dispatch Box to debate the facts of a particular case unless he is encouraged to do so by those directly affected. I am not privileged to have access to the files of any one taxpayer unless the taxpayer or his representative invites me to look at them. I take the hon. Gentleman's point; and, as I said, we shall certainly examine the general principle involved.
    Mr. Dalyell:Is there not a general point that it takes so long to settle estates? I am not accusing lawyers of having a Dickensian circumlocution on this matter. I know exactly what happens, and it is precisely for that reason that I hope that the hon. and learned Gentleman will give consideration to the length of time that it takes in practice, as opposed to in theory, to settle such matters.
    Mr. Rees:We are deeply conscious of that. The hon. Gentleman in one way and I in another way have certain connections with the law. We are as conscious as any hon. Member of the problem. There are cases where negotiations with the capital taxes office have played a part, but I do not think that general delays in matters should weigh with us too much when we are devising a system of relief from taxes in this particular area.
    New clause 9 refers to
    "income tax outstanding at or arising after death"
    without any limitation. It could happen that if the residuary estate comprised a work of significant value, the income of the residuary estate, which had no relationship with the particular work of art, could be prayed in aid in relation to it. Many matters would need to be tied up. I do not think that any hon. Member is pressing the Government to accept new clause 9 in its present form, but we shall take on board the general point made. It is not comprised within the undertaking that I have given.
    Mr. Dalyell: That is good enough for me.
    Mr. Faulds: It is not quite good enough for me. I am delighted that the hon. and learned Gentleman has given

    1397
    those undertakings, but he must examine the matter further. If he does not, there will be problems within a matter of months of the setting up of the fund.
    Mr. Rees: I have made careful notes of the hon. Gentleman's points. In so far as it is proper for me to do so, I shall certainly look at the two cases mentioned. As I said, it may no the proper, unless I am invited to do so. I accept the general points made by the hon. Members for Warley, East (Mr. Faulds) and for West Lothian, but, as I said, at this stage I am not in a position to give any undertaking. I shall bear in mind the dire warnings that have been conveyed. We are all aiming at the same objective, and we must decide how widely we could and would extend this form of relief.
    I hope, however, that the general undertaking that I have given will satisfy the House. I also hope, notwithstanding my absence from the debates in Committee, that hon. Members will accept my remarks in the spirit in which they are offered and not press the new clauses to a Division.
    Mr. Dalyell: I do not wish to look a gift horse in the mouth, and I understand the powerful point about the web of obligations. I shall seek to withdraw the new clause in the knowledge that, doubtless, some of these issues will be discussed in the sweaty and sultry atmosphere of Committee Room 10 in late June or early July—that is, if my hon. Friend the Member for Neath (Mr. Coleman) puts me on the Finance Bill Committee.
    I therefore beg to ask leave to withdraw the Motion.
    Motion and clause, by leave, withdrawn.

    Clause 2
    PAYMENTS INTO THE FUND
    Mr. Dalyell: I beg to move amendment No. 1, in page 2, line 18 at end insert:
    '(1A) The initial sum paid into the Fund in the financial year in which it is appointed that section 1(1) above shall come into force shall not be less than the value of the investments in and other assets of the National Land Fund on 1st April 1980 is predicted at the time when that sum is determined by the Ministers.'.
    Mr. Deputy Speaker: With this it will be convenient to take the following amendments:
    No. 39, in clause 18, page 10, line 36, after 'modify', insert 'a)'.
    No. 40, in page 10, line 38, at end insert:
    'and
    (b) section 2(1A) above such that the day appointed by the order shall be substituted therein for 1st April 1980'.
    Mr. Dalyell: The first amendment is the main one. The other two are consequential and simply allow for any difficulty that may arise if part I of the Bill is not brought into force on 1 April 1980.
    The first amendment requires that a sum equal to that in the National Land Fund is transferred to the new fund, not merely £12 million—plus, as envisaged by Ministers. That implies that Ministers will have to find the money for the financing of acceptances in lieu from a higher Vote, presumably at the cost of an additional £3 million.
    One purpose in tabling the amendment is to allow discussion of the expenses that will be incurred by the trustees in setting up shop—possibly purchasing accommodation, if not leasing it, unless Government property is to be made available, and buying furniture, equipment and so on, unless that also is to be loaned free of charge.
    Another purpose is to allow debate of the difficulties in which the trustees will find themselves over the purchase of investments that will not be earning interest but which will rather, at some time in the future, provide them with income in the form of dividends. If the trustees have to buy investments too close to the dividend date to obtain such income, they will have to pay the more for them. That will whittle away, a little at any rate, of their capital.
    All that is quite apart from consideration of whether the Government should make a more handsome gesture and pay the full sum in the Land Fund to the trustees without reducing it by £3 million to cover the cost of acceptances in lieu in the first year.
    It is not one of the major amendments but it would be generous if the Government could accept it.
    Mr. Monro: I appreciate the objective of the amendment, which is to try to

    1399
    obtain a further £3½ million from the Government. I have one little point that might please the hon. Member for West Lothian (Mr. Dalyell).
    Many people would be delighted if we could give the additional sum, but, regrettably, we cannot unless we renege on our commitment to continue the arrangement whereby executors can offer works of art in lieu. It would also have to be at the expense of other desirable, necessary and important expenditure programmes. That is financial reality, which perhaps in his commendable enthusiasm on behalf of the Heritage Fund trustees the hon. Gentleman overlooked.
    We said that an amount equivalent to the balance in the National Land Fund on 31 March 1980 will be provided for the trustees and acceptances in lieu in 1980–81. As the hon. Gentleman indicated, that is the £12 million in round figures to the trustees and £3½ million kept separate for in lieu. We made it clear from the outset that that available sum would have to cover both kinds of expenditure.
    We estimate that £15·5 million will be in the Land Fund at the end of this financial year, and that is why we have taken that figure for discussion throughout the Bill. If the balance is less than £15·5 million, we shall honour our commitment. If it is significantly more, our intention is to make the excess available to the trustees. If the market goes up, we are batting on a good wicket.
    5.45 pm
    The trustees' share will be about £12 million, which is by no means a derisory sum. It will be supplemented by annual grants and the interest earned on the original sum will be available for the trustees.
    It has been suggested that the initial cost of the fund will be disproportionately high in relation to the ongoing costs once it is firmly established and that the grant should be supplemented to take account of that and prevent too rapid depletion of the fund's resources. The cost of setting up the fund's administrative machinery will be met in the current year by my right hon. Friend the Chancellor of the Duchy of Lancaster's Department and the Department of the Environment.
    In consultation with the chairman-designate of the trustees, when he is appointed, we shall acquire suitable office accommodation and equipment and take steps to engage the nucleus of the administrative staff, so that the fund can be launched as a going concern on 1 April. The costs involved, as I said, will be met from my right hon. Friend's Department and the Department of the Environment. The trustees will assume responsibility for the day-to-day running costs from 1 April, and they will be taking on an office that is in being.
    Mr. Cormack: Has it yet been decided where the trust will be housed?
    Mr. Monro: No. We would want to involve the chairman-designate. I am sure that my right hon. Friend the Chancellor of the Duchy of Lancaster, with his involvement with the PSA and others, will have a number of suitable offices available in London, which is where I believe that we should all like the offices to be based.
    The hon. Gentleman indicated that he believed that it would be some time before substantial income results from investments, but that is not strictly so. It is possible to invest such a substantial sum so that it bears interest quickly. There will be income flowing into the fund in its early days. In practical terms, it will be some weeks or months before there is any major purchase or assistance. We know how long it takes to get lawyers and trustees of estates working quickly towards a conclusion, so there will be that initial period during which income can be earned.
    We have been as generous as we possibly can. If the Land Fund is above £15·5 million, that will be to the advantage of the trustees and in lieu.
    Mr. Faulds: I do not believe that the Committee understood why the Minister felt it necessary to differentiate in the grant between the first year and later years. I do not believe that it was ever explained. I accept the hon. Gentleman's arguments that there will be investment coming in and immediate decisions will not be taken for two or three months. However, if a crisis should arise in that first year, and the trustees have to eat into capital—which may well occur—will the Government consider putting forward an

    1401
    emergency grant in those unhappy circumstances?
    Mr. Monro:The greater the emergency, the longer it will take to resolve. A crisis such as Mentmore would not be resolved in a matter of weeks. It would take much longer. I do not make any commitment, but if a situation arose that would dramatically deplete the amount of money available to the Heritage Fund trustees, they should turn to the Government for advice. The sale of Mentmore would have removed half of the fund in one purchase. Now that hon. Members have taken a new look at the Heritage Fund, we shall not operate in that way. We are determined to do better than in the past.
    Mentmore and other large estates would have to be discussed with the Government. However, we must hope that such sales will be infrequent as they destroy the objectives of the Bill, namely, to keep country houses, estates and places of historical interest as they are. We do not wish them to be broken up and dispersed because of an unfortunate death or for financial reasons. If a crisis arose, the Government would stand by the Heritage Fund. How far the Government can go will be determined by economic circumstances.
    The hon. Member for West Lothian was right to raise that question and it has given me an opportunity to speak about the money available. It has also given me an opportunity to show that the Government are ready to take care of the expense of setting up the Heritage Fund Trust and its staff. If the National Land Fund is above £15·5 million on 1 April, any surplus will be to the benefit of the trustees. If the National Land Fund is not at that level, the Government will stand by their promise to ensure that that sum is available.
    We have played our part. I hope that with these assurances the hon. Gentleman will feel that he can withdraw his amendment.
    Mr. Dalyell: In a previous incarnation, as a senior Opposition Whip, Mr. Deputy Speaker, you had to put up with me for many hours during the Scotland Bill. I often told my own Front Bench that they had no right to go ahead with the Royal high school until the Scotland Bill had
    1402
    been signed, sealed and delivered. In the event, they did not take that advice. That was to the disadvantage of the taxpayer. However, I shall not complain too much as a good building has been restored although its use has not yet been determined.
    I am the last out of 630 Members of Parliament to lecture a Government on the need to act quickly and to think about headquarters. I shall not complain that the Government are not forthcoming about where the headquarters of the trust will be. I merely ask that those headquarters are not put on the fifteenth floor of a modern office block. This is an opportunity to set an example. We should take part in a rescue operation and rescue a building of distinction. That building will probably have to be in London.
    Mr. Cormack: I merely wish to suggest the Royal high school in Edinburgh. However, I do not do so seriously.
    Mr. Dalyell:Perhaps we could shift the Royal high school stone by stone to within the proximity of London airport. Does the building have to be in central London, or is there an argument for putting it within reach of Gatwick or of Heathrow? As trustees will come from all over Britain, there are advantages in having a prestige building near to an airport rather than in the centre of the city. I understand that this will depend on the buildings that are available. I simply ask that that point should be considered. Perhaps some building could be saved that would make an appropriate headquarters for the trust.
    Mr. Monro: I hope that all hon. Members will realise that the headquarters should be modest. There are a limited number of trustees and there will be—we hope—a small office staff. We therefore do not seek anything large or expensive. I suffer on the fifteenth floor of a modern tower block and I entirely sympathise with the hon. Gentleman. It would be an inappropriate place for the Heritage Fund trustees. I can think of some most attractive offices such as those which the Crown Estate Commissioners have in Carlton House Terrace, where trustees would feel at home. Their minds would be able to concentrate on their work in such appropriate surroundings.
    Mr. Cormack:The National Portrait gallery is vacating Carlton House Terrace very shortly. Accommodation will be available that is highly attractive.
    Mr. Morro:We shall bear that in mind. However, during the Committee stage it was said that no one could find Carlton House Terrace and that that was why no one went there. Perhaps that is a different point. We hope that the trustees will be given surroundings appropriate to their work. However, those surroundings should be of modest proportions. We want to spend money not on offices but on our heritage.
    Mr. Dalyell: I remind the Minister that there is a block of Government-owned property—owned, I think, by the Foreign Office—in the area adjacent to the Foreign Press Association. There are some beautiful rooms and houses that might be appropriate. With that thought, I happily beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.

    Clause 3
    GRANTS AND LOANS FROM THE FUND
    Mr. Monro: I beg to move amendment No. 2, in page 2, line 26, leave out 'or building' and insert', building or structure'.
    Mr. Deputy Speaker: With this we may also take the following amendments:
    No. 4, in page 2, line 34, leave out 'land or object' and insert 'property'.
    Government amendment No. 7.
    No. 8, in page 2, line 37, leave out 'a building' and insert 'any property'.
    No. 9, in page 2, line 42, leave out 'land or an object' and insert 'any property'.
    Government amendment No. 10.
    Mr. Monro: There was doubt among Committee members about the definition of "building" and whether it covered everything that we wished. The amendment changes "building" and inserts "building or structure". That may seem a humble amendment, but I hope that it will meet with the agreement of Committee members. Every point that was raised about the definition of "building" has now been adequately covered. Iron
    1404
    bridges were mentioned as examples of structures that might not have been covered by "building", although we thought that they would be.
    My hon. Friend the Member for Kidderminster (Mr. Bulmer) raised several points relating to amendment No. 5. I shall deal with that later, although it concerns car parks and we had thought that car parks might have been excluded. Government amendments Nos. 2, 7 and 10 clarify that point.
    Mr. Dalyell: I have tabled amendments Nos. 4, 8 and 9. I am glad that the Government have responded by tabling amendment No. 2. The Minister called it a humble amendment, but I am all in favour of humble amendments as long as they are effective. This amendment is effective. It clears up any doubts about structures on land. Although in Committee the Minister did not refer to land—including trees and growing things—I understand that the definition in the Interpretation Act goes that far. I have therefore withdrawn an amendment that was tabled last Thursday. I hope that that will satisfy the Council for the Preservation of Rural England as it has written to several hon. Members.
    Amendment No. 4 refers to clause 3(1)(d). I do not understand why there has to be a restriction on "land or object". Surely, anything that should be accepted by reason of its association with property—covered by paragraphs (a), (b) or (c)—should be eligible. Hence my amendment to substitute "property" and so avoid the exclusion of buildings and structures.
    Indeed, why should association be restricted to being with an eligible building, or even with
    "land or a building or structure"
    as it will be under Government amendment No. 7? This, as distinct from eligible property of any type, falls within subsection (1)(a) as my amendment No. 8 proposes. Certainly, land should be included here, and I am glad that the Government have included it.
    6 pm
    My amendment No. 9 amends the phrase in brackets in clause 3(2). This is consequential on the first amendment. Clearly there has been some advance in the Government amendments, but none;

    1405
    the less I cannot quite see why these cannot be made a good deal simpler by referring to "property" in a wider sense. Do we need to inhibit the activities of the trustees with such narrow and possibly confusing definitions? Has the Minister grasped this point? Would he like me to repeat it?
    Mr. Monro Mr. Monro indicated assent.
    Mr. Dalyell: My first amendment, No, 4, is to paragraph (d) in clause 3(1). It is not at all clear why there should be a restriction to "land or object" in the first line of the paragraph. Surely, anything that should be excepted by reason of its association with property covered by paragraph (a), (b) or (c) should be eligible. Hence my amendment to substitute "property" and so avoid the exclusion of buildings and structures. Indeed, why should association be restricted to being with an eligible building or even with
    "land or a building or structure?"
    This will be the case under Government amendment No. 7. This is distinct from the eligible property of any kind that falls within paragraph (a), as my amendment No. 8 proposes. Perhaps the Minister would like some comment from his advisers. That is understandable.
    Mr. Monro: The hon. Member for West Lothian (Mr. Dalyell) has asked me some detailed questions which I may not be able to answer completely. As I said earlier, we tabled our amendments to cover the word "structure" after "land or building" because we felt that it made the context that much clearer. It clarified the position of monuments, piers and chimneys, and so on, which might have been doubtful had we stuck to the terminology of "building".
    On the meaning of the word "land", the definition that I gave the Committee was inclusive. It did not cover everything that the word denotes in law. The legal maxim is that whatever is attached to the land is land. All the King's College scholars who were on the Committee knew of "quid quid adherat soli solum est", whatever that stands for. Therefore, any trees, plants or any kind of object attached to the land are all covered by the term "land". There is no doubt that everything that we have wished to include in the Bill is now satis-
    1406
    factorily covered by the definition, particularly after the Government amendments are accepted.
    Mr. Faulds: I think that the Minister has met very well the arguments made in Committee about the need to add the word "structure". His explanations about the addition of the word "land" are perfectly acceptable. I am delighted that the Government have so wisely moved in the spirit of the Committee.
    Mr. Monro: I thank the hon. Member. The hon. Member for West Lothian raised a point about the word "property". The feeling is that it would be more restrictive to have that word than the wording that is in the Bill. On reflection, and when he has also had expert advice, I think that he will feel that our wording is the better.
    I appreciate that I might not have given him a detailed answer on one particular point that he raised, but I shall do so as soon as possible. I hope that he will accept what I have said.
    Mr. Dalyell: Am I to understand that the Government will bring forward an amendment in the House of Lords if their lawyers and advisers think that that is necessary? Am I right in thinking that, if this is at all necessary after legal advice has been sought, the Government will do something at the appropriate stage?
    Mr. Monro: Yes, of course I shall give that assurance. If anything needs further explanation in the legal sense on the definition of "land", "structure" or "building", it will be done. It is the Government's wish that this legislation should become an Act of Parliament in the clearest possible terms. There is no point in approving a Bill that has a drafting flaw. I have no reason to think that it has, but I shall look at it carefully.
    Mr. Cormack: I should like to associate myself with the remarks of the hon. Member for Warley, East (Mr. Faulds). The Government have met the points made in Committee and the Government amendment goes all the way. I am glad that my hon. Friend has given an assurance to the hon. Member for West Lothian (Mr. Dalyell) that should there be any second thoughts about the clarity of this matter, the Bill will be amended in another place. Therefore, I welcome

    1407
    and endorse the Government amendments.
    Amendment agreed to.
    Mr. Monro: I beg to move amendment No. 5, in page 2, line 35, leave out from 'above' to 'by' in line 36 and insert
    'the acquisition, maintenance or preservation of which is in their opinion desirable'.
    Mr. Deputy Speaker:With this we may take amendment No. 6, in page 2, line 35, after 'opinion', insert 'should be acquired, or'.
    Mr. Monro:This is another clarification that was requested in Committee, particularly by my hon. Friend the Member for Kidderminster (Mr. Bulmer), who was worried about land that would or would not be included in the pre-eminent status, such as land for a car park, which would be extremely valuable if the property were open to the public. This amendment makes the position abundantly clear.
    Mr. Cormack: In the absence of my hon. Friend the Member for Kidderminster (Mr. Bulmer), who much regrets not being able to attend today, I should make it clear that he is very grateful to the Government.
    Mr. Dalyell: My amendment No. 6 was brought forward in order to highlight the problem raised by the hon. Member for Kidderminster (Mr. Bulmer). In Committee he posed the possibility that a piece of land just next door to outstanding land, but not itself outstanding, might be central to the enjoyment of the outstanding land and that its purchase should therefore be grant-aided.
    Alternatively, it might be that that land was needed for access, car parking facilities or other visitors' facilities, as was suggested by my hon. Friend the Member for Caerphilly (Mr. Hudson Davies). At present, clause 3(1)(d) stipulates that associated land must be
    "worthy of acquisition, maintenance or preservation by reason of its association with a building."
    It is difficult to conceive of a patch of land which is to be covered up with tarmac and public lavatories as being worthy of acquisition, whereas obviously it should be acquired. The Minister was clearly interested in the debate in Committee which centred on the addition of
    1408
    the words "structure or other thing thereon" and he undertook to look at the problems raised. It is a pleasure to see that the Government have taken the point and brought forward amendment No. 5, which does the same job. Clearly, that amendment is acceptable, and in those circumstances I shall not seek to press my amendment.
    Amendment agreed to.
    Amendments made: No. 7 in page 2, line 37, leave out 'a building' and insert
    'land or a building or structure'.
    No. 10, in page 3, line 1, leave out 'building mentioned in that paragraph' and insert
    'land, building or structure with which it is associated'.—[Mr. Monro.]
    Mr. Cormack: I beg to move amendment No. 11, in page 3, line 5, leave out from 'securing' to end of line 6 and insert:
    'improving, limiting or preventing public access to, or the public display of, the property for the public benefit such that reasonable public access is provided in the circumstances of the case'.
    We touched on this matter in Committee. We are all concerned with public access, and obviously, where public funds are involved, it is important that public benefit should accrue. At the same time, it is recognised that there are occasions when too much public access can destroy the very gem we are seeking to preserve.
    In Committee we referred particularly to nature reserves and the Government met us with an amendment of their own. One seeks to highlight the fact that reasonable public access need not always mean a great degree of public access. I am thinking in particular of the smaller country house. A vast number of visitors, lured there as bees to a honey-pot, can destroy the very thing which the fund would have preserved. This is in the nature of a probing amendment, and I should be grateful if my hon. Friend would give us his latest reflections. It is a matter that causes concern to many people in the National Trust and elsewhere.
    Mr. Dalyell: We have a double-barrelled problem here. There was some discussion in Committee of arguments put to us by the Royal Society for the Protection of Birds. The society

    1409
    was naturally concerned about sanctuaries. It may well be that access to a sanctuary—or more than limited access—is highly undesirable.
    On the other hand, there is a problem with certain properties. Leeds Castle is an example. I understand that it is now given over to conferences following the gift of the widow of the last Conservative Member of Parliament for West Lothian, Lady Bailey, who has spent her life refurbishing Leeds Castle. Through the work of Lord Geoffrey-Lloyd, it has become a remarkable place.
    I had the good fortune to be shown over the castle by Lord Geoffrey-Lloyd and his colleagues. There are rooms there in which it would be highly undesirable to have more than a certain number of visitors per year. This amendment is relevant to such a building as Leeds Castle. Possibly it does not have general relevance, but it has a specialised relevance and I look forward to hearing the views of the Government.
    Mr. Monro: I share the views of the hon. Member for West Lothian (Mr. Dalyell) and my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack). There is total unanimity on this point. As one who has also been to Leeds Castle and who appreciates the immense amount of work done by Lord Geoffrey-Lloyd and his colleagues, I believe it is right for us to say that it would be wrong for queues of people to trail through those magnificent but small rooms. Such numbers of visitors would damage the delightful atmosphere at Leeds Castle, and to an extent some of the fittings, furniture and draperies might also be destroyed by large numbers of visitors.
    We are lucky that Leeds Castle was provided for us by Lady Bailey and her trustees and that it is so admirably used for good causes. It is a part of our heritage which is highly commendable. There are circumstances where restriction of access is as important as the welcoming of visitors, but that restriction applies mainly to wildlife habitat rather than to historic buildings.
    I am keen on birds and wildlife and I know how important quietness is during the nesting season. It would be wrong for large numbers of visitors—albeit with
    1410
    the best of intentions—to walk through a bird sanctuary and do immense harm through ignorance. It is, therefore, right that the Bill should ensure that access must not be overdone.
    6.15 pm
    I said in Committee that the Bill adequately covered the proposition that I now put forward. It gives the trustees, or whoever is in charge of property, total authority to exclude as well as to include. Naturally, inclusion will be more important to them. We must make certain that when substantial sums of Government money have been made available there will be a right for the public, within reason, to see the treasures and historic buildings that have been provided for under the provisions of the Bill.
    There is nothing between us. I am glad that my hon. Friend the Member for Staffordshire, South-West tabled this probing amendment. It has given us a chance to ventilate this important issue, and I assure my hon. Friend that all is well as far as general and restrictive access is concerned under the provisions of the Bill.
    Mr. Cormack: I am grateful to my hon. Friend and I am pleased that he has made these points. The hon. Member for West Lothian (Mr. Dalyell) raised the question of Leeds Castle. The hon. Member for Warley, East (Mr. Faulds) and I have been exercised about Baddesley Clinton, which we hope will soon become part of our national heritage. It is another perfect example of a small property that would be destroyed if vast numbers of people went round it. My hon. Friend has made it plain that these points have been taken by the Government and we are very grateful to him.
    I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Mr. Cormack: I beg to move amendment No. 12, in page 3, line 29, leave out from 'institution' to 'a' in line 31 and insert—
    'one of the principal purposes of which is the preservation for the public benefit of'.
    Mr. Deputy Speaker: With this it may be convenient to take the following amendments:
    Government amendment No. 46.
    No. 14 in page 3, line 43, leave out 'and'.
    No. 15, in page 4, line 7, at end insert—
    '(f) any body or institution approved by the Ministers under this paragraph as an eligible recipient with respect to a specfic case'.
    Government amendments Nos. 16 and 47.
    No. 25, in clause 9, page 6, line 28, leave out section 3(7)(a)(b) or (c)' and insert
    'section 3(7)(a), (b), (c), or (f).
    No. 26, in page 6, line 28, leave out '(a)'.
    Government amendment No. 48.
    No. 38, in clause 16, page 10, line 19, leave out from 'section' to first 'to' in line 21.
    No. 41, in page 11, line 7, at end insert—
    ' "university" includes a university college and a college, school or ball of a university.'
    Mr. Cormack: Here we return to a point that was touched on a number of times in Committee. It concerns an
    "institution which exists wholly or mainly for the purpose of preserving for the public benefit a collection of historic, artistic or scientific interest."
    A number of us, including the hon. Member for Warley, East (Mr. Faulds), were concerned about the restrictive nature of that clause. I look forward with interest to what my hon. Friend will say about the Government amendments. I would like to add to the example that I gave the Committee when I referred to such places as the Royal hospital at Chelsea with its fine collection of guns, cathedral treasuries and museums.
    I received a letter from Miss Judith Scott, who for many years was the Secretary to the Council for the Care of Churches, which is now the Council for Places of Worship. I am concerned as a trustee of the Historic Churches Preservation Trust, as she is, that cathedral treasuries and museums should be included. One could not argue that cathedrals exist wholly or mainly to preserve a collection. Yet at a number of our great cathedrals—one thinks of Lincoln, York and Durham—wonderful treasuries have been created with the help of splendid gifts from the Goldsmiths' Company. In those cathedrals one can
    1412
    see collections of ecclesiastical plate, beautifully displayed and more than adequately protected, which has come from the whole diocese. The are often changing exhibitions. As a rule, parishes lend their chalices and patens and other pieces of plate for a period. It is very important, if the Bill is to be all embracing, that institutions such as the cathedral treasuries at Lincoln, York and Durham, or the musuems at York and Durham, should be able to benefit. I hope that my hon. Friend the Minister will be able to give a reassuring reply. If he has any doubt on this minor but important point, I hope that he will be able to promise that in another place the Government will think seriously about introducing an amendment so that institutions of this nature will be included.
    The example of Christ Church was mentioned in Committee, and we had an assurance that the Christ Church library and collection would be included. But one cannot separate a cathedral treasury, museum, or perhaps even library, in the way that separation has been carried out at Christ Church.
    Mr. Dalyell:I do not want to be dragged into irrelevancies, but I must express concern about the proposals of the hon. Member for Staffordshire, South-West (Mr. Cormack) on this point. If we include all that he wants, we should be in danger of creating a watering can effect while knowing that the sums available were finite. The expense that could be incurred at Lincoln alone—I have no recent knowledge of Durham—could be considerable. Some of us might argue that the major ecclesiastical work has to be financed elsewhere.
    Mr. Cormack: I think that the hon. Member for West Lothian (Mr. Dalyell) has misunderstood me. If I was not clear, I apologise. I merely say that there could be occasions when the sort of institution that I have described might wish to acquire a valuable piece of church plate, and that that institution might be the right place in which it should repose. During the period of the Commonwealth and since, there have been occasions when churches and cathedrals have lost their valuables. I am suggesting that only where there is a treasury should the opportunity arise to restore some piece of plate to it, that that would be a

    1413
    legitimate concern of the trustees and that it should be within their province so to do.
    Mr. Dalyell: I gather from glancing at my hon. Friend the Member for Neath (Mr. Coleman), who is the Whip, that he thinks that I may be embarking upon an esoteric argument and that that would not do the Bill any service.
    Amendment No. 14 is a paving amendment leading to the main amendment, amendment No. 15. Amendment No. 25 is consequential.
    By amendment No. 15 a new class of eligible recipients is inserted into the list of classes in clause 3(7). In Committee a similar amendment was tabled, but it was starred and not selected. Nevertheless, it was referred to in the debate on amendments to clause 9(2), though the Minister did not respond.
    Clause 9(2) contains a reference back to some of the paragraphs in clause 3(7) and, accordingly, the various institutions and bodies listed in clause 3(7)(a), (b) and (c) are identified as institutions and bodies which can receive property accepted in satisfaction of tax under such conditions as may be laid down under clause 9(2).
    So, if my main amendment is made—together with the consequential amendment—Ministers will be able to approve any body or institution they like not only as an eligible recipient in a specific case with respect to grant or loan from the trustees but as a recipient of property accepted in lieu of tax under the procedure in clause 9(2).
    The Minister said—col. 202 of the Committee report—that there could be circumstances where an individual specifically requested the property accepted in lieu of tax to be given to the National Art-Collections Fund, and he pointed out that such a situation could be coped with under the power to direct disposal in any manner as either of the Ministers may direct, under clause 9(1). But it is submitted that it would be better to be able to make such directions under clause9(2).
    Reverting to the situation of the trustees, there is no power equivalent to clause 9(1) to give grant or loan aid except to the bodies that fall within the classes set out in clause 3(7). Para-
    1414
    doxically, the trustees can give away property that they have acquired, with the approval of Ministers, to whoever they think appropriate.
    Here again, the National Art-Collections Fund might be involved. Who knows, it may have funds and wish to make a purchase by private treaty yet need to obtain a small grant or loan from the fund to complete the transaction, a grant which might be best made direct to ensure the application of conditions.
    There may be other bodies which should be approved as eligible recipients that do not fall into the classes already set out in clause 3(7). Mention was made of the Friends of the National Libraries.
    So it is submitted that there is a case for a catch-all paragraph in clause 3(7), in spite of the applications that such a clause might draw and the decisions, probably rejections, that might result. Here, flexibility should be the order of the day, and the Bill as it stands is a little inflexible. If no such catch-all paragraph is provided, time may have to be found for legislation in the future—and parliamentary time is always in short supply.
    As to the other amendments in the group, the hon. Member for Staffordshire, South-West has a good point in amendment No. 12. In the debate in Committee, the words "wholly or mainly" gave rise to quite a lot of discussion—and I am sorry that the Government have not seen fit to table an amendment on the lines of amendment No. 12.
    I would accept amendments Nos. 16, 38 and 41. Amendment No. 16 makes good sense.
    Mr. Monro: This is a large series of amendments which basically seek to widen the category of museums and other institutions that can be covered by the Bill. In replying to the debate, and particularly to the speech of the hon. Member for West Lothian (Mr. Dalyell), I have to say that I can go so far but no further, and that perhaps the catch-all amendment of which he speaks would broaden the provision rather too much. I welcome the words of my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack), particularly in relation to cathedral treasures. I assure him that

    1415
    they are covered by clause 3(7)(a) as it stands. I am sure that that will be good news to him and to those whose case he has so eloquently advanced.
    There are six Government amendments in the selection which I shall move at the appropriate time. These are all designed to clarify the point that national university and local authority libraries are eligible for assistance through the fund. I can also give an assurance that I gave in Committee, namely, that record and archive offices are within the scope of subsection (7)(a).
    6.30 pm
    Mr. Faulds:When the Minister speaks of archives, does that include local Conservative Party or Labour Party records, local mining institute records and other records as unimportant in passing as those?
    Mr. Monro: This has been a congenial debate. There is an immense difference between Conservative Party records and those that we see in The Sunday Times from distinguished members of the Labour Party.
    Mr. Faulds: The hon. Gentleman must not be naughty. Those are not records but bits of chit-chat and gossip spread around to damage colleagues in the party. I am speaking of official records, responsibly kept by secretaries of local parties. The hon. Gentleman knows that.
    Mr. Monro: The hon. Gentleman has discovered how dangerous it is to provoke me.
    Mr. Dalyell: Does the Minister accept my assurance that we are not speaking of Mrs. Jenkins's dinner? We are speaking of items such as the Warnlockhead Lead Miners' Library, where the HBC gave a grant. It is a matter of some substance. It is highly desirable that such places should be preserved.
    Mr. Monro: We must return to a level plane. I thank the hon. Gentleman for mentioning that distinguished library at Warnlockhead, which I know well and visit from time to time. The library is grateful for the support that it has received to continue its good work.
    We must keep in mind that we are speaking of matters that are pre-eminent. We are not speaking of records that are
    1416
    of little consequence, though it is often difficult to decide at an early stage whether such records will be valuable in 100 years. The work of the record and archives offices is within the scope of clause 3(7)(a).
    Mr. Ernie Ross: I apologise for not being in the Chamber earlier. We are discussing valuable records. Will the Minister take the opportunity to reassure the historians concerned with the decision to move the valuable records in Chancery Lane to Kew that that will not now take place?
    Mr. Monro: That is rather outside the terms of the Bill. It is a matter for internal decision by those involved with the transfer of treasures. I should need to have more knowledge of the subject before I could reply. I do not know which Department is involved or the ownership of the papers. I shall find out and write to the hon. Gentleman. I could not give him any indication from the Dispatch Box on a matter about which I have no knowledge.
    The hon. Member for West Lothian has tabled an important amendment, designed to add a residual catch-all category to the set of eligible recipients. It is an attractive amendment. It places considerable power in the hands of Ministers to rule that certain bodies and institutions which would not otherwise have been eligible shall be eligible. The cases which the hon. Gentleman has in mind are similar to those mentioned in Committee and are, inevitably, border-line cases. No doubt it will be administratively convenient to allow these to be covered by the trustees and for them to consider granting help.
    My objection is twofold. First, in principle it is wrong to provide specific powers in the Bill for the trustees to assist the categories in clause 3(7) and then to enable Ministers to drive a coach and horses through the subsection by empowering them to approve any other body or institution, subject to the limitations of subsection 3(a). It gives Ministers too much discretion.
    Secondly, it places Ministers in an awkward position. As I explained in Committee in relation to other amendments, it tends to water down subsection 1(a). Ministers, and the trustee, will be

    1417
    bombarded with applications that are non-starters. The trustees will have to consult Ministers on whether certain applicants could be considered under the residual category. It will broaden the clause too much, will leave too much discretion on the whim of Ministers, and will not make life easier for the trustees.
    I have given my hon. Friend the Member for Staffordshire, South-West an assurance on his original amendment. I listened to his remarks with interest. In principle, I should have been happy to accept the amendment, but we believe that it would restrict rather than broaden the relevant passage in the Bill. With those remarks, especially with the assurance that I have given on cathedral treasures, I hope that my hon. Friend will withdraw his amendment and let the Government amendment proceed.
    Mr. Dalyell:It is not often that we hear Ministers at the Dispatch Box saying that Ministers should not be allowed too much discretion. However, the Government are probably right. I am against ministerial discretion being used too widely. We are building up the decision-making process of the trustees. My instinct is to accept that in this instance the Government are probably right.
    Mr. Cormack: I have listened with great interest to my hon. Friend. I am grateful for his assurance about cathedral treasures. Up and down the country, archivists will be reassured by his reiteration that archives, such as the William Salt Library, will fall within the scope of the Bill. My hon. Friend has given a considered and reasonable reply, and I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Amendments made: No. 46, in page 3, line 32, at end insert—
    '(aa) any library which is maintained—

    (i) wholly or mainly out of moneys provided by Parliament or out of moneys appropriated by Measure; or

    (ii) by a library authority;

    or the main function of which is to serve the needs of teaching and research at a university in the United Kingdom;'.
    No. 16, in page 4, line 11, after '(b)', insert 'or (c)'.
    No. 47, in page 4, line 13, at end insert—
    '(9) In subsection 7(aa)(ii) above "library authority" means a library authority within the meaning of the Public Libraries and Museums Act 1964, a statutory library authority within the meaning of the Public Libraries (Scotland) Act 1955 or an Education and Library Board within the meaning of the Education and Libraries (Northern Ireland) Order 1972.'.—[Mr. Monro.]

    Clause 4
    OTHER EXPENDITURE OUT OF THE FUND
    Mr. Dalyell: I beg to move amendment No 17, in page 4, line 25, after 'section', insert—
    'for more than six months'.
    Mr. Deputy Speaker: With this it will be convenient to take amendment No. 18, in clause 5, page 4, line 36, after 'gift', insert—
    'for more than six months'.
    Mr. Dalyell: Two amendments were tabled on these lines but were started and debated only on clause 5 stand part in Committee. Even that debate was brief. The main point of the amendments was not discussed, hence the re-tabling for debate on Report.
    The amendments affect acquisitions and the acceptance of gifts under clauses 4 and 5 respectively. As the Bill stands, the trustees may not make acquisitions or accept gifts, other than money, without ministerial approval. In contrast, they can make 100 per cent. grants without obtaining approval.
    Under the amendments the trustees would be able to make acquisitions and accept gifts as they may decide, provided, of course, that they disposed quickly of the property so acquired or received. All are agreed that only in exceptional circumstances, properly involving ministerial approval, should the trustees continue to hold such property for long periods.
    The main point at issue is whether trustees are to be given discretion to act. There is much to be said for not tying them to Ministers' coat tails, and giving them the power to acquire, which they would not abuse. I conceded on the previous amendment on the issue of ministerial discretion, and I believe that that strengthens my case on these amendments.

    1419
    The minor point is how long trustees should be allowed to hold property which they have acquired. Six months is stipulated in the amendments, but perhaps it should have been nine months or one year. Nine months would certainly seem to be a practical proposition.
    I do not pretend that I shall press the amendments to a Division, but I feel strongly about them.
    Mr. Monro: The effect of amendment No. 17 would be to allow the trustees to acquire and hold property for up to six months without their having to seek the approval of Ministers. As I explained in Committee, the trustees are essentially a body which will help others to acquire property. It is not their primary purpose to acquire property in their own right, even for a short period, and it would be wrong for them to be given the power to acquire property just to buy and sell or otherwise dispose of within a short period without reference to Ministers. They are not dealers or handlers of bridging loans, and they are certainly not running estate agencies or picture galleries. I made clear on Second Reading and in Committee that the trustees should have in mind and agree where property or objects are going before becoming involved with a purchase or other forms of financial support.
    We believe that the power to hold property provided in clause 4 will be exercised sparingly, and it is important that Ministers keep complete control of it. It may be suggested that opportunities to purchase items arrive at short notice in the property market and the art world, but that does not justify the trustees acting in their own right in such cases. If they hear of such opportunities before other bodies, which is unlikely, they can still consult the appropriate categories of recipients of assistance to see whether they are interested in the items and need assistance.
    To all intents and purposes, amendment No. 18 is on the same point. We believe that we should not encourage the trustees to hold property without knowing where it is ultimately to reside or in whose responsibility it will be held. Trustees should not have the right to hold property without reference to Ministers. The hon. Member obviously feels strongly about this matter. So do I, and I ask him to withdraw his amendment.
    Mr. Dalyell: I am not happy with that reply. May I ask the Minister some questions? He said that the trustees were not concerned with bridging loans. I understand that, but surely they have a warehouse function. The matters with which we are concerned often arise in crisis conditions. It is not a question of trustees dealing with bridging loans or the money markets.
    It was slightly unfair for the Minister to give the impression that by tabling the amendments I thought that we were dealing with a bunch of people who would speculate on the money markets. That is not the nature of the trustees.
    6.45 p.m.
    The hon. Gentleman said that Ministers must have control. Surely we are concerned about day-to-day control. Does he mean that, in this respect, though not in many others, Ministers must have complete control?
    The Minister also said that trustees were not justified in acting in their own right. Will he expand on that? I thought that the point was that we should trust the trustees to act in their own right in such matters. If I have got the wrong end of the stick, no doubt the Minister will tell me.
    Mr. Monro: There is little between us on this matter, and perhaps less than the hon. Gentleman indicates. He underestimates the speed with which Governments can act when requested to do so in an emergency. If the trustees need urgent support, advice or decisions from either the Chancellor of the Duchy of Lancaster or the Secretary of State for the Environment, I have not the slightest doubt that they will be able to get them rapidly.
    However, the basis of the amendments is to extend the period to six months. Despite the immense trust and responsibility that I know the trustees will have, we want to encourage them to pass on property at the speediest rate possible. We do not want them to hold property for a long period. That is not the purpose or the duty given to them in the Bill.
    The hon. Gentleman is asking for additional powers which the Government do not think are justified or necessary. I ask him to withdraw the amendment.
    Mr. Dalyell: I am not sure that the Minister is right in saying that there is little between us on this issue. I think that there is something between us. I am not happy about what the Minister said about the trustees passing on property at "the speediest rate possible". When things are done at speed, they are not always done to the national advantage. The idea that trustees must be hustled and jostled into acting in that way is not wise. If a little more time is taken—and we know that time is often of the essence in these matters—it may be to the greater national advantage. I am not happy with the Minister's reply.
    Mr. Monro:The last thing that I want is for the hon. Gentleman to be unhappy, particularly since he has been of great assistance during the passage of the Bill. We indicated on Second Reading that before the trustees step in they will have gone to immense trouble to find a recipient or new owner for the property. That will be done long before they pass over the money from the fund.
    It is not so much that action will be taken in a hurry as that, when a decision is taken that property will be passed on to a gallery or the National Trust, we want speedy action then so that money is not lying in someone else's bank account when it could be earning interest or purchasing other properties. The spadework takes time. It will perhaps be done over months, but the actual ownership of the property by the trustees should be for the minimum time possible.
    Mr. Dalyell: I do not think that it is a question of money lying in someone else's bank account. I am not sure that that would be my version of the situation. It is known that the Whips do not wish our proceedings to be too protracted. I do not wish to make a meal of the matter. I give notice, however, that I shall write to the Minister in the hope that there will be a Lords amendment and some reflection given to what is admittedly a complex issue. I shall not withdraw the amendment, but it will doubtless be negatived.
    Amendment negatived.

    Clause 7
    ANNUAL REPORTS AND ACCOUNTS
    Mr. Neville Trotter: I beg to move amendment No. 19, in page 5, line 19, leave out from 'year' to end of line 21.
    Mr. Deputy Speaker (Mr. Richard Crawshaw):With this, it will be convenient to take the following amendments:
    No. 20, in page 5, line 27, leave out from 'direct;' to 'before' in line 29 and insert:

    '(c) to submit the statement for audit by auditors (qualified in accordance with Schedule 1A) appointed by the Ministers on such terms and conditions as they may determine; and

    (d) to send copies of the statement and of the auditors' report thereon to the Ministers.'.

    No. 21, in line 32, leave out subsection (3) and insert:
    '(3) The Ministers shall cause to be published the report made to them under subsection (1) above, the statement of account and the auditors' report and shall lay copies before Parliament.'.
    No. 45—new schedule, 'Qualification of Auditors—

    1. A person is qualified for the purposes of section 7(2)(c) of this Act if he is a member of one of the recognised professional bodies.

    2. Those bodies are—

    the Institute of Chartered Accountants in England and Wales;

    the Institute of Chartered Accountants of Scotland;

    the Association of Certified Accountants; and

    the Institute of Chartered Accountants in Ireland.

    3. A person is also qualified if he is a member of a body of accountants established in the United Kingdom and recognised by the Secretary of State for the purposes of section 161(1)(a) of the Companies Act 1948.

    4. A Scottish firm is qualified if each of the partners in it is so.'.

    Mr. Trotter: The purpose of these amendments is to allow private auditors and not the Comptroller and Auditor General to be appointed to the fund. Amendment No. 45 states that a person shall be qualified to audit the fund if he is a member of the Institute of Chartered Accountants in England and

    1423
    Wales or the similar bodies for Scotland and Ireland, a member of the Association of Certified Accountants or qualified as a member of a body of accountants established in this country and recognised by the Secretary of State for the purpose of auditing companies.
    I should declare an interest as a member of the English institution, but I have no personal desire to be appointed as auditor of the fund. The Government should look favourably on the appointment of a private firm rather than the Comptroller and Auditor General as their policy, in general, is to support private enterprise and to minimise the Civil Service. My amendment seeks to achieve that purpose. The Minister may say that a question of constitutional principle is involved and that the amendment cannot be supported for that reason. If that is the case, I hope that he will elaborate on what that constitutional principle is, so that hon. Members may hear, in detail, arguments to support the appointment of the Comptroller and Auditor General.
    The evidence suggests to me that there is no such principle. My research shows that all the nationalised industries are audited by private firms. Many of the largest local authorities are so audited. Eighty per cent. of water authorities are so audited. The British National Oil Corporation is audited by private auditors. The British Airports Authority is audited by private auditors. Quangos, large and small, are audited by private auditors.
    The Home Grown Cereal Authority, one of the smallest quangos, is audited by Thomson McLintock. The Housing Corporation, responsible for over £1,000 million—the figure could not be much bigger—is audited byDeloitte. The National Trust is audited by Price Waterhouse. The National Trust for Scotland is audited by Arthur Young McClelland Moores. The Crown Agents are now audited by Deloitte. You will remember, Mr. Deputy Speaker, that in that case it was necessary to pass a special Act in 1979 to remove the Comptroller and Auditor General. I shall not go into the sorry background. I am sure it is within your memory what happened. It is interesting to reflect that the Crown Agents have put the audit out to tender. That should appeal to a Government seeking to reduce public expenditure.
    1424
    Deloitte must have submitted the lowest tender because it was successful. There are good precedents for the appointment of an independent auditor.
    There are also precedents for changes being made while a Bill is before the House. The Dockwork Regulation Act 1976 was so changed. As a result, private auditors are now appointed to the National Dock Labour Board. More recently, the Nurses, Midwives and Health Visitors Act 1979 was changed. As a result, private auditors will be appointed for the Central Council and the four national boards.
    Mr. Clement Freud: I was unimpressed by the hon. Gentleman's mention of the Crown Agents' auditors. Would there be any financial saving to the fund itself if it went into the private sector as opposed to the appointment of Government auditors?
    Mr. Trotter: That cannot be quantified in advance. I have no reason to suppose that independent firms of the highest repute would charge more than the Comptroller and Auditor General. An additional avantage relates to the question of advice. I believe that one of the eminent private firms of auditors would be able to give better advice to the trustees.
    This leads me to the question of the independence of the trustees. In the Second Reading debate, a great deal was made of this point. My right hon. Friend the Chancellor of the Duchy of Lancaster told the House that the fund was to be vested in, and administered by, independent trustees. He went onto compare it with a number of other bodies such as the National Trust and the National Trust for Scotland, which have, as I mentioned, independent auditors. He made the point that the trustees should be generally independent and that they should take expert advice before reaching decisions and could seek that advice where they wished. I believe that this should also apply to the audit.
    It is laid down in the first schedule to the Bill that the trustees are not to be Crown servants and that the trust should be a charity. I would have thought that independent auditors were the more appropriate. I do not think that one can argue that, just because public money is involved, the Comptroller and Auditor

    1425
    General should be appointed as auditor. I believe that the examples I have quoted support that view.
    Mr. Keith Wickenden: I confess to feeling slightly uncomfortable in rising to support my hon. Friend the Member for Tynemouth (Mr. Trotter). Like my hon. Friend, I am a member of one of the bodies set out in his schedule. In my case, however, not only would not wish to be appointed. I am totally incompetent to occupy the post because it is so long since I did any work of that nature.
    It seems churlish, on a Bill of this importance, dealing with matters of national interest, to take issue on what, after all, is only a matter of administration. I console myself with the thought that, whereas other hon. Members have demonstrated that they are better fitted to comment on this general matter of national interest, I possess some special expertise in this sphere.
    I doubt whether the facilities available to the Comptroller and Auditor General remotely match those of any of the leading national firms of accountants. If the Comptroller and Auditor General had not been auditor of the Crown Agents and that task had been carried out by an independent accounting firm, the Exchequer would almost certainly not have suffered to the extent that it did. It would have been possible for a negligence action to be brought against the firm of auditors, who would be insured at Lloyd's. I therefore support my hon. Friend's amendment. I hope that the Minister will respond favourably.
    I should also like to comment on clause 7, which my hon. Friend seeks to amend. I wish to compare the degree of accountability that it contains with the degree of accountability required in the private sector. I refer specifically to public companies. Under clause 7, it is the duty of the trustees to prepare, in respect of each financial year, a statement of account in proper form and to send that statement to their auditors within eight months of the end of the year to which it relates. It speaks of a period before the end of November, referring to the accounting year ending on 31 March. Public companies that may be controlling assets worth many millions of pounds, and certainly dealing with a turnover in those
    1426
    figures, do not merely have to submit their accounts for audit within eight months. They have to lay them before their shareholders in audited form within six months. Otherwise, they do not comply with the listing requirements of the Stock Exchange. It seems to me strange that a fund of this nature should have a lower degree of accountability laid on it than is laid on public companies in the private sector.
    I apologise for the fact that I shall have to leave the Chamber shortly. I have to attend a meeting with some constituents who have worked for me for a long time. I know that I shall not agree with what they are asking me to do, and doubtless they are getting angrier and angrier.
    I support the amendments.
    7 pm
    Mr. Monro: I am grateful to my hon. Friend the Member for Tynemouth (Mr. Trotter) for raising the matter dealt with in the amendments. I was very appreciative of the fact that representatives of the professional body to which he and my hon. Friend the Member for Dorking (Mr. Wickenden) belong came to see me in the House last night to put their case, which my hon. Friends have developed admirably today.
    I have some reservations about accepting the amendment. However much we hope that over time the fund will attract substantial private donations, the reality is that by far the greatest part of its income will be derived from public funds. The House will rightly have a keen interest in how the moneys are spent and accounted for, and it is entirely right and proper that the Comptroller and Auditor General should conduct the audit and report to the House.
    What I have said is in no way to belittle the accountancy bodies. I readily accept that their members could perfectly well perform the function. It is simply that where public money is involved and is paid out in advance of need the Comptroller and Auditor General is the appropriate person to turn to.
    I have been looking at similar situations. One that is close to my other (responsibilities is the position of the Sports Council, where the sum involved is almost identical, at £15½ million. That is audited by the Comptroller and Auditor General.

    1427
    There are exceptions to the general rule, but they normally involve trading bodies or bodies whose expenses are wholly or almost wholly administrative. The fund fits into neither of those categories.
    Secondly, it is likely that the Public Accounts Committee will wish at some stage to look beyond the auditors' report. It may wish to take evidence not only from the representatives of the fund but from the auditors. When the audit is performed by the Comptroller and Auditor General, that is straightforward. When it is performed by another person, it is far less so. The Comptroller and Auditor General may have to be asked to examine the books and submit his report. Therefore, use of the Comptroller and Auditor General as a matter of course facilitates the work of the House and its Committees.
    A further consideration is that of cost. I know that all hon. Members will examine this matter carefully. Outside auditors would naturally expect to be paid their scale fee, which would come out of money that would otherwise be available to the fund's trustees.
    Mr. Trotter:Is it being suggested that the Comptroller and Auditor General has cheaper staff than professional firms? Could that perhaps be why the Crown Agents' audit was carried out in the way that it was?
    Mr. Monro:I should not like to say whether the staff were less expensive, but they would certainly be fully qualified.
    Mr. Dalyell:This may be a difficult question to answer off the cuff, but is there any way in which we can be given a rough idea of the extra cost of outside auditors? It could be very expensive.
    Mr. Monro: I cannot give the hon. Gentleman the answer at once, but we have two distinguished accountants with us in the Chamber and a Treasury Minister. I could not even guess what the scale fee would be for the audit of the fund. Clearly, it would be a substantial sum, which would be paid for by the trustees and would, therefore, be money taken away from the fund.
    I accept that my hon. Friends have raised an important point, but I think that they will both agree that their col-
    1428
    leagues in the profession raised it at virtually the last moment. It is asking a great deal to expect a Government to come to a conclusion at such short notice.
    I ask my hon. Friend the Member for Tynemouth to seek to withdraw his amendment, but I shall look at the matter in greater detail, and if we think that it has substance we can deal with it in another place. I say that totally without commitment, because I have put forward a strong case for the Comptroller and Auditor General. What I am saying is that I am not shutting my mind to the matter.
    Mr. Dalyell: It behoves the Minister to be tactful and polite to his hon. Friends, but I can afford to be less tactful and less polite. If the professional chartered accountants, who are supposed to be efficient folk, were going to raise this matter, they might have done it at the beginning, before we went all through the Committee stage, rather than spatchcocking it in at the last moment out of the blue, when we suddenly see an amendment on the Notice Paper. The hon. Member for Tynemouth (Mr. Trotter), who takes an active part in other Committees and is a diligent hon. Member, will agree that it is a bit irritating for those of us on both sides of the House who have given a great deal of time to the Bill suddenly to find the amendment placed before us.
    I agree with the Government. Let us forget any irritation that we may feel with the chartered accountants. It is a legitimate amendment, and I do not make much of that point. What I make a good deal more of is the fundamental principle of responsibility to the Public Accounts Committee. As an alumnus of a previous PAC and one who worked on it for four years, I think it extremely desirable that the fund should be subject to the Comptroller and Auditor General and all the expertise at his command rather than have the matter cluttered up and complicated by outside auditors.
    I ask the House not to get me wrong. In many cases outside auditors have their uses and should be brought into the Government's affairs. All that I am saying is that I do not think that there is a wonderful case for so doing here.
    Mr. Wickenden: The hon. Gentleman speaks of the considerable expertise of the Comptroller and Auditor General, but

    1429
    does he accept that the numbers of his qualified staff are limited to, at most, a few dozen, whereas the qualified staff of any one of the major five accounting firms in the country run into several thousand? Because of the width of their experience, the resources and advice available from those firms far outweigh anything that the Comptroller and Auditor General can possibly offer.
    Mr. Dalyell:I do not have the latest figures, but when I first became a member of the PAC and Sir Edmund Compton was the Comptroller and Auditor General, I spent two days with him learning precisely what the holder of his office did. At that time, if my memory serves me correctly, there was a staff of at least 600, many of whom had varying degrees of qualifications. It is a formidable instrument of Government—the most formidable instrument of its kind that a Government have in Britain. It is certainly the only thing that we have approaching an instrument of the thoroughness of the Senate committees in the United States.
    Mr. Trotter: I quite accept the tenor of the comments about the lateness of the amendment. It is a comment that I myself made to the institute. Apparently, a letter sent some weeks ago was not received, which is a pity.
    In view of the statement by my hon. Friend the Minister that he will consider the matter further, I shall seek to withdraw the amendment. I only hope that my hon. Friend is prepared to meet the institute for further discussion, similar to that which we held yesterday.
    I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.

    Clause 9
    DISPOSAL OF PROPERTY ACCEPTED BY COMMISSIONERS
    Amendment made: No. 48, in page 6, line 28, after '(a)', insert '(aa).—[Mr. Monro.]
    Mr. Monro: I beg to move amendment No. 27, in page 6, line 29, after 'above', insert
    'which is willing to accept it'.
    Mr. Deputy Speaker: With this we shall take Government amendment No. 29.
    Mr. Monro:This amendment meets an undertaking that I gave in Committee that we would look at the implications of the word "direct", which had alarmed the national museums and galleries. They were concerned that they might be obliged, under the Bill, to accept objects on conditions which they found repugnant. In particular, they feared that they might be required to retain nominal ownership of an object which was to be left in its historic setting, even though they were not satisfied with the security, conservation and public access.
    I gladly repeat the assurance I gave in Committee that Ministers would not contemplate forcing recipients to take in property against their will. It was suggested that Ministers could not bind the trustees of the fund, who might take over the responsibility for acceptance in lieu if an order were made under clause 14. The amendments we are now debating put the matter beyond doubt even in that eventuality, and amendment No. 29 really is consequential on amendment No. 27. I hope that this clarifies the assurance I gave in Committee and will be accepted by the House this evening.
    Mr. Dalyell: It was made clear during the Committee debate on amendment No. 36, together with amendment No. 109 and other amendments, that there was much disquiet in the museum world over the thought that museums might be directed under clause 9 (2) to accept property accepted in lieu under conditions which they might find repugnant. The Minister gave a categorical assurance that this would not be the case.
    The same subject came up again later on in the debate on indemnities and the Minister responded by saying that the thought that any such directions should take place was repugnant, not only to hon. Members but to the heritage world beyond the confines of the museum lobby.
    It was in earnest of this and to probe the position that I tabled three amendments, which have not been selected and to which I do not intend to refer, knowing your hawk-like eye in these matters, Mr. Deputy Speaker.

    1431
    It is a pleasure to see that the Govment have taken the point, and amendments Nos. 27 and 29 certainly leave no doubt as to the intention not to force museums and so on to accept property accepted in lieu against their will.
    I wonder why a similar amendment has not been made to clause 9 (1). Perhaps it is simply to ensure that the Commissioners of Inland Revenue have to accept Ministers' directions. I should like to ask why there has not been a similar amendment to clause 9 (1). The faithful PPS has left his post, but I see that the Government Whip is there in time of need, so I ask that question.
    Mr. Cormack: We again say "Thank you" to my hon. Friend. Many of us are very concerned about this. The hon. Member for Warley, East (Mr. Faulds) and I raised this issue over a long period, when the Bill was first mooted, because directors of our great national museums—indeed, of any museums—are rightly proud of their reputation, independence and integrity and they did not like to feel that they were being coerced or directed or that there was any chance of that. The point was well made in Committee and it has obviously been well taken. I for one am truly thankful.
    Mr. Faulds: These are attempts, it seems to me, to meet—and not altogether successfully—the strong objections which arose from the museums following their somewhat gratuitous insertion, represented by the reference back to clause 3(7) (a), into a subsection drafted for the environment bodies, represented by references back to clause 3(7) (b) and (c). But the phrase in this paragraph "on such conditions as he may direct" is really most inappropriate for and disliked by the museums. It need never have been brought into this if a separate subsection had been devoted to museums alone, as I suggested in my amendment No. 23—which, of course, I do not intend to discuss because it was not selected.
    I think that the point could have been met more simply had the Minister listened to us in Committee and, instead of bringing forward this new idea, had used the word "specify" instead of "direct". It seems to me that that would have met the matter more simply and would have been very much in the spirit of what the museums wanted to see.
    7.15 pm
    Mr. Monro: I am glad that hon. Gentlemen accept that I have responded to the debate in Committee. We have attempted to do that throughout the Report stage.
    The hon. Member for West Lothian (Mr. Dalyell) asked me about clause 9(1). The point there—and I agree that it is not too clear—is that, unlike the position in (2) and (3), where there is an institutional body, there is no institutional body in clause 9(1) to which anything could be referred. But, again, while I cannot give any commitment, I will look at this carefully. I do not think there is a point here; I believe it is clear. We have dealt, through the amendment, with the main point on which the Committee wished to be assured about directions to museums andgalleries concerning objects they might not wish to receive or conditions they would not wish to accept. I believe that we have gone a very long way to meet the wishes of the Committee and I hope that the hon. Member for West Lothian is partly reassured, if not totally so. At least, we have gone as far as we possibly can to meet the Committee's views.
    Mr. Dalyell: I would be totally assured if it were found necessary, after talking to the Government's advisers, to introduce a clearing-up Lords amendment.
    Amendment agreed to.
    Amendment made: No. 29, in page 6, line 34 after 'person', insert
    'who is willing to accept it'.
    No. 50, in page 7, line 2 at end insert—
    '(5) In exercising their powers under this section in respect of an object or collection or group of objects having a significant association with a particular place, the Ministers shall consider whether it is appropriate for the object, collection or group to be, or continue to be, kept in that place, and for that purpose the Ministers shall obtain such expert advice as appears to them to be appropriate.'.—[Mr. Monro.]

    Clause 14
    TRANSFER OF MINISTERIAL FUNCTIONS
    Mr. Monro: I beg to move amendment No. 34, in page 8, line 28 after 'Heritage', insert 'Memorial'.
    This is virtually a consequential amendment that should have been included at Committee stage.
    Mr. Faulds: I want to comment on this in order to raise the matter of a letter which I have received today from the Chancellor of the Duchy of Lancaster and which I think is very important.
    First, however, since elsewhere throughout the Bill the fund is now referred to as the National Heritage Memorial Fund, the omission of "Memorial" in this line should be remedied. But this insertion, which is necessary for reasons of consistency, also serves to reinforce the view of many that it would be undesirable and improper for a body with memorial connotations to be involved in any way in the administration of acceptances in satisfaction of tax, with the potentialities for controversy which could so easily arise from that. This, however, is where the implementation of clause 14 would seem to lead us, constituting a further reason for the misgivings which are widely felt regarding its apparently arbitrary insertion in the Bill.
    It seems to me not to be sufficiently realised that the representatives of our public museums are most categorically opposed to the prospect, opened up by clause 14, of their having to deal with the trustees of the fund in substitution for the Ministers in matters relating to acceptances in lieu. It is, moreover, somewhat ironical that the policy of entrusting the administration of these matters to the Ministers, which is generally known to be the concept advocated by the Chancellor of the Duchy of Lancaster himself, has always received consistent and unwavering support from the museums.
    In this context, I am delighted that to-day I have received a letter, sent out this day and written, I think, this day by the Minister, which I should like to read, because I think it puts on the record for the museums the important assurance which the right hon. Gentleman gives in that letter. I am sure that the Minister is aware that I have had this letter from the Chancellor of the Duchy of Lancaster today, in which he says:" I am, of course, aware of the strong feelings of the museums that acceptance in lieu should remain a ministerial responsibility. Equally, I know that others in the heritage world feel just as strongly that the responsibility should pass to the Trustees. The provisions inclause 14 in no way pre-empt any decision about the transfer of responsibility; they merely permit a change to be made without recourse to primary legislation though not, of course, without the approval of both Houses of Parliament.
    1434
    Once the Bill is passed, the position will be that responsibility for acceptance in lieu rests with me and Michael Heseltine, which is the position preferred by the museums. I am sure you understand that I must take account of the views of others in the heritage world even though they are not my direct responsibility. I hope that you will agree that the statutory position after the Bill is enacted will be in line with the wishes of the museums.
    I am fully aware of the importance that the museums attach to the acceptance of the in lieu provisions, and I give you my firm assurance that I will not put forward a draft order for parliamentary approval unless I have the willing consent of the museums."
    I think that that is a most important statement by the Chancellor of the Duchy and I am glad that I received the letter in time—literally a few moments before I came into the Chamber. I am delighted to see that the right hon. Gentleman has come to join us now. That is a great pleasure for all of us. We have missed him this afternoon. But he has had a very good stand-in, may I tell him, so he will have to be on his best performance to keep up with him. I am delighted that I have had that letter from the Chancellor of the Duchy of Lancaster. I think that it puts at rest the worries of the museum world about the insertion of clause 14. I am very grateful to the right hon. Gentleman.
    Mr. Monro:I am glad that the hon. Member for Warley, East (Mr. Faulds) took the opportunity to read my right hon. Friend's letter, which puts in much more eloquent and clear terms what I was saying in Committee. I hope that all those who are concerned with our heritage are clear where we stand on clause 14. I hope that there is no concern about the way in which it will be implemented in future.
    Amendment agreed to.

    Clause 16
    INDEMNITIES FOR OBJECTS ON LOAN
    Mr. Monro: I beg to move amendment No. 35, in page 9, line 22, leave out from "(a)" to "in" in line 25 and insert:
    "a museum, art gallery or other similar institution".
    Mr. Deputy Speaker: With this we may take Government amendments Nos. 36 and 49.
    Mr. Monro: The purpose of the amendment is to provide clarification. During the last sitting in Committee, clause 16 was virtually rewritten. When that had taken place it seemed fairly complicated, and we have again redrafted the clause. We have made our intentions clear. I hope that the clause as it now stands will be more beneficial to those who are concerned with and involved in our heritage. They will read the Bill, and they will want it to be clear. They will want to be clear where the Government stand in terms of the institutions and bodies that are referred to in the clause. I hope that this is a step in the right direction.
    Mr. Dalyell:I promised my right hon. Friend the Member for Wakefield (Mr.Harrison) that I would convey to the Government the thanks of the Royal Air Force museum at Hendon for what they have done. The museum was mentioned in Committee, and my right hon. Friend is an active supporter of it. I convey thanks on behalf of the parliamentary RAF group.
    Mr. Monro:As the vice-chairman of the Royal Air Force group, I am glad that the hon. Gentleman made those comments. I was especially keen that the Royal Air Force museum at Hendon should be included. It is a splendid museum, and the more publicity that it can get, the better.
    Amendment agreed to.
    Amendments made: No. 36, in page 9, line 28, after 'maintained' insert—
    '(1) wholly or mainly out of moneys provided by Parliament or out of moneys appropriated by Measure; or
    (ii)'.
    No. 49, in page 9, line 30, leave out paragraphs (c) and (d) and insert—
    '(c) any library falling within section 3(7)(aa) above;'.
    No. 38, in page 10, line 19, leave out from 'section' to first 'to' in line 21.—[Mr. Monro.]

    Clause 19
    SHORT TITLE, INTERPRETATION, REPEALS AND EXTENT
    Amendment made: No. 41, in page 11, line 7, at end insert—
    ' "university" includes a university college and a college, school or hall of a university.'—[Mr. Monro.]

  Schedule 1
  THE TRUSTEES OF THE NATIONAL HERITAGE MEMORIAL FUND
  The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): I beg to move amendment No. 42, in page 13, line 15, leave out emoluments and'.
  Mr. Deputy Speaker: With this we may take the following amendments:
  No. 43, in page 13, line 17, at end insert—
  '(3) Emoluments paid to the Chairman and to the other Trustees shall not be less than £5,000 and £1,000 per annum respectively'.
  No. 44, in page 13, line 17, at end insert—
  '(3) Emoluments for trustees shall be not less than £2,000 p.a. per trustee'.
  Mr. St. John-Stevas: The Government move the amendment because we feel that it involves an important issue of principle. That is why the matter was taken to a Division when it was pressed in Committee. We have done our best to accommodate ourselves to the wishes of hon. Members, but this issue involves potential public expenditure. We have considered the matter and we take the view that there should not be the possibility of payment being made to the trustees.
  No post of chairman or trustee of a national museum or art gallery receives remuneration. Nor do the members of the reviewing committee on the export of works of art or the Standing Commission on Museums and Galleries receive remuneration. These are all positions that involve great sacrifice of time and leisure and require dedicated and continual work. I take this opportunity to express my appreciation to the members of these and other bodies who work so selflessly for the safeguarding of our heritage.
  It is true that the chairman of the Historic Buildings Council, the chairman of the Ancient Monuments Board and the trustees of the British Library receive remuneration, but these are people who work closely with the Government in posts which have a strong Executive element.
  I was not a member of the Standing Committee, but I have followed closely

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  the debates that took place in Committee. Comparisons were made with bodies such as the Horserace Betting Levy Board. The trustees of the proposed fund will have a different function and the analogy is unsound. The trustees will be acting much more in the capacity of providers of assistance to those who will be taking initiatives in seeking to acquire property of heritage quality.
  Mr. Dalyell:The right hon. Gentleman is right to say that an analogy was made with the chairman of Horserace Betting Levy Board. Of course, we cannot go into the financial circumstances of the chairman. It would be impertinent to do so. However, Sir Stanley Raymond could not have taken his post unless he had been paid. Are we saying that the chairman of the trustees, ipso facto, is to be a rich man of means of his own? If so, I do not think that that is satisfactory.
  Mr. St. John-Stevas:I have been bombarded with suggestions for the post of chairman and with applications to be the chairman. They seem to cover all social classes and all income groups. There seems to be no practical issue at stake. It is partly a matter of supply and demand. I can assure the hon. Gentleman that the supply is becoming embarrassing.
  Mr. Dalyell: The supply may be embarrassing, but what happens if the best candidate out of such a rich supply is someone who cannot afford to take up the post because he has no private means? The right hon. Gentleman is implying that we shall not necessarily be able to choose the most suitable candidate because the means of the candidate will have to be taken into account.
  Mr. St. John-Stevas: The hon. Gentleman is assuming that it is to be a full-time job. I do not wish to enter into the details of the applicants and candidates. Some of them have private means. The vast majority are in employment of various sorts. The authority, the prestige and the status of the trustees will be diminished in the eyes of people in the arts, rather than enhanced, if they can receive remuneration. This point has been made to me quite independently by a number of people, and I have reached the same conclusion.
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  Apart from that point of principle, there are two important practical considerations. The first I made in answer to the interjection by the hon. Member for West Lothian (Mr. Dalyell). There is no shortage of able candidates volunteering to serve as trustees, and they come from a wide range of backgrounds.
  7.30 pm
  I am sure that the hon. Member for West Lothian is genuinely concerned about this matter, but not only will it not be a full-time occupation—we would expect people to pursue their normal avocation—but we shall be able to give a loss of earnings allowance, which can be an allowance of considerable importance. But I do not believe that an honorarium—which in the nature of things would have to be a very modest one of up to about £1,000 a year—will make available a vast and otherwise untapped field of potential trustees.
  Secondly, £15,000 for 10 trustees and a chairman—that would be the absolute minimum—would not be that small a bite out of this fund. It would not be right to pay trustees at the expense of the heritage. It would be unpopular and a considerable source of criticism. Therefore, I have to advise the House that it is the Government's considered view that if this amendment is not made and the words are allowed to stand—I hope that it will not be so—the Government will rely on the fact that the power not to pay the trustees is permissive. I must make that quite clear. That is the Government's position.
  The Committee discussed whether the Government should have the power to pay trustees, even if they did not want to do so at present. But it is not good law to bestow on the Government a power that they do not intend to exercise, and it is slightly deceptive to accept a power which, in the opinion of the Government, should not be exercised. If this amendment is not made, it will be necessary to consider adding a provision adding the trustees to the House of Commons Disqualification Act, at least in so far as they receive emoluments; otherwise, we should restrict the field rather than extend it.
  I sympathtise with the motives that lie behind the desire of those who want the amendment proposed in Committee to

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  stand. But at a time when the Government are reviewing the whole of public expenditure and are dedicated to good national housekeeping and economies it would be singularly inappropriate, having made available a considerable sum of money for the fund, to set up what would inevitably be denounced as a new paid quango.
  Those arguments outweigh the undoubted weight of the arguments which I know are supported by my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack) and Opposition Members. But we would prejudice the good reception and success of this venture by persisting with these proposals. I hope that the amendment will be acceptable to the House.
  Mr. Faulds rose—
  Mr. Cormack: I appreciate the chivalrous gesture of the hon. Member for Warley, East (Mr. Faulds). It was an amendment headed by my name that was passed with support from both sides of the Committee.
  It gives me no pleasure to be in disagreement with my right hon. Friend the Chancellor of the Duchy of Lancaster, to whom I pay tribute for all that he has done to enable us to have the Bill. It is a small matter on which we are falling out. Before my right hon. Friend entered the Chamber, we all congratulated my hon. Friend the Member for Dumfries (Mr. Munro) not only on being such a willing and helpful leader in Committee but on coming back on Report with a number of amendments that meet most of the points that we made.
  As I said, it gives my absolutely no pleasure to disagree with my right hon. Friend, but I do. After all, this is only an enabling measure. There is no need for the Government to implement it. Had my right hon. Friend come to the Dispatch Box and said "Yes, we accept this but we cannot see our way at the moment to paying trustees", I should have accepted that as a matter of judgment. The Committee accepted that by making the power enabling and not obliging the Government to pay.
  I must cross swords with my right hon. Friend on a number of matters. Many pieces of legislation are enabling
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  and they are no less valuable because of that. There are a number of enabling measures dealing with preservation and the heritage. For instance, there are the powers that local councils have to make grants to historic buildings within their areas. They are not obliged to do so, but the power is there. It was on that sort of lines that we thought when we advanced this amendment.
  My right hon. Friend mentioned the chairman of the Historic Buildings Council, and I want to concentrate on that. All along—all hon. Members know that made this point clearly in Committee—I have not been concerned about payment to trustees as such, but many people involved with the heritage believe that in the initial years the chairmanship of this fund will be an onerous responsibility and amount to almost a full-time job.
  I raised that point for the first time on Second Reading. I had a great deal of support from all quarters of the heritage lobby—if I may call it that. Many of those who supported me were far from poverty-stricken, but they agreed that it was wrong to restrict appointments of this nature to the rich or the elderly.
  If the fund is to be properly managed and play the significant part which we all believe it will play, being chairman will he no sinecure. Indeed, the analogy of the chairman of the Historic Buildings Council is a good one. If it is right to pay the chairman of that council, surely it is right to have at least the opportunity to pay the chairman of the National Heritage Memorial trustees.
  Mr. Dalyell: Of course it is.
  Mr. Cormack: This is a very modest proposal. My right hon. Friend has done much to meet us on other points, and I had hoped that he would concede this one. If he does not—I respect his opinion and I know that he will respect mine—I cannot do other than vote in the same way as I did in Committee. I shall seek to vote down the amendment because that is what I believe would be the wish of many who are interested in our heritage. I return to the point that I made earlier. We are seeking only to enable the Government to do this.
  I have one final point to make. This is a subject on which we have operated across party lines, to the benefit of everyone. I do not want anyone to be

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  excluded as a potential candidate because of his or her lack of financial means. I want the field to be open.
  Mr. Dalyell: That is right.
  Mr. Cormack: That is why I moved the amendment in the first place, and it was in that spirit that I referred to the matter during Second Reading. It is with those views still firmly in mind that I shall go into the Lobby tonight if I am obliged to do so.
  Mr. Dalyell: First, I should like to pay tribute to the part that has been played by the hon. Member for Staffordshire, South-West (Mr. Cormack). I shall certainly not make party capital out of this issue. On the other hand, it is necessary to refer to what has actually happened, because I believe that the Leader of the House let the cat out of the bag.
  The key word is "quangos". It is quite clear from what was said that the blessed Margaret in Downing Street—concerned with steel, employment legislation and heaven knows what else—has told the Leader of the House "With regard to this Heritage Bill, let there be no quangos whatever else you do." I always know when I have struck oil, because the Leader of the House gives a watery grin that we know so well. Likewise, a laugh from the Minister of State, Treasury reveals that one has told the truth.
  Let us start from the basis that this is a prime ministerial dictum, even though the right hon. Lady knows very little about the details of the issue, and I do not blame her for that. We should point out why the Prime Minister—for it is she who has done this thing—is wrong in this instance.
  First, she is wrong for the reasons advanced by the hon. Member for Staffordshire, South-West. In the same breath, I should like to ask the Government how much time they think that the chairman of the trustees can devote to this task. The fact is that, if he or she is to be at all effective, the person will have to devote a lot of time, which excludes a large number of suitable candidates. Incidentally, I agree with the hon. Member for Staffordshire, South-
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  West in that the main issue relates to the chairman and that the other trustees are a relatively lesser issue.
  Secondly, the Leader of the House said that trustees would be diminished in the eyes of the arts world if they were paid. Does he deny that that is what he said? No, he does not. Therefore, I reported accurately what he said. I should like to know what evidence there is for that statement. Who are all the people in thearts world who have said "Trustees must not be paid, otherwise they will be diminished in our eyes"? Frankly, I doubt whether there is any evidence for such a statement. As is known by every hon. Member who served on the Committee, some of us have had close relations with various people in the arts world, otherwise we would not have been able to make the contribution that we did. I have met no group or individual in the arts world who has said that the status of trustees would be diminished if they were given some remuneration. Therefore, what the Leader of the House said was a terminological inexactitude. I defy him to produce the evidence for the remark that he made.
  I wish that the hon. Members for Eastleigh (Mr. Price) and for Kidderminster (Mr. Bulmer),who both spoke so eloquently on this subject in Committee, were present. I can only suspect that they have been exiled to the Conservative equivalent of Siberia, but I am willing to be told that I am wrong.
  Mr. Cormack: Neither of my hon. Friends expected this matter to be debated. In fact, they are both paired. I hope that the hon. Gentleman will accept that explanation.
  Mr. Dalyell: I am aghast at that, because I have known the hon. Member for Eastleigh for nearly 20 years and I would not say that he wasnaive. It really stretches the imagination to believe that he did not think that this matter would be voted on.
  Mr. Cormack:I am sorry that my hon. Friend is not here to participate, but none of us knew about the Government amendment until yesterday. In fact, my hon. Friend the Member for Eastleigh is doing something extremely important.
  7.45 pm
  Mr. Dalyell: The hon. Member for Eastleigh is an honourable man and it is not like him to shirk his responsibilities. I must say that he and I are united with regard to the Government amendment. Like him, I did not anticipate it because I thought that the Government would submit to the discussion that occurred in Committee.
  Mr. Donald Coleman: That makes it even more shady.
  Mr. Dalyell: As my hon. Friend has rightly said, that makes it a great deal worse. If the Government intended to do this, they might: at least have had the courtesy to warn their hon. Friends. I shall not lecture Front Bench spokesmen on courtesy, but they might have told the two hon. Members concerned about what they were up to.
  Thirdly, the Leader of the House told us that no such post receives remuneration, although he accepted that the chairmanship of the HBC did. The review body on the export of works of art is a very different institution. It is nothing like full-time. I happen to know something about this because I have recently asked the Attorney-General about it in another context. The review body is totally different—at least, I think that it is. The fact is that we spent a lot of time in Committee discussing the trustees, yet even now we are far from clear about what their job specification is. The Minister was honourably open in saying that that would evolve. However, the job of chairman is likely to be one approaching a full-time job.
  Fourthly, it is all very well to use the analogy of the review body on the export of works of art, but I and a number of other hon. Members represent new towns, and we all know that the chairmanship of a new town development corporationis a paid post. It does not behove the Leader of the House to make such an egregious speech without recognising that there are many other bodies of which the chairman is automatically paid a reasonable sum. If he were not paid such a sum, many candidates would be excluded.
  I did not care for the right hon. Gentleman's remark that it is not right to pay trustees at the expense of the heritage. Will his next argument be that it
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  is not right for the chairman of a new town development corporation to be paid at the expense of the ratepayers, owner-occupiers and tenants of new town houses? If it is, it is trawling the bottom of the ocean.
  There was also the argument about posts with a strong executive element, which the Leader of the House believed should be treated somewhat differently. I may be wrong, but as I understand it there is a large executive element in relation to the trustees. Certainly, it appears from the literature on this subject that the trustees are to have a good deal of executive power—at least, in the mind of the Under-Secretary they are to have a good deal of executive power.
  We then told the Leader of the House "If you do this, you will then raise complications with regard to the House of Commons Disqualification Act." Does that mean that two or more of the trustees are to be Members of the House of Commons? I am not happy about that, and I pray in aid my distinguished ex-colleague, Mr. George Strauss, who for many years was a trustee of the British Museum. In no way do I want to quote him out of context, but he used to say that there were certain problems about Members of the House of Commons being trustees. In regard to this body, I would have thought that it was positively undesirable for Members of the House of Commons to be among the trustees. If there is an argument against, it would be germane and relevant if we were told.
  The question of inserting a power to pay the trustees was raised in Committee. It was not pressed to a Division, but at any rate the power is still in the Bill. Amendment No. 43 goes further and actually requires that the trustees are paid. A pay structure is suggested by the figures £5,000 and £1,000 per annum, thus reflecting the degree of responsibility and likely time involvement of the chairman and trustees respectively.
  There are strong feelings—they were expressed in Committee—that not only must there be a power to pay trustees—and the Bill has progressed that far already—but that the trustees should actually be paid. Without such a requirement, we may yet find Ministers jibbing at paying emoluments, thinking that they

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  can still find people of adequate capacity to serve and not appointing those who should have the job, in order to save trifling sums of money, in the context of the fund, let alone of national expenditure. It is the best people that are needed here. Financial consideration must not enter into the matter. The trustees should be paid.
  That said, it should be emphasised that this debate, rather like the long debate on not reimbursing the commissioners of the Inland Revenue with real money but rather doing it painlessly with paper "units of account"—indeed, the whole question of payment for the trustees—is not an argument about heritage. It is about good management, sensible staffing and fair treatment. Let us be celar that there is no discord between us on heritage as such. It is an argument about the good management of a public body.
  While management and staffing are under discussion, what about the duties of the trustees? What progress have Ministers made on the delicate subject of the appointment of the chairman and other trustees? It gives me no pleasure to be cantankerous on the subject. Indeed, this is the first sign of cantankerous behaviour on the Bill—certainly from myself and those who have taken part in the debate. However, we feel strongly about the matter. We feel that it is an issue of principle and that the good management and success of the heritage trustees—heaven knows, we want them to succeed in their important task—are at stake. In that spirit, I beg the Leader of the House, with his power as a senior member of the Government, to say that he has changed his mind after all. There is nothing disgraceful about changing one's mind.
  Mr. Freud: I rise to my feet in support of a good argument, but I look around to find that there are fewer than 20 hon. Members in the Chamber. The argument has been well rehearsed in Committee, but I believe that a new element in the debate has been introduced by the Government's new amendment.
  I should like to quote from the remarks of the Chancellor of the Duchy of Lancaster. He said that no similar appointees receive remuneration. That is a rotten argument. The fact that something has
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  happened of which we disapprove is no reason why it should go on happening. He also said that the authority status and prestige of those who are not paid will be enhanced. On that point I argue most of all with the right hon. Gentleman.
  I have obtained from the Library a volume which I would not recommend to anybody for light reading. It is called "A Directory of Paid Public Appointments made by Ministers, 1978."If we are to take the words of the Chancellor of the Duchy of Lancaster seriously, it would seem that all the persons in that volume have diminished authority, status and prestige by virtue of the fact that they are paid. Not even the Minister would agree that that is fair comment.
  The Minister said that it would be wrong to compare the Gaming Board with the National Heritage Memorial Fund. Of course, he is right. It is always wrong to compare anyone with anything. However, it is fair to look at the sort of quangos or paid public appointments that are made by Ministers working inunison one with another, in order to see in how many of those the members are paid. In the British Film Fund there are two paid members. The British Library Fund has eight paid members. There are paid members in the British Tourist Authority and the British Waterways Board. The Countryside Commission does not have paid members, but it has a paid deputy-chairman and a paid vice-chairman. Of course, all the bodies have well-or reasonably well-paid chairmen. I come to the Cumbernauld development corporation. I am going through the list in alphabetical order and the House will be relieved to hear that I stop at the letter 'g'.
  There are 12 paid members on the Development Board for Rural Wales. There are paid members on the English Tourist Board and the Forestry Commission. Indeed, the Forestry Commission is a body that is not a million miles removed from the Heritage Fund. The part-time chairman and the five part-time members are paid four-figure sums. I end on the Gaming Board of Great Britain—I will not go on. It seems to me that the Government are wrong to adduce the argument that to be paid diminishes the standing of the people. The hon. Member for West Lothian (Mr. Dalyell) has proved that it

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  is wrong to say that the arts world deplores or feels worried about payment and any connection with it.
  Mr. Dalyell: Does the hon Gentleman agree that senior Cabinet Ministers who make statements about the alleged opinions of other people—be they in the art world or any other world—should be able to produce the evidence for those statements? Frankly, some of us do not believe that those statements were ever made.
  Mr. Freud: Yes; it would be hard not to agree with that sort of statement.
  I shall be brief because I see the Whips racing around the Chamber trying to persuade hon. Members to end the debate. [Interruption.] Well, I saw them a moment ago.
  I should like to raise one further point. The Chancellor of the Duchy of Lancaster said that it would not look right in the economic climate that we are currently enjoying—or perhaps failing to enjoy on this side of the House—to set up a new quango with new paid appointments. I remind the Chancellor and the Minister of State of their own self-financing policies. By paying a modest but realistic sum both to the trustees and to the chairman, there is every chance of achieving the self-financing upon which the Government are so keen. I believe that the right people will be able to get the right items for the National Heritage Fund at the right price. I believe that to be the policy of the Government, and I totally agree with that policy.
  If you call my amendment, Mr. Deputy Speaker, I shall press it. However, I shall certainly vote against the Government if they persist in not accepting the opinion of the majority of the Committee and, I believe, the majority in the country.
  Mr. Faulds: What seems like a long time ago now, I gave way with a chivalrous gesture to the hon. Member for Staffordshire, South-West (Mr. Cormack). He should have known me better. It was not a chivalrous gesture but a calculated kindness. I wanted him to go on record as opposing his right hon. Friend's intention of downing the will of the Committee. I am sorry if hon. Members are upsetting the Whips by delaying the House on this matter.
  Mr. Spencer Le Marchant (Comptroller of Her Majesty's Household): Continue.
  Mr. Faulds: I shall continue at some length. It is an important matter, and we should get it on record that there is general disagreement within the Chamber—certainly there was in Committee—with the Government's intention not to listen to the opinions of the Committee. There are enough hon. Members present in the Chamber to express the will of those on the Committee and those who are concerned about these matters. Nevertheless, we shall see how many hon. Members the right hon. Gentleman manages to muster from the musty corners of the House when it comes to the vote.
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  If no emoluments are available either to the chairman or to the trustees, there is a danger that there will be the usual establishment assortment on the board of trustees. I am not making a generalised attack—it is a risk that I often run, and I sometimes succumb to it—on the boards and trustees who run aspects of our heritage. Most of them do a very good job. However, it is well known that there are a large number of people on those boards whose names simply decorate them. They do not take an active part in the proceedings of the trust. They are there because they are well-to-do, they have the time, and their titles look good on the headings of the notepaper. That is the danger that the right hon. Gentleman runs if he insists on downing the will of the Committee.
  I can only quote at the right hon. Gentleman—I regret that the hon. Gentleman is not here to speak for himself—the words of the hon. Member for Eastleigh (Mr. Price), his colleague, who said in Committee:
  "It is essential, if we are to make a success of this, that the base be as broad as possible."
  He was talking about the trustees. He continued:
  "We do not want the heritage to be thought to be a matter for a limited number of people. It is everybody's heritage. That cannot be put too strongly."
  I am sorry that the hon. Gentleman is not present tonight. That morning in Committee was most impressive. It was not just we terrible Socialists who said that people should be paid for their

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  public duties. Conservative Members who are not normally thought of as being on the Left wing of the party were most reactionary. They supported our arguments. It is unacceptable to hon. Members who served on that Committee and discussed the matter at great length that our will should be disregarded.
  It is important to remember that for the chairman, and probably the trustees—the chairman may have so much to deal with that he delegates some matters to the trustees—this will be a more or less full-time job. We are living in a period of economic stress. We shall find increasingly in the next few years that people are forced to sell properties, objects d'art and paintings, and that more and more such works of art will appear on the market, works of art which we want to keep in Britain as part of our national heritage. There will be a flood of problems to consider.
  Again I quote from the Committee proceedings, because the right hon. Gentleman was not present. I said that
  "in the economic circumstances of our time, there is likely to be an increasing number of cases in which properties, land and objects will come up for consideration…It is more than likely that this will be a time-consuming job. There will be crisis after crisis. The job will not be a sinecure. It will need a great deal of time and frequent meetings."—[Official Report, Standing Committee F, 22 January 1980; c. 270–75.]
  If the Government expect the board of trustees to do the job properly—it will be a full-time job—they must reconsider the sort of people whom they will appoint. It will be very disturbing if suitable candidates for the board of trustees—I hope that we shall all play a part in putting up names—are prevented from taking on a job of this nature simply because they cannot afford to do so. That argument cannot be repeated enough to get it into the right hon. Gentleman's noddle that we must have a suitable selection of representative people on the board of trustees, not the decorative establishment figures that I am beginning to think the right hon. Gentleman may have in mind.
  It would be interesting to know who the Minister has in mind. I wish we knew, particularly about the chairman. Some hon. Members made representations earlier about the unacceptability of one or two names that were running
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  around in his head. We hope that he has excised them for good.
  Mr. St. John-Stevas: Exorcised them.
  Mr. Faulds: Well, if they are in that sort of spirit, perhaps it is better to exorcise rather than excise them. I cannot judge the right hon. Gentleman's hon. Friends better than he can.
  The members of the Committee considered the matter at great length, and in their wisdom they defeated the Government. It was a very happy occasion. The Government should have the grace to accept that decision. I urge all hon. Members to have the guts, when the matter comes to a Division, to move into the Opposition Lobby and defeat the Government on this important aspect.
  Mr. Ednyfed Hudson Davies: It is sad that the Leader of the House has introduced a discordant note at this late stage, having kept at a happy distance from the working of the Committee. He has struck across the strong feeling of the Committee on the matter of payment of the trustees. He said that this involves an important question of principle. For him, the principle was a possibility of public expenditure. That in itself is an important question of principle. He is afraid of the implications and potential of public expenditure, but he is more than happy to accept potential public service and for that service to be unpaid.
  It has already been argued that it is inadequate to list the museums and galleries and to say that no payment should be taken by their trustees and to pretend that that is the ideal system. I think it is sad that many trustees are not paid, and that is such a valuable use of precedent in this connection. The right hon. Gentleman referred to the fact that the analogies which were drawn in Committee were to bodies with a strong executive element. We have heard the hon. Member for the Isle of Ely (Mr. Freud) review various bodies which, although they do ber for Isle of Ely (Mr. Freud) review payment.
  I speak from experience. I was the chairman of the Wales Tourist Board. A good deal of the work involved was non-executive. It involved exercising discretion over grants and loans, precisely an aspect of the activity which the trustees would exercise in this connection.

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  Board members and the chairman received a modest payment, and it is proper that in this case the trustees should receive payment.
  The Leader of the House referred to the fact that there would be provision for allowances as compensation for loss of earnings. That is not a good way of showing recognition for services. The compensation received within any group of people will be different, according to the different earnings capacity of their earning commitment. It is improper that their role as trustees should be reflected in that way.
  It was argued that there was no shorttage of candidates. That is no justification. Is the right hon. Gentleman suggesting that if there were a shortage of candidates he would be prepared to buy them? I do not see that the availability of candidates is relevant to the argument of principle whether payment should be made for the job. The right hon. Gentleman came to the conclusion that it would be wrong to bestow a power, as appears in the clause as amended in Committee, which the Government do not intend to exercise. Surely that is done frequently. That might happen under clause 14 of the Bill. Do not the provisions of that clause bestow a power—transferring some functions—which the Government do not propose to exercise, or is the right hon. Gentleman telling us that on the basis of that argument he does not approve of exercising bestowing powers? Is he telling us, in a devious way, that he intends to implement clause 14? If he is not saying that, I do not see the force of his argument.
  The Government, in their economic and taxation policy, have constantly used the argument of a causal link between effort and reward. The effort should be to reward, and reward should breed effort. We are talking of a group of trustees whom we expect to show effort and dedication. Why does the principle, so widely deployed by the Government, of properly recognising effort not apply here?
  It is a disappointing amendment. I implore the Chancellor at this late stage to review the position and take cognisance of the fact that the Committee looked carefully into the question and was strongly of the view that there should be
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  a measure of payment to the trustees. I ask him to withdraw his amendment.
  Mr. St. John-Stevas:I congratulate my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack) on his—
  Mr. Dalyell: Decision to vote against the Government.
  Mr. St. John-Stevas: No. I am not a Whip or a slave-driver. My hon. Friend must make up his own mind. When I was interrupted, I was about to congratulate my hon. Friend on his moderate approach to the problem and the persuasive way in which he put his argument.
  The hon. Member for Caerphilly (Mr. Hudson Davies) was less than just to me in his reflections on my appearance to move the amendment. I did so because I realised that the amendment would be unpopular with some hon. Members. I therefore thought it right that I should come to move it myself. That was my motivation. Otherwise, I could have hovered without until Third Reading.
  I must make it clear that this is a Government decision made right at the beginning. The new element is not the amendment. The new element of payment came in in Committee. That was when it was first proposed. It was never envisaged by the Government when the Bill was brought before the House that these trustees would be paid.
  The hon. Member for West Lothian (Mr. Dalyell) alleges that he always knows what is the truth when he finds me smiling. I say to him, attach no importance to my smiles. It is simply that I find it easier to smile than to scowl. It has no particular significance, except that I am today my normal cheerful self, in spite of my regret that we are having some controversy at this late stage.
  The hon. Member for West Lothian said that it was "all the fault of the blessed Margaret in No. 10". I assure him, first, that the title is wrong. On the day that she entered No. 10, she rose from "blessed" to "saint". The Prime Minister, of course, has overall responsibility, but the amendment is not being moved at her particular instigation. It is in accord with the general policy of the Government with regard to the Bill.
  In spite of the impressive list of the hon. Member for Isle of Ely (Mr. Freud),

  1453
  which I believe that we have reduced, it is also true that it would be inappropriate to be adding to that list unnecessarily at a time when we are trying to reduce it.
  The hon. Member for West Lothian asked me for evidence about the reaction in the arts world. I can only say that there is evidence. No doubt people have reacted in different ways, but the view has been represented to me that it would be a bad thing and prejudice the standing of the trustees, not personally but as trustees, and that is what I am concerned with. I stress that it is intended that if there is any loss of earnings there should be provision made for that to be made up.
  8.15 pm
  Mr. Dalyell: I do not wish to be offensive, but will the right hon. Gentleman name one important segment of the arts world that has put that point of view? The evidence that most of us have is absolutely to the contrary. People in the arts world think that it is extremely important as a matter of principle that trustees should be paid. The image too often associated with the very well-heeled is not desirable for our heritage, which belongs to everyone.
  Where has all the evidence come from? I am not asking for a whole list of names, only one or two.
  Mr. St. John-Stevas:Journalists do not reveal their sources, and it would be quite improper for me to reveal confidential expressions of opinion passed to me as Minister. Of course, the hon. Gentleman's experience is different from mine. If he can find any opinion that is shared universally throughout the arts world, I should be grateful to be made aware of it. It is a world in which there is a wide variety of individuals and, therefore, a wide variety of opinions.
  Mr. Dalyell: One final point—and it is my final point.
  Mr. St. John-Stevas: Good.
  Mr. Dalyell: On two occasions, in October and December, the National Trust in Scotland convened widespread conferences, casting the net over all the heritage bodies in Scotland. On a number of issues there were differences of opinion, but it is my recollection that on this issue every one of the bodies
  1454
  centred on Edinburgh, which is a microcosm of Britain, agreed that it was important, as a matter of principle, that there should be payment for the chairman and the other trustees. Opinion was not necessarily unanimous on other topics, but it was unanimous on this point.
  Mr. St. John-Stevas: I accept the hon. Gentleman's evidence. I can only tell him that that is not the unanimous view of the arts world.
  A thought came into my mind when I was listening to the interesting contribution of the hon. Member for Isle of Ely. I believe that it is important to preserve the voluntary principle as far as possible. It is an important part of our national life. One sees it operating in all sorts of spheres, and particularly where spiritual values are involved—in nursing, medicine, religion and the arts. There is some value in preserving it where we can.
  Mr. Freud: Does the right hon. Gentleman accept that the voluntary principle could be preserved if people were able to give the money back? We are simply arguing for a facility for these people to be paid in order not to exclude anyone from consideration as a trustee.
  Mr. St. John-Stevas: That is an interesting suggestion. However, it would cause more complications than it would solve. The hon. Member for Warley, East (Mr. Faulds) was concerned that we might have too many members from the Establishment. Establishment is not a state of income but a state of mind.
  Mr. Faulds: It is frequently a state of income.
  Mr. St. John-Stevas:No, it is a state of mind. The hon. Gentleman is an Establishment figure. I think that he would agree with that. He is an Establishment figure on two grounds—vast income from the acting profession and—
  Mr. Faulds rose—
  Mr. St. John-Stevas: He looks like a member of the Establishment to me.
  Mr. Faulds: Unfortunately, the right hon. Gentleman is quite wrong about my income from my old profession. I devote far too much time to the House rather than to my old profession. That may be

  1455
  regretted by some of my colleagues, and the right hon. Gentleman must not damage me in public by asserting that I am an Establishment figure. If that has happened to me after 13 years in the House, perhaps I should give up.
  Mr. St. John-Stevas: Rather than face that horrific possibility, I withdraw all imputations that the hon. Member is a member of the Establishment. As I look at him, I do have doubts. Never mind. I accept the hon. Gentleman's assurance.
  I am not a member of the Establishment on either ground. I am a free spirit and I range as far as the Chief Whip allows me. [Interruption.] I am very glad to see my right hon. Friend the Patronage Secretary here. He is, after
  all, the Patronage Secretary—another of his titles—and is a well-known patron of the arts. That is an unsolicited tribute.
  I am sorry that I have not been able to accede to the wishes of those who are here. If I could, I would. The balance of the argument—it is not a clear-cut issue—is against them. I admit the perfect right of any hon. Member to divide the House, but I hope that we can avoid that. If not, we must vote according to our conscientious convictions.
  Question put, That the amendment be made:—
  The House divided: Ayes 165, Noes 134.
  Question accordingly agreed to.
  8.32 pm
  Mr. St. John-Stevas: I beg to move, That the Bill be now read the Third time.
  I am delighted that we have come to the Third Reading of the Bill with only the most minor disagreements.
  My first task must be to pay a heartfelt tribute to my hon. Friend the Under Secretary of State for the Environment for his devotion, enthusiasm, ability and dedication to the Bill. I have, of course, been in the closest touch with him during the Committee stage proceedings. However, I do not want to give the impression that his was not a fully independent and creative role. We all owe him a debt of gratitude for the progress made in Committee and the good spirits that prevailed.
  I also thank the hon. Member for Warley, East (Mr. Faulds) for all the
  effort he has put into the Bill. I thank him particularly for being here today. I know that he is here at great personal inconvenience, as he cancelled an important late-night engagement in Paris. We all appreciate the sacrifice that he has made.
  It would be a tragedy if heritage matters became an issue of party political dispute. In the nature of things there must at some time, I imagine, be a change of Government. This Government cannot be in power all the time, though they are doing very well at the moment and it looks as though we will be here until the end of the century.
  Mr. Cormack: Which century?
  Mr. St. John-Stevas: I will settle for the present century at this moment.
  It would be disastrous for the heritage if there were not the widest possible measure of bipartisanship, and I am extremely grateful to the hon. Member for

  1459
  Warley, East for having made such a notable contribution in this sphere. It is rare for an individual to make a great difference. His accession to the position of spokesman for the Opposition has made a major difference to our arts policy, and I pay tribute to him, as I pay tribute to the hon. Member for West Lothian (Mr. Dalyell) for his contribution to the debate. I also thank my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack) for his continuing contribution to the arts in the House and outside it which is followed by all those interested in the heritage.
  After the detailed consideration the Bill has received in Committee and on Report, I think it would be useful to stand back for a few minutes and set the proposal that it contains in the context of our other policies for the heritage and the arts. The Bill sets up a new fund to be run by independent trustees providing assistance to bodies and institutions that wish to acquire, preserve or maintain outstanding land, buildings and objects of national heritage quality. I have given no sustained consideration to who should be appointed, save in the most general terms, because it would be quite wrong, until I was assured of the approval of the Bill by Parliament, to begin that consideration. When, as I hope, the Bill receives its Third Reading, I shall devote my mind to this matter in conjunction with my right hon. Friend the Secretary of State for the Environment.
  I can make a few general remarks about the sort of people we shall be looking for. We do not want crabbed specialists. We do not want astronomers who have never seen the stars. We do not want bankers who have never seen the world save by looking out of a bank window. We want people of wide experience and cultural perceptiveness and an interest in the whole question of the heritage and the arts. We want people who will be able to assess and take expert advice but who are not necessarily experts.
  Mr. Dalyell: The right hon. Gentleman said he would consult the Secretary of State for the Environment. Will he also confer with the Secretaries of State for Scotland and Wales?
  Mr. St. John-Stevas: Yes, when that is appropriate. I am very glad to have them added to the rota.
  Second, the Bill transfers ministerial responsibility for acceptance of property in lieu of capital transfer tax from the Treasury to the Secretary of State for the Environment and myself in my capacity as Minister for the arts. I do not think that any one alteration in policy has done more than that to ensure this measure a favourable reception in the arts world. There was widespread dismay at the prospect of the in-lieu proceedings being abandoned. They have been and will be preserved in principle for the foreseeable future. How the actual administration will be carried out will be a matter for review after experience, however.
  The Bill now contains a major new concession, introduced at Committee stage with my full approval and support, to provide the means for a very wide-ranging scheme under which the Government can undertake to indemnify lenders of works of art and similar objects when they are loaned for display to other persons, bodies or institutions.
  Mr. Faulds: Excellent.
  Mr. St. John-Stevas: I am grateful for that expression of support. I have received expressions of appreciation from a number of people outside the House.
  The steps which have been taken in the Bill should be seen in the context of what we are already doing. We already provide the maintenance costs, the capital costs and the purchase grants for the national museums and galleries, and special funds to aid the purchasers in the local museums and galleries. My right hon. Friend the Secretary of State for the Environment provides similar support for a number of historic buildings and ancient monuments, and he, of course, is advised by the historic buildings councils.
  I am advised by the Standing Commission on Museums and Galleries. I thank the commission and Sir Arthur Drew for all the help that they have given in the course of the Bill. I especially thank Mr. Michael Levey, the director of the National Gallery, who has taken such a constructive and informed interest in the Bill and in all matters concerning the visual arts.

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  My right hon. Friends the Secretaries of State for Wales, Scotland and Northern Ireland have similar responsibilities for the arts and the environmental heritage. As has been pointed out by the hon. Member for West Lothian they will be advising and taking decisions where appropriate.
  In addition, we control the export of works of art on the advice of the Reviewing Committee on the Export of Works of Art. The committee has an extremely difficult task which it does extremely well and conscientiously. It is a tribute to it that no one has even questioned the bona fides of its decisions, however much he may have disagreed with the decision reached. Professor White is doing a wonderful job in that respect.
  In round terms, as a proportion of my arts budget, which also covers the Arts Council, the British Library and a number of other bodies concerned with the living arts, expenditure on heritage is over £40 million out of a £140 million budget. Next year, with the addition of the National Heritage Fund and the provision for acceptance in lieu, the proportion will be significantly higher.
  That is a firm demonstration of our commitment to the national heritage and is all the more notable when one considers the steps that we are having to take, unfortunately, to retrench public expenditure generally. I know that the Expenditure Committee report, from which the idea of the new fund sprang, recommended that we should add to its endowment the £50 million that it said was taken away in 1957, but it sensibly said:
  "as the public expenditure situation permits".
  I should be delighted to comply with that recommendation. I am sure that the House will recognise that it is simply not practicable at the present time. I regard it as a major achievement—and I have been supported in this view by the heritage movement—that we have ensured that the total sum standing to the credit of the National Land Fund at the end of this financial year will be handed over to my right hon. Friend the Secretary of State for the Environment and myself, so that we can provide an immediate and reasonable endowment for the new fund and continue the acceptance in lieu system.
  1462
  I have referred to the heritage movement. It has played a full role in the preparation and the success of the Bill. It has been constructive and helpful from the time when it gave its detailed evidence to the Expenditure Committee until now, and it has collaborated fully with the Government, the Opposition and hon. Members on the Back Benches in ensuring that we have an accurate and comprehensible statute which reflects the wishes of those concerned. The Bill has made swift progress and will need to maintain this to reach the statute book in time for the fund to be set up at the start of the next financial year. I am most anxious to meet that deadline.
  I have nothing but praise for the manner in which my hon. Friend the Under-Secretary of State for the Environment handled the debates in Committee. He and the many others who have contributed to the original text and the amendments deserve our congratulations on a great achievement for the national heritage.
  Mr. Hugh Leggatt, a great supporter of the arts, said that the Bill constituted the brightest day for the arts and the heritage for more than 30 years.
  I wish to thank all those who have contributed.
  8.44 pm
  Mr. Faulds: This is a happy occasion. We see now the realisation—or near realisation, or imminent realisation—of a much-hoped-for development. Out of Hugh Dalton's original concept of stretches of lovely land being preserved, unspoiled, as a memorial to the war dead of the last great war, there developed the extension of concern to historic houses and, eventually, to paintings and objets ďart.
  Sadly, the National Land Fund, the original vehicle, was not properly utilised because of Treasury machinations and, let us be honest, by parliamentary parsimony when funds were diverted, quite improperly, to the Treasury for purposes other than those for which the fund had been established.
  Mentmore was a national scandal which had the fortunate result of rousing such fury and concern that the whole subject became a matter of public interest and subsequently a matter of examination by Arthur Jones's Sub-Committee of the Expenditure Committee.

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  The excellent report that came out of that led to the White Paper of February 1979, produced—and it is advisable that we should remember this—by Lord Donaldson and Lady Birk and strongly backed by the then Prime Minister, my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan). I recount the history yet again just to put the record straight and so that the Chancellor of the Duchy of Lancaster should not get all the kudos. The right hon. Gentleman is a great collector of paraphernalia of all sorts, but he is not averse to picking up whatever kudos lies around.
  Mr. St. John-Stevas: Nor is the hon. Gentleman.
  Mr. Faulds: I am not quite such a collector of either kudos or bits and pieces as is the right hon. Gentleman. Incidentally, I have another Gladstone bust for him if he can afford it.
  Mr. St. John-Stevas: How about a Queen Victoria bust?
  Mr. Faulds: This is becoming most improper. Queen Victoria's bust is not a matter which should be discussed on the Third Reading of the National Heritage Bill, even though it may lie in the right hon. Gentleman's collection.
  Let us be fair to the right hon. Gentleman. He deserves some of the kudos. He was generous to me—rightly so—and I must be generous to him. He has played an admirable role in seeing that matters were got right in Committee and in the final form of the Bill. We should put on record that he was the final contributor, with his hon. Friend the Under-Secretary of State for the Environment, who did so excellently in Committee.
  However, it is only fair to add that the right hon. Gentleman took the advice that I gave on Second Reading when I instructed him to apply a touch of his delicate toe to a number of bureaucratic bottoms in Whitehall. The result has been a much improved Bill in which the right hon. Gentleman has handsomely met the main requirements of the heritage and museum worlds.
  All along, the right hon. Gentleman has supported the in-lieu provisions, which were regrettably left out of the February White Paper. The right hon. Gentleman and I were at one on that. He
  1464
  has met the in situ suggestions for which the museum world has wished for years and, more admirably—and this is where the toe penetrated the posterior—he has insisted on introducing the indemnity arrangements for which the museum world had also argued for years.
  The right hon. Gentleman deserves a good deal of credit, and I should like to put on record again the contribution of the Under-Secretary in Committee. He dealt courteously, good-humouredly and efficiently with a fairly ugly crew.
  Mr. Cormack: Speak for yourself.
  Mr. Faulds: Of course, I include myself but do not exclude the hon. Member.
  Where the Chancellor of the Duchy of Lancaster has not been so good is in failing to resist the Treasury's baleful influence. I had wanted to speak at length on that matter, but I have rehearesd the arguments a number of times in Committee and on Second Reading, and I understand that there are problems about completing the business of the House satisfactorily tonight, so I shall drop, perhaps ill-advisedly, the animadversions on the Treasury.
  However, I should like to raise one or two other matters on which the Minister might like to comment. There is common agreement that, in the nature of things, no accurate advance estimates can be made of the sums required to record in the books acceptances in lieu, since too many unpredictable factors are inevitably involved. In view of that, will the right hon. Gentleman take this opportunity to confirm to the House that if the estimates are insufficient in any one year the moneys will not be made up by raiding the annual grant of income to the National Heritage Memorial Fund? That matter was touched on earlier, but I should like confirmation when the right hon. Gentleman replies to the debate. Conversely, will the right hon. Gentleman also confirm that any excess of the estimate over the sums made available in respect of in lieu acceptances will be passed to the Fund as an addition to its income?
  I have another important query. Now that acceptances in lieu are being placed on a new footing in the Bill, will the right hon. Gentleman tell us precisely how he plans to obtain expert advice on

  1465
  the pre-eminence or otherwise of works of art offered in satisfaction of tax? He will be aware that the old system was not working satisfactorily and that the Select Committee came up with a constructive suggestion for reform. If he has completed consideration of this point, which he informed me was in progress some time ago, will he take this opportunity to impart his conclusions to the House? It is important that the House should know.
  This is a most welcome piece of legislation which meets the concern of all the parties to the heritage. It was a pleasure to serve on the Committee with such amenable colleagues. I believe that we have ensured the better conservation of all aspects of our heritage, which now plays such an important part in our economic life and in the cultural lives not only of natives of Britain but of the many tourists who flock in to look at our heritage in all its aspects. I believe that Hugh Dalton's dream has been more than fulfilled. For once the House can be proud of its work and sure of the value of its legislative decision in these matters.
  8.50 pm
  Mr. Cormack: It is a great pleasure to join hands across the Chamber and welcome this significant piece of legislation. I add my congratulations to those that have been given to my right hon. Friend for his drive in carrying major responsibility for this Bill. I congratulate also my hon. Friend the Member for Dumfries (Mr. Monro), to whom tributes have already been paid, for a magnificent job in Committee. Without his calm, patient understanding, I do not think that the Bill would be quite the measure that we now have. He considered most carefully a number of important points. He obviously had lengthy discussions with my right hon. Friend, as a result of which improvements ensued.
  This is only the beginning of the road in many ways. Although for many of us it is a day of celebration, we would be deluding ourselves if we thought that all the problems of the heritage will pass into oblivion when the Bill reaches the statute book. I said on Second Reading that this is only one strand of a comprehensive heritage policy. Without long-awaited tax concessions and reforms in the Budget
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  and other proposals to which we all look forward, there will be a flood of heritage objects on to the market with which the fund will be unable to cope. It can be effective only as a safety net. It will survive as a safety net only if it is not tested too often.
  I hope that all hon. Members realise that this is just one victory and that our heritage has not been rescued from all the dangers that threaten it merely by the passage of the Bill, welcome as it is. The Bill is, however, a significant milestone. It is the most important piece of heritage legislation since the war. For that, my right hon. Friend, my hon. Friend the Member for Dumfries and my hon. and learned—and benevolent—Friend the Minister of State, Treasury, who played a part this afternoon, have our grateful thanks.
  I sincerely hope that their Lordships' House will consider that we have examined the Bill fairly thoroughly and will give it a quick and speedy passage so that it receives the Royal Assent in good time for the trustees to be appointed and the Bill to come into effect on 1 April.
  8.54 pm
  Mr. Dalyell: The Leader of the House paid tribute, properly, to the heritage movement. Having occupied many column inches of the Committee proceedings in the Official Report and having had my say today, I should like simply to say "Thank you" to the many heritage bodies in Scotland that were brought together on the initiative of the National Trust for Scotland and have done a great deal of constructive work on the Bill. They may be a model of how to influence events, particularly as they had the maximum co-operation from the Civil Service. But the heritage bodies helped themselves greatly by letting civil servants and Ministers know exactly what was in their minds at an early stage. The civil servants were extremely co-operative, constructive and helpful.
  Mr. Cormack: I have been remiss. I am sure that the hon. Gentleman would agree that it would be a great shame if the Bill were passed without the name of Mr. Jeremy Benson being recorded.
  Mr. Dalyell: It is always invidious to pick out names. We have had a great deal of help from all sorts of heritage

  1467
  bodies. I shall not speak of a heritage lobby, because there has been no trace of self-interest on their part. Naturally, one is alert for that.
  I say "Thank you" to the bodies concerned, because unless we have available to us the kind of briefings that they provided I am not sure that on such a complex matter the House can be effective.
  8.56 pm
  Mr. St. John-Stevas: With permission, I should like to reply briefly to three points.
  First, the fund will receive a grant in aid that cannot be raided to provide more for acceptance in lieu.
  Secondly, the sources of expert advice for the pre-eminence test that the hon. Member for Warley, East (Mr. Faulds) raised are under consideration. My officials are discussing the matter with our present expert advisers and the Standing
  1468
  Commission on Museums and Galleries and the Royal Commission on Historical Manuscripts. Any excess on the acceptance in lieu provision in any year can be transferred to the National Heritage Memorial Fund trustees.
  I was extremely glad that the hon. Member for West Lothian (Mr. Dalyell)paid tribute to the civil servants. We take the help, advice and work of the civil servants for granted, so much so that normally they receive no tributes, although from time to time they receive censure. I should like to put my experience on record. I do not think that on this Bill and other matters I could have received more devoted, intelligent and constructive service than I have had from the Civil Service.
  Question put and agreed to.
  Bill accordingly read the Third time and passed.

SCHOOL MILK AND MEALS
8.58 pm
Mrs. Ann Taylor: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Provision of Milk and Meals (Amendment) (No. 2) Regulations 1979 (S.I., 1979, No. 1686), dated 17 December 1979, a copy of which was laid before this House on 19 December, be annulled.
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): I understand that it is the wish of the House that we take with this the following motion:
That an humble Address be presented to Her Majesty, praying that the Milk and Meals (Education) (Scotland) Amendment (No. 2) Regulations 1979 (S.I., 1979, No. 1682), dated 7 December 1979, a copy of which was laid before this House on 19 December, be annulled.
Mrs. Taylor: The House should be clear about what we are discussing. The Government may well say that we are discussing a simple increase in charges for school meals. They will probably say that it is a modest increase of only 5p. They will say that it is an increase of a kind that we have had before. They may even mention the economic cost of school meals and say that the increase is justified and that there is no real difference between the present increase and increases in the past.
In fact, that is not so, because the regulations are significantly different from those that have increased the price of school meals previously. It is true that the increases are made in order to raise revenue. The Government take every opportunity to grab what revenue they can and to increase charges. But the regulations simply introduce an interim increase until local authorities can increase the price of school meals further, under the Education (No. 2) Bill. We cannot view the regulations in any other way.
The House should be grateful to the Secretary of State, who is not with us tonight, because in his press release at the time of the announcement of the increase he honestly told us the real reason for the increase. He said on that occasion that the increase would help local authorities to make progress towards achieving the savings next year set out in the Government's White Paper, pending the enactment of the Education (No. 2) Bill.
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Therefore I think we cannot separate the regulations that we have before us this evening from the Education (No. 2) Bill, which is now in Committee, where discussion has been curtailed because of the guillotine, so that we cannot discuss the school meals problem properly. We cannot separate these regulations from the Government's general economic policy, such as it is, and we cannot separate these regulations from the other measures which the Government are embarking upon that do harm to ordinary families and make life more difficult for many people in this country.
This increase in the charge for school meals, which comes into operation next week, follows an increase in school meal prices only last September. That increase was one which we Labour Members regretted. But we understood and, indeed, accepted the need for that increase. Indeed, as the Minister no doubt intends to remind the House, that increase was one which we as a Labour Government had acknowledged was necessary and had accepted would take place.
However, that increase in school meal charges last September was the first increase for two years, because the previous Government, the Labour Government, had held the price of school meals steady for two years. The present Government are to introduce another increase in school meal charges just five months after the last one. I doubt whether any Government in the past have had two increases in school meal prices in such a short time.
One reason for this is the quickening pace of inflation under this Government, but there are also other reasons. The Government are obviously taking every opportunity they can both to increase charges and to cut public services. Indeed, the Government are almost proud of their record in making cuts and their record in increasing charges. Part of the problem that the country is facing is that the Government make hasty decisions, such as this one to increase school meal charges, without looking at the facts, without looking at the consequences and without any sense of priorities or any idea of what the country needs.
No doubt the Minister will tell us this evening that charges of this kind are

1471
necessary because he sees the alternative as more classroom cuts. His right hon. and learned Friend the Secretary of State has told the House on several occasions that school meals, school milk and school transport must all face new charges because the alternative is other cuts in the education field. Indeed, his noble Friend who speaks for the Government in another place put it very clearly when he said that these cuts were necessary because the alternatives, which included cutting back on classroom supplies and teachers, were even less acceptable to the Government.
The sad fact is that the choice is not one of cuts in school meals or cuts in the classroom. It is a false argument that the Government are putting forward, for two reasons. It is a false argument because even the Government ought to accept that teachers cannot teach hungry or tired children—which is the attitude Government members are coming round to on the Education Bill. It is also a false argument because it is untrue that cuts in school meals at the present time are preventing cuts in the classroom. All over the country we are seeing cuts in the number of teachers that many local authorities are employing, cuts in book supplies and cuts in capitation generally.
The Government's proposal on school meals, these increased charges and the other cuts they are introducing are doing nothing to prevent real education cuts in the classroom, which many Conservative authorities have been making in a frenzy of enjoyment. Now, they will not only continue to cut classroom equipment and teachers, but will cut school meals and milk with relish as well.
The regulations are important. They indicate the future pattern of school meal charges. In the past, school meal prices have been fixed by the Government. Nutritional levels have been laid down by the Government. If the Government have their way, all that will be a thing of the past. We shall have more frequent increases in school meal charges, and they will be substantial increases. That is bound to happen, and the two increases that we have seen in the past five months are merely the first stages of what will happen because of the Government's attitude.
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Following the Government's lead, many local authorities are now planning the increases that they will have to make. They are anticipating legislation that the Government are forcing through the House. Families had to face an increase in September 1979. They will have to face a further increase next week, in February. If the Government are successful in pushing their Bill through the House, many parents will face an increase in April, an increase in September and further increases in the following year. By September, many parents will have had four increases in school meal charges within 12 months.
That is not speculation. Many local authorities have already made their decision. There is much evidence that they will charge 45p in April and 50p in September. Some authorities, such as those in Devon and Warwickshire, are even now announcing plans to charge 60p for a school meal. The list of authorities that are making such decisions is endless. They are making these decisions under pressure from the Government to make public expenditure cuts.
The Government do not seem to understand that merely increasing the charge for school meals will not solve their problem. That will not raise the revenue that they are expecting. The Government are forgetting that as charges increase, fewer children will take school meals. As fewer children take school meals, the economic cost per meal will increase. We are entering a vicious circle that will lead to the break-up of the school meals service as we know it.
The Government seem to ignore these considerations. Their aim remains the same. They want parents to have to pay the full economic cost for school meals. That is the Government's intention, but so far Government spokesmen have not had the courage to say so. They have said instead that local authorities will have to make the decisions for them.
There has been much discussion about school meal subsidies, but no Minister has suggested that local authority employees or other workers who receive subsidised meals should have them withdrawn. Many chief executives and many directors of education receive subsidised meals. However, no one on the Government Benches is complaining about that. They are saying that children should not

1473
have their meals subsidised and that we should move towards a system in which parents have to pay the full economic cost.
I wonder how the Government think that ordinary families will be able to cope, especially as the increased charges have to be set against the background of the Government's other actions. It is not only an increase in the price of school meals that families face. The Government are to abolish the supply of milk for infants. They know that that is the reality of their plan. They are forcing local authorities to introduce new transport charges which will hit many family budgets. It may be that Ministers in the Department of Education believe that these new charges do not matter. Perhaps they believe that families can use the glorious tax rebate they received some time ago to enable them to cover these charges. But, for the vast majority of families the tax rebate of which the Government are so proud has been swallowed up many times over. It has been swallowed up by value added tax increases, inflation, increased mortgages, increased rates, the increased television licence fee and increases in the cost of gas, electricity and school transport.
One of my hon. Friends raised an important point yesterday about the Government's attack on families. What the Government are now doing is almost taxing parenthood. The Government's policies hit hard at the pockets of those who can least afford it. The Government must realise that their present financial policies affect mothers in particular.
What a constituent of mine said to me recently must be typical of the thoughts of many mothers throughout the country. She asked me whether it was true that the price of school meals was to be increased again. When I confirmed what the Government were doing, her next question was "Oh, is child benefit going up as well?" The Government may think that that is a very simplistic view, but for many mothers there is a direct relationship between child benefit and the price of school meals because they are the people who have to pay the bill.
The reason for this increase is very clear. The Government intend to make as many cuts as they can as quickly as possible and to increase as many charges
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as they can as quickly as possible. These regulations are not simply about increased charges, because many similar regulations in the past have contained provisions for increasing the income levels at which families could claim free school meals. If we look at the regulations, which are extremely brief, we see that there is no provision for that. No doubt the Government will say that part of the reason for that is that they increased the limit last year and, therefore, they do not want to do it again. But if they can increase the price of school meals twice in five months they can look at the income levels at which free school meals can be claimed twice in five months.
Though the Government will not admit it, the real reason why the income levels have not been increased is that the Government are against free school meals, or at least the number who can claim free school meals. The Government are determined to cut down the number of free school meals that are obtained.
Mr. Andrew F. Bennett: My hon. Friend will remember that in the election campaign the Conservatives made great play of trying to reduce the poverty gap. Would she not agree that by deliberately refusing to adjust the means test the Government are deepening the poverty trap and reducing the incentive for people to work?
Mrs. Taylor: The Government are doing exactly that at present. At the time of the election, many people were attracted by the idea that this Government would do something to rationalise that situation. The Conservatives made many promises and gave many indications that that would be their approach. What my hon. Friend the Member for Stockport, North (Mr. Bennett) says is correct, and I am sure that if he catches your eye, Mr. Deputy Speaker, he will wish to develop that point further. The Government are determined to reduce the number of free school meals available to children. On reflection, we should not be surprised that there is no provision in these regulations for the extension of free school meals.
The Secretary of State made his attitude to free school meals quite clear in our debate on the Education (No. 2) Bill, because on that occasion he said:
"many children who have free meals flog their vouchers and spend the money in other

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ways".—[Official Report, 5 November 1979; Vol. 973, c. 47.]
I should be very surprised if the Secretary of State really believed that. He is present, and if he wants to indicate that he has changed his mind I shall be pleased to give way. But a Secretary of State who adopts that type of attitude and assumes that free school meals are used in that kind of way shows a complete lack of understanding of the way in which people claim school meals and the way in which the system works.
It is strange that we should be discussing the order tonight, because hon. Members serving on the Education (No. 2) Bill Committee are also discussing school meals. Although the Committee debate is guillotined, there has been some indication of the attitude of the Under-Secretary of State. He has given some guidelines as to his attitude. He has told us that he believes that school meals and the obligations that at present exist, are an out-of-date duty. He has acknowledged that a few children may suffer from malnutrition as a result of what will happen. But he thinks that somehow we shall get round that and that it will not matter. He has not told us how he will get round it or how it will not matter. We look forward to the Under-Secretary using this opportunity tonight to defend the position that he has taken in Committee as well as the position that the Government have taken overall.
The regulations are short. The Government will present them as a simple increase. But it is important for the House to consider them in their true context in view of the other recent increases that have taken place in school meals and in view of the Government's proposals in regard to school meals under the Education (No. 2) Bill.
The Government's proposals will have a devastating effect on the school meals service and will, therefore, have a devastating effect on education. This measure is the Government's first step in destroying the school meals system. It is an indication of their cavalier and careless attitude towards school meals and education in general. Labour Members will have no hesitation at all in voting against the Government tonight.
9.17 pm
The Under-Secretary of State for Education and Science (Mr. Neil Macfarlane): The hon. Member for Bolton. West (Mrs. Taylor) has, in her own style, presented her views in a way which she thinks will generate some sincerity. However, there are two aspects of her speech that I should like to deal with at the outset.
Like many of her hon. Friends serving on the Education (No. 2) Bill Committee, which has also debated this subject, the hon. Lady has engaged in purveying speculative gloom and despondency, and I do not believe that it is any part of the duty of a Member of Parliament to convey that sort of message to one's constituents.
Mr. Robert Hughes: Will the hon. Gentleman give way?
Mr. Macfarlane: The hon. Member for Aberdeen, North (Mr. Hughes) must allow me to develop the opening part of my speech.
Mr. Hughes: I thought that the hon. Gentleman had finished.
Mr. Macfarlane: If the hon. Gentleman expected me to give way, he certainly closed the door completely by that closing aside. I believe that four Front Bench Members wish to speak. In addition, a number of hon. Members are gathering on the Opposition Benches. Therefore, I think that I should be allowed to get on with my speech.
The hon. Lady's reference to free meals was a gross exaggeration. It was the sort of remark to which we have become used during the past 24 sittings of the Committee. There have been exaggerated claims that we are destroying the school meals service and free meals, neither of which is true. The Government have done nothing over the past seven or eight months to destroy the provision of free meals. There is nothing planned in the legislation that will destroy the free school meal service. The House must understand that—[Interruption.] I am glad that I have triggered off a sedentary reaction from Opposition Members. I knew, in particular, that the hon. Member for Bedwellty (Mr. Kinnock) would rise to that bait in the same way as he has risen to it for the last three or four months

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in Committee. His derisive laughter helps me to conclude that I am striking oil. He knows that he owes a better deal to his constituents than to exaggerate the situation.
Mr. Neil Kinnock rose—
Mr. Macfarlane: The hon. Gentleman is a fisherman, obviously. He knows that I shall not give way when he rises like that. It would not be in his interest for me to give way to him now.
Mr. Kinnock: Tell us about your constituents.
Mr. Speaker: Order. My constituents are all right.
Mr. Macfarlane: The background to the Government's decision to increase the school meal charge by 5p is well known. However, it is worth repeating for the benefit of Opposition Members, because they appear to show a callous disregard for the true facts.
The White Paper "The Government's Expenditure Plans 1980–81", Cmnd. 7746, which was published in November of last year, began with these words:
"Public expenditure is at the heart of Britain's present economic difficulties."
Those economic difficulties were perpetrated largely by Opposition Members—[Interruption.] I am glad to see that the hon. Member for Bedwellty has his sense of humour well to the fore, even though he should be contemplating the true facts in greater detail.
Mr. Kinnock: I enjoy farce.
Mr. Macfarlane: The hon. Gentleman purveys it most of the time.
Over recent years, public expenditure has been allowed to increase on assumptions made about the economic growth needed to finance it that have not been borne out. The Government intend that their plans for spending should be compatible with a realistic assessment of the prospects for economic growth. Also, they intend that the plans should be compatible with the objectives of increasing incentives through reduced taxation—which has taken place—and controlling public sector borrowing, which has started. The overwhelming need for 1979–80 and 1980–81 was to reduce the
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unrealistic growth in public expenditure contained in the previous Administration's plans.
What of education expenditure? On several occasions, my right hon. and learned Friend and I have said that spending on education services could not be exempt from that process. However, because of the importance for the future of doing all that is possible to maintain the standard of education, my right hon. and learned Friend believed that the bulk of the reductions should come from the ancillary services of providing school meals, milk and transport. I remind all hon. Members that expenditure on those items costs about £530 million—almost 7 per cent. of the cost of the education service as a whole. Both local authority associations, the ACC and the AMA, expressed their support for the strategy. Indeed, the ACC urged upon the Government in July the need to relax a number of statutory duties, of which the inflexible requirements relating to the provision of school meals was one.
I turn to the school meal charge. We propose that expenditure on school meals, in particular, should be halved in 1980–81. Both local authority associations said that they would help their members to achieve the required reductions if we increased the school meal charge this term. They argued that small regular increases are less disruptive of the service than are large irregular ones. My right hon. and learned Friend—and, indeed, my right hon. Friend the Secretary of State for Wales—accepted that argument. Furthermore, a continuing high level of income from pupils who pay for the school meal is essential if a viable service is to be maintained. The effect of the increase in the charge on the number of paying pupils has to be carefully judged.
The evidence of the past two increases in the charge supports those views. There was a 5p increase last term from 25p, which had no effect when compared with one year earlier on the proportion of pupils at school who paid for a school meal. It was about 52 per cent. at the time of each October census. However, there was a small increase in the proportion of primary school pupils paying for a meal, from 61 per cent. to 63 per cent., and a small decrease among secondary school pupils paying for a meal from 42 per cent. back to 41 per cent.

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By contrast, the two-thirds increase in the charge introduced by the Labour Administration in the summer of 1977 from 15p to 25p resulted in a drop in the proportion of pupils who were paying for a meal from 60 per cent. in October 1976, to 50 per cent.—a drop of 10 per cent.—in October 1977.
In 1978–79, the income from paying pupils amounted to about £200 million, or about one-third of the gross expenditure on the service. In that year, a daily average of 4 million children were paying 25p for a meal which cost 54p to produce. One million children were getting the meal free, as were 500,000 adults under their general terms of service.
But it is clear from the figures for unit costs in 1978–79 that local education authorities already apply different priorities, even when subject to national standards and national charging policies. Although the average cost of producing the meal was 54p, it varied among individual local education authorities from 44p to 65p. Although, on average, 29p of the 54p went on wages of catering staff and midday supervisory assistants, some authorities had been able to hold those costs down to about 23p. Similar variations were apparent in the amounts spent on food and on other overheads.
I turn to some aspects of future arrangements, which are all-important in view of the—
Mr. Kinnock rose—
Mr. Macfarlane: I should hate to spoil a good relationship, so I shall show some typical Celtic generosity and give way to the hon. Gentleman.
Mr. Kinnock:Before the Minister moves on from this point, will he answer the point raised by my hon. Friend as to why, in the case of these regulations, there is no new provision for income limits so that there is a guarantee against poor people suffering as a consequence of this rise?
Mr. Macfarlane:That guarantee is included in clauses 22 and 23 of the Bill. The hon. Gentleman recognises the importance of the supplementary benefit and family income supplement considerations, and local education authorities understand the discretionary arrangements which they have to make for the disadvantaged. That point will be well preserved.
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I turn now to future arrangements. It will be for each local education authority to make its own decisions about the school meals service it wants to provide, including the charging policy, under the powers that we propose to give the authorities. Although it will be for each local education authority to decide its own priorities in the light of its own circumstances, the Government's policy of safeguarding educational standards is well known to all authorities. [Interruption.]
Once again, I can understand by the derisive jeers from the Opposition Benches that Labour Members acknowledge that my right hon. and learned Friend has made a series of speeches up and down the country in the past four months underlining the importance that the Government attach to the core curriculum and to the secondary survey, and the way in which the Government will concentrate on educational standards. That was not done under the previous Labour Administration.
The indication given by the Government of where economies should be made is clear beyond doubt. Labour Members must begin to understand that. We expect expenditure on the school meals service to be halved. Two important elements in achieving that are less expensive meals and a lower average subsidy to the paying pupil.
On the information so far available, authorities are planning to maintain a traditional midday meal for primary pupils, and many will continue to give a substantial, though reduced, subsidy. With 75 per cent. of primary pupils at present taking the school meal and 63 per cent. paying for it, that would be a reasonable policy for authorities to adopt. By contrast, only 40 per cent. of secondary pupils are paying for a meal—in some authorities it is less than 20 per cent.—which suggests that for many children the traditional meal is not what they want.
Most local education authorities—[Interrruption.] It is depressing that hon. Gentlemen find it so easy to laugh.
Mr. Kinnock: It is nonsense.
Mr. Macfarlane: It is nonsense when quite clearly the Shadow spokesman for education is not au fait with what is happening in secondary schools. It has

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been the trend of the past 10 or 12 years, and the hon. Member for Bedwellty should understand that.
Most local education authorities are therefore planning to provide cafeteria-type meals, with items individually priced and the choice of items being not only what nutritionists think is good for children but also what the children prefer. Many authorities have been experimenting with such provisions under present legislation.
They find a number of advantages. First, there is less waste because children choose only what they want to eat. Secondly, there is more customer satisfaction, demonstrated by the considerable increase in the number of children staying for a meal. Thirdly, there is better control of the children. Many head teachers prefer to have the children on the premises rather than have them going outside. Fourthly, there is more job satisfaction. The children's interest in the food encourages the kitchen staff. Finally, overall reduction in net expenditure results in increased taking, which means increased income. Those are positive advantages that authorities have found from experiments over the past few years. I suggest that hon. Gentlemen visit the regions in Scotland and the LEAs in this country to find out what is happening.
All those factors suggest that authorities generally are approaching their task in a responsible manner. From comments made, I can only assume that hon. Gentlemen have no confidence in their regional or local authorities and the role of local government.
It is therefore right for the Government to facilitate the transition to a less expensive service in 1980–81. Even though the local education authority's role in assisting parents by providing a school meals service must be secondary to its main task of educating the children—and it must surely be accepted that it is primarily the responsibility of parents to ensure that their children are adequately fed—authorities are clearly intending to maintain a service that provides what children want at a price that parents are prepared and can afford to pay.
The general conclusion to be drawn from these points is that, given the need to curb public expenditure, the Govern-
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ment are right to seek to relax the out-of-date and rigid controls over what local education authorities provide as a school meals service. We also have our priorities right in identifying the school meals service as one in which there is scope for achieving a substantial reduction in net expenditure.
Mr. Allen McKay rose—
Mr. Macfarlane: The hon. Gentleman will have ample opportunity to catch Mr. Speaker's eye. I shall not give way, as many hon. Members wish to speak.
It is right that the Government should do what they can to assist local education authorities to achieve the required reductions, in particular by raising the charge for school meals by 5p this term.
I therefore suggest that hon. Gentlemen on the Opposition Benches would do well to read the legislation more closely and work out what lies in store. I invite my hon. Friends to reject the motion.
9.32 pm
Mr. Frank McElhone: I shall be brief, as a number of hon. Members wish to voice their utter dismay at this mean and contemptible action. The Minister has said that the charge for school meals was being increased to help solve our economic difficulties. That is the baldest statement that I have heard from any Minister. Perhaps he will reconsider it when he studies the Official Report tomorrow.
It is true that the previous Government increased prices, but that must be compared with the present increases in VAT, the 30 per cent. increase in gas prices and substantial rent and rate increases, which will especially affect the poorer sections of our community. There are many other increases that will result from this Government's policies. It is galling that the Government should further burden the poorer sections of our community with this mean and contemptible charge.
The Minister repeats the point that free school meals are sacrosanct, but, from reading the regulations and the briefing that he no doubt has from his advisers, he should know that that is not true. The truth is that local authorities will be allowed to make their own charges. In Scotland there are one or two rather mean, Conservative-controlled

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authorities. Such authorities can raise the price of school meals beyond 50p or 70p a day after tonight. The Minister has repeatedly said that responsibility and freedom is being given to local authorities. He now has an opportunity to deny that.
The Secretary of State for Education and Science (Mr. Mark Carlisle):Tonight we are debating a proposal to raise the price of school meals from 30p to 35p. That is the maximum charge that any authority can make. The question of any future freedom depends on whether the Education (No. 2) Bill is enacted. Therefore, the hon. Gentleman is totally wrong to say that, as from tomorrow, local authorities will be able to charge what they wish.
Mr. McElhone: When the Bill is enacted, the Secretary of State will have to rethink his words. I have a copy of a circular that was sent by the Secretary of State for Scotland to local authorities on 2 October 1979. I shall quote from that circular to Scottish local authorities in order to help the Secretary of State for Education. Paragraph 5 says:
"Under the present regulations education authorities are required to provide meals free of charge for children from low income families."
That refers to children who receive free school meals. The Minister said that they were not at risk. It continues:
"In line with the Government's policy of allowing greater discretion to local authorities, the intention is to let education authorities decide entirely for themselves".
That has stated the case clearly. The circular comes straight from the office of the Secretary of State for Scotland. It goes on:
"decide entirely for themselves what provision should be made in future for children from low income families".
It will not depend on the Secretary of State and his colleagues. That circular has already gone out to Scottish local authorities. Again:
"The legislation wil seek to give authorities who decide to make provision for children from low income families a variety of options".
Looking at some Scottish local authorities, we know what that means.
I am sorry that I did not hear the speech of my hon. Friend the Member for Bolton, West (Mrs. Taylor). However, I heard her remark about vouchers,
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and it was a valid point. I therefore ask the Minister to repudiate the actions of the Secretary of State for Scotland. I invite him to rethink the advice that he gave me earlier.
The Secretary of State for Scotland (Mr. George Younger):The hon. Gentleman must understand that his point has nothing to do with tonight's regulations. He may have a perfectly good point, but it is relevant to a debate on the Education (No. 2) Bill. With respect, it has nothing to do with tonight's regulations.
Mr. McElhone: I made that point when I quoted from the circular. The Secretary of State has not listened to the comments that are made in his own circular. Will the Secretary of State give an assurance that we shall have only a 5p increase? Perhaps the Minister will confirm that it is only 5p—however iniquitous that 5p may be—and that there will not be any more impositions upon the poorer sections of our community.
The Secretary of State is tackling a serious social issue. This charge will endanger the social fabric of our community. The Secretary of State for Education and Science must understand that. I do not wish to be too personal, but perhaps his background and the area that he represents do not reflect the problems that those of us who represent city centres experience in our advice surgeries.
The Secretary of State for Scotland has already received warnings from his colleagues. One of those warnings was prophetic. The hon. Member for North Angus and Meatus (Mr. Buchanan-Smith) spoke in Perth in 1978 and indicated the type of legislation that we would receive from his Government. The hon. Member is now the Minister of State, Ministry of Agriculture, Fisheries and Food. I shall quote what he said at a Tory conference in Scotland. Although he was talking about militants on the Left, he gave a warning to the Prime Minister when he said:
"On the other hand, the Conservative Party is showing a tendency to react to extremism of another sort, probably most apparent in economic policy."
When I read that in the Glasgow Herald on 15 May 1978, I was sceptical that even the Tory Party would bring such legislation forward so early in the life of the Government.

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Those of us who have had some experience in the Scottish Office realise that almost 500,000 Scottish children take school dinners and 150,000 of them get free dinners. We still believe that there is a serious threat to free school meals as we know them. The Minister should rethink the position, or the reaction that will come from the Scottish constituencies will be one of extreme anger. I repeat that this is a mean and contemptible action for any Government to take.
9.42 pm
Mr. A. J. Beith: Life would be much simpler if all we had before us was these regulations or a single clause in a simple education Bill that gave local authorities a little more flexibility in the organisation of school meals and the charging of individual children for them. There are some general principles on which I am in agreement with the Government, and they affect my attitude to the regulations. That is rather different from my attitude the Education (No. 2) Bill.
In present circumstances we cannot expect school meal subsidies to command as large a share of the education budget as they do now, keen though I am on the school meals service. I believe that people who can afford to pay for school meals should be doing so, and I believe fervently—and the Government are supposed to believe this, too, but there is very little evidence of it—that we must so organise our provision of benefits, such as free school meals and school transport, as to do away with the poverty trap. We must end the situation in which people are better off out of work than in work and better off not doing overtime than doing it. The Government are trying to apply the first two principles in the regulations. However, they are abandoning the third principle in just about everything they are doing in the area of school meals.
If we are to achieve the various objectives that I have just mentioned and at the same time retain the fundamentals of a school meals service of proven worth and recognised high standards which we damage at our peril, there are certain things that we must do.
We must give local authorities more flexibility on charging. That is why I cannot, in conscience, oppose their having
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the opportunity to make a 5p increase in school meal prices. To deny them that measure of freedom is to make impossible all the other things that we should be doing about the service. It follows from that that we must also try to make more flexible and sensitive provision of aid for parents whose children need school meals but cannot afford them.
That is the exact opposite of what the Government want to do in their Bill, because in that measure they draw the stockade more narrowly around the statutory poor, reduce the numbers of people receiving benefits, and give them the total benefit of free school meals if, and only if, it can be shown that those children do not get enough to eat. If there were more Members in the House tonight who were not serving on the Education (No. 2) Bill Committee, it might have been instructive for them to have heard a few things about the Government's intentions. However, this is not the right occasion for it. Suffice it to say that the basis of the Government's proposals on free school meals is to provide them for children on supplementary benefit and family income supplement. Therefore, the local authority must satisfy itself on what those children had for breakfast and what they are having for tea. If they are not getting enough food, the local authority has a statutory obligation to provide them with a free school dinner.
However, those who are just outside that net do not get these benefits and do not even get the advantage of the local authority inspecting their breakfast and tea menus in order to see whether they need some kind of midday provision. The Government need to make a much more intelligent provision and give some really serious thought to the matter.
I stress the fundamental importance of ensuring that parents on the line between supplementary benefit and family income supplement and low working wages should not be penalised for working and putting in extra effort. That will happen if school meal prices are increased and present free school meals scales are not revised. It will happen if we forget to tie up social benefits and taxes. It will happen as a result of their Education (No. 2) Bill.
I believe that local authorities should have that measure of flexibility which

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enables them to charge separately for individual items and to charge slightly more for school meals than they do now. The local authorities should be encouraged to continue a general school meals service but not to divide their pupils into the small company of those who have free provision and the remainder for whom they exercise no responsibility at all.
It would be inconsistent with that belief for me to vote tonight against allowing a 5p increase on the price of school meals. That provision is the only one in the whole range of the Government's proposals on school meals that I can conceivably support. I believe that the remainder of the Government's proposals will not achieve the objectives they have set themselves. They are liable to cause the most serious difficuties for those who have to carry out those proposals in our schools.
9.46 pm
Mr. Malcolm Thornton: One can hardly dispute that the proposed schools meals price increase is a very modest one and is probably one to which very few people will take exception, given that costs must go up. However, that is not really the subject of tonight's debate. This debate is taking place against the background of a debate on the floor above this Chamber.
It was on that basis that the hon. Member for Bolton, West (Mrs. Taylor) made her opening comments. I heard most of them though not all, but in any case I have heard them before. Hon. Gentlemen have subsequently referred to the passage of the Bill we are now considering in Committee.
The Under-Secretary of State said that the prime object of the Bill was to restore to local authorities more control over the decisions that affect their education budget. Even as a new Member of this House, I feel qualified to talk about the pressures on local authorities over the last few years. I speak not only of Conservative-controlled authorities but of all local authorities.
Local authorities of every political persuasion have consistently campaigned, under successive Governments, for relief from some of the statutory requirements that have been added to other longstanding statutory requirements so that
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they might better cope with Government demands for reductions in expenditure.
Educational expenditure, however, is not sacrosanct, and as a former finance committee chairman, knowing the size of the education budget in my own local authorities, I know that those authorities could not conceivably hope to meet Government targets without revising education estimates. Because of what I call the statutory overload on local authorities, more and more they must look at, and attack, some of the basics of the fabric of education that we all believe should be preserved.
The local authority association which I had the honour and privilege of leading for some time, together with our sister organisation from the counties, made strong pleas to Mrs. Shirley Williams when she was Secretary of State for Education and Science, as local authority associations have done to the present Secretary of State in order to see that some of this statutory burden may be lifted off the local authorities. That is what the Bill intends. One cannot doubt that with £400 million or so involved, which is the cost of the school meals service, many people, faced with unpalatable alternatives, would prefer to see the extremely expensive umbrella that the service has become removed in order to allow local education authorities to preserve other more important parts of the education fabric.
The object of the exercise is to enable local education authorities to review their total budgets, and in that review they must turn first to ancillary services. School meals have over the years played an important part in education, but to hear Labour Members talk about the Education (No. 2) Bill one would think that the school meals service is to be completely abandoned. We are talking not about abandoning it but of giving the LEAs the opportunity to impose realistic charges. The measure before us is a step towards that end.
This debate is not taking place in isolation. It must be seen against a background of what is being said elsewhere. I make no apologies for reiterating the point upon which I started—that is, the paramount need for LEAs to take advantage of the opportunities presented

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by the Bill to help them lower their costs. Only in that way will they be able to preserve the basic fabric of education.
The people voted overwhelmingly at the election for reductions in public expenditure. In providing for those reductions we have to recognise that on school meals the local authorities are in the best position to decide what is right for their areas. We are saying only that they should be allowed to do that and that they should not have this prescription put upon them by statute.
9.53 pm
Mr. Frank Field: I want to pursue the point raised by the hon. Member for Liverpool, Garston (Mr. Thornton) that we cannot discuss the regulations in isolation. He was right. We need to consider what is happening elsewhere, not just in terms of the Education (No. 2) Bill but also of the Government's policies for the family. We have to see this measure as just one part of an attack on families, both rich and poor. One can see how families have suffered in the past 20 years or so in a number of ways, but I want to concentrate on how they have lost out as the tax burdens have increased.
Any candidate in the last election will need no reminding that one of the moans from electors of all political views was about the increasing tax burden. That burden was not shared evenly. It moved in two ways. It moved against the poor, although that may not be of particular interest to the Conservatives. More important for tonight's debate, it moved against families with children, whether those families were rich or poor. That trend continued over a 15 to 20-year period under Governments of both parties.
One would have thought that when at last we had a Government who cut tax, those who had paid a disproportionate increase in the burden of taxation would benefit most. What were the facts of the last Budget? It was a record tax-cutting Budget. Over £4·5 billion was cut from taxation, but only £8 million of that—an almost insignificant sum—went to families with children.
If families had received their fair share of the tax cuts—through increases in child benefit because the child tax allowance was abolished—the child benefit would be £8 per child, and there
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would not have been murmurs from the Labour Benches about raising the price of school dinners to what Conservative Members consider to be an economic price.
We are objecting because it was families who disproportionately paid the increase in tax burden and lost out totally when the tax cuts came. To help finance those tax cuts, we are seeing a cutback in public services that affect families. That is the first reason why we shall be opposing the regulations that were gently presented by the Minister as a small increase of 5p. That is 5p on top of other increases and against the background of a Budget that ruthlessly discriminated against those with children, whether those families were rich or poor. It is of as much concern to Conservative Members as to Labour Members that rich and poor families lost out in that deal.
There are two other powerful reasons why the regulations should be opposed. If we examine the incomes of those with children, we see a significant increase in those who earn their poverty. The only data available on a comparative basis is for the period 1974 to 1977. The number of those who brought home poverty wage packets almost doubled in that period from 240,000 to 460,000. The numbers on supplementary benefit also doubled.
Of special importance to the regulations, and even more important when the Education (No. 2) Bill becomes an Act, are the numbers above that line—the notch group—who are outside the reach of FIS and supplementary benefits. That number doubled also. They are least able to afford to pay even 5p per week, let alone 5p per child per day, as the increased cost of school dinners. That links with the third reason why the increase should be opposed by Members on both sides of the House. It links into the effect on the poverty trap. It feeds into the argument that I understand is being conducted on the Education (No. 2) Bill upstairs.
The regulations would increase the price of school dinners. The Education (No. 2) Bill would increase massively the poverty trap. There are a number of eligibility limits. There is the supplementary benefit level, above that there is the FIS level, and way above that is

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the present level for eligibility for free school dinners. The Bill would concertina the eligibility limits. When a family loses eligibility for FIS, it also loses other benefits, including the right to free school dinners. Every price increase would make the poverty trap deeper because it is 5p per day, per child, magified over a week.
When the Bill becomes an Act, many low income families will face a marginal rate of tax in excess of 250 per cent. The Government told us of the incentive problems for high earners with an intolerable marginal tax rate of 83 per cent. that had to be reduced to 60 per cent. We opposed it but understood the reasons why it was done. However, it made the poverty trap that much more worse for those who earn their poverty.
The Government tell people to respond to incentives, but, knowingly or not, they have cemented a ceiling over the heads of the poor, making it almost impossible for them to escape from poverty by their own efforts or to respond to the Government's pronouncements about the importance of families improving their lot.
There are three powerful reasons for opposing the regulations. The first is that the Government, like others before them, have singled out for rough treatment those with children. The Conservatives claim to be the party of the family, and we know how crucial the family is to a free society.
The second reason is that the number of those just above the eligibility limits for family income supplement and supplementary benefit has increased significantly over the past few years. That leads on to the third reason because it will make the poverty trap that much more severe when the Education (No. 2) Bill becomes law.
10.1 pm
Mr. John Townend: There has been a lot of hot air about nothing over the increased charges, though I grant Labour Members that it is sincere hot air.
At a time of rising energy and food costs and rising wages, an increase of 5p cannot be regarded as excessive. It is only about 16 per cent. and, set against the average current level of wage increases, it is not unreasonable.
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However, I agree to a certain extent with the hon. Members for Berwick-upon-Tweed (Mr. Beith) and for Birkenhead (Mr. Field) about the dangers of the poverty trap, but we cannot deal with that by refraining from making any increases in charges for services to the public, the vast majority of whom can afford those charges.
There are three aspects of dealing with the poverty trap. I do not suppose that they will be wholly supported by Labour Members. First, we must continue the process started in the Budget of taking more people at the bottom end of the income range out of the tax net.
Secondly, we must start to tax short-term social security payments.
Mr. Field: Of course it is important to raise tax thresholds, but that can be done effectively for families with children only by increasing child benefits. There was no increase in last year's Budget.
Mr. Townend: When talking of the poverty trap, we are dealing with the difference between those who are working and those who are not.
The other way of dealing with the poverty trap is to stop the automatic indexation of social security benefits. When workers in private industry or nationalised industries are suffering the cruel winds of the current depression and the increase in oil prices and their companies, whether private or, for example, the British Steel Corporation, are telling them that they must accept wage increases of 5 per cent. or 6 per cent., or even no wage increase because the money is not there, it is unacceptable that those who are not working should be granted a l7½ per cent. increase in short-term social security benefits.
I think that all hon. Members will agree that one of the great worries of society in recent years has been the lack of parental responsibility. The hon. Member for Bedwellty (Mr. Kinnock) dealt with that at length in Committee today and he pointed out that the school meals service had taken the place of much of what parents ought to do.
Most of us would accept that the first responsibility of any parent is to see that a child is clothed, fed and given a good home. It seems not unreasonable that people who can afford it—the vast

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majority—should be asked to pay for the feeding of their own children. Even after this modest increase, school meals will still be substantially subsidised by the rest of the population.
I have had very few letters of complaint from constituents about the proposed changes in school meal charges and about the giving back to local authorities of the power to fix the level. The population accept that the feeding of their children is their responsibility. I have had 20 times as many letters on the question of school transport. For some unknown reason, parents seem to expect school transport to be highly subsidised but do not expect school meals to be subsidised.
It has tended to be overlooked that local authorities need this money at this time if they are to stay within their cash limits and meet the Government's guidelines. It is all very well the hon. Member for Bedwellty laughing. The hon. Gentleman should realise that the difficulty that local authorities have in remaining within cash limits this year is very much the responsibility of the previous Government. Their incomes policy, for what it was, was destroyed in a welter of industrial disputes last winter. It is the wage increases in the local authority sector that have continued to be fuelled throughout this year by the infamous Professor Clegg that have put such a strain on local authorities.
Local authority associations—certainly my authority in Humberside—have requested the Government to allow them to increase the price of school meals at this time. I submit that it is far better to have relatively small rises at frequent intervals than to keep putting off grasping the nettle, like the previous Government, who then had to raise the price of school meals at one go by 10p.
Mr. Kinnock: Does not the hon. Gentleman realise that from now on this Government will not have the guts to grasp the nettle? They are giving so-called freedom to local authorities without giving them the means of exercising that freedom because of the cuts that are being imposed. If the hon. Gentleman understands that, he should join us in the Lobby.
Mr. Townend: I have listened to the hon. Member for Bedwellty over the last
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few weeks for more hours than I care to remember, and I would have thought it was clear that the Government have grasped the greatest nettle by giving this power back to local authorities. It is a load of nonsense, as the hon. Gentleman knows, to say that the cuts will stop local authorities from exercising the power. The local authorities, if they wish, and if they think that they can use their resources better in the classroom, will be able to put up the price of school meals even higher. It will be their decision. I cannot see how the hon. Gentleman can claim that the Government have refused to grasp the nettle.
This increase is justified. It is important to reduce subsidies, wherever possible, to bring the economy under control. I am sure that hon. Members on both sides are anxious to see the level of interest rates reduced. Those levels will be reduced only if public sector borrowing is brought under control, which means reducing public expenditure.
10.8 pm
Mr. Norman Buchan: We have heard some extraordinary speeches from the Conservative Benches. The hon. Member for Bridlington (Mr. Townend) seeks to cure the poverty trap by increasing poverty. That was what he advocated with every word.
Mr. Tristan Garel-Jones: Will the hon. Gentleman give way?
Mr. Buchan: Yes. We must see whether someone on the Government Benches has any sense.
Mr. Garel-Jones: I am grateful to the hon. Gentleman for giving way. I listened with care to the hon. Member for Birkenhead (Mr. Field), who is known to be very concerned about these matters and who was very fair. I do not want to make a party political point, but did not that hon. Member make clear that the numbers of people on supplementary benefit and family income supplement had doubled during the period of the previous Government?
Mr. Buchan: I do not know whether the hon. Gentleman expects me to blush about that. The more we look at truth and this Government's abysmal behaviour, coming on top of the implied criticism, the better we shall be at securing the answers. Of course, my hon.

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Friend the Member for Birkenhead (Mr. Field) was correct in saying that, as he was correct in saying that the crucial question was the large numbers of people coming immediately on top of that level.
I have referred to the hon. Member for Bridlington, who sought to cure the poverty trap by increasing poverty. His hon. Friend the Member for Liverpool, Garston (Mr. Thornton) advanced the extraordinary proposition in favour of an increase in the charge for school meals that it was the only way to obtain money to preserve the fabric of education—that it was better than cutting direct education facilities. That hon. Gentleman was a pilot. It is rather like the pilot's telling the passengers when he runs them aground "It is better to be running aground than sinking you."
There is another way of providing money for education, if authorities are constricted by the cash limits. That is to increase the cash limits. There is an alternative to increasing the price of the school meals. That is to bring in a supplementary rate support grant if necessary.
Mr. John Townend: Will the hon. Gentleman give way?
Mr. Buchan: I shall, I think for the last time.
Mr. Speaker: May I appeal to the House. Interventions will stop someone from being called. A large number of hon. Members still want to speak in the debate.
Mr. Buchan: I was overcome by my usual generosity, Mr. Speaker, as you were when you called me after I had waited an hour.
The argument that I have just described is nonsensical. The truth is that the increase in the price of school meals has nothing to do with providing money for education facilities, because they can be paid for in other ways if the Government are prepared to pay for them. Nor is it much to do with the Under-Secretary's statement that halving expenditure on school meals does not destroy the school meals service. He said that we must restrict public spending to a level compatible with increasing growth and providing incentives.
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Has the Government's policy succeeded in increasing growth? Has it given any evidence of increasing incentives? Every economic indicator has become worse since the Government took office. Virtually every action by the Government is increasing our economic problems. None of the Government's actions has resulted in increasing incentives. The one opportunity of increasing incentives through their tax cuts—because they went only to the rich—was for increased investment in this country. But then the Government scrapped exchange controls. What madness this Government are embarked upon!
Those are the reasons for raising the price of school dinners. It is not because people voted for cuts in public expenditure. They voted for cuts in taxes. The average earner is in fact paying more in taxes under this Government than he was paying before, because increased value added tax results in increased payments for various products. Not only are we seeing the destruction of the services, but we are seeing it for a tawdry political purpose—winning an election and giving hand-outs to the rich.
If the Government want to know where money can come from to pay for that, I shall tell them. We have heard talk tonight about the need to cut public expenditure and thus reduce taxes to give incentives. Defense expenditure is now running at £8,000 million a year. I shall tell the House the contribution made by a family of four on average earnings. An average earner with four in the family is paying £12 per family per week—and the Government talk about the need to cut taxes. The people of this country are indeed heavily taxed for this—not to solve the problem of poverty, not to save and improve our education service—and the result is that the Government have carved their way into every one of our social services.
Do not the Government understand the importance of school meals? When I was a teacher, we used—and I hope this continues—the school dinner period—and we got a very large number of children coming to meals at that time—for other things. I did five days a week of extra-mural work. I ran a music club, teaching children music and songs, and so did the other teachers. It was a valuable part of the children's education.

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But what happens when we get on to the Yorkie and crisps concept? If kids are going to buy at a snack bar, they would much rather go outside the school. So the kids drift, and that is when they get into difficulties and trouble. Yet the Conservatives are the people who talk about delinquency and law and order. They are the party that claims to speak for the family—a family of four paying £12 a week on defence expenditure; a family of four paying an additional 5p per head per day on school meals.
We are told that it is a small amount, that it is only—that was the word used—a 16 per cent. increase. But the price of the meals went up in September, and since September, putting the two increases together, it has gone up by 40 per cent. Who says that is a trivial increase?
The people who claim to represent working-class areas like Bridlington and Garston had better learn how the people of this country live, they had better give them a bit more credit for proper understanding and they had better reverse their policies smartly before they destroy the very fabric of many of the social services.
10.17 pm
Mr. Martin Flannery: The hon. Member for Liverpool, Garston (Mr. Thornton) told the truth when, at the end of some six and a half hours of debate on school meals—and we have come here today to make it about nine hours—he said that it was impossible to discuss this increase in isolation; and of course it is. The regulations say:
"These regulations shall come into operation on 4th February 1980."
The Bill, which we have been discussing for some 80 to 90 hours now, says on school meals and transport, in clause 22 (3):
"A local education authority—
(a) may make such charges as they think fit for anything provided by them."
Therefore, it is impossible to isolate the 5p on 4 February from the reality of the situation. A Bill has been rushed through with indecent haste, to the extent that the Minister gabbled through his set speech at such a speed that we could hardly understand what he was saying. We understood what he was saying, of course, but that is exactly what has hap-
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pened with the Bill; it has been rushed through at great speed, and this 5p is only the tip of the iceberg.
My hon. Friends have pointed out that, in the midst of this increase in prices, the Government have offered the steel workers 2 per cent. when a 40 per cent. increase has gone on meals. What an insult and a provocation that is. These are the realities. The 5p on meals which we are debating now cannot be isolated from the fact that there are nearly 1½ million unemployed. The Conservative Party will make it 2 million. Prices are rocketing, the Government are trying to hold wages down, and we are asking people who cannot afford it to pay another 5p on school meals as a prelude to paying whatever any local authority asks them to pay when the Bill goes through in time for the next financial year. The Government are rushing the Bill through, in order to get the money in, so that 5p will only just be being paid when people will immediately have to pay more for meals without the same nutritional value as the meals which the children have been getting so far.
As I said this morning in a speech on the same topic, there is an appalling lack of understanding on the part of the Conservative Party. It does not understand precisely what it is doing. It does not understand that it cannot continue to provoke working people without a major kick-back. If the Government were trying cold-bloodedly to plot the ruin of the British economy, they could not do it more brilliantly. The charitable way of describing the increase of 5p is to say that the Government are innocent and do not know what they are doing. The real way—possibly the uncharitable way—is to say that they know exactly what they are doing and that they are trying to mulct those who cannot afford to pay out more money.
My hon. Friend the Member for Renfrewshire, West (Mr. Buchan) said that an additional 3 per cent. on the defence bill will amount to about £12 per week per family.
Mr. Buchan: No. An additional 3 per cent. would make matters even worse. I said that a family of four on average earnings pays about £12 a week in tax for the total defence budget. That is in value added tax and direct tax.
Mr. Flannery: I am grateful to my hon. Friend. The reality is that we are talking about another £250 million on the defence bill. It is laughingly called defence. Are the Russians about to attack us overnight?
Mr. John Townend: What about Afghanistan?
Mr. Flannery: The hon. Gentleman and his hon. Friends had better get under their beds. When is it coming? Is it coming next Tuesday afternoon? Let us not lose sight of reality. The Americans have it all.
The extra 3 per cent. will mean £250 million. We are told that the Exchequer is poverty-stricken. However, in the Education (No. 2) Bill another £60 million is to be provided for private schools. Where is the poverty?
We are talking about increasing the school meal charge by 5p when £250 million is to be directed to increased defence spending and £50 million or £60 million is to be spent additionally on private schools. Those are the schools of Conservatives. That is where all the children of Conservatives will go while our children will take all the cuts. That is the reality. The Government will try to cream off some of our children and charge those who are left as much as they can in addition to the 5p increase. These are the realities. The Government must think that we are daft and that we will not fight back.
Statutory school meals have been provided since 1944, and before. Now, their provision is in grave doubt. My hon. Friend the Member for Bolton, West (Mrs. Taylor) said that the extra 5p is not an isolated increase. As she said, it is a full-scale assault on the entire meals service. It is the tip of the iceberg. Following the increase, the Government will wade into us and our children. At the same time they will utter pious platitudes about trying to increase the standard of education. They think that we do not realise that the black paperites are trying to carve education into pieces as fast as they can go.
Implicit in the Education (No. 2) Bill is the decision whether to provide school meals. Many local authorities do not want to provide meals. Likewise, there are many Tory-controlled authorities that
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do not want to provide housing. Authorities will increase the school meal charge by 5p and at the same time they will be able to implement their own nutritional standards. They will be able to lower the standard of the meals that our children receive. Many of our children will go to school without breakfast.
Many of my hon. Friends are ex-teachers. There are some on the Conservative Benches. They know, as does any practising teacher, the condition of a child who comes to school in the morning having had no food. They know that it is even more difficult to teach such a child when there is no milk in the morning. These are the realities of teaching. If the ex-teachers on the Conservative Benches are not aware of the realities, they should learn about teaching.
The extra 5p will be levied and subsequently authorities will be able to charge whatever they like. The 5p increase is the beginning. The increases will not stop until the charge for a school meal is about 70p. That will happen within the year. That is the reality of snack meals. Children in the towns will be put on the streets during dinner time. This is a major social change that will have far-reaching consequences.
It is said that many letters have been received about school transport but only a few about meals. It is not understood that parents do not know exactly what is to happen to school meals as a result of the Bill. When they realise what they will have to pay, especially when there are three or four children going to school, the kick-back will rapidly put a Labour Government back in power. Let no one make any mistake about that. As I said this morning, the Tory Party is like Scrooge without the last redeeming chapter. They just do not understand.
The hon. Member for Preston, North (Mr. Atkins), who got in because he had the initial 'R'and was confused with our R. Atkins, makes a practice of never making a speech in the House. He merely makes rude rejoinders. He is welcome to do that. It shows him up and not me.
The reality is that we shall have hungry children in our schools who are unable to be taught properly because in many cases they will have had no breakfast and there will be no milk in the middle of the morning.

1501
The increase in the price of meals is opposed by most teachers, who also oppose the Education (No. 2) Bill. Every teachers' organisation and every voluntary organisation opposes what the Government are doing.
In conclusion, may I say that the 5p increase was not opposed, I am sad to say, by the Liberal Bench. That is unfortunate, because one Liberal Member has fought valiantly all the way through on the subject of meals. Every speech made by him was directly in line with our thoughts. Yet he failed to see that the 5p increase was directly linked with the Bill. We should all go into the Lobby and oppose the 5p increase knowing that at the same time we are consciously opposing the Bill.
10.26 pm
Mr. Robert Hughes: The hon. Member for Bridlington (Mr. Townend) said that he had spent some hours in Committee upstairs listening to my hon. Friend the Member for Bedwellty (Mr. Kinnock). My only regret is that he learnt nothing during that period. If he had been listening closely, he would have learnt something. The hon. Member has a curious mentality. He dismisses the 16 per cent. increase in the cost of school meals as a mere triviality, yet he complains bitterly if workers ask for a 6 per cent. increase in wages. That is the psychology—costs must rise right across the board for working people, but they must not ask for any increase in pay.
We have already seen an increase of 40 per cent. as a result of the additional charges on school meals. What we have not had from the Government tonight is a reason for bringing this statutory instrument before us. I listened carefully to the Minister's tired apologia. His speech reminded me of what my old friend and mentor, Willie Ross, said about the speech by a former Minister. He said that there were three things wrong with the hon. Gentleman's speech: first, he read every word of it; secondly, he read it very badly; and, thirdly, it was not worth reading in the first place. We have had nothing whatever from the Government, apart from the old cliche about the state of the economy.
What puzzles me as someone who is not a member of the Committee discuss-
1502
ing the Education (No. 2) Bill is that we have been told that one of the purposes of that Bill is to allow local authorities more freedom and flexibility. Why could not the Government have waited until that Bill was passed? That would have allowed local authorities to take care of the matter themselves.
The Government have a curious split personality. On the one hand, they flourish the Bill and say "We are giving local authorities freedom, though we know that that is nonsense because we are not giving them any money." On the other hand, having imposed the guillotine motion and guaranteed that the Bill will go through, the Government bring these regulations before us. They say that it is only 5p on a meal, but it is 5p per day per child and it represents an increase of 16 per cent. Why could not the Government wait until the Bill was through before bringing this forward?
The Government have not increased the income level at which people can receive free school meals for their children. This Government are so obsessed with monetarism and cash that they totally neglect the effects that their policies will have upon our children. These continual increases in school meal charges—we have already had two and there are many more in the pipeline—will drive children out of the school meals service.
Let us not imagine for a moment that when children go to school they enter a completely isolated environment. There are shops near the schools and vans that go round "flogging" ice cream and crisps. All those things are commercially attractive. There is competition for such money as is available. What will happen—and there is clear evidence of this happening—is that parents will find it more and more difficult to pay the costs. Therefore, instead of giving the youngster 35p a day or whatever, as the charges go up, they will give them less, and that will be spent outside the school meals service.
I do not know why the Minister is smirking. He ought to have some sense of responsibility. That means that children will have a greatly reduced nutritional diet. The Minister ought to know that a great deal of discussion is now taking place about the nutritional value of the diet of school children.

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Even if one were to concede—which I do not—that 5p is not a great deal, it means that we are putting at risk the health of future generations, and anyone who does not understand the importance of nutrition for schoolchildren does not have the right to be a Minister. For example, if girls go through a period of bad nutrition as they mature, their child-bearing capacity and capacity to bear children is reduced. That will also affect any children that they have. Therefore, this is not a trivial matter about which Conservative Members should snigger and laugh and say "It is only 16 per cent. or 17 per cent.".
As I have said, the Government are totally obsessed with monetarism. It would be far better to have a thorough examination of the school meals service. I am willing to concede that the service is not perfect and that a great deal ought to be done to make meals more attractive. I am also willing to concede that sometimes the buying pattern of food in some authorities is not all that it might be. Sometimes the very method of cooking does not do nutrition much good. However, I am willing to face those problems. That is the direction in which the thrust of the Government's attention ought to be going. They ought to be considering how to improve the school meals service, nutrition and benefits for working people.
Since the day that they came into office, the Government have shown themselves to be callous and short-sighted and to care nothing about human beings. That is why they will be condemned out of hand, and that is why I shall vote in the Lobby against the regulations.
10.32 pm
Mr. Dennis Canavan: The Minister's introductory speech was like a cracked record. We have heard it all before, and those of us who serve on the Education (No. 2) Bill Committee have heard it many times before.
When we have complained about the Government attempting to cut back the school meals and milk service by more than £200 million in England and Wales and by £20 million in Scotland—a total cut of £220 million—the Minister and his colleagues claimed that they are not forcing this upon local authorities and that they were really giving them greater discretion and freedom. Freedom for what? What kind of freedom?
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By means of the regulations, the Minister is on the one hand forcing the local authorities to increase the price of school meals and, on the other, by means of the inadequate rate support grant orders, he is denying the local authorities the adequate financial support that is necessary to maintain the existing school meals provision.
It is a distortion of the word "freedom" for Conservative Members to claim that they are giving more freedom to local authorities. In fact, they are tying their hands. I draw the attention of the House to a document published by the Scottish Education Department five years ago entitled "Catering in Scottish Schools". Recommendation No. 22 states:
"The charge to pupils for midday meals provided by the School Catering Service should continue to be a nationally prescribed charge but should not exceed one-half of the running costs (food and overheads) of producing them. The Government should continue to subsidise the Service through Rate Support Grant."
The Government are reneging on the three principles contained in that recommendation.
For a start, the Government will eventually do away with the nationally prescribed charge, although it is odd that they are continuing it in the interim. Secondly, by introducing this charge they are setting a bad example to local authorities, which afterwards will have their own discretionary charges. I understand that the cost of a school meal is now about 56p and not the 70p of which the 35p would be half. In other words, the charge to parents will be well over the recommended 50 per cent. The third principle outlined is that the Government should continue to subsidise the service through the rate support grant.
I am glad to see the Under-Secretary of State for Scotland with responsibility for education in the House tonight instead of the Under-Secretary of State who has responsibility for health. He proved his incompentence in Committee earlier today. We shall see how competent his hon. Friend is this evening. I remind him that the Rate Support Grant (Scotland) Order says:
"Provision for education is 4·2 per cent. in real terms less than the corresponding figure for 1979–80. It has been assumed the authorities will be able to effect substantial savings in expenditure on school meals, school milk and school transport as a consequence of the

1505
increased freedom they will have in providing and charging for these services under the Education (No. 2) Bill now before Parliament."
The Government virtually admit in their own document that they will not give local authorities adequate financial support to maintain the school meals service.
In Scotland the total subsidy for school meals is about £40 million per annum, which is about 4 per cent. of the total education budget in Scotland. About 53 per cent. of primary school children and about 33 per cent. of secondary school children take advantage of the school meals service. If we deduct the number receiving free school meals in Scotland alone, we are left with 287,000 paying for school meals. These are the children who will primarily suffer. The regulations will reduce the living standards of these children and their families.
The proposed increase is from 30p to 35p. The Government may say that previous Governments of various complexions have imposed increases, but this is the second increase from this Government in less than a year in office. They inherited a charge of 25p, which they raised to 30p in September, so we have seen a 40 per cent. increase in five months. That is far too much.
There have been several increases since September 1970, but this is the biggest percentage increase in real terms since April 1971. We all know who the Secretary of State for Education and Science was in April 1971. That was before the right hon. Lady had the keys to No. 10 Downing Street, but even at that time she had begun her onslaught on the educational and health standards of our children.
It is fairly obvious that a substantial increase in school meal charges will reduce the number of children having meals at school. The Scottish Education Department document to which I referred admits that. It says:
"there is a direct correlation between increases in the charge and the uptake of meals. The succession of modest increases in the charge from 1949 to 1957 had the effect of reducing the uptake from 40 per cent. to just below 30 per cent. of pupils present. During the eleven years from 1957 when the charge remained at 1/- and the meal was increasingly good value the uptake steadily increased to approximately 49 per cent. in 1968."
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That was an all-time high in the provision of school meals, according to the fairly recent Scottish Education Department statistics.
If there is a reduction in the service, not only will the number of children taking school meals decrease but there will also be a reduction in the work force supplying those meals. In Scotland alone, it appears that there are 17,000 people employed in that service. Is it any wonder that trade unions such as NUPE and the General and Municipal Workers are concerned? The Minister who is replying also has responsibility for employment—or, rather, unemployment—in Scotland. Unemployment is once again over the 200,000 mark. That is the second highest total since the Second World War. The whole trend of the regulations will lead to yet another increase in unemployment in Scotland, where it is already too high.
There are plenty of examples of workers who receive subsidised meals in works canteens and even within the catering system of the House of Commons. It is well known that many company directors are on to a tax fiddle with free meals. What about the gravy trains? Honest taxpayers pay for that jamboree indirectly. However, instead of attacking those people, the Tory Government attack children—especially those from poor families. As my hon. Friend the Member for Birkenhead (Mr. Field) said, that is just one facet of a general attack on the living standards of children. The Government refused to increase child benefits in April. They reduced the purchasing power of family income supplement and supplementary benefit with which poor families have to try to feed their children. The Government have made a concerted attack on family life.
This Government are sacrificing children on the altar of doctrinaire monetarism. That is why Conservative Members should vote with the Opposition against the proposal to increase the price of school meals.
10.41 pm
Mr. Andrew F. Bennett: I agree with my hon. Friends that we should vote against the regulations. I congratulate the hon. Members for Liverpool, Garston (Mr. Thornton) and Bridlington (Mr. Townend) on their speeches. It must be difficult for them

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when they discover a Government Whip chasing along the corridors, saying that the Front Bench has been left on its own, trying to justify the regulations. The Front Bench needed someone to speak from the Back Benches. In those circumstances, those hon. Members did very well.
However to claim that an increase of 5p does not matter shows that Tory Members are out of touch with many of their constituents. This increase means an extra 50p a week to the family budget of many constituents—two children, five days a week. For many of my constituents, such an increase matters. Often constituents come to me asking why supplementary benefit has reduced their benefit by 12p, 20p, or 30p a week. To those people such sums of money are extremely important. It was, therefore, very glib of the hon. Member for Bridlington to say that 5p does not matter. For many constituents it makes a big difference.
We should also congratulate the Government on the regulations. At least the Government have been honest. They have said to the people of Britain that they are putting up the cost of school meals to pay for tax cuts. They have had the honesty to face the electorate and to tell them that that was the consequence. That may be contrasted with the Government's behaviour towards the Education (No. 2) Bill. They did not have the honesty to say that they were going to force up school meals even more dramatically in order to make a £200 million cut. They have passed that job to local authorities so that they can carry out the Government's dirty work. They have not had the honesty to stand up and say that they believe that school meals should go up by "x" amount in order to pay for tax cuts. That is despicable. They have asked local authorities to do their work and the Government expect them to take the blame.
It is sad that although the Government are raising the charges they have neglected another aspect that usually accompanies such a measure—the means test. The only argument that could be put in favour of the regulations would be that there has been inflation since the last increase in the price of school meals. However, if inflation is taken into account, the means test scale should also
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be raised. It is disgraceful to raise the charge without increasing the means test levels. In other words, the Government are saying to those who are within the means test scales "You should suffer most." If the Government are looking for groups in society to pick on, they should not choose these people. On the contrary, they should give them the most help.
The Government appear to be saying that they are not prepared to put up the child benefit this year. I hope that the Minister will give us an indication that, if child benefit is considered for increase next November, he will take account not just of his increase in school meals prices but of the increases that are being forced on local authorities during the summer.
Perhaps the Minister will also explain why the Government have decided on 5p for two months of this financial year. Do the local authorities need the extra money for those two months? Will the Government claw that money back from local authorities? Are the Government pre-empting the local authorities and attempting to start them off on a course of increasing meals by 5p every two months? What price do the Government expect local authorities to be charging by September next year? The Minister should come clean and give us some answers instead of leaving it to the local authorities to use their discretion. They do not have any discretion as long as the Government insist on cuts of £200 million.
We have heard from many Tories, in this debate and in Committee, of their concern for nutritional standards in schools. We would understand that a little better if the Minister would look at the whole question of tuck shops which are promoted in a lot of schools. Perhaps he should give a little guidance to head teachers about the provisions that are made to sell sweets, crisps and biscuits at break and dinner time in those tuck shops. If the Government want to improve nutritional standards in schools, they should pay a little more attention to that sort of practice rather than attack school dinners.
Finally, I hope that the Minister will tell us the implications for employment. How many children will stop having dinners as a result of the price increase? How many jobs will be lost? What will it cost in unemployment benefit? Are

1509
the Government certain that the extra 5p will represent much profit, taking account of the lost dinners, the lost benefit to the children, the loss of jobs and the extra unemployment benefit that they will have to pay? I hope that on this occasion the House will indicate in the voting the real lack of enthusiasm for the regulations. It was clear at the beginning of this debate that, apart from the Government Front Bench spokesmen, there was hardly anyone in the House who was prepared to support the regulations.
10.48 pm
Mr. Harry Ewing: We have had a very interesting debate on the regulations. I am sure that the Government Whips must be in a dilemma, having started off the debate with no Back Benchers present and then, having dragged in two or three hon. Members from the Tea Room, heard them make absolutely terrible speeches. The Whips must be wondering what they can do next to get some support for these measures.
This evening is a rather historic occasion because it is probably the last time that the House will debate a statutory instrument on increases in school meal charges. Also, it is the first time that the House has debated such a statutory instrument on school meal charges without the accompanying increase in income limits. That has never happened before.
Thirdly, this is probably the first time that a statutory instrument has been used as a paving measure for legislation presently going through the House. The Secretary of State's press release makes is abundantly clear that the sole purpose of increasing the price of school meals to 35p, pending the Education (No. 2) Bill coming on to the statute book, is to make it easier for local authorities to effect the savings that the Government are imposing on them as a result of that legislation.
Fourthly, this is a historic occasion because the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, North (Mr. Fletcher) will make his maiden speech on education. He has been a Minister since last May, but apart from Scottish Question Time each month has been running education in Scotland by a series of press releases. He has shunted off all his responsibilities in
1510
the House on to the other Under-Secretary, his unfortunate hon. Friend the Member for Aberdeenshire, West (Mr. Fairgrieve), who is probably the most misunderstood member of the Government.
The Under-Secretary has said that the legislation was not designed to reduce the uptake of school meals. He was referring to the legislation that we are now discussing in Standing Committee. That is to mislead the House. What is planned in the financial memorandum to that legislation is that the Government will take £200 million from local authorities in England and Wales and £20 million from local authorities in Scotland. The same Under-Secretary of State for Scotland said in a parliamentary answer to me that the legislation would lead to a reduction in the uptake of school meals. That is the whole purpose of the legislation going through Committee and it is also the purpose of this statutory instrument.
As my hon. Friend the Member for West Stirlingshire (Mr. Canavan) said, we had heard the Minister's speech before. He did not read it too well this afternoon and he read it less well tonight. According to the Minister, the Government accept that children in Great Britain will suffer from malnutrition as a result of their decision to withdraw school meals. I do not misquote the Minister. He is on record as saying that this afternoon. He now has the audacity to come to the House and try to justify the statutory instrument to increase school meals to 35p.
My hon. Friend the Member for Birkenhead (Mr. Field) made a relevant speech today. Unfortunately hon. Gentlemen who were interrupting him from seated positions have left the Chamber. His point was that the figures for the increase in the number of people applying for supplementary benefit and family income supplement—which admittedly had doubled—were for the years 1974–77. We do not yet have the figures that would show the impact of the Labour Government's policy of pumping £1·5 billion in child benefits into the economy. Those figures would enable us to see what impact that policy had on the figures for earlier years given by my hon. Friend.
When we compare the Labour Government's £1·5 billion provision for child benefit with the Tory Government's paltry £8 million, we can look forward

1511
only in fear to the 1980s when we consider the Government's policy for child benefit. I am absolutely confident that when the figures for the period 1977–79 are available we shall see that the impact of that injection by the Labour Government of £1·5 billion has been substantial.
We are not talking about an increase of 5p in the price of a school meal for some 500,000 children in England and Wales. Nor are we talking about an increase for the 200,000 children in Scotland. They are the children who are getting free school meals at the moment. But in eight weeks' time, when the Government's Bill becomes law, we shall be talking about an increase from nothing to at least 35p for them. We are not talking about an increase of 5p for these children and the Minister knows that. We are talking about an increase, for the children who now get free school meals and who are not on child benefit or family income supplement—on the Secretary of State's own figures—of from nothing to 35p.
At his press conference in October last year, the Secretary of State said that there were 500,000 children in England and Wales in that category, and I suspect there are something like 100,000 children in Scotland in that category.
The Under-Secretary of State for Scotland took 13 weeks to answer a question from me about the effects of the Education (No. 2) Bill on the school meals service. He did not answer off the cuff. I take it that he thought long and hard about what he said. It took from 27 July to 22 October for him to produce the answer. He said that it was impossible for him to estimate the effect of the Bill on the price of a school meal. He had a guess at it and said that a school meal would be at least 60p once the Government's policies had been implemented as a result of the Bill.
That figure applied last October, so I think that we can add another 15p to that. The picture that is emerging tonight is that the effect for the children who are presently getting free meals but are not on family income supplement or supplementary benefit—children for whom my hon. Friend the Member for Birkenhead has done so much—will be an increase from nothing to nearly 75p. If
1512
the Minister wants to deny that and come back to the House later and apologise, we shall be pleased to accept his apology. That is what will happen as a result of the regulations and of the Bill.
It is no good the Secretary of State for Education shaking his head. Either he does not understand his own legislation or he does not understand the impact that it will have on those children and the damage that it will do in relation to the poverty trap. I am astonished, because I got the impression that the hon. Member for Berwick-upon-Tweed (Mr. Beith) intended to vote with the Government tonight. I hope that what we on the Labour Benches have said will have persuaded him to vote in our Lobby tonight because of the damage that the regulations are likely to do to the children I have defined.
Mr. Mark Carlisle:May I ask the Under-Secretary this? I am sorry: I meant to say "the hon. Gentleman". Can he give me the name of one local authority in England, Scotland or Wales that has said that the likely price of a school meal will be 75p?
Mr. Ewing: I will come to that point in a minute—[HON. MEMBERS: "Answer."] I am not surprised at the Secretary of State describing me as the Under-Secretary, because if I had an Under-Secretary as incompetent as his I, too, would be looking for another.
The position is that the Association of Metropolitan Authorities here in England and Wales and the other association that the Minister called in evidence are now on record as saying that it will be impossible for them to effect the savings that the Government want them to effect.
The Secretary of State has asked me to name one authority that has said that it will charge the full economic cost for school meals—
Mr. Mark Carlisle: The hon. Gentleman said 75p.
Mr. Ewing: On the Under-Secretary's statement last October it was going to be 60p. Even if I grant the Secretary of State the concession that there has been no inflation since October last year—but that is not true—the price will be at least 60p. The authority in Hillingdon has already said that it will charge the full

1513
economic cost. I suspect that the Secretary of State's heart is not in what he is doing here. He is not that kind of a man. He is a compassionate person and he is being bumped along the line by the Chancellor and the Secretary of State for Industry into doing many things he does not want to do. This nonsense about the freedom that is being given to local authorities—first by the regulations—means that, whether or not they like it, from 4 February they must charge 35p.
In case the Minister puts forward the argument about the increase that was applied by the previous Labour Government, let me say that I accept that the increase applied in 1977 was 67 per cent. for a four-year period from 1975 to 1979. The Government are increasing the cost of meals by 40 per cent. in five months. I hope that the Minister will not throw out that hoary argument tonight. I hope that I have said enough to persuade Liberal Members—I know that I do not have to appeal to my right hon. and hon. Friends—to join us in the Lobby and reject these despicable statutory instruments.
11 pm
The Under-Secretary of State for Scotland (Mr. Alexander Fletcher):The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) is lucky to have had the freedom of the House to make such remarkable misrepresentations, not only about the regulations that we are debating but about the Education (No. 2) Bill. He is misleading the House about the Bill. He should stop to consider the insults that he is hurling at local authorities, knowing that they will have discretion, under the Bill, to make decisions and to deal with school meals. To suggest that local authorities, whether Labour or Conservative-controlled, would act in the manner that he has suggested is, to say the least, extremely irresponsible.
When the hon. Gentleman referred to increases in the price of school meals made by the previous Labour Administration, I thought that he would point out to the House that the last increase, from 25p to 30p, planned by his party, was allowed for in its expenditure White Paper and in the rate support grant. It is too much to expect the hon. Gentleman to take these matters into account.
1514
It cannot be said too often that education expenditure must not be exempt from the general reduction in public expenditure. In Scotland, milk, meals and transport cost about £60 million, of which £40 million is spent on meals alone. That is clearly the place to look for savings. It will not damage the real process of education. It is essential to have a realistic level of income from the service, and that means keeping school meal charges abreast of inflation. That was done in the last few years of the previous Labour Government.
The Opposition, and some of my hon. Friends, are quite right to care about low income families. It can sometimes be forgotten that the majority of families have income earners and a good standard of living and are not in need of a big public subsidy to buy food for their children. Throughout the debate that fact has been ignored. The majority of families in Britain are perfectly capable of feeding their children. To suggest otherwise is totally irresponsible, in this debate or anywhere else.
Mr. Field rose—
Mr. Fletcher: I shall give way to the hon. Gentleman in a moment. I am glad that the hon. Member for Berwick-upon-Tweed (Mr. Beith) accepted that point, as did my hon. Friend the Member for Bridlington (Mr. Townend). There is a great diversity of local circumstances, and that is allowed for in the Education (No. 2) Bill.
It is clear that there is a need for local decisions on the school meals service. In Scotland, the figures show that the uptake of meals at the end of last year in primary schools was 54 per cent. compared with a figure in England of 75 per cent. In secondary schools in Scotland it was 37 per cent. compared with 51 per cent. in England, making a total uptake in Scotland of only 47 per cent. at the last census compared with 64 per cent. in England. Clearly there must be something wrong with the school meals service in Scotland if the uptake is so low, bearing in mind that the figures include the provision of free meals.
The hon. Member for Birkenhead (Mr. Field) gave us a brief lecture on the difficulties and problems of the poverty trap and other related matters. We do not complain about that, but we should

1515
not ignore the families—clearly a majority in Scotland—who do not need to take advantage of the allowances. They use the education service but do not derive benefit from the large subsidies paid for the school meals servise. In discussing the question broadly, one must look at both sides of the picture.
Mr. Field: Will the Minister give way?
Mr. Fletcher: No. Time is short and I have a number of other matters to deal with.
Let us consider the charge that local authorities cannot cope with the cuts in public expenditure. We read in The Scotsman today that the leader of the Labour group on Lothian regional council—the hon. Member for Stirling, Falkirk and Grangemouth is groaning because it is bad news for him and his colleagues—has resigned in protest at the financial policies of the council, and he said that in his view reductions in public expenditure can be made without cutting services.
Mr. George Foulkes: Read on!
Mr. Fletcher: I would happily read on—
Mr. Harry Ewing: Will the Minister give way?
Mr. Fletcher: No.
Mr. Ewing: Will the Minister give way?
Mr. Fletcher: No, I will not.
Mr. Ewing rose—
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. The Minister is not giving way. The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) must resume his seat.
Mr. Ewing:On a point of order, Mr. Deputy Speaker. Is it in order for the Minister to mislead the House?
Mr. Deputy Speaker: What the Minister uses in the content of his speech has nothing to do with the Chair.
Mr. Fletcher: The hon. Member for Stirling, Falkirk and Grangemouth overran his time considerably, leaving little time for me.
Mr. Kinnock: Why does the Minister not read the next bit of the report to which he referred?
Mr. Fletcher: If I read the next bit, I shall embarrass Labour Members even more and I have no wish to do that.
The only effect of the regulations is to raise the price of school meals from 30p to 35p—an increase of 16 per cent. No changes have been made to the conditions of entitlement to free meals or to the maximum charge of 15p for pupils receiving special education.
My hon. Friend the Member for Liverpool, Garston (Mr. Thornton) made clear from his experience of local government that savings could be made, but our object is not just to save money on milk and meals. It is to save on ancillary services in order to protect the essentials of the education service from damaging cuts. It is to make savings that will enable us to preserve the planned pupil-teacher ratios and to make allowance to improve them, in the light of the difficulties of declining rolls in our schools. We also need money for developments to which many hon. Members on both sides attach importance, including the advancement of teaching and training in microelectronics in Scotland, on which I announced expenditure of £300,000 a few weeks ago. We want to set up a training centre in Scotland to study teaching methods in microelectronics. We can do all that by making better use of the resources available to us.
It is obviously right that education authorities should provide catering and other services at a reasonable cost. But there is more to education than school meals. It would have helped the House in this debate if there had been some indication that the Opposition were aware of that fact. The Government's insistence on higher standards in the classroom and their attempt to improve the education service generally enable me to recommend my right hon. and hon. Friends to support the regulations.
Question put,
That an humble Address be presented to Her Majesty, praying that the Provision of Milk and Meals (Amendment) (No. 2) Regulations 1979 (S.I., 1979, No. 1686), dated 17 December 1979, a copy of which was laid before this House on 19 December, be annulled.
The House divided: Ayes 108, Noes 155.

Division No. 149]

AYES

[8.23 pm

Adley, Robert

Grist, Ian

Nelson, Anthony

Alexander, Richard

Grylls, Michael

Neubert, Michael

Ancram, Michael

Gummer, John Selwyn

Newton, Tony

Aspinwall, Jack

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

Onslow, Cranley

Atkins, Robert (Preston North)

Hannam, John

Page, John (Harrow, West)

Berry, Hon Anthony

Haselhurst, Alan

Page, Rt Hon Sir R. Graham

Best, Keith

Hawksley, Warren

Page, Richard (SW Hertfordshire)

Bevan, David Gilroy

Heddle, John

Parris, Matthew

Biggs-Davison, John

Henderson, Barry

Patten, Christopher (Bath)

Boscawen, Hon Robert

Hicks, Robert

Pollock, Alexander

Bowden, Andrew

Hogg, Hon Douglas (Grantham)

Proctor, K. Harvey

Boyson, Dr Rhodes

Holland, Philip (Carlton)

Raison, Timothy

Braine, Sir Bernard

Hooson, Tom

Rees, Peter (Dover and Deal)

Bright, Graham

Howell, Ralph (North Norfolk)

Renton, Tim

Brinton, Tim

Hunt, John (Ravensbourne)

Rhys Williams, Sir Brandon

Brooke, Hon Peter

Hurd, Hon Douglas

Ridley, Hon Nicholas

Brown, Michael (Brigg & Sc'thorpe)

Jopling, Rt Hon Michael

Roberts, Wyn (Conway)

Bruce-Gardyne, John

Knox, David

Rossi, Hugh

Buchanan-Smith, Hon Alick

Lang, Ian

Rost, Peter

Burden, F. A.

Langford-Holt, Sir John

Sainsbury, Hon Timothy

Cadbury, Jocelyn

Latham, Michael

St. John-Stevas, Rt Hon Norman

Carlisle, John (Luton West)

Lawrence, Ivan

Shepherd, Colin (Hereford)

Carlisle, Kenneth (Lincoln)

Le Merchant, Spencer

Shepherd, Richard(Aldridge-Br'hills)

Carlisle, Rt Hon Mark (Runcorn)

Lennox-Soyd, Hon Mark

Sims, Roger

Chalker, Mrs. Lynda

Lester, Jim (Beston)

Skeet, T. H. H.

Chapman, Sydney

Lloyd, Ian (Havant & Waterloo)

Speed, Keith

Churchill, W. S.

Lloyd, Peter (Fareham)

Speller, Tony

Clark, Hon Alan (Plymouth. Sutton)

Loveridge, John

Spicer, Michael (S Worcestershire)

Clarke, Kenneth (Rushcliffe)

Luce, Richard

Sproat, Iain

Cockeram, Eric

Lyell, Nicholas

Stanbrook, Ivor

Colvin, Michael

Macfarlane, Neil

Stanley, John

Cope, John

MacKay, John (Argyll)

Stevens, Martin

Cranborne, Viscount

McNair-Wilson, Michael (Newbury)

Stewart, John (East Renfrewshire)

Critchley, Julian

McQuarrie, Albert

Stradling Thomas, J.

Crouch, David

Madel, David

Tebbit, Norman

Dean, Paul (North Somerset)

Major, John

Thatcher, Rt Hon Mrs Margaret

Dorrell, Stephen

Marland, Paul

Thompson, Donald

Dover, Denshore

Marten, Neil (Banbury)

Thorne, Neil (Ilford South)

Dykes, Hugh

Mather, Carol

Thornton, Malcolm

Eggar, Timothy

Mawby, Ray

Townsend, Cyril D. (Bexleyheath)

Eyre, Reginald

Mawhinney, Dr Brian

Waddington, David

Fairbairn, Nicholas

Maxwell-Hyslop, Robin

Waldegrave, Hon William

Fairgrieve, Russell

Mellor, David

Walker-Smith, Rt Hon Sir Derek

Faith, Mrs Sheila

Miller, Hal (Bromsgrove & Redditch)

Waller, Gary

Fenner, Mrs Peggy

Mills, Iain (Meriden)

Ward, John

Fisher, Sir Nigel

Mills, Peter (West Devon)

Watson, John

Fletcher. Alexander (Edinburgh N)

Mitchell, David (Basingstoke)

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

Fletcher-Cooke, Charles

Moate, Roger

Wheeler, John

Fookes, Miss Janet

Molyneaux, James

Wickenden, Keith

Fry, Peter

Monro, Hector

Williams, Delwyn (Montgomery)

Gardiner, George (Reigate)

Morrison, Hon Charles (Devizes)

Young, Sir George (Acton)

Garel-Jones, Tristan

Morrison, Hon Peter (City of Chester)

Younger, Rt Hon George

Gorst, John

Murphy, Christopher

Gow, Ian

Myles, David

TELLERS FOR THE AYES:

Gower, Sir Raymond

Neale, Gerrard

Lord James Douglas-Hamilton and

Greenway, Harry

Needham, Richard

Mr. John MacGregor.

Griffiths, Peter (Portsmouth N)

NOES

Abse, Leo

Foulkes, George

Morris, Rt Hon Alfred (Wythenshawe)

Adams, Allen

Freud, Clement

Morris, Rt Hon Charles (Openshaw)

Alton, David

Garrett, W. E. (Wallsend)

O'Neill, Martin

Ashton, Joe

George, Bruce

Palmer, Arthur

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

Gilbert, Rt Hon Dr John

Parker, John

Beith, A. J.

Golding, John

Parry, Robert

Bennett, Andrew (Stockport N)

Gourlay, Harry

Pavitt, Laurie

Bidwell, Sydney

Graham, Ted

Penhaligon, David

Booth, Rt Hon Albert

Grant, George (Morpeth)

Powell, Raymond (Ogmore)

Bray, Dr Jeremy

Hamilton, W. W. (Central Fife)

Prescott, John

Brown, Hugh D. (Provan)

Harrison, Rt Hon Walter

Race, Reg

Brown, Ronald W. (Hackney S)

Haynes, Frank

Roberts, Ernest (Hackney North)

Buchan, Norman

Hogg, Norman (E Dunbartonshire)

Ross, Stephen (Isle of Wight)

Campbell, Ian

Home Robertson, John

Rowlands, Ted

Campbell-Savours, Dale

Homewood, William

Sandelson, Neville

Canavan, Dennis

Hooley, Frank

Sheerman, Barry

Carmichael, Neil

Howells, Geraint

Silkin, Rt Hon S. C. (Dulwich)

Cartwright, John

Huckfield, Les

Silverman, Julius

Clark, Dr David (South Shields)

Hudson Davies, Gwilym Ednyfed

Smith, Cyril (Rochdale)

Cocks, Rt Hon Michael (Bristol S)

Hughes, Robert (Aberdeen North)

Spearing, Nigel

Coleman, Donald

Hughes, Roy (Newport)

Spriggs, Leslie

Conlan, Bernard

Jones, Rt Hon Alec(Rhondda)

Steel, Rt Hon David

Cormack, Patrick

Jones, Barry (East Flint)

Stewart, Rt Hon Donald (W Isles)

Cryer, Bob

Jones, Dan (Burnley)

Stott, Roger

Cunliffe, Lawrence

Kilfedder, James A.

Summerskill, Hon Dr Shirley

Dalyell, Tam

Kinnock, Neil

Taylor, Mrs Ann (Bolton West)

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

Lambie, David

Thomas, Dafydd (Merioneth)

Dean, Joseph (Leeds West)

Leadbitter, Ted

Thomas, Dr Roger (Carmarthen)

Dempsey, James

Leighton, Ronald

Tinn, James

Dixon, Donald

Lewis, Ron (Carlisle)

Walker, Rt Hon Harold (Doncaster)

Dormand, Jack

Litherland, Robert

Weetch, Ken

Douglas, Dick

Lofthouse, Geoffrey

Welsh, Michael

Dunnett, Jack

Lyons, Edward (Bradford West)

White, Frank R. (Bury & Radcliffe)

Eadle, Alex

McCartney, Hugh

White, James (Glasgow, Pollok)

Eastham, Ken

McDonald, Dr Oonagh

Whitlock, William

Edwards, Robert (Wolv SE)

McKay, Allan (Penistone)

Wigley, Dafydd

Ellis, Raymond (NE Derbyshire)

Marks, Kenneth

Wilson, Gordon (Dundee East)

Ellis, Tom (Wrexham)

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

Winnick, David

Evans, John (Newton)

Marshall, Dr Edmund Goole)

Woodall, Alec

Ewing, Harry

Marshall, Jim (Leicester South)

Wrigglesworth, Ian

Faulds, Andrew

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

Wright, Sheila

Field, Frank

Mason, Rt Hon Roy

Young, David (Bolton East)

Fitch, Alan

Maxton, John

Flannery, Martin

Maynard, Miss Joan

TELLERS FOR THE NOES:

Ford, Ben

Millan, Rt Hon Bruce

Mr. James Hamilton and

Foster, Derek

Mitchell, R. C. (Soton, Itchen)

Mr. George Morton.

Division No. 150]

AYES

[11.10 pm

Ashton, Joe

Hamilton, W. W. (Central Fife)

Newens, Stanley

Bennett, Andrew (Stockport N)

Harrison, Rt Hon Walter

O'Neill, Martin

Booth, Rt Hon Albert

Hattersley, Rt Hon Roy

Palmer, Arthur

Brown, Hugh D. (Provan)

Haynes, Frank

Parry, Robert

Brown, Ronald W. (Hackney S)

Hogg, Norman (E Dunbartonshire)

Pavitt, Laurie

Buchan, Norman

Home Robertson, John

Powell, Raymond (Ogmore)

Campbell-Savours, Dale

Homewood, William

Prescott, John

Canavan, Dennis

Hooley, Frank

Race, Reg

Carmichael, Neil

Howells, Geraint

Roberts, Ernest (Hackney North)

Clark, Dr David (South Shields)

Huckfield, Les

Robertson, George

Cocks, Rt Hon Michael (Bristol S)

Hudson Davies, Gwilym Ednyfed

Ross, Ernest (Dundee West)

Coleman, Donald

Hughes, Robert (Aberdeen North)

Rowlands, Ted

Conlan, Bernard

Hughes, Roy (Newport)

Sheerman, Barry

Crowther, J. S.

Jones, Rt Hon Alec (Rhondda)

Silkin, Rt Hon S. C. (Dulwich)

Cryer, Bob

Jones, Barry (East Flint)

Silverman, Julius

Cunliffe, Lawrence

Kinnock, Neil

Spearing, Nigel

Dalyell, Tam

Lambie, David

Spriggs, Leslie

Dean, Joseph (Leeds West)

Leighton, Ronald

Stewart, Rt Hon Donald (W Isles)

Dixon, Donald

Lestor, Miss Joan (Eton & Slough)

Stott, Roger

Dormand, Jack

Lewis, Ron (Carlisle)

Summerskill, Hon Dr Shirley

Douglas, Dick

Litherland, Robert

Taylor, Mrs Ann (Bolton West)

Dunnett, Jack

Lofthouse, Geoffrey

Thomas, Dafydd (Merioneth)

Dunwoody, Mrs Gwyneth

Lyons, Edward (Bradford West)

Thomas, Dr Roger (Carmarthen)

Eadle, Alex

McCartney, Hugh

Walker, Rt Hon Harold (Doncaster)

Eastham, Ken

McElhone, Frank

Welsh, Michael

Ellis, Raymond (NE Derbyshire)

McKay, Allan (Penistone)

White, Frank R. (Bury & Radcliffe)

Ellis, Tom (Wrexham)

MacKenzie, Rt Hon Gregor

Wigley, Dafydd

Evans, John (Newton)

Marks, Kenneth

Wilson, Gordon (Dundee East)

Ewing, Harry

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

Winnick, David

Flannery, Martin

Marshall, Dr Edmund (Goole)

Woodall, Alec

Foot, Rt Hon Michael

Marshall, Jim (Leicester South)

Wrigglesworth, Ian

Foulkes, George

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

Wright, Sheila

George, Bruce

Maxton, John

Young, David (Bolton East)

Gilbert, Rt Hon Dr John

Millan, Rt Hon Bruce

Golding, John

Mitchell, R. C. (Solon, Itchen)

TELLERS FOR THE AYES:

Graham, Ted

Morris, Rt Hon Charles (Openshaw)

Mr. James Tinn and Mr. Terry Davis.

Grant, George (Morpeth)

Morton, George

Hamilton, James (Bothwell)

NOES

Adley, Robert

Faith, Mrs Sheila

MacKay, John (Argyll)

Alexander, Richard

Fenner, Mrs Peggy

McNair-Wilson, Michael (Newbury)

Ancram, Michael

Fletcher, Alexander (Edinburgh N)

McQuarrie, Albert

Aspinwall, Jack

Fookes, Miss Janet

Madel, David

Atkins, Robert (Preston North)

Forman, Nigel

Major, John

Beith, A. J.

Gardiner, George (Reigate)

Marshall, Michael (Arundel)

Benyon, Thomas (Abingdon)

Garel-Jones, Tristan

Marten, Neil (Banbury)

Berry, Hon Anthony

Gow, Ian

Mather, Carol

Best, Keith

Gower, Sir Raymond

Mawhinney, Dr Brian

Bevan, David Gilroy

Griffiths, Peter (Portsmouth N)

Maxwell-Hyslop, Robin

Biggs-Davison, John

Grylls, Michael

Mellor, David

Boscawen, Hon Robert

Gummer, John Selwyn

Meyer, Sir Anthony

Bowden, Andrew

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

Mills, Iain (Meriden)

Boyson, Dr Rhodes

Hannam,John

Mills, Peter (West Devon)

Braine, Sir Bernard

Haselhurst, Alan

Mitchell, David (Basingstoke)

Bright, Graham

Hastings, Stephen

Moate, Roger

Brinton, Tim

Hawksley, Warren

Morrison, Hon Charles (Devizes)

Brooke, Hon Peter

Heddle, John

Morrison, Hon Peter (City of Chester)

Bruce-Gardyne, John

Henderson, Barry

Murphy, Christopher

Buck, Antony

Hicks, Robert

Myles, David

Cadbury, Jocelyn

Hogg, Hon Douglas (Grantham)

Neale, Gerrard

Carlisle, Kenneth (Lincoln)

Hooson, Tom

Needham, Richard

Carlisle, Rt Hon Mark (Runcorn)

Howell, Ralph (North Norfolk)

Nelson, Anthony

Chalker, Mrs. Lynda

Hunt, John (Ravensbourne)

Neubert, Michael

Chapman, Sydney

Hurd, Hon Douglas

Newton, Tony

Churchill, W. S.

Jenkin, Rt Hon Patrick

Onslow, Cranley

Clark, Hon Alan (Plymouth, Sutton)

Jopling, Rt Hon Michael

Page, John (Harrow, West)

Clarke, Kenneth (Rushcliffe)

Kellett-Bowman, Mrs Elaine

Page, Rt Hon Sir R. Graham

Colvin, Michael

Knox, David

Page, Richard (SW Hertfordshire)

Critchley, Julian

Lang, Ian

Parris, Matthew

Dean, Paul (North Somerset)

Langford-Holt, Sir John

Patten, Christopher (Bath)

Dorrell, Stephen

Latham, Michael

Penhaligon, David

Dover, Denshore

Lawrence, Ivan

Pollock, Alexander

du Cann, Rt Hon Edward

Le Marchant, Spencer

Proctor, K. Harvey

Dunn, Robert (Dartford)

Lester, Jim (Beeston)

Raison, Timothy

Dykes, Hugh

Lloyd, Peter (Fareham)

Renton, Tim

Eggar, Timothy

Luce, Richard

Rhys Williams, Sir Brandon

Eyre, Reginald

Lyell, Nicholas

Roberts, Wyn (Conway)

Fairbairn, Nicholas

Macfarlane, Neil

Rossi, Hugh

Fairgrieve, Russell

MacGregor, John

Rost, Peter

1518

1519

Sainsbury, Hon Timothy

Stanley, John

Waller, Gary

St. John-Stevas, Rt Han Norman

Steel, Rt Hon David

Ward, John

Shelton, William (Streatham)

Stevens, Martin

Watson, John

Shepherd, Colin (Hereford)

Stewart, John (East Renfrewshire)

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

Shepherd, Richard(Aldridge-Br'hills)

Stradling Thomas, J.

Wheeler, John

Sims, Roger

Tebbit, Norman

Wickenden, Keith

Skeet, T. H. H.

Thompson, Donald

Wolfson, Mark

Smith, Cyril (Rochdale)

Thorne, Neil (Ilford South)

Young, Sir George (Acton)

Speed, Keith

Thornton, Malcolm

Younger, Rt Hon George

Speller, Tony

Waddington, David

Spicer, Michael (S Worcestershire)

Wakeham, John

TELLERS FOR THE NOES:

Sproat, Iain

Waldegrave, Hon William

Lord James Douglas-Hamilton and Mr. John Cope.

Stanbrook, Ivor

Walker, Rt Hon Peter (Worcester)

Question accordingly negatived.

MILK AND MEALS (EDUCATION) (SCOTLAND) AMENDMENT (No. 2) REGULATION 1979
Motion made, and Question proposed,
That an humble Address be presented to Her Majesty, praying that the Milk and Meals
(Education) (Scotland) Amendment (No. 2) Regulations 1979 (S.I., 1979, No. 1682), dated 7 December 1979, a copy of which was laid before this House on 19 December, be annulled.—[Mr. Milian.]
Question put:—
The House divided: Ayes 109, Noes 157

Division No. 151]

AYES

[11.20 pm

Ashton, Joe

Harrison, Rt Hon Walter

Palmer, Arthur

Bennett, Andrew (Stockport N)

Hattersley, Rt Hon Roy

Parry, Robert

Booth, Rt Hon Albert

Haynes, Frank

Pavitt, Laurie

Brown, Hugh D. (Provan)

Hogg, Norman (E Dunbartonshire)

Powell, Raymond (Ogmore)

Brown, Ronald W. (Hackney S)

Holland, Stuart (L'beth, Vauxhall)

Prescott, John

Buchan, Norman

Home Robertson, John

Price, Christopher (Lewisham West)

Campbell-Savours, Dale

Homewood, William

Race, Reg

Canavan, Dennis

Hooley, Frank

Roberts, Ernest (Hackney North)

Carmichael, Neil

Howells, Geraint

Robertson, George

Clark, Dr David (South Shields)

Huckfield, Les

Ross, Ernest (Dundee West)

Cocks, Rt Hon Michael (Bristol S)

Hudson Davies, Gwilym Ednyfed

Rowlands, Ted

Coleman, Donald

Hughes, Robert (Aberdeen North)

Sheerman, Barry

Conlan, Bernard

Hughes, Roy (Newport)

Silkin, Rt Hon S. C. (Dulwich)

Crowther, J. S.

Jones, Rt Hon Alec(Rhondda)

Silverman, Julius

Cryer, Bob

Jones, Barry (East Flint)

Spearing, Nigel

Cunliffe, Lawrence

Kinnock, Neil

Spriggs, Leslie

Dalyell, Tam

Lambie, David

Stewart, Rt Hon Donald (W Isles)

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

Leighton, Ronald

Stott, Roger

Dixon, Donald

Lestor, Miss Joan (Eton & Slough)

Summerskill, Hon Dr Shirley

Dormand, Jack

Lewis, Bon (Carlisle)

Taylor, Mrs Ann (Bolton West)

Douglas, Dick

Litherland, Robert

Thomas, Dafydd (Merioneth)

Dunnett, Jack

Lofthouse, Geoffrey

Thomas, Dr Roger (Carmarthen)

Dunwoody, Mrs Gwyneth

Lyons, Edward (Bradford West)

Tinn, James

Eadie, Alex

McCartney, Hugh

Walker, Rt Hon Harold (Doncaster)

Eastham, Ken

McKay, Allan (Penistone)

Welsh, Michael

Ellis, Raymond (NE Derbyshire)

MacKenzie, Rt Hon Gregor

White, Frank R. (Bury & Radcliffe)

Ellis, Tom (Wrexham)

Marks, Kenneth

Wigley, Dafydd

Ewing, Harry

Marshall, David (Gl'sgow, Shettlesin

Wilson, Gordon (Dundee East)

Flannery, Martin

Marshall, Dr Edmund (Goole)

Winnick, David

Foot, Rt Hon Michael

Marshall, Jim (Leicester South)

Woodall, Alec

Foulkes, George

Martin, Michael (Gl'gow, Springb rn)

Wrigglesworth, Ian

George, Bruce

Maxton, John

Wright, Sheila

Gilbert, Rt Hon Dr John

Millan, Rt Hon Bruce

Young, David (Bolton East)

Golding, John

Mitchell, R. C. (Soton, Itchen)

Graham, Ted

Morris, Rt Hon Charles (Openshaw)

TELLERS FOR THE AYES:

Grant, George (Morpeth)

Morton, George

Mr. John Evans and

Hamilton, James (Bothwell)

Newens, Stanley

Mr. Joseph Dean

Hamilton, W. W. (Central Fife)

O'Neill, Martin

NOES

Adley, Robert

Boyson, Dr Rhodes

Clark, Hon Alan (Plymouth, Sutton)

Alexander, Richard

Braine, Sir Bernard

Clarke, Kenneth (Rushcliffe)

Ancram, Michael

Bright, Graham

Colvin, Michael

Aspinwall, Jack

Brinton, Tim

Critchley, Julian

Atkins, Robert (Preston North)

Brooke, Hon Peter

Dean, Paul (North Somerset)

Beith, A. J.

Bruce-Gardyne, John

Dorrell, Stephen

Benyon, Thomas (Abingdon)

Buck, Antony

Dover, Denshore

Berry, Hon Anthony

Cadbury, Jocelyn

du Cann, Rt Hon Edward

Best, Keith

Carlisle, Kenneth (Lincoln)

Dunn, Robert (Dartford)

Bevan, David Gilroy

Carlisle, Rt Hon Mark (Runcorn)

Dykes, Hugh

Biggs-Davison, John

Chalker, Mrs. Lynda

Eggar, Timothy

Boscawen, Hon Robert

Chapman, Sydney

Eyre, Reginald

Bowden, Andrew

Churchill, W. S.

Fairbairn, Nicholas

Fairgrieve, Russell

MacGregor, John

Rost, Peter

Faith, Mrs Sheila

MacKay, John (Argyll)

Sainsbury, Hon Timothy

Fenner, Mrs Peggy

McNair-Wilson, Michael (Newbury)

St. John-Stevas, Rt Hon Norman

Fisher, Sir Nigel

McQuarrie, Albert

Shelton, William (Streatham)

Fletcher, Alexander (Edinburgh N)

Madel, David

Shepherd, Colin (Hereford)

Fookes, Miss Janet

Major, John

Shepherd, Richard(Aldridge-Br'hills)

Forman, Nigel

Marshall, Michael (Arundel)

Sims, Roger

Gardiner, George (Reigate)

Marten, Neil (Banbury)

Skeet, T. H. H.

Garel-Jones, Tristan

Mather, Carol

Smith, Cyril (Rochdale)

Gow, Ian

Mawhinney, Dr Brian

Speed, Keith

Gower, Sir Raymond

Maxwell-Hyslop, Robin

Speller, Tony

Griffiths, Peter (Portsmouth N)

Mellor, David

Spicer, Michael (S Worcestershire)

Grylls, Michael

Meyer, Sir Anthony

Sproat, Iain

Gummer, John Selwyn

Mills, Iain (Meriden)

Stanbrook, Ivor

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

Mills, Peter (West Devon)

Stanley, John

Hannam, John

Mitchell, David (Basingstoke)

Steel, Rt Hon David

Haselhurst, Alan

Moate, Roger

Stevens, Martin

Hastings, Stephen

Morrison, Hon Charles (Devizes)

Stewart, John (East Renfrewshire)

Hawksley, Warren

Morrison, Hon Peter (City of Chester)

Strading Thomas, J.

Heddle, John

Murphy, Christopher

Tebbit, Norman

Henderson, Barry

Myles, David

Thompson, Donald

Hicks, Robert

Neale, Gerrard

Thorne, Neil (Ilford South)

Hogg, Hon Douglas (Grantham)

Needham, Richard

Thornton, Malcolm

Hooson, Tom

Nelson, Anthony

Waddington, David

Howell, Ralph (North Norfolk)

Neubert, Michael

Wakeham, John

Hunt, John (Ravensbourne)

Newton, Tony

Waldegrave, Hon William

Hurd, Hon Douglas

Onslow, Cranley

Walker, Rt Hon Peter (Worcester)

Jenkin, Rt Hon Patrick

Page, John (Harrow, West)

Waller, Gary

Jopling, Rt Hon Michael

Page, Rt Hon Sir R. Graham

Ward, John

Kellett-Bowman, Mrs Elaine

Page, Richard (SW Hertfordshire)

Watson, John

Knox, David

Parris, Matthew

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

Lang, Ian

Patten, Christopher (Bath)

Wheeler, John

Langford-Holt, Sir John

Penhaligon, David

Wickenden, Keith

Latham, Michael

Pollock, Alexander

Wolfson, Mark

Lawrence, Ivan

Proctor, K. Harvey

Young, Sir George (Acton)

Le Marchant, Spencer

Raison, Timothy

Younger, Rt Hon George

Lester, Jim (Beeston)

Renton, Tim

Lloyd, Peter (Fareham)

Rhys Williams, Sir Brandon

TELLERS FOR THE NOES:

Luce, Richard

Ridley, Hon Nicholas

Lord James Douglas-Hamilton and Mr. John Cope.

Lyell, Nicholas

Roberts, Wyn (Conway)

Macfarlane, Neil

Rossi, Hugh

Question accordingly negatived.

FIREMEN (PENSIONS)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Le Marchant.]
11.31 pm
Mr. Tony Durant: I have pleasure in coming to the House to take up the case of Mr. Ingram, who is the deputy chief fire officer of Berkshire. I have been involved with this case for five years, during which I have been in correspondence with the Home Office. It is necessary for me to set the scene.
The firemen's pension scheme, which has been in operation since the service was denationalised in 1947, enables firemen to transfer between brigades in Great Britain. In these cases a man's pensionable service is transferred with him. In Northern Ireland, in the postwar period, the local authority fire brigades were organised on identical lines with the rest of the United Kingdom. But, because Northern Ireland then had a devolved Parliament at Stormont, the legislation covering the fire service
1522
was enacted there and firemen could transfer between brigades in Northern Ireland and take their pensionable service with them.
While pensions were transferable between brigades in both areas, administratively no provision had been included in the scheme for transfers of pensionable service between a brigade constituted in Northern Ireland and an English, Welsh or Scottish brigade. Mr. Ingram joined the service in Northern Ireland in 1950 and served in various parts of the Province. From 1957 to 1960 he was seconded from Northern Ireland to the Fire Service College at Dorking as an instructor. In 1960 he was offered an appointment with the Hertfordshire fire and ambulance brigade.
When Mr. Ingram took up the question of transferring his pensionable service from Northern Ireland to Hertfordshire, the then fire authority refused to agree to the transfer of his pensionable service on the ground that legislation did not exist to enable it to do so. It was pointed out that an amendment to the pensions regulations would be a fairly simple thing to do, but the fire authority still refused to do it at that time.

1523
Mr. Ingram decided to take the appointment in Hertfordshire and press for reconsideration of his case. He has persisted with this over the years, until recently to no avail. As a result of changing attitudes on pension transferability between widely differing forms of employment in recent years, transfer arrangements for police and firemen's pension schemes have been introduced. Under these arrangements it seemed that the anomalies of this case could be covered. Within the regulations framed to cover these transfers there are formulae evolved to convert years of service into money purchase terms. This is sometimes referred to as the "money purchase" scheme. This also enables transfers to take place between schemes with dissimilar benefits.
In theory, the new scheme enables persons joining fire brigades to take advantage of their existing pension arrangements from a wide diversity of employments. It also brought in the Northern Ireland pension scheme, which has always been broadly similar to the firemen's pension scheme in this country. Anyone who transferred from Northern Ireland to a brigade in this country after 1 April 1972 could do so without any detriment to his benefits. In 1978 regulations were made enabling persons who transferred from Northern Ireland before April 1972 to count their Northern Ireland service. Under these later regulations, money purchase was the basis for calculating transfer values. They also provided that Northern Ireland service was calculated on the basis of the age and salary of the transferee at 1 January 1974.
The results in the entitlement in years of service fall far short of the actual years served in Northern Ireland. For example, Mr. Ingram served for nine years and 158 days, and the only service transferred on the pension rights is two years and 47 days. If the regulations enable service to be credited on the basis of the age of the person concerned at the date of first joining a fire authority in this country, this would provide a much more equitable arrangement.
Another fireman involved in this case—only two are in this difficulty—is a Mr. Lightbody, who is the chief fire officer for Cheshire. I have been asked by my hon. Friend the Member for City
1524
of Chester (Mr. Morrison) to associate him with my remarks, because he is equally concerned.
There are several letters from which I wish to quote in order to support my case. First, there is a letter from the hon. Member for Halifax (Dr. Summerskill) at the time that she was at the Home Office. In a letter dated 13 December 1977, she said:
"In the case of the Northern Ireland Fire Authority the new transfer arrangements apply to transfers taking place on or before 1 January 1974, but that authority will be prepared to consider paying and accepting transfer values on the new basis where transfers took place before that date. Thus, if our amending Order"—
which came in later, in 1978—
"is made in the form proposed, the transfer of your constituent's pension rights may be considered by the authorities concerned."
At that time, my constituent felt that all would be well and that when the order was introduced his pension rights would be safeguarded. However, when the order was introduced he was not assisted and, as I have already said, he got a reduced period of service.
Lord Belstead, in correspondence with me in a letter dated 27 December last, outlined the history of this case, most of which I have repeated. He said:
"I do not think it would be reasonable to require fire authorities in Great Britain to meet the additional cost which would arise from allowing firemen who transferred from the Northern Ireland Fire Authority in the 1960s to reckon the length of service they would have been allowed to reckon had Northern Ireland been prepared to agree to transfer arrangements at that time, without the receipt of a commensurate transfer value. As far as I am aware, it is not intended that the Northern Ireland Firemens Pension Scheme should be amended to provide for the payment of increased transfer values in these circumstances."
That seems like a negative answer. However, the fourth paragraph of another letter from the Home Office, dated 21 September 1979, which was also signed by the noble Lord, states:
"Mr. Ingram is quite right in saying that the Northern Ireland and Great Britain Fire schemes are broadly similar, but in this case he will be credited with less reckonable service largely because his transfer value has been calculated on the monetary value of his pension rights in Northern Ireland on the basis of his age and pay in 1960."
It was thought that the Northern Ireland fire service would not support his application. But a letter which

1525
Mr. Ingram has passed to me to use in the debate, dated 2 October 1979 and signed by the secretary to the Fire Authority for Northern Ireland, said:
"It is not part of the policy of this Authority to obstruct or restrict your right to previous service".
I feel that this man, as well as the other gentleman, both of whom are good fire officers, who have served the fire service extremely well both in this country and Northern Ireland, have been badly penalised in respect of their pension rights. I urge my hon. and learned Friend the Minister to consider some ex gratia basis to put this matter right or to amend paragraph 1 of part 11 of appendix 4 to the Firemen's Pension Scheme (Amendment) Order 1978 so that paragraph 1(2) applies to Mr. Ingram and Mr. Lightbody as opposed to paragraph 1(4), which appears to be the present interpretation.
I appreciate that this is a complicated case and I know that the Minister has all the papers with him. I make a special plea on behalf of these two men who, I think, have not had a fair deal in relation to their pension rights.
11.39 pm
The Minister of State, Home Office (Mr. Leon Brittan): If I may say so, Mr. Ingram owes a considerable debt to my hon. Friend the Member for Reading, North (Mr. Durant) for the assiduous way that he has pursued his case, not only in this debate, where he has put the matter so clearly, but also in correspondence both with the present Administration and with our predecessors.
I should also like to add that the case of Mr. Lightbody has been pursued with a similar degree of assiduity by my hon. Friend the Member for City of Chester (Mr. Morrison), who has pressed his claim in the same manner and using similar arguments to those put forward by my hon. Friend the Member for Reading, North.
The essence of Mr. Ingram's claim is that he should be allowed to reckon his period of service as a fireman in Northern Ireland towards his fireman's pension in Great Britain. Broadly speaking, there is no difficulty in reckoning the same service on transfer between fire
1526
brigades in Great Britain, as the same pension schme covers all brigades in England, Wales and Scotland.
The Great Britain and Northern Ireland firemen's pension schemes, on the other hand, are separate but they now belong to the same transfer club, and for transfers since April 1972 there is similar provision for firemen who transfer between the two schemes.
However, before April 1972 there were no such arrangements. The policy in Northern Ireland was not to encourage such transfers. The fact that the secretary of the Northern Ireland Fire Authority said on 2 November 1979 that it was no part of the policy of his authority to obstruct or restrict Mr. Ingram's right to previous service may reflect the policy of that authority in 1979, but it does not reflect the policy that was applied by the Northern Ireland authorities dealing with these matters in 1960, which was the relevant date.
The policy in Northern Ireland, as I have said, was not to encourage such transfers. Recent changes, however, enable those who transferred during that time to gain some benefit from their service in Northern Ireland by an actuarial calculation, translating the value of the transfer payment made by Northern Ireland into the value of the length of service credited in the Great Britain scheme.
Mr. Ingram is asking to be treated exceptionally by being credited with more service than the actuarial value of the transfer payment being made. He is asking to be treated either as if he had transferred after April 1972, when the new transfer system took effect, or as if there had been reciprocal arrangements in force between Great Britain and Northern Ireland in 1960.
I must make it clear that, although I appreciate the force with which my hon. Friend puts forward Mr. Ingram's case, Mr. Ingram is not in any way being victimised. He is being treated in accordance with the rules of the scheme.
The fireman's pension scheme for Great Britain is set out in an order made under section 26 of the Fire Services Act 1947 by the Home Secretary, subject to the negative resolution procedure. Before making an order, the Home Secretary is required to consult the Central Fire

1527
Brigades Advisory Councils for England and Wales and for Scotland. The current scheme is set out in the Firemen's Pension Scheme Order 1973.
This scheme is considered to be one of the best in the public service. The two main factors that determine pension are reckonable service and pensonable pay in the last year of service. The scheme provides for a maximum personal pension of two-thirds of annual pensionable pay after 30 years' reckonable service, or half pay after 25 years. The scheme covers the whole of Great Britain but does not extend to Northern Ireland, where they have their own scheme.
As I have already indicated, firemen may normally move about between brigades in Great Britain without affecting their pension rights, because they are members of the same pension scheme. Where there has been a promotion on transfer or a gap in service, the transfer value will be insufficient to meet the cost in pension terms of the improved circumstances. Nevertheless, fire authorities accept these results on a "swings and roundabouts" principle.
There is also a transfer system that applies throughout the public service and to other schemes prepared to pay and receive transfer values, under which pension rights may be transferred from one pension scheme to another. Rights which have accrued during service under the scheme the employee is leaving are converted into a sum of money, which is called the transfer value and which is the actuarial equivalent of such rights. The transfer value is then reconverted to establish what it represents in terms of pensionable service in the scheme to which the employee is moving.
It has been agreed between public service schemes on a reciprocal basis to credit service for all transfers since April 1972 on the basis of age and pensionable pay on leaving the first scheme. This means that for recent transfers from the Northern Ireland fire service a fireman is likely to be credited with the same length of service as he had in Northern Ireland.
There was no such general agreement for reciprocity between schemes in respect of transfers before April 1972. However, amendments to the firemen's pension scheme were made in October 1978 enabling some service to be credited
1528
on receipt of a transfer value for such transfers. These transfers are dealt with on the basis of crediting service as if the transfer value had been paid on 1 January 1974. Fire authorities bear the cost of any improved circumstances between January 1974 and the date when the transfer value is received. It was not considered reasonable to impose any greater burden on them. The firemen concerned benefit in being able to reckon service under the scheme, which they had formerly no prospect of counting at all. Mr. Ingram's case comes into this category.
Mr. Durant: Surely, the Minister's argument shows that everyone has been discussed except these two poor chaps. The authorities have amended the regulations and done everything to make a transfer suitable, but those two were left out.
Mr. Brittan: That is not the case. At the time of transfer, my hon. Friend's constituent and Mr. Lightbody—to the extent that he is in a comparable position—had no reason to expect that any of their years in Northern Ireland could count towards any pension entitlement through any transfer mechanism. Contrary to any expectations that Mr. Ingram might have had, he was subsequently put in a position whereby some entitlement accrued. That puts the question in a different light.
I now come to the circumstances of Mr. Ingram's case. He transferred from the Northern Ireland Fire Authority to the Hertfordshire fire brigade in 1960. At that time the two schemes were broadly similar, as they are now. There was, however, no provision for the transfer of pension rights between the two schemes, because the policy in Northern Ireland at that time was quite clear and deliberate. It was not an accidental administrative quirk or omission. The policy was not to enter into transfer arrangements that might encourage firemen to leave Northern Ireland.
As regards the equity of the case, there must be many people in Northern Ireland who continued to serve in the fire brigades there—no doubt under more arduous conditions than operate in some parts of Great Britain—and they might have been tempted to come to Great Britain. However, they did not do

1529
so because they knew full well that if they did their years of service in Northern Ireland would not count towards their ultimate pension.
It would be quite wrong to say that Mr. Ingram, having decided to come to Great Britain in full knowledge of the situation, should have those years accredited to him at a later date when his colleagues had remained in Northern Ireland. Those colleagues remained there because they realised the situation, and they did not want to lose their years of pensionable service in Northern Ireland. Mr. Ingram decided to transfer in the knowledge that his Northern Ireland service would not reckon at all for pension purposes under the Great Britain scheme. This was made abundantly clear to him at the time and he accepted the position.
I have the documents here which show just how carefully the matter was considered. A letter was written to Mr. Kerr, who at the time headed the Fire Service College where Mr. Ingram was. The letter says:
"I should be glad if you will ask Ingram to confirm in writing that he still wishes to take the post in Hertfordshire, notwithstanding that he realises that this will involve the forfeiture of his pensionable service in Northern Ireland."
That letter was dated 30 November 1959. Elsewhere in that letter the signatory—a Home Office official dealing with the matter at the time—said:
"I have now received a reply from Stormont about Ingram. I am afraid it is not very favourable, since the Northern Ireland Government, after consultation with the Northern Ireland Fire Authority, have decided, not only that they cannot pay a transfer value, but that as a matter of policy they do not wish to enter into negotiations for arranging reciprocity of transfer values. It follows from this that if Ingram takes the Hertfordshire post, his previous service will not count for pension, and that there is no prospect of any future amendment of the law which might be operated with retrospective effect so as to allow his pensionable service in the past to count for pension."
The letter from the official goes on:
"I understand, however, that when Ingram visited Northern Ireland he informed the Fire Office Commander that he intended to accept the Hertfordshire post…notwithstanding the fact that he would forfeit his pensionable service with the Northern Ireland Fire Authority."
The suggestion was that Mr. Ingram should confirm in writing that he realised that position and none the less wanted to go ahead and transfer to England.
1530
Duly we find on the file a letter of 7 December 1959 to the official at the Home Office from Mr. Ingram saying:
"With reference to your letter of 30 November 1959 to the Commandant of the Fire Service College"—
and that is the letter from which I have just quoted extensively—
"I wish to confirm that I am still anxious to take up the appointment with Hertfordshire, providing the difficulties under the appointment of promotion regulations can be overcome."
Therefore, the position is somewhat different from that which appears at first sight.
As a result of the amendments made in 1978 in the Great Britain scheme and similar amendments made in the Northern Ireland scheme, a transfer value has now become payable in Mr. Ingram's case. But it must be calculated on the basis of his pensionable pay in Northern Ireland in 1960, and I would stress that, in so far as any transfer value has now become payable at all, it is something which Mr. Ingram had no reason to expect when he came to England, and did not expect.
The position is that as a result of the amendments made in 1978 the service that Mr. Ingram had accumulated in 1960 was calculated actuarially to produce a transfer value. That was treated under the scheme as if it had been paid to the new fire authority in 1974. By 1974 Mr. Ingram was earning very much more than in 1960, and with a consequent higher potential pension entitlement. This meant that the cost of buying a year's worth of pension had become that much higher, so that the transfer value of his Northern Ireland years, in terms of the number of years' pension that they could buy, was much less. In round figures, Mr. Ingram's nine years in Northern Ireland buy only two years' credit in the scheme here.
Once the fire authority decides to accept a transfer value, it has no discretion to depart from the resulting calculation of service. The only way to do that would be to revise the scheme itself or to make some sort of ex gratia payment. Mr. Ingram has risen to the senior ranks of hisprofession—I am sure by hard work and ability. I congratulate him on his success. But when a man has taken a deliberate decision to forgo pension entitlement in the interests of his career,

1531
for whatever cause, I think that it is reasonable to expect him to abide by the consequences of that decision.
It is to his advantage that subsequent amendments to the firemen's pension scheme enable him to count two extra years towards his pension. That is what I might call an uncovenanted bonus. I sympathise with Mr. Ingram's desire to improve his pension position still further,
1532
but I am afraid that this is all that the scheme, as it now stands, provides for. For the reasons that I have given, I do not think it would be justified to make any further changes in it.
Question put and agreed to.
Adjourned accordingly at five minutes to Twelve o'clock

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  Vehicle Imports (Content Rules)

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

STAMP DUTY ON THE TRANSFER OF PROPERTY
Baroness SHARPLES: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will consider adjusting the rates of stamp duty on the transfer of property which were last altered five years ago.
The MINISTER of STATE, TREASURY (Lord Cockfield): My Lords, my right honourable and learned friend the Chancellor of the Exchequer has noted my noble friend's suggestion.
Baroness SHARPLES: My Lords, I thank my noble friend the Minister for that not entirely unexpected short reply. Will he perhaps ask his right honourable and learned friend whether he would consider raising the stamp duty on the much more expensive houses to compensate for the possible loss if the threshold of stamp duty on the lower-priced houses is raised?
Lord COCKFIELD: My Lords, I am most grateful to my noble friend for her interesting suggestion, which will certainly be examined. However, I see one immediate problem; namely, that the increase in the duty on the more expensive houses might need to be quite considerable to make good the loss of revenue on the smaller properties.
Lord GISBOROUGH: My Lords, is the noble Lord aware that this tax was
836
started in 1694, three years before the window tax, which was then abolished in the year of the Great Exhibition? Is it not time that this tax was thrown out of one of the long since unblocked windows?
Lord COCKFIELD: My Lords, I am most grateful to my noble friend for his excursion into history. The stamp duties are of course one of the oldest and most honourable of our taxes. Their origin lay in the greater ease of taxing a piece of paper, rather than taxing a somewhat elusive individual. The current yield of the stamp duties is of course quite considerable—namely, some £550 million—and my noble friend's suggestion therefore does raise certain difficulties.
Lord MONSON: My Lords, can the Minister say whether the Government have given any consideration to the idea of levying stamp duty not on the purchase of property, but upon its sale, as is done in certain other countries? This considerably helps first-time home buyers, while at the same time it largely maintains the revenue from this tax, which, as the noble Lord said, is considerable.
Lord COCKFIELD: My Lords, this is a suggestion which has been made on a number of occasions. The stamp duty itself is not charged either on the buyer or the seller; it is charged on the conveyance itself. It so happens that because the purchaser is the person who needs to have the deeds, de facto the burden tends to fall on the purchaser. But it is open to question whether if one tried to impose a tax on the vendor, it would not in fact be passed on in the price. However, this is an interesting suggestion, which we have looked at before, and which we shall certainly look at again.
Lord HAWKE: My Lords, have Her Majesty's Government ever considered putting an extra tax on the purchase by foreigners of property in this country? A tremendous amount of property is now changing hands and is being bought by Arabs, Dutch people and others.
Lord COCKFIELD: My Lords, while I am always grateful to receive suggestions, suggestions for the imposition of new taxes are not always particularly popular.

No. 7 GREENWELL STREET HOME OF JOHN FLAXMAN
2.40 p.m.
Lord SUDELEY: 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, in view of the recent interest in the famous neo-classical sculptor John Flaxman, the Secretary of State for the Environment would be willing to issue a direction under Section 149 of the Housing Act 1957 requiring Westminster City Council to consider the possibility of saving Flaxman's former house at No. 7 Greenwell Street.
Lord MOWBRAY and STOURTON: No, my Lords. No. 7 Greenwell Street is in an area in respect of which the then Secretary of State confirmed a slum clearance compulsory purchase order, made by the Westminster City Council, in July 1978. At the same time, he gave consent for the demolition of No. 7 and the other listed buildings in the clearance area. A direction under Section 149 of the Housing Act 1957 would conflict with the council's duty to secure the clearance of the area.
Lord SUDELEY: My Lords, I thank the Minister for that Answer, but may I ask him whether he would not consider it particularly appropriate for a direction to be issued by the Secretary of State for the Environment in this instance, having regard to the fact that at the public inquiry of 1977 the Historic Buildings Division of the Greater London Council withdrew at the last minute the evidence which it had prepared, and the inspector declared that it was outside his competence to judge Flaxman's significance? Furthermore, is the Minister aware that, according to the report of the Community Housing Association, which I have in my hand, the cost of new building in this instance would be one-third more than the cost of rehabilitation?
Lod MOWBRAY and STOURTON: My Lords, I am not briefed to comment on the figures that the noble Lord gave in the last part of his supplementary question,
838
but I can tell him that the application for consent to demolish was, as he said, the subject of a public local inquiry. The inspector found that the listed buildings in the clearance area made little contribution to the locality. He found no indication that No. 7, where Flaxman lived for 30 years, was held in regard by those who could be expected to show an interest. His conclusion that consent for demolition should be given was accepted by the Secretary of State.
Lord COTTESLOE: My Lords, is the Minister aware that there is intense and bitter opposition among those who live in the terraces of listed Georgian houses known as the Carburton Triangle to the proposals for demolition and redevelopment? Is he aware that the full rehabilitation of these houses is feasible, while redevelopment would cost rather more than the figures quoted by my noble friend? Indeed, it is estimated by the local tenants' association that it will cost more than twice as much and will provide little additional living accommodation. Is the Minister further aware that, even if the proposals for redevelopment go forward, it would be perfectly feasible for the house in which Flaxman (who was the outstanding neo-classical designer and sculptor in this country) lived for 30 years to be preserved together with the adjoining houses on either side of it; and, in those circumstances, will he encourage his right honourable friend to prevent this destruction?
Lord MOWBRAY and STOURTON: My Lords, it always gives me great pain to have to say, No, to my noble friend, but I do not think I can give him any such encouragement because, however much there may be a revival of interest, I do not think it could justify the retaining of a house which is not of any great merit, however distinguished the gentleman who lived there. As I have said, consent for this demolition was given as recently as July 1978. In this case the city council have a statutory duty to demolish the building and have this listed consent to do so. It really does not make sense to issue directions requiring the council to consider preservation.
The Earl of GOSFORD: My Lords, is the Minister aware that Flaxman had, and has, an international reputation;

839
that he was at the time considered by the whole of Europe to be one of the greatest sculptors since Michelangelo; and that he was a great influence on William Blake? I would suggest that keeping this house would certainly attract to this country a large number of people who are interested in this man.
Lord MOWBRAY and STOURTON: My Lords, the noble Earl might be interested to know that the Westminster City Council have indicated that they would be prepared to incorporate the present plaque on the new building. But I should like to say that the purpose of listing a building is to ensure that a building of special architectural or historical interest is not demolished without every aspect being examined. There was a full inquiry into this matter, and all the parties concerned came to the conclusion that it was sensible to go ahead. Of the 21 houses, 20 were in a state of total disrepair, and it was only No. 7 which was habitable. The only reason why there has been the delay is the moving of the people concerned who want to be rehoused in that area.
Lord SUDELEY: My Lords, may I ask the Minister whether he is aware that there was a report in The Times on 23rd November that the historic buildings division of the Greater London Council have asked Westminster City Council if they consider that a case could be made for saving Flaxman's house? If Westminster City Council do come to a favourable decision on this, regardless of any direction coming from the Government, would the Minister not agree that this would help to discourage any further attempts in other directions to demolish what is left of Georgian London?
Lord MOWBRAY and STOURTON: My Lords, the Secretary of State is always willing to consider matters when councils approach him, but it is highly unusual, I repeat, for Secretaries of State to be expected to overturn the decisions of previous Secretaries of State after public inquiries. At the moment, so far as I know, the position is that we have not had any request from the Greater London Council or the Westminster City Council to reconsider.
Lord HARMAR-NICHOLLS: My Lords, may I just say, apropos the last answer, that one of the reasons for getting a new Secretary of State and a new Government is that they might reconsider previous decisions.
Lord MOWBRAY and STOURTON: My Lords, one of the happier facts of life in this country is that on matters of artistic taste both parties have very similar views.

THE UNITED KINGDOM AND .ALBANIA: DIPLOMATIC REPRESENTATION
2.47 p.m.
Baroness EMMET of AMBERLEY: 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 prospects there are for an exchange of diplomatic representatives between the United Kingdom and Albania.
Lord TREFGARNE: My Lords, successive British Governments have made clear that they would be glad to find a way round the obstacles which have so far prevented a resumption of relations.
Baroness EMMET of AMBERLEY: My Lords, I thank the Minister for that reply. I think it would be satisfactory if we concentrated on getting a representation there: not necessarily an ambassador, but, anyway, a representative, in what is a key harbour in that part of the Mediterranean and the Adriatic, especially in view of the foreign situation and the rather "dicey" position in the Balkans.
Lord TREFGARNE: My Lords, I would agree with my noble friend that representation at full ambassadorial level might not be appropriate in this case; but I should say that the Albanians have still not paid the compensation awarded to Britain by the International Court of Justice in 1949 in respect of the Corfu Channel incident.
Lord GORONWY-ROBERTS: My Lords, while going along with the Minister

841
with regard to the money owed to British nationals by the Albanian Government, would he not agree that this is perhaps a very suitable time for us to take a new initiative towards restoring full diplomatic relations with this small but strategically vital country in the Balkans, particularly in view of the excellent relations it enjoys with its neighbours to the South, Greece, and to the North, Yugoslavia?
Lord TREFGARNE: My Lords, I would agree with that, but I would make just one point. The noble Lord said that it was money owed to British nationals. It is in fact money owed to the British Government.
Baroness ELLIOT of HARWOOD: My Lords, 1949 is a very long time ago. As events change with such rapidity, would it not really be wise for Her Majesty's Government to start, as the noble Lord, Lord Goronwy-Roberts, has suggested, an initiative, but with the intention of coming to some compromise over the money? My Lords, 1949 is a very long time ago now. Masses of debts have been wiped out since 1949.
Lord TREFGARNE: My Lords, we shall not be inflexible in this matter, but I should perhaps remind the House that in the incident that I referred to 44 British sailors were killed.
Lord DAVIES of LEEK: My Lords, is the noble Lord aware—or, if he is not, he could find out—that we are still owing for the Battle of Waterloo? On this business of the national debt, if anybody owes anybody anything, it is to the British people that these things are owed.
Lord TREFGARNE: My Lords, we are not proposing to re-open the question of the Battle of Waterloo; but with respect to this outstanding matter I have said that we are prepared to be flexible.
Lord ORR-EWING: My Lords, could I press my noble friend a little further? I have visited the graves of these seamen and I know how acutely their relations must feel; but we must remember also that this was at the end of a hard-pressing war in which they, themselves, were making great sacrifices to bring about peace and to avoid a third world war. I cannot help feeling that the initiative
842
should come from the new Government in these circumstances to get in touch with the Albanian Government and to try to resolve this difficulty which has stood between us for too long.
Lord TREFGARNE: My Lords, we shall bear in mind what my noble friend has said.
Viscount ST. DAVIDS: My Lords, will the noble Lord not agree that a very good start in this matter, and possibly the best thing that we can do for the Albanians, is for Her Majesty's Government to declare that we are very willing to join in any "Hands off Albania!" movement; but only if the Albanians wish us to do so?
Lord SEGAL: My Lords, is the noble Lord saying that this matter is the sole reason for our not resuming diplomatic relations? If not, can he give us any reasons why we should not do so?
Lord TREFGARNE: My Lords, I did not say that that was the sole reason. We still have to determine that the Albanians themselves want to establish relations.
Viscount ST. DAVIDS: My Lords, we have not yet had an answer.
Lord DERWENT: My Lords, as we seem frequently to be lending money, free of interest, which we do not expect to get paid back, could we not lend the Albanians the money with which to repay us?
Baroness EMMET of AMBERLEY: My Lords, since we hold in this country some £8 million frozen money of Albania, would it not be easier to settle this matter if we had a representative who could talk to the Albanians than to remain at a distance?
Lord TREFGARNE: My Lords, it is true that there is a quantity of gold held by the Tripartite Commission for Restitution of Monetary Gold. I have no doubt that the Albanians are anxious to have it back.
Viscount ST. DAVIDS: My Lords, would the noble Lord please answer the supplementary question that I put to

843
him, as to whether it would not be a good idea, as a start to any relations and possibly to encourage such relations, to start by declaring our happiness to join in any "Hands off Albania!" movement if they wished us to do so?
Lord TREFGARNE: My Lords, I am not sure what the noble Viscount means by a "Hands off Albania!" movement. We have no designs on that country.
Lord SHINWELL: My Lords, will the noble Lord say what he means when he says that he will bear it in mind? Does that mean he is doing something, or nothing?
Lord TREFGARNE: The noble Lord, Lord Shinwell, has much more experience in parliamentary expressions than I have. I am sure that he knows the meaning as well as I do.

THE CYPRUS DISPUTE
2.53 p.m.
Lord SPENS: 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 have been approached recently by the Government of Greece on the question of the settlement of the Cyprus dispute and if so what reply has been given.
Lord TREFGARNE: My Lords, the Answer to the noble Lord's Question is that there has been no formal démarche or approach. However, the Government are in regular contact with the Governments of both Greece and Turkey, as well as with the parties themselves, about the Cyprus problem.
Lord SPENS: My Lords, will the noble Lord inform us whether the Government are ready to take an initiative now in trying to get the two parties to come together at the conference table?
Lord TREFGARNE: My Lords, the Secretary-General of the United Nations is taking such an initiative and is trying
844
to get the intercommunal talks restarted. The most helpful thing that interested parties can do is to support this initiative. The Government have told him and the parties that, together with our partners, we are ready to help in any way that they would find helpful.
Lord MAYBRAY-KING: My Lords, is the noble Lord aware that the settlement of the Cyprus-Turkey issue would please not only the friends of Cyprus and Turkey in this country, but would be a great contribution to the defence of democracy in view of what is happening in Afghanistan?
Lord TREFGARNE: My Lords, I agree with the noble Lord.
Lord KILMARNOCK: My Lords, further to that, and in view of the abstention by the Government of Cyprus in the United Nations debate on Soviet aggression in Afghanistan and the condemnation of this aggression by the Islamic Conference, including Turkey, at Islamabad, do Her Majesty's Government not think that we should do all we can to maintain our friendship with the Islamic world?
Lord TREFGARNE: My Lords, if the noble Lord is referring to our relations with Turkey, we accept that the importance of Turkey has been particularly reinforced in recent days and weeks and we will do what we can to help.
Lord NEWALL: My Lords, in view of my noble friend the Foreign Secretary demonstrating considerable expertise in diplomatic skills, is it not now time, after six years, that he could probably achieve a great deal in the Cyprus problem which would make a lot of difference in the whole world?
Lord TREFGARNE: I think that I can only repeat what I said earlier. We think that the right course for us at the moment is to give what support and help we can to the Secretary-General of the United Nations.
Lord HAMNETT: My Lords, are the Government aware of the projected move to take people from the Turkish mainland into the empty hotels and apartments of Famagusta and the influence that this has on the rejection of continued negotia-

845
tions between the Greek Cypriots and the Turkish Cypriots?
Lord TREFGARNE: My Lords, we have heard those reports but the Government have no information to confirm or deny that the status quo in Varosha is to be altered. We have made it clear to those concerned that any action which could harm the United Nations' efforts to reconvene the negotiations should be avoided.

GAS AND ELECTRICITY: PRICE INCREASES
2.57 p.m.
Lord STRABOLGI Lord STRABOLGI rose to call attention to the huge price increases for gas and electricity authorised by Her Majesty's Government, which, following the severe cuts imposed on local authorities' expenditure, will fall heavily on all consumers but particularly on the poorer sections of the community; and to move for Papers. The noble Lord said: My Lords, in rising to move the Motion standing in my name, I should like to say at the outset how grateful we are to the noble Lord, Lord Ferrier, for withdrawing the Unstarred Question that be put down for last week on the increased price of gas so that the House could have a full debate today. I am very glad that the noble Lord will be taking part in this debate and I am sure that we are all looking forward to his speech. I understand that yesterday was the noble Lord's 80th birthday. Perhaps we may be permitted on this side of the House to wish him many happy returns. I must say with respect that he does not look it, and we are glad to see him here and full of vigour.
We have put down this Motion to enable the House to consider the huge price increases for gas and electricity that the Government insisted upon earlier this month and to debate these in the context of the severe cuts imposed on local authorities' expenditure.
In real terms, the Government's decision will mean increases of 29 per cent. on gas and 23 per cent. on electricity prices during 1980. The Government have also decided that prices must con-
846
tinue to rise every year for the next three years by 10 per cent. for gas and 5 per cent. for electricity more than the inflation rate. A forecast by the London Business School calculates that within three years gas prices will have increased by more than 80 per cent. and electricity prices by nearly 60 per cent. Indeed, they would double over this period. The rate and pace of these increases, far above the rate of inflation, have caused considerable alarm throughout the country. They will fall most heavily upon the poorer section of the community, particularly on those who used gas because it was cheaper. The higher rates will have a grave effect particularly in Scotland and the North of England where the climate is more severe, and there will be increased risk of deaths from hypothermia.
People whose earnings are below average spend at least 10 per cent. of their income on fuel, light and power, compared with 6 per cent. for the average household, and only 4 per cent. for the richest 20 per cent. of households. The Government have, in effect, imposed a savage extra tax on the poorest consumers and those least able to bear it. Why has this been done? The Government have insisted on higher profit targets than the British Gas Corporation wanted, and the British Gas Corporation have said the increases cannot be justified on commercial grounds. The Price Commission has said that the increases should be phased. Over the next financial year there will be between £200 million to £300 million extra resulting from the increased prices. Is it the Government's intention that this surplus should be paid into a fund to help other nationalised industries, or is it to be diverted for some other purpose? Will the increased revenue from the poorer consumers be used to reduce income tax which will mainly benefit the rich and all those who enjoy large incomes, and who are better cushioned against inflation, such as the £20,000 a year man who received a £2,000 tax-free bonus in last year's Budget?
I understand that the BGC wanted to phase the increases over a longer period to make it less painful for the consumer. Why was this advice disregarded with seeming indifference to the financial problems of many consumers, particularly the most vulnerable?
The National Consumer Council consider that it is essential that price increases are phased in gradually so that the consumers can adapt and plan ahead on a rational basis. It is surely an unwarranted intervention by Government in the commercial dealings of a nationalised board to force the British Gas Corporation to make larger increases than the board wished to make. The Government claim that the enormous increases in the price of gas are to be used to reduce demand, and to conserve a finite source of energy. But it will be those least able to bear it who will be used as the instruments of conservation. As a doctor put it recently in a letter to The Times—and here I quote:
"the old and the poor are to be deprived of heat so that there is more of it available for those who can afford to pay for it. This may be a ' rational ' policy, but it would be difficult to think of one that was less defensible on moral grounds".
I am aware that the present Government have introduced a limited scheme to assist those on supplementary benefits who are over 75 or who have a dependant over 75, and to assist householders on supplementary benefits where there is a child under five. Presumably those pensioners aged 65, who have not yet reached the qualifying age, in ten years' time will not qualify although most will feel just as cold and many householders will have great difficulty in paying their fuel bills. The present scheme helps only 350,000 people at a cost of about £16 million. Labour's rebate scheme helped over 3 million people at a cost of £45 million and helped them with the equivalent of a lump sum when they most needed the money—that is, when the fuel bill was received. The Government should consider urgently bringing in a much more comprehensive fuel allowance than their present one. If this is not done, poor people in particular will suffer severe hardship. The Government stated in the other place yesterday that they are reviewing the whole range of help available to consumers who need assistance. We urge them to introduce a scheme for fuel that is not only humane but also wide ranging and designed to help all those in need.
I realise that supplies of North Sea gas are finite and will not last, unless there are further discoveries, much beyond the end of the century; but would it not
848
be more sensible for the Government instead of rationing by the purse to have a determined policy of conservation and to step up the production of substitute natural gas from coal? I hope that R and D expenditure in this area at least is not going to be axed. There should also be a positive conservation programme and more encouragement and more cash to encourage homeowners to install insulation. Perhaps I may remind the Government that the Tory manifesto said—and here I quote:
"We attach particular importance to measures to reduce fuel consumption by improving insulation".
There was not much said by the Tories at the time of the election about the rationing of essential domestic fuel by the purse. However, I agree with the Government about the importance of insulation. But many people are going to find it difficult to raise the cash quickly to insulate their lofts, or to buy more efficient heating appliances on top of their higher fuel bills. I hope the Government will increase the grants available to help householders under the Homes Insulation Scheme. It is not much good for the authorities to pay a proportion of the cost if the consumer has not got the balance of the money required. The only alternative for many people in the lower income groups will be to switch off and shiver. Surely there should be a more humane way to conserve energy than causing severe hardship to those least able to help themselves.
Part of the surplus money from these fuel increases should be used to finance energy conservation, particularly conservation in the homes of the poorer consumers. I think there is likely to be an increased number of disconnections resulting from the fact that many families will be unable to pay their gas bills. The last Government introduced a Code of Practice for Disconnections, and I understand that this was recently reviewed by the Department of Energy's working party. May I ask the noble Earl, Lord Gowrie, to confirm that the Government intend to continue the code, and will he also give the House some idea how it is working out in practice?
I think the House should have some reassurance on these points, since clearly the poorer consumers are going increasingly to need the code's protection.

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The present Government, which is by far the most reactionary Administration since the war, seem determined to dismantle the Welfare State, which their predecessors helped to build, and to abandon it to the jungle of an uncaring society. These rocketing increases in gas and electricity prices follow increased VAT and the savage cuts imposed on local authorities, all of which will fall heavily on every section of the community, but particularly on the less well off, whether they are young parents with families, the elderly or the disabled.
Since this Government came into power we have seen cuts in teachers and nursery provision; cuts in home helps; cuts in health ancillaries; cuts in meals-onwheels and old people's homes. Free school transport for long distances will be discontinued in many areas, except for the children of parents on supplementary benefit, and added to this charge of several pounds a week the low income worker will have to pay an extra £5 a week for school dinners if he has two children.
On top of all these cuts and high inflation, people will have to endure the highest minimum lending rate on record and all the hardships and difficulties that result from that, particularly for young couples buying a house and for small traders and the owners of small businesses. I sometimes wonder whether the present Government have any idea how most people manage. After only eight months in office, the Government's record on the home front seems to be an almost total disaster. We on this side of the House urge them to step back and consider where they are leading the country, and to change their present policies before it is too late. My Lords, I beg to move for Papers.
3.11 p.m.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, I congratulate the noble Lord, Lord Strabolgi, for the clear and trenchant way in which he has put his case. If I may say this to him, he did rather better than his right honourable friend, Dr. Owen, in another place yesterday, and really he should lose no time in persuading the Shadow Cabinet to take a few more Peers on board !
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He might have put into his speech that his right honourable friend had suggested in his speech yesterday that there should be a minimum rise of at least 17½ per cent. in the price of gas this year; that point was not taken on board by the noble Lord, Lord Strabolgi. I want to answer the noble Lord in some detail about the general cuts issue later in my speech. If the House gives me leave and if it is convenient to the noble Lord, Lord Strabolgi, I should like to deal with his particular points on insulation and the rest when I come to wind up. I am sure other speakers will raise similar points and that will provide a better context.
I know, of course, that price increases of any kind are never welcome, and I do not expect the recently announced rises in gas and electricity prices to be any exception. However, I believe it is most important that the general economic background to the Government's recent statement on the financial targets for the gas and electricity industries should be understood. That is why I welcome the opportunity this afternoon to explain the Government's views on the matter.
We all recognise, and recent events have surely underlined it, that we are living in a world of great international uncertainty over energy supplies and of rising energy costs. In my view, we are facing a decade in which the challenges to our security and way of life may be more acute than at any time since the end of the last war. These dangers have been vividly illustrated recently, in Iran and Afghanistan. The revolution in Iran led to a sudden drop last May in the supply of oil from which the Western industrialised economies have yet to recover. The Russian presence in Afghanistan threatens the stability of the whole Gulf area, from which the Free World draws 50 per cent. of its oil. I do not know whether it is generally known that 50 per cent. of the entire imports of oil of the American economy—that enormous economy of 200 million people—comes from two oil wells in Saudi Arabia.
This is a literally terrifying world in which we are trying to stage our economic recovery. It will therefore be essential, in dealing with the problems of the coming decade that, together with our allies, we try to reduce our consumption

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of energy in general and of fossil fuels in particular. Living in a world of international uncertainty of energy supplies in addition to rising fuel costs, it would, in our view, be grossly irresponsible of any Government not to recognise this fact and not to face up to it.
With oil becoming increasingly scarce and expensive, we are of course relatively well placed in this country, endowed as we are with substantial indigenous resources of oil. But these reserves do not allow us to insulate ourselves from world developments. Indeed, they underline the need for us to make the best possible use of our own resources so as not to bring forward unnecessarily the time when we may once more be dependent on external suppliers. Security of supply is in itself a very valuable asset—at least as valuable as any price considerations out of the source of supply—and it is one which this country must preserve for itself as long as it can.
However, we must not withdraw in upon ourselves. As I said, this is a problem of wider dimension and it affects all the oil-consuming economies of the industralised world. We are working with the nineteen other Member States of the International Energy Agency to reduce demand for oil in the industrialised West. Energy ministers of the IEA expressed their determination in December to work together to restore order and reduce pressures on the world oil market. If we cannot achieve this aim by agreement among the main oil-consuming countries, then an intensification of the economic disruption we had last year is inevitable: it will occur again. We cannot count on the OPEC countries being willing in the future to produce significantly more oil than they are producing at present; so our own ability and that of the non-OPEC suppliers to produce more oil is very limited.
What I am trying to say is that if the Western economies are to grow, oil will constantly become an increasingly scarce resource. We have to face up to the implications of the fact that oil—and leading on into other energy items, also, therefore, gas and coal—are finite resources. We have to face also the implications in the long run for prices of their
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being finite: the implications for rational pricing policies which have a key role to play in ensuring a more efficient use of the world's energy resources. Only in this way can we avoid a scramble for oil of the kind which led to the very sharp and disruptive price increases of 1979 and which could lead to something worse—to an armed scramble for these resources. So it is the Government's intention, and that of our partners in the International Energy Agency, to work together to avoid further sharp price increases. But we cannot, and I believe that we should not, try to delude ourselves that the days of cheap and superabundant fossil fuel will return ever again.
Frequent repetition of the statement that we are living in an era of high energy costs may perhaps have dulled its impact, and your Lordships may find it helpful to have a few reminders of the dimensions of the problems we are facing. Over the past decade, for instance, the price of crude oil has gone up some 15 or 20 times, so that the barrel of oil which could be bought for well under 2 dollars at the beginning of the 1970s costs some 25 to 30 dollars or more by the close of the decade. In the last year alone, the price of crude oil rose by over 100 per cent. in most cases, and further increases have already taken place this year. Indeed, my Lords, since I wrote that paragraph the price of oil has risen by 2 dollars per barrel.
The price of oil affects that of all other forms of energy, both directly, in forcing up the costs of production or generation, and indirectly, in increasing the market value of fuels which are in competition with oil products. Although the last decade has seen significant increases in the cost of all forms of energy, they have by no means kept pace with the very significant rises in the price of oil which I have just outlined to the House. This is partly due to intervention by Government; and I ought perhaps to explain that I am not here making party political points, since successive Governments throughout the 1970s have alternately stepped in to hold down the price of fuel or, on occasion, to bump it up again. So the process of price increases in the last decade has been characterised by a series of fits and starts—sudden jumps followed by periods of relative stability. This has undeniably proved

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confusing to consumers, as well as damaging to the industries themselves, since the real trend of energy costs has not become apparent and consumers have had no basis upon which to plan rationally for the future, for instance in the choice of alternative fuels or in evaluating a potential investment in energy conservation. We cannot escape entirely from this situation, while OPEC and the world market continue to determine the level of oil prices in a similarly erratic fashion. But what the Government can do, and have done, is to give consumers a clear indication of their intentions and of the likely trend in fuel prices, in so far as it relates to matters within the Government's power to control.
Returning to the question of the high energy cost era, although I have illustrated the force of this description by reference to the price of oil, consumers of other fuels have not experienced the same direct impact of rising energy costs. Looking back again over the past decade, to the era of presumably low energy costs before the events of 1973 and subsequently, we find that the price of fuel for domestic consumers has risen only very slightly more than prices generally; it has roughly kept pace with inflation. Indeed, in some cases, the rise has been slower. Domestic gas, in particular, on which the noble Lord, Lord Strabolgi, concentrated, has fallen in price by over 30 per cent. in the past decade, as compared with the rate of inflation, while consumption of domestic gas has, as one would expect, risen fourfold. So in the case of gas, many people have actually experienced, in this world of high energy costs, falling real energy prices.
Indeed, when taken along with the general rise in living standards over the period, most people will have been well placed to cope with the price rises of the 1970s in this area. Pensions and benefits have comfortably outstripped both general inflation and the rise in fuel prices during this period. The proportion of an old-age pension required to pay for a given quantity of gas has, in fact, fallen by half. Even after the increase in gas prices just announced, the real price of domestic gas will not be above its 1970 level, while real income will, of course, have shown considerable increases as against that basis.
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I hope that the House will bear these points in mind when considering the recently announced price increases. I readily accept that the increases involved will be substantial; but when set against the events of the last 10 years, and in particular against the 100 per cent. increase in oil prices last year alone, they can, I think, be seen in slightly better perspective. Against this background, it will be seen that the reality of high energy prices may not really have conic home to all of us. It would be a tragedy, in our view, if this concealed from us the need to husband our energy resources and treat them with all the care they deserve. A sensible energy pricing policy is essential for a balanced energy conservation policy.
It may be more helpful if I were to set out briefly, in a little more detail, the background to the Government's decision for each fuel. I shall deal with gas first.
The situation may require more explanation to people here, in the light of the Gas Corporation's high level of profitability. I should perhaps explain that in some ways the Corporation's apparent profitability may be misleading. First, the profit does not at present stem from domestic sales. In the current financial year, British Gas expects its domestic gas sales to do no more than break even, as was mentioned in the Price Commission's Report of last July. Virtually the whole of its forecast profit—which is expected to be close to last year's figure of £360 million—will come from sales to the industrial and commercial markets. In earlier years, by contrast, domestic sales had contributed their fair share towards the Corporation's overall profitability. The increases in the 1980–81 domestic tariff make a modest contribution only to the overall profitability of BGC in that year, with a greater contribution thereafter over the financial target period.
Secondly, in large measure, the level of British Gas profits stems from the very favourable price at which at present it purchases a large proportion of its supplies under contracts which were, in fact, negotiated some years ago. But gas from newer contracts from now on, which will form an increasing proportion of its supplies over the coming years, is several times more expensive; because it is more expensive to get gas from the northern waters of the North Sea than it is from the

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southern waters of the North Sea. What I am saying, therefore, is that the level of BGC's profits is not the best guide to the prices which it should be charging. There are a number of other factors to be taken into account, in both the long and the short term. In the short term, a sensible approach to pricing is essential, as I said earlier, to keep supply and demand in balance.
Noble Lords may have heard of the "flight from oil", which took place last year in response to oil price rises and supply uncertainties. Against this background, there arose a situation where British Gas was not competing for customers, but customers were competing for gas. So economic pricing is the only way to ensure that the available supplies are distributed fairly, without recourse to arbitrary rationing or the risk of ever-increasing supply shortages. That is why we have endorsed the British Gas Corporation's policy of selling to industrial and commercial markets at a price which is broadly related to that of the competing oil product. The price of domestic gas should also be set at a proper economic level, to ensure a balance of supply and demand as between all gas consumers, and to avoid the risk that supplies will be diverted to the domestic consumer from the industrial customer; the industrial customer being prepared to pay the proper cost. When the price of gas to the domestic consumer is too low, this also increases the risk of shortages and supply cuts on cold winter days.
There is also another consideration, and one which should appeal to noble Lords opposite and to the Labour Party generally. There is an important consideration of equity. I would remind the House that not everyone is fortunate enough to have access to a gas supply. Under-pricing of domestic gas benefits those who have gas—especially those who have been able to make use of it by installing gas central heating—at the expense of others who may not have access to gas, or may, through no fault of their own, be locked into some other form of heating. So economic pricing is essential to secure the benefits of North Sea gas for the nation as a whole.
I have seen it argued that in setting the target for British Gas the Government are interfering with free market pricing.
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In fact, the reverse is the case. If a free and competitive market for the supply of gas was in existence in the United Kingdom, prices would already have risen to at least the level now proposed. The price to the consumer would have risen to the price charged to the industrial customer. What British Gas, with the monopoly advantages it enjoys, may prefer to do with price levels is quite understandable, but it is no reflection of the real market situation where demand so exceeds supply that thousands of customers are, at the moment, queueing to be connected. So let there be no misunderstanding that this Government are artificially pushing up prices. What we are doing is progressively phasing out artificially low domestic gas price levels and bringing them up to something approaching the true market value. If the noble Lord, Lord Davies, and others do not believe me, let them take my text to the noble Lord, Lord Kaldor, and the noble Lord, Lord Balogh, tomorrow and ask them whether that is not, in fact, the case.
Lord DAVIES of LEEK: My Lords, will the noble Earl please give way? I hate interrupting; I have done my utmost not to. Will he explain to me how he hopes to help British industry, particularly the pottery industry—which uses gas for firing in our domestic efforts to gain markets overseas—by these prices? Could he not have evolved a differential system of gas prices to help British exports?
The EARL of GOWRIE: My Lords, it is exactly because there has been an unfairly differential price between what the British pottery industry pays for gas and what domestic consumers pay for gas—and consumers are using up gas at a rate of knots—that is probably causing the difficulties to that industry which the noble Lord mentioned. What we are doing, as I said, is progressively phasing out artificially low domestic gas price levels, and bringing them up to something closer to their true market value in relation to world energy costs from which, as I have argued, we cannot afford to isolate ourselves.
This is not just the Government's view. All recent studies have shown that gas prices to domestic consumers need to rise. As I have said, the right honourable gentleman, Dr. David Owen, said yesterday that they would have to rise. Even

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the Price Commission last year concluded that the price should be higher, in real terms, by 30 to 35 per cent. So the Government have a clear responsibility which, unlike their predecessor, they have not ducked, to correct the present unsatisfactory situation. But we do recognise that price increases must be phased in gradually and we have not attempted to make up all the shortfall in one go. Instead, we have proposed a phased programme of increases over the next three years, and the point of doing it over three years is to give consumers a chance to adjust to the situation and take it into account in their planning and their budgeting.
With electricity, the same broad considerations of economic pricing of course apply. Electricity is produced mainly from fossil fuels and its price must reflect this, both in order to enable the industry to make a proper return on its assets and to provide for its future investment programme in order to cover the cost of the fuels involved.
I recognise that there are substantial increases, as I said at the beginning, although, as I also pointed out then, I believe that the dimensions ought not to be exaggerated. I want to close by saying that I am also fully aware of the problems that adapting to higher energy prices will cause for many consumers, and I share noble Lords' concern especially for the situation of the old and the poor. But there is no solution to the situation of the old and the poor in general price restraint. That would be inefficient and wasteful, helping the rich along with the poor. By making resources available to those who do not need them, you are depriving those who do need them of the possibility that those resources could be more effectively used elsewhere.
The proper way to provide help in this area, as the Government have done against a very difficult public expenditure background this winter, is to concentrate a worthwhile degree of help where it is most needed. I admit to the noble Lord, Lord Strabolgi, that fewer people are benefiting this winter than those who collected discounts—including people who did not really need such discounts—under the previous Government's scheme, but it is worth stressing that this winter the benefit, which is £50, is big enough to make a substantial dent in the heavy
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winter quarter's bill. It is seven times larger than was the average amount of help the previous winter.
As I told this House a fortnight ago, the Government will take proper account of the cost of energy in their social policies and in determining benefit levels, particularly the level of extra heating additions. In this way, the most vulnerable groups will receive valuable protection. In addition, we are reviewing the whole range of help available to assist consumers with their fuel bills. I am not in a position today to forecast to the House what will be the outcome of the review, but I can assure noble Lords that the special needs of the old and the poor will be taken into account. The purpose of our announcing these price increases now is that they will not come into real function until next winter.
Let me sum up briefly, in the clearest and most straightforward way I can. The reason why these unpopular price rises are to take place is that the nation cannot afford to encourage people to burn up a scarce energy resource by means of the Government subsidising that resource by maintaining its price below energy market levels. Nor can the nation afford—this is only another way of saying exactly the same thing—the losses to the Exchequer which this kind of subsidy involves. Gas is a national, indeed a nationalised, asset. Selling it cheaply denies the nation the value of that asset, and in a way which is particularly unfair to other energy users.
However, in a caring society subsidies are, of course, necessary. They should be directed towards those who need them. The best way to insulate the poor, the elderly and the disabled from high energy costs, if that is what society wishes to do, is to enable them to pay the price for energy. The worst way is to subsidise across the board. That insulates everyone from the realities of the world we live in, a world in which energy is dear and food is dear and a world, in the Western economies, in which labour is dear.
Like all Governments, we loathe taking unpopular decisions and decisions which lose us votes, but the central platform of our claim to government is the need to restore this country to a sense of economic reality—to hid the sleeper awake. Unlike

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our opponents, we are not frightened about the capacity of the British people to deal with reality, to face its difficulties and to take hold of its opportunities. What we dislike and despise is the politics of evasion. A lot has been said in the debate, and more will be said, about compassion. Compassion and caring have nothing whatever to do with evasion. Compassion is not something you do on borrowed money, on "tick", or on credit. We are determined to protect in every way we can all those who cannot help themselves. We invite everyone else to join us in the real world where things cost what people will pay for them, where livings have to be earned and where rewards and incentives are available. There is no credible alternative. Whatever argument there may be between us in Parliament about the scale, or the timing, or the presentation of such things, these are just the packaging, and I believe that all of us know it.
Lord KALDOR: My Lords, before the noble Earl sits down, may I ask him a simple, factual question which arises out of his remarks, the answer to which he may or may not be able to give me but which will have a considerable bearing on the subsequent discussion? The noble Earl made considerable play with the fact that, in the case of gas, domestic consumers are being specially favourably treated, as against industrial consumers. Does the noble Earl know what the figures actually are? I am looking at the latest issue of December 1979 of——
The MINISTER of STATE, MINISTRY of AGRICULTURE, FISHERIES and FOOD (Earl Ferrers): My Lords, I think that the noble Lord is extending the bounds of his question. He is down to speak later on. To ask the noble Earl a short question is one thing but to read from a document, when he is down to speak later, is another.
Lord KALDOR: My Lords, may I, then, ask the noble Earl what is the price per therm to the industrial consumer as against the price per therm to the domestic consumer?
The Earl of GOWRIE: My Lords, I will take advice on that question and give the answer to the noble Lord when I come to wind up.
3.37 p.m.
Lord TANLAW: My Lords, we are very grateful to the noble Lord, Lord Ferrier, for withdrawing his Question and for allowing this debate to take place. May I also say that we on these Benches would like to add our congratulations to him on his birthday. Those of us who listened to the debate yesterday in another place must have been struck by the very poor attendance it attracted. I feel that the social conscience of Members of another place is rather thinly spread. That is not the case in your Lordships' House. Your Lordships have given a great deal of support to the noble Lord, Lord Strabolgi, in what I believe will be a much more deep-rooted debate than that which took place yesterday.
My party voted last night against the Government, mainly because of their poor presentation of these gas price rises to the public and their apparently uncaring manner about the way in which they could affect those who are less well off. We also felt that there was no provision fur proper conservation measures as a result of the increased income which is hound to accrue to the industry concerned. Furthermore, there seemed to be inconsistency in some of the Government thinking and in their relationship with the chairman of the Gas Board.
The right honourable Minister's Statement on the new pricing structure for gas and the 29 per cent. increase specified indicates a far wider change in Government policies than at first is apparent. The gas policy announced by the Government appears to reflect some confusion of purpose in my view, for the new price rises, as with all fuel costs, are a discriminatory form of indirect taxation, made on this occasion in the name of conservation. Furthermore, these prices will affect most those members of the community least able to pay because they do not pay income tax, due to insufficient income.
This new kind of taxation by the public corporations would be much better presented as part of a Budget speech than as a Statement from the Department of Energy, because the surplus profits are absorbed by the central Exchequer and have not been put aside for an energy loan fund, for instance, or for any other means of promoting a conservation policy.

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A sum has already been mentioned by the noble Lord, Lord Strabolgi, for insulation measures.
The other argument used relating to the timing of the announcement was the need for the conservation of the gas reserves in the North Sea. Regrettably, I do not feel that this argument stands up to investigation, because there was no statement by the right honourable Minister for Energy about a general depletion policy. By that, I mean that there was no mention of any change in the attitude towards the flaring-off of gas, nor was there any indication of a review of the pricing structure for the oil companies to pursue exploration for new gas fields in the northern sector and to continue to exploit those gas fields that remain in the southern sector. It must therefore be difficult, if not impossible, for the Minister to know for sure the full extent of our gas reserves and for how long gas will be available for both industrial and domestic use. Indeed, one of the spokesmen for the Government in another place spoke about 50 or 60 years' gas available, so there seems to be a wide span of opinion as to how much gas is available. Perhaps the noble Earl will be able to clarify this in his winding-up speech.
There was also reference in the Statement to strict financial disciplines for the gas and electricity industries, but again there was no mention of how the capital structure of these corporations was to be reorganised in order that they may be assured of the capital funds available for their future investment programmes. This applies both to gas and electricity. Yet there was a very precise target set of 9 per cent. for the expected return on capital, which is exactly five times the target the Minister has set for the electricity industry; and we must ask: on what basis does the Minister set these targets, and why does he make this distinction between one industry and another? Again perhaps the noble Earl can enlighten us.
I now return to the possible hardship areas caused by the increase in prices and for clarification as to how the Minister intends to alleviate the position of those least able to absorb the new price increases in both gas and electricity. The new allowances announced with the Statement are presumably—and this has been con-
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firmed by the noble Earl—to assist the needy and will amount on average to approximately either just under £50 a year or 95p a week. The categories which will benefit from this extra allowance are those over 75 years of age and those with young children under the age of five who are claiming social security benefits. It was these same categories of people, living in all-electric flats or who relied on space heating or overnight domestic electric storage heaters, who went out to buy paraffin heaters after the recent increase in electricity prices. It is our concern that this situation may be repeated with similar families who are using gas appliances for space heating in poor housing areas. The Minister must understand that it is the elderly and the very young who are most vulnerable to accidents from the misuse of paraffin heaters, and therefore will the Minister make it abundantly clear, through his Department and through all the means of publicity available to him, that it may not be cheaper to use paraffin heaters to compensate for the increase in gas prices.
I can only tell the House that my first reaction after the announcement of the price rises was that 95p a week could be better spent by using paraffin heat and not gas; but after consultation with the Department of Energy I believe that this could be a false economy and in fact the paraffin heater will give less heat for 95p a week than a similar gas convector heater of the same capacity. So I think there is some urgency for the Minister to make this information more readily available, because I still believe that gas is a good buy.
People have spoken about hypothermia as a result of high energy prices to the elderly and to the poor. I think we should look at this somewhat differently. I believe the statistics available of accidents by fire should be looked at again because my concern is that people do not die from hypothermia; in order to keep warm they huddle closer to the fire which they have turned down. I think there is a danger here which we should try to prevent, and safety measures should be issued by the department at the same time as they are issuing their economy measures. From these Benches I say that I think we should look very carefully at statistics of accidents in the home, especially fire accidents in poor housing areas, in order to see whether there is any connection

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between them and the increase in energy prices.
One of the most disturbing aspects of these price increases is the admission by the Government that the excess profits of the Gas Corporation will not be put aside in a special fund for the benefit of the energy industry and its consumers or to promote conservation, but will be absorbed by the central Exchequer. The £2 million to £3 million a year that will be raised through these extra charges will be mainly at the expense of the poorer members of the community, as has already been said; but will the Government therefore consider the propositions put forward by the chairmen of the nationalised industries, that a separate system of funding should be used by those industries to ensure that their capital programmes can be implemented and that their industries can be run along businesslike lines, as the noble Earl has been telling them to do, to face reality?
For a Government who are committed to a policy of what they call "market forces" it would seem a sensible and logical step for the nationalised industries in the energy sector to be freed from the present restrictions on their borrowing requirements. This leads me on to inquire from the Government the policy regarding intervention and non-intervention. Can the Minister clarify the present position, which appears to be that if a nationalised industry is unprofitable the Government do not interfere, on the basis that it is a bit "dodgy"; and if an industry is profitable then the Government interfere in a most abrupt manner——
The Earl of GOWRIE: My Lords, since it will be a long time before I wind up this debate and the noble Lord is making this point perhaps he will allow me to answer it right away. All Governments interfere with nationalised industries all the time by setting them financial targets. This procedure was initiated by the last Government; we have decided to continue it. It is very worthwhile and sensible and it is a form of interference. It is the only way in which a monopoly industry can, as it were, imitate the conditions available in free competition.
Lord TANLAW: My Lords, I am grateful to the noble Earl for interposing
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those remarks because I am coming on to that subject. I have already asked on what basis these financial targets are made. It is not clear to me, and I am sure it is not clear to a lot of other people, because there appears to be a clear division of policy and of purpose in the treatment of the energy industries and other industries outside. The leaders of the nationalised industries are clearly worried that the cash limits already set for 1980–81 could be cut back, and this must needlessly create internal problems for the industry concerned on income account, while their capital programmes still remain equally uncertain.
In spite of what the noble Earl has said, it is difficult to understand the position of the Government with regard to their relationship with the chairmen and boards of the public utilities. What is the point of these corporations establishing a link through their Consumer Councils with their market and attempting to run their businesses—to use the Government's phrase—"within strict financial disciplines", while at the same time not being allowed to manage the price structure of their market? I believe that this attitude by the Government to the energy industry is based on a total incomprehension of how a business of any kind operates. We have already had the example of the steel industry having been brought to its present condition mainly as a result of constant Government interference. The concern I feel is that similar interference could reduce the highly profitable energy industries to the same level of disarray due to mismanagement and misguided interference by Government and their departments.
This might be a good opportunity to get another clarification from Her Majesty's Government on the terminology which they use with regard to the running of energy industries. I have made reference to market forces, which used to mean the price obtainable for any product in the open market, and consumers of the gas and electricity monopolies have learned to their cost that this does not apply. The noble Earl touched on that in his speech. That is because their costs are being affected by matters from outside this country, by political events in the Middle East, by the pricing policy of OPEC and not by the laws of supply and demand on the home market, namely, market forces. There-

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fore, how can the Minister for Energy be so sure that he can predict the future price rises for the next three years without that information? Does he have special access to the conclaves of OPEC? Can he control events in Afghanistan? I do not think he can, although I may be wrong. But perhaps he is not basing his prices on events outside the country, as the noble Earl has specified, but is basing his pricing in the gas market on some other matters. Please, can he advise us on what basis this price structure is established?
There is one more expression which I think we must just develop—"strict financial disciplines". That phrase would normally refer in a business context to considerations of cash flow and capital expenditure. Within the context of the Department of Energy this would imply that the income is dependent on Government policy and not market forces, and the profit available to the industry concerned is not retainable for capital expenditure purposes but is merely an added source of revenue for the Exchequer. I believe there is a difference here between monetary policies and money-grubbing policies and I have a feeling that the Government are running a money-grubbing policy which conies under the guise of conservation, economy or whatever.
If the chairman of a commercial organisation were not given the authority for pricing his products, or retaining profits for capital expenditure or distribution, he would be unable to fulfil his duties. Yet this is precisely the position in which the chairman of a nationalised industry board finds himself today. They have no proper control over pricing, capital or profits, and, therefore, as far as I can see, they might well be tempted to take up midweek golf instead of attending the office. The present policy of the Department of Energy has brought the role of the chairmen of the energy industries to a head. What is it to be? Are they to become government servants again without any pretensions to responding to so-called market forces, or are they to be allowed to get on with their job of supplying energy to the consumer at the best possible price and the price least likely to add to inflation? These questions cannot remain unanswered much longer. Who really sets the price for energy to the consumer? Is it the chairmen of the gas and electricity industries or is it the Department of Energy?
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If it is the department then on what basis, I keep asking, is this price worked out?
My Lords, this finally leads me to the lack of a depletion policy for the gas industry in the North Sea, and it is relevant to some of the comments the noble Earl has made. Some further clarification is needed immediately as to the Government's attitude towards the flaring off of natural gas by the oil companies. The present price structure gives no incentive to the oil companies to prevent this wasteful process where up to one-third of the total gas available to the housewife and to industry is going up in smoke. It is a matter of some urgency that the Government allow the Corporation to renegotiate this policy with the oil companies concerned. I fully realise that this will slow down production of oil, and this is why a definitive statement from the Department of Energy is required as to what they consider to be the right rate of oil depletion from the North Sea field. I suspect that once again the Treasury is insisting that the present rate of extraction of oil from the North Sea should be maintained simply to satisfy the annual balance of payment deficits, which bear no relation to a sound energy strategy for this country.
It must be pointed out that by maintaining this policy the Government are reducing the amount of gas available to the consumer at a time when the demand, as the noble Earl said, is exceeding supply. Yet just the opposite situation exists for the supply of oil; it is still possible to import heavy crude from the Middle East, and demand for oil is falling slightly at home. This trend may continue for the next three years, even if some of the least pessimistic forecasts for the economy prove to be correct. The situation five years from now is very difficult to predict, when supplies of heavy crude from the Middle East could be very seriously interrupted. But only then will the United Kingdom need to use the maximum from the North Sea fields.
I see no point in achieving so-called self-sufficiency, as the Government is proclaiming, this year. It must make much more sense to retain as much oil as possible in our own fields in the early part of the 'eighties, in anticipation of further and greater interruptions in supply later on in the decade. I see no point at

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all in achieving self-sufficiency in 1980 or 1981. Both these goals can be achieved in some of the ways that I mentioned in the hope of opening up this debate so that further questions can be asked of the Government to clarify their position. We on these Benches are quite confused as to where the Government think they are going, and the reality which the noble Earl talked about is not apparent in the Government's policy.
3.54 p.m.
Lord JACQUES: My Lords, hitherto gas and electricity have been classified with housing and food and have been regarded as essentials to the consumer, and have been free of VAT. But now we are to go to the other extreme and have what in effect is a special tax on gas and electricity. While I have no doubt that the need for equalisation of fuel prices and the need for conservation of energy have been important questions in the Government's reasoning, I do not believe that they have been the overriding considerations. I believe that the overriding consideration in the Government's reasoning is the need, as they see it, to reduce the public sector borrowing requirement, the PSBR, and consequently I am going to devote my time to that particular point.
To get at the Government's reasoning one has to go back to some of the political shorthand that was used at the time of the election. They said, "There will be free collective bargaining, but if wages settlements are too high we will not print the money". That did not mean, of course, that when a joint stock bank ordered currency from the Bank of England to be charged to its account the Bank of England would say, "Sorry, we are not printing today". That would be default by the Bank of England, and in due course default by the joint stock bank to its customers, and no British Government would contemplate that. That piece of political shorthand could only have one meaning. It meant that if the wage settlements, in the opinion of the Government, gave rise to business increasing the demand for money the Government would take steps to reduce the demand for money elsewhere, so that additional money had not got to be printed. That was the real meaning. Here you have an
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example par excellence. The Government view the wages settlements as too high, as attracting too much money, and consequently they are going to reduce the demand for money elsewhere by reducing the PSBR.
My Lords, we talk a good deal about Governments controlling the supply of money. No British Government attempts to control the supply of money. They could not do so without involving the possibility of default by the Bank of England. What Governments do is to try to control the demand for money, which is a different thing. In controlling the demand for money they have three principal instruments, and the difficulties into which this Government have got themselves are due to the fact that they are using only two instead of three of the instruments available to them.
The first and obvious instrument in the control of the demand for money is for the Government to control their own demands by reducing the credit they require which in due course will reduce the money required; in other words, to reduce the PSBR. This, of course, has a number of disadvantages. It clashes with the unions in the Civil Service, because much of Government money is spent on wages. Even in the case of increases in the price of fuel there will undoubtedly be clashes with the unions in the energy industries. The Government's philosophy is that increases of wages can only be paid when the profits are there to pay them. Consequently in the next round of wages the workers in the gas and electricity industries are going to say, "Well, there is plenty of profit available now. What about the workers having a bigger share of the profits? "Consequently, even in this case there will be some clash with the unions.
Attempts to reduce the PSBR also bring clashes with sections of the public. Either their services are reduced or alternatively they have to pay higher prices for the services which they receive, and there are objections to that. But, in this case, the Government have a very excellent answer, "Oh, it is due to the need for conserving energy. It is not due to the need to reduce the PSBR, it is due to the need for conserving energy." They have an answer which they think will satisfy the public. In the first place a reduction in the PSBR

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adds to prices. It is estimated that in the period from mid-1979 to mid-1980 Government action in reducing the PSBR will have increased the retail price index by 3 per cent., and that is even before we consider the increases which are now proposed for gas and electricity.
The second instrument which the Government have for controlling the demand for money is the minimum lending rate. Clearly, if the minimum lending rate is high it will reduce the demand for credit and, in due course, reduce the demand for money. However, it also has a number of serious disadvantages. First, a high rate of interest increases the costs of industry and hinders our competitiveness in exports. It inhibits investment, and investment is the surest way to achieve increased productivity which the Government say they want. Furthermore, a high rate of interest attracts money from overseas to this country and that increases the lending base of the joint stock banks and their subsidiaries. Consequently, they are in a position to lend more money, and not less, because of the increase in their funds by the inflow of money due to the high interest rate. That inflow of funds strengthens the pound and the strengthening of the pound makes our exports dear and our imports cheap.
Therefore, the use of the MLR is extremely damaging to the economy. It also makes an immediate addition to prices. It is estimated that from mid-1979 to mid-1980 the higher rates of interest charged will have added 1·75 per cent. to the retail price index. We see a good example of that when we look at the mortgage rate.
The third instrument which is available to any Government for controlling the demand for money, is an incomes policy—either statutory or voluntary—because an incomes policy will reduce the demand for money by industry. The Government decline to use that third instrument which is available to them. Instead, they depend upon the other two and their use of them has to be heavy-handed. Free collective bargaining which the Government are using instead of an incomes policy, means that Government-induced inflation is perpetuated in the future. For example, in the period mid-1979 to mid-1980 it is estimated that Government policies will increase the retail price
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index by 8·5 per cent.—3 per cent. due to their policies in trying to reduce the PSBR; 1·75 per cent. due to the high interest rates; and a further 3·75 per cent. due to the increase in VAT. That makes a total of 8·5 per cent., almost one half of the present rate of inflation.
Government-induced inflation of that kind does not end there. When there is free collective bargaining all trade union members expect their negotiators at least to try to maintain their standard of living. That is part of human nature. We would all do that; we do not need to be on any side of politics to take that view. Consequently, the rate of inflation at any point of time in wage negotiations, when there is free collective bargaining, is a paramount consideration. Therefore, if the Government by their policies have induced an increase in the retail price index of 8·5 per cent., they can expect that 8·5 per cent. to be perpetuated in wage claims in the following year and successive years. So Government-induced inflation, like we have now, is something which affects us not just for one year but for successive years because of the philosophy of free collective bargaining.
Lord ROBERTHALL: My Lords, I very much agree with what the noble Lord is saying about incomes policy, but it would help if he could explain how this Government could carry it through when the TUC turned it down as regards the last Government.
Lord JACQUES: My Lords, we had, indeed, a statutory incomes policy when the last Conservative Government were in power. An incomes policy can be either voluntary or statutory. The real point is that this Government did not wish to work with the TUC. If they had gone to the TUC in a spirit of cooperation, instead of a spirit of antagonism, there could probably have been an incomes policy.
Viscount MASSEREENE and FERRARD: My Lords, forgive me for interrupting——
Lord JACQUES: My Lords, the noble Viscount may speak when I have finished. I shall finish my speech. Of the three instruments which are available for controlling the demand for money, as I have

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shown, the first two—that is, a reduction in the PSBR and use of the MLR—add to inflation. An incomes policy is the only instrument available to the Government which does not add to inflation, but that is the policy which the Government have cared to ignore. Granted, it could be said: All right, when the incomes policy is at an end the floodgates are opened. However, there is one way of dealing with that situation and that is to make it a permanent incomes policy.
It is also said that incomes policies are inflexible and that they handicap the skilled, whose differentials are reduced. The cure for that is to make such a policy flexible. What this country needs—and it will make no real progress until it gets it—is a permanent but flexible incomes policy. By "incomes policy", I mean an incomes policy and not just a wage policy. There would have to be some control of profits. However, I would not call for the reinstatement of the mechanism that we had under the Price Commission. I would be satisfied with a much simpler way of dealing with the question of excess profits. We need to revise our corporation tax so that the tax is related to the amount of capital which is employed in the business. Moreover, we need to have a graduated rate of tax so that excess profits are caught by the tax. I believe that that is a sensible and easy way of dealing with excess profits and one which would be acceptable to the trade unions if there were negotiations on an incomes policy.
It has never been any part of my socialist philosophy that the wages of any sector of the community should depend upon their ability to disrupt the economy and inconvenience the public. That is the opposite of socialism, and many on this side of the House have no room for such a view. Our sympathies are with the school-leaver who at present cannot get a job. Our sympathies are with the poorly paid, the people who have had an increase of something less than the going rate, who will nevertheless have to pay these increased fuel charges but will not have the wherewithal to pay them and consequently will have to switch off. That is where our sympathies lie.
In conclusion, I should like to say that I believe it is becoming abundantly clear
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where the Government's policies are taking us. In the short run they are clearly adding to inflation; in the middle term there are clear indications that their policies are going to bring great hardships on the country by unnecessary unemployment and bankruptcies; and in the long term they are going to give this country the most Left-Wing Government it has ever had.
4.11 p.m.
Lord FERRIER: My Lords, first I should like to thank noble Lords who have spoken for referring to the withdrawal of my Unstarred Question last Wednesday. Despite my belief in the importance of the Unstarred Question, I am certain that it is better that we should have a full-scale debate of this nature, although I must say that the last speaker has made it go a little wider than I had originally thought. I should like to thank noble Lords who have congratulated me on my advancing years. I shall not conceal from your Lordships that I turned to the 90th Psalm and saw the 10th verse. It says:
"….if by reason of strength they be fourscore years, yet is their strength labour and sorrow".
I only hope that my speech is not going to be labour to you, though in a measure it is sorrow to me, as you shall hear, in that I seem to have been striving for many years to improve the availability of power for domestic space heating with absolutely minimal success.
Thanks to the fact that a great deal of water has flowed under the bridge since last Wednesday much has been said, much has been written, and much has been printed about the subject, and there has been an interesting correspondence in the Press. It enables me to concentrate on only one facet of this fairly wide-ranging subject. I accept straight away the basic thesis that it has turned out that gas prices have been too low and that conservation must be the order of today while mankind searches for alternative sources of energy. I have listened with great interest to Lord Tanlaw's speech on the problem of what to do in the next few years. I contend that within this strategic framework the Government have their tactics wrong.
Looking back over the years I recall that in my maiden speech I pleaded for better care for domestic heating for the aged and infirm. In those days added to the problem

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of ignorance as to what assistance was available, we had to face the pride of folk who were too proud to apply to "go on the parish", as they called it. This was overcome in great measure by substituting for "National Assistance" the words "Supplementary Benefits" which are much more acceptable in the eyes of old people.
What is more, in twenty years people have come to accept that the State wants to protect them from hardship, but the problem of ignorance remains. Too many people, aged or infirm, overworked mothers with young families beset by the problems of inflation, do not know of all the assistance which is available to them; nor do many of them know what they can do about it. I have had the benefit of discussing this problem with a busy and hard working health visitor who confirms that this is so; people do not know. One has only to read the Hansard of yesterday's debate in the other place, and the Government's published statement of interest, to realise that this is appreciated. But what is being done about it? That is what I ask.
There are two things which should be done at once. First of all the steep—as this Motion says "huge" price increases—measure of increase must be abandoned for a much more gradual acceleration. Surely the Department of Energy can temper the wind. Why do I say "must"? It is because looking back over the years the public in the lower income groups have been disappointed far too often for this final blow to be acceptable. For instance, what about the excellent and economical electrical appliance, the night store heater? Purchase tax taken off; a massive advertising campaign; expanded manufacturing facilities; off-peak equipment, wiring and the like applied; all crumbling in dust and ashes when, thanks to the rise in the cost of coal, off-peak tariffs increase fivefold. No fault of the apparatus; no fault of the consumer.
Then came the gas expansion, to which reference has been made. Quite the most efficient medium of distributing thermal energy. More advertising; more encouragement to domestic capital expenditure; more Government financial assistance to increase consumption and add to equipment. Now look; blow after blow on the meagre resources of the
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average householder. What about house insulation?—regarding which your Lordships gave much valuable time and thought, and passed a Bill during the last Government.
I do not know how many of your Lordships have seen a couple of Questions for Written Answer which show that some applicants have been unable to obtain any money in grants because their local authority's funds have run out. Admittedly the Government have undertaken to see if they can help by distributing funds which are available from local authorities who have not spent all their allocation. I wonder whether they can.
In my view, this series of blow after blow is sufficient excuse for the energy department to go slow; certainly at first, and far slower than they presently plan. "Beginning in April" they say; the "incidence will not be felt until the autumn". Will not it just! As I think the noble Lord, Lord Strabolgi, pointed out, parts of Scotland and the North can have frost and snow in May and June, and it may be a real hardship if this 17 per cent. increase is to be applied in April.
To return to my health visitor, she got me these folders from the Post Office. They are obtainable from civic centres and the like. But—now I come to my point, and it is a very big "but"—many of those who need help, many of those who would apply if they knew how, cannot get to the civic centres, especially in rural areas and areas of wide distribution. I understand that health visitors and district nurses are not in a position to collect applications or to overlap into the social security side of looking after the aged. I think that the meals-on-wheels people are in the same situation; they are unable to assist. They can advise but not assist over the getting of these supplementary income benefits. They are all available if people are able to apply for them. There was a letter in The Times on the 23rd from a Mr. Posner, who said:
"If the effect on the locked in consumer of gas amongst the poorer families is judged a problem, it would be just as right for the Government to face their responsibilities for spending more on the social services as it is right for them to face their responsibilities in the field of energy".
The large sums which are likely to be clawed back should in some measure be

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used to further a programme of this sort. I think the noble Lord, Lord Strabolgi, was in error in saying that the Welfare State had been abandoned. The party to which I belong is part of a caring society and it is wrong to say that because we are not Socialists we do not believe in society. I vividly remember seeing the Chancellor of the Exchequer in an interview on television when he was asked why he went into politics. After a pause he said, in effect, "It is because I am deeply concerned about the welfare of the society in which I live and I find myself in a position to do something about it". That applies to me and, I believe, to all noble Lords on this side of the House.
I welcomed the noble Earl's assurances at the end of his speech in regard to the measures which are to be taken to deal with the problems to which I have referred, and, regarding strategy, this is not the occasion to go deeply into that. As for the problem to which the noble Lord, Lord Tanlaw, referred and to which the noble Lord, Lord Hammett, referred in a short intervention when we had exchanges last Wednesday—the problem of the need for an overall strategy for energy—that need has come out in our debates, including a debate which the noble Lord, Lord Strabolgi, and I had on domestic heating in 1978, when it was pointed out that, although it might be an ideal solution, it would take a long time before anything could be done to merge the whole thing together. By the way, what has happened to the Energy Commission which the Minister for Energy in the last Government spoke of?
Lord STRABOLGI: It has been done away with, my Lords.
Lord FERRIER: My Lords, at least there was a spark of something which I and perhaps the noble Lord, Lord Tanlaw, had in mind. We are faced today with today's situation, which is not of this Government's making. It calls for energetic and well-directed action by the energy and social services departments, so what do the social services staff intend to do about it? Will there be a fuel rebate scheme? Perhaps, in view of what the noble Earl said, this is in mind; and I hope it is.
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In my maiden speech, referring to a lady who was concerned with benevolent work, I said she had found that house visitation was the only real way of getting to the bottom of some people's troubles. I urge the Government to bear that in mind when, as I hope they will, they tackle this problem of letting the poor people know as soon as possible what benefits are available. That is the challenge—and let it be met with alacrity. I close with a quotation from the prologue of a poem:
"The toad beneath the harrow knows
Exactly where each tooth-point goes;
The butterfly upon the road
Preaches contentment to that toad".
I appeal to the noble Earl to ensure that he and his friends down the corridor do not adopt an attitude which emulates that of Kipling's butterfly.
4.25 p.m.
Baroness STEDMAN: My Lords, I am grateful to the noble Lord, Lord Strabolgi, for the very able way in which he moved the Motion, but I must confess that the very competent Ministerial brief from the noble Earl, Lord Gowrie, did nothing to allay my perhaps unworthy suspicions that these sudden price increases in gas and electricity are mainly because the Government are having difficulty in balancing their books because of the overgenerous tax concessions to the better-off in their last Budget, and that they are perhaps hoping that this penal increase will help to pay for those concessions.
British Gas did not ask for these increases, neither have they asked for further increases over the next two years. Indeed, only six months ago the Prime Minister herself vetoed any increase in gas prices for domestic consumers. Yet now her energy Secretary has swung right to the other extreme, against the advice of the Gas Corporation, by doubling the price over the next three years. One could be cynical and say that perhaps we should take heart in that the Government can do a U-turn, even if this time it is in the wrong direction.
British Gas is already expected to make nearly £500 million profit this year and, on the Government's own estimates, next year it will make between £700 million and £800 million, and by 1981 it could make £1 billion. As the noble Lord, Lord Strabolgi, said, the poorer

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people spend a greater proportion of their income on fuel and power than do the better-off, so this increase is really regressive against the poorer sections of the community.
The Government seem to accept that we have to live with high cost energy and will make economies in its use only when all the fuel costs are roughly the same, and the Energy Secretary himself said on Friday that the only alternative to raising the price was rationing. What is this but rationing by price? The Government have not even been fair in setting their targets. The target rate of return for gas this year is given as 9 per cent. after allowing for inflation, which is something like five times as high as the target for electricity, according to the Statement given to this House on 16th January.
Maybe there is an economic case for saying gas is too cheap. Maybe there is a case for saying North Sea gas resources should be preserved and conserved by some form of price mechanism. But I have yet to find an ordinary voter who can understand why, with inflation at over 17 per cent., the profits of a very profitable corporation should be made to rise by another 29 per cent. And even less does the ordinary man or woman understand why the price must leap ahead of the market force of inflation for another three years. The Government are inconsistent. They avow that the steel dispute is none of their concern and that no more money will be forthcoming, whereas with gas they are interfering like mad, ordering the industry to increase its prices over and above what the industry thinks either necessary or justifiable.
One must ask: if gas is worth preserving, then surely our steel industry is also. The difference seems to be that saving steel will cost money, while saving gas will raise revenue. If the Government can intervene in British Gas, they should also intervene in the steel industry.
The Government are proposing to grab back the huge surplus from British Gas, and, as I have said, most people will suspect that it is to help to pay for the tax concessions to the better off. I believe that there is an unresolved doubt as to whether Ministers even have the power to control the prices in the nation-
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alised industries. The Select Committee, in its report on nationalised industries in 1968, certainly had such a doubt. Can the Government simply grab the Gas Corporation's surplus, or that of any other nationalised industry?
Part of the case for such a disquieting rise in the price of gas and electricity is conservation, but it is a very crude way and a very cruel way of enforcing conservation, and the poor, especially the elderly poor, cannot possibly stretch their meagre budgets to meet increases of 29 per cent. in gas and 23 per cent. in electricity. If many elderly people are not to suffer from hypothermia, they will have to go without the other basic necessities of food and warm clothing.
Conservation must be achieved, but it must be achieved with a degree of humanity. I believe that if the Government are foolish enough to go ahead with this costlier fuel policy, they should at the same time introduce better and much wider schemes for discounts and rebates for the poorer families. I join my noble friend Lord Strabolgi in asking them to do this and, at the same time, restore and increase the insulations grants to enable people to establish modern and well-insulated heating systems.
What has happened to the "Save it" campaign, which was launched by my noble friend Lord Lovell-Davis and his colleagues some years ago? Are we perhaps committing too much to new sources of supply, such as power stations, which generally yield less energy and employ fewer people than saving would do? The Department of Energy has scrapped a pilot project setting up centres in the regions to advise on the insulation of homes. It would have cost a mere half a million pounds a year, and it could have played a very important part in conservation. The Department of Industry had a £25 million programme to help insulate business buildings and to improve boilers in buildings. That was widely expected to be extended after June, but I understand that the department has now said, No.
The Manpower Services Commission paid groups of people to insulate older persons' homes and help them to get grants. This was financed by the STEP project, but that budget has been cut by half. The Department of the Environ-

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ment—my own old department—is putting forward new proposals in building regulations for increasing energy conservation. These proposals will stipulate only three-inch insulation for roofs, though the Department of Energy has for a long time been pressing for four inches of insulation. One can only ask: Do not the two departments or their Ministers ever get together and speak to each other?
I have spent 30 years in local government in a shire county, where the administration has been streamlined and where there is no fat left to prune. In my county of Cambridgeshire, notwithstanding still more drastic pruning of the personal social services and education, the county rate is going up by 19p, or 21·8 per cent., and the district rate is going up by 3p, or over 14 per cent. The owners of business premises will pay the full amount, and even with domestic rate relief, householders will pay a combined county and district rate of 111·5p in the pound. On top of that, the water rate is going up by 6p, or 28 per cent., to 27p in the pound—that is a total of 136·5p in the pound for householders to find.
What about the Government's statutory obligation to provide education and ensure that all children receive it? With cuts in school transport and increase in the cost of school meals and transport, how are parents to be able to afford to send their children to school? In the rural areas the transport costs alone will cripple many household budgets—and add to that, my Lords, the increased VAT, inflation that is running at over 17 per cent., increased prescription charges, and extra charges for home helps, meals-on-wheels, and care at day centres. Where will the average working class family find the money for necessities; and do the Government still hope that wage claims will be moderate?
What about cash limits and local authority budgets? What increase orders are going to be made, and what cash limits lifted in order to meet the increases in the price of gas and electricity? Or are these increases to be found by a further round of cuts and increased charges for services?
What about the pensioners and those on low fixed incomes? The recent pension increase has already been swallowed up
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by inflation and higher prices and charges. These are the people who do not benefit from the tax cuts for the better off. They just go on making do and mending and providing, through VAT and other charges, the wherewithal to give the tax rebates to those who are richer. Is that fair Does it create anything like a just society? Is it really a sign of a caring society—which was referred to by the noble Lord, Lord Ferrier—to abrogate the responsibility for looking after the frail, the handicapped, and the elderly, as well as the children in our midst? If this kind of economic and fiscal policy is pursued by the Government, the only people who will be able to afford to vote Conservative at the next election will be those who can afford to pay for the cuts.
The Tories complain about vandalism and about the anti-social behaviour of our young people, yet they have actively encouraged it. Youth unemployment has increased, and young people are being denied their educational opportunities and recreational facilities. The Manpower Services Commission has predicted that the number of unemployed youngsters under 19 will be almost double by 1982, to 478,000. Yet the Tories have cut the Youth Opportunity Programme by £25 million, and have cut another £42 million from the STEP programme. They have cut discretionary awards; they are not going on with any mandatory grants to the 16 to 18 year-olds who are still studying full time——
The Earl of GOWRIE: My Lords, I am most grateful to the noble Baroness for giving way. I do not see what this general issue of public spending has to do with a debate on energy costs. That is my first point. The second point that I would put to the noble Baroness is as follows. Her party was in Government for 11 out of 15 years during which time the poor in this society became progressively poorer and more and more people who could afford to jumped on the wagon of the Welfare State, which is exactly why we are in the pickle we are in today.
Baroness STEDMAN: My Lords, the points that I have raised come within the terms of the Motion that is before us today, which is looking at the rises in gas and electricity charges in the light of the local authority cuts that have taken place

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under this Government. My Government, when they were in power, did as much for the poorer people of this country as any Government have done. It is the idle hands and the idle minds of the young people that encourage them to get into mischief, and the only answer that the party opposite has to offer is a negative one—a short, sharp shock for young offenders. I say to Her Majesty's Government, if they will accept a word of warning, that if they go on like this, it will be the Conservative Party that will get a sharp shock at the next election, and it will not be a short one!
I now return to the question of Government interference in the price of gas. Is it really their policy to do this; and, if so, can the noble Earl say whether they will be prepared to intervene with North Thames Gas Board? The Beckton development in Newham Council district has been dealt a savage blow by North Thames Gas, which is refusing to supply gas to non-housing developments at Beckton unless they are within 25 yards of an existing gas main or will use no more than 25,000 therms a year. Only three years ago North Thames Gas gave assurances to the council that it was confident that there was sufficient spare capacity to serve the proposed development, which is the largest as yet in Dockland. The Newham Director of Engineering has now told his council that the
"lack of gas could well be the last straw in turning industrial developers away from Beckton".
The Minister referred to the fact that we must have some consideration for those people who are not near a gas supply, but Beckton is; some of that development will be very little more than 25 yards away from a main. Not only would new factories not have gas, but schools, community centres, and shops would also suffer. I thought successive Governments had been anxious to see Dockland redevelopment, and I hope that the noble Earl will take this up with his department and perhaps be able to intervene and authorise this supply for Beckton. If they can intervene on the price of gas, then I am sure they can intervene on the supply to a development like the one envisaged.
My Lords, for years we have argued, in successive Governments, about the need for a national fuel policy. It would
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seem that we have now got one: simply to make fuel as expensive as possible. They want to conserve stocks by making it expensive enough to deter people from using it, and with this we are all supposed to agree. That is exactly what OPEC said when they blasted up the price of oil. We did not agree with them when they did that, and we are really being no better now than the oil sheiks were at that time. I believe that many voters are becoming disillusioned. Some 13½ million—many of them misguidedly, in my view—thought it worth voting Conservative at the last election, to cut costs by being efficient and by letting people make their own choice. Certainly great play was made of these two points at the time of the election when the party opposite was touting for votes in May. Some of those 13½ million must be very disillusioned and extremely disgruntled by now.
Perhaps I may end on a slightly lighter note. My local newspaper mulled over the derivation of the word "expert"—those people who advise Governments. They decided that "X" was an unknown quantity, and "spurt" (wrongly spelt, I will admit) was a drip under pressure. My Lords, 10 or 15 years ago, when the potential of North Sea oil and gas was being realised, the experts led us all to believe that there was plenty of gas just around the corner and that is would be cheap. They all led us to believe that. Today, 10 or 15 years later, we know that neither is it cheap nor is there as much of it as we were told at that time. Perhaps that was just the experts talking.
Viscount MASSEREENE and FERRARD: My Lords, before the noble Baroness sits down, may I point out that she said in her speech that the increase in the price of gas was 29 per cent. But that is spread over 3 years, and, of course, in that period——
Several noble Lords: No!
Baroness STEDMAN: My Lords, the increase in April is to meet inflation, and then, in October, it is to go up by another 10 per cent., which makes 29 per cent. in this year.
Viscount MASSEREENE and FERRARD: My Lords, I think the increase in wages, though, will be more than that.

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But, of course, the Government have said that they are going to look after the old people, so I do not really see——
Baroness STEDMAN: My Lords, the trade unions would be delighted, I think, to hear that wages are going up as much as that. The steelmen would be.
4.43 p.m.
Lord ORR-EWING: My Lords, may I first apologise to the House in that I have to leave at 5 o'clock because I need to attend Lord Shinwell's all-party Defence Committee, which is being addressed by the Secretary of State for Defence. I will of course return; so it is not discourtesy if I do not sit here for the next speech from the opposite side. I should like to start by congratulating the noble Lord for the manner and the succinctness with which he introduced this debate. He was only 13 minutes, which I think is currently a record, and I hope to match him.
I also noticed that the Opposition were rather more moderate in their wording, as behoves an Opposition in the House of Lords. There was rather less dramatic phraseology, in that they talked about "huge" price increases. In the other place, when I went to listen to the debate yesterday, the Motion said "savage" price increases, with a "devastating effect" on the cost of living. I imagine that the wisdom of your Lordships' House, and the fact that they do not have to try to score cheap political runs, made them more moderate in their phraseology, because they also have a much greater regard for honesty and truth, I hope. In fact, the effect on the cost of living is that in the current winter these price increases will not affect it, because the first price increase comes into effect on 1st April. That will put ·25 per cent. on the cost of living, and the one in October will be ·16 per cent.; and, of course, from the point of view of the consumers, it will be spread as gas bills are submitted over the next three months. So it is a total of ·41 per cent. Of course, for the needy it is serious, but it is not a tremendous increase compared with some of the other increases that one has had to face.
It has been suggested from the Opposition Benches that this is something outrageous that has never been done
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before. Have they forgotten that Eric Varley put on 28 per cent. in one tremendous hike, bang in the middle of the parliamentary year, in March? Of course, it was slipped in by means of a Written Answer, so no one actually noticed it at the time and we did not move votes of censure and say dramatic things about the situation being serious and devastating, about hypothermia, and all this. Have they also forgotten that there was an increase in the price of gas by 10 per cent., announced, again, as Parliament rose for the Christmas Recess in 1976—when, incidentally, there was pressure from the IMF to reduce the public sector borrowing requirement? Have they not noticed that when the Gas Corporation applied to the Price Commission for an 8 per cent. increase they were given it forthwith? Furthermore, the Price Commission, not normally given to these viewpoints, said that the price increases should be between 30 and 35 per cent. more. That is not a recommendation which comes lightly from a Commission not normally prone to advocate bigger price increases. Of course, the fact of the matter is that there have been increases over the years in the price of both electricity and gas. I recognise that.
I want to concentrate on the gas side, because electricity prices are geared so much to the cost of coal, which is geared so much to the cost of the miners' wages and their earnings, and is related to absenteeism and a whole lot of other questions concerning productivity; and, of course, it is geared to the price of oil. I think the noble Baroness who has just sat down went rather far to suggest that we were the sheikhs and were hiking up the price of oil. We do not influence the price of oil; we just follow, rather reluctantly, the world price of oil.
Baroness STEDMAN: My Lords, will the noble Lord give way? Perhaps I did not make myself as clear as I should have done. I said that the 29 per cent. increase now in the gas price could be likened to the tremendous increase that the OPEC countries introduced. We did not complain about that; we had to accept it. But we are now complaining about this.
Lord ORR-EWING: Yes, my Lords, but I would point out that the price of

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oil has increased 100 per cent. in the last year, and that this is 29 per cent., so the oil increase is much more serious.
I am going to concentrate on gas and on the half which is taken up by domestic consumers. That percentage, by the way, will increase according to the forecast by the Gas Council. If noble Lords will read their very well prepared and thoughtfully prepared report for the current year, they will see it shows that they are expecting domestic consumers to take 60 per cent. within the next four years. Incidentally, according to yesterday's debate the price was 20p a therm for domestic consumers and 28p a therm, now being negotiated, for industrial consumers. I say that in answer to the point put in an interruption by the noble Lord, Lord Kaldor.
I am rather surprised myself that the Opposition chose this particular subject, more especially because it was debated down the corridor yesterday. I wonder whether we get the best, both in publicity and in additional information, by having debates two days running on exactly the same subject. But I thought, mischievously, that they probably could not find another subject that would not leave them either open to quarrels within their own party between the Marxist wing and the social democrats or might conceivably force them to state their policies in this direction. Here is something on which they could just attack and try to forget the past of which I have tried to remind them.
Of course, these increases should have been undertaken, like so much else, before they left Government after 11 years during the last 15, but it was put off, again like so much else, in the interests of not alienating any further voters. God knows!, enough voters had already been alienated judging from the electoral results of which the noble Baroness reminded us after the agonising strikes last winter and the trade union and pickets' behaviour. One of the many tasks when this Government came to power was to consider—and this is one of the factors, one of the reasons for this price increase—the tremendous increase planned in the public sector borrowing requirement. It has now been recognised that they had planned for £4 billion more than could possibly have been absorbed by the economy.
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I say this because the noble Lord in starting this debate kept saying that there were cuts here and cuts there and cuts elsewhere; but they are not cuts. They are cuts in what was planned in all the areas by the Labour Government. Why did the Labour Government do this? Were they so ignorant? I do not believe that; they were well advised and are not without some very clever people. They did it because they assumed that there was going to be a 3 per cent. increase in the productivity and output of wealth-creating industry. What made them think in the run up to a general election that there would be a 3 per cent. increase in our GNP? Certainly, it was not on past performance. In the last five years, the increase averaged 0.3 per cent.—one tenth of what they were planning to happen that year. On that basis they said they would increase this, and increase expenditure here and there, and increase local Government expenditure. They have since recognised—and Denis Healey has said this—that there would have had to be reduction in the public sector borrowing requirement to the amount of £4,000 million.
They had the great advantage, in making plans on a totally false assumption, that they could then turn round and say that the unthinking and hard hearted Tory Government are now cutting this, that and the other—none of which is a cut. I am sure that the noble Lord who introduced the debate does not want to use his words inaccurately. They are cuts on what was planned by the Labour Government and not cuts in what they would have achieved.
Lord KALDOR: My Lords, I am grateful to the noble Lord for allowing me to intervene. Most of the public expenditure cuts represented an increase in charges for services which had already been provided for a long time, but provided without charges. They imposed charges of all kinds, the increase of charges for prescriptions, for this, that and the other which are not charges. You cannot say that this is a reduction in Government expenditure planned. It is not even a reduction in Government expenditure; it is a concealed increase in regressive taxation.
Lord ORR-EWING: My Lords, I do not agree with the noble Lord. I did not

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make the point that, as a result of the comparability commission and other machinery, they had already put in the pipeline huge increases in many cases in the salaries and earnings of public servants. These have now come through. If money is absorbed for increased pay, then you must cut other services. The Socialist local governments have been all too keen to cut the welfare services for poor people and the children's services rather than to cut their own staff and save money in that way.
I take serious note of two points. The British Gas Corporation in its report, to which I would draw the attention of noble Lords, set out on page 18 the financial standards. It says that it greatly regrets that the Labour Government only gave financial targets for one year ahead, when the White Paper on national expenditure set out the suggestion that at least three years should be set down by Governments in respect of financial targets. Then a Select Committee the year before sitting on this matter, and chaired by a Labour chairman, Mr. Russell Kerr, who is not known to be at the extreme right of his Party, and with a Labour majority on that committee, also recommended that the Government should give financial targets for three years ahead. Unfortunately, the Labour Government, I think for electoral reasons, gave one year ahead and no more.
Now, Her Majesty's Government have done this for reasons which I think the average person would understand if only the Government of the day could get their message across. I am grateful in that respect for this added occasion. Perhaps through the admirable speech which my noble friend Lord Gowrie made from this side this message will begin drip by drip on stone gradually to get the message across. I support this because I think it is done as part of energy policy, for reasons which I believe to be most sensible. It does not pay to have one source of energy artificially cheap. I think it has been done so that the domestic consumers (whose share of total gas is going to increase, as I stated) do not have to face a swingeing increase in prices at a future date—because, at some time, sooner or later, we must pay for the more costly gas from the northern parts of the North Sea and for imported gas. Algeria is now
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negotiating to double the price of the gas that she sends to us. Now that we no longer are self-sufficient in North Sea oil-produced gas we are going to have to pay bigger prices and it is only prudent to spread the increases over a period. It is done also so that the Gas Corporation can go ahead with large capital programmes. I would mention that their planning is for £450 million a year in capital expenditure over each of the next four years. That is very substantial. It is also to store gas, to bring gas from Morecambe Bay and to undertake the fresh exploration which the noble Lord mentioned.
We are running out of cheaper resources and running out of the period where there was a fixed-price gas contract at very favourable terms. It was done, too, because I think it wrong to encourage people to invest in gas fires, gas appliances and gas cookers and then say to them later, You may have spent hundreds of pounds on hire purchase contributions, but now we are going to increase the price of gas"—because of all the factors I have mentioned.
I support it—and this is a point I should like to stress—because there is associated with this policy a policy of compassion. My noble friend Lord Ferrier spoke of this. I am a Tory for the same reason that he is, and for the same reason as is the present Chancellor of the Exchequer. It is not because I believe intrinsically only in private enterprise but now, realistically, in a mixed economy. But it is desperately important to create the wealth first before distributing it to those who are most in need. It seems that the noble Baroness who has just sat down, gives us all hard hearted faces and pretends we do it for the love of it. We are doing it because we want to get the financial control of the country and the economy in a system where wealth is being created and where we can then begin to benefit those in need. I would stress that the Government in another place have promised a scheme which will concentrate the financial help—and in larger amount than the financial help possible under the Labour Government's electricity scheme, which was a failure and which cost £4 million a year—on those most in need; those who are old and poor and those with large families.

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Finally, I would support the noble Lord who started and the noble Baroness—who I may say was just as sweet and effective from these Benches as she is vituperative from the opposite ones. I have no doubt that she will become quieter and more conciliatory as she matures on those Benches—in saying that I believe that the insulation of houses is a really essential part of the saving of energy of our country.
4.59 p.m.
Lord KALDOR: My Lords, I should like to begin, unexpectedly perhaps, by paying a tribute to the Government of the noble Lords opposite. They certainly have not lacked courage in introducing a whole host of measures which are bound to have a highly adverse effect on their popularity. In fairness, one has to admit that they did not shirk such measures even when their main impact was likely to fall on their own supporters, as with mortgage rates. But no previous measure in the field of taxation or prices or wages or interest rates has given rise to such a universal chorus of criticism from all sides as has the Statement of the Secretary of State for Energy on the future of electricity prices in the coming year and in the following three years.
One need only look at the letter columns of The Times or the commentaries of people like Mr. Searjeant in the Sunday Times or Mr. David Wood in The Times—neither of whom could be described as being antagonists of the present Government—or read in Hansard of the other place (I am referring not to yesterday's debate but to that on the original Statement)the numerous interventions by Back-Benchers on the Government side to realise that criticism on this occasion has reached well beyond its usual boundaries and penetrated deep into Government territory, if I may use that phrase. This, in the view of several commentators, was partly because of the unfortunate way in which the matter was presented by the Secretary of State for Energy.
At this stage, if your Lordships will allow me to do so, I should like to introduce a personal note. I was Mr. David Howell's supervisor when he was an undergraduate at Cambridge. He was for two years at least my favourite and
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most promising pupil who duly ended up with carrying off the top first of his year in the Economics Tripos. Since then our intellectual paths have diverged markedly—a development which showed an independence of mind which one can only respect. It is therefore with considerable reluctance that I find myself, not for the first time, having to criticise him in the same way as if he had written an unsatisfactory essay which marshalled the arguments in an inconvincing and faulty manner. Having said that, I must also confess that I am not impressed by those critics who argue that he made the worst of a good job—implying that the case for Government proposals is in fact much stronger than he made out.
The major weakness of the presentation—and I am sorry to say that the noble Earl was inclined to follow the same line this afternoon—was in listing no fewer than five reasons for increasing the price of gas. It is always a bad thing to list a number of causes for taking a certain action. It implies that one is not confident that any one of them will stand up to examination and is thus driven to seek safety in numbers. However, when in a particular case any one of the arguments looks weak, listing them and adding them together does not make the case any better.
I shall not detain the House with a detailed point-by-point critique of each of the reasons presented. Suffice it to say that some of them at least are so poor that the case would have been a great deal stronger without them. For example the argument—which the noble Earl repeated this afternoon—that low prices,
"concentrate the benefits on those who have access to gas supplies at the expense of the rest of the population",
looks distinctly shady when it is remembered that 15 million households have the benefit of gas supplies and fewer than 5 million are without. The argument about conserving supplies for future generations also looks dubious, as Mr. Enoch Powell observed,
"when we cannot know what the circumstances of those future generations will be".
For all we know, as a result of an atomic war—which looks less improbable this week than it did last week—there may be no such generations to enjoy the benefits.
Again, the argument that the marginal costs will rise when present supplies are

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augmented from the new North Sea fields does not justify price increases now in anticipation of such future events. That is not how free markets operate. Last but not least—and this is the main point—the argument about the risk of supply cuts due to excessive peak demand and the need to achieve a proper balance of supply and demand as between domestic and industrial customers does not imply, as the Statement suggests—and this point was emphasised by the noble Earl—that:
"some form of arbitrary rationing and the risk of ever-increasing supply shortages"
are the only alternative to a "stiff increase" in the price of gas to domestic consumers. The Secretary of State himself emphasised that it is the marginal cost which matters in this connection; and the marginal cost to consumers could be raised to any desired extent by the time-honoured method of a two-part tariff (which some people call a "two-tier" tariff) without the need of an indiscriminate levy affecting all consumers.
As it is the "stiff" rise in the price serves two distinct purposes. One is to deprive consumers of a certain amount of money in the same way as by the imposition of an unavoidable tax, and thereby reduce their power to consume, not just gas, but goods in general. The other and legitimate purpose is to make gas less attractive in relation to competing forms of fuel, such as electricity.
The case for the second objective looks greatly exaggerated when one examines the figures. Though one could hardly guess it from the tone of the official pronouncements, the low price charged to domestic consumers has increased the proportion of total gas supplies consumed by domestic users in the five years from 1973 to 1978 by only three per cent.—that is, from 44 to 47 per cent.—whereas in the case of electricity, where industrial consumers are greatly favoured at the expense of domestic consumers, the proportion of domestic consumption fell by only three per cent.—from 40 to 37 per cent.—over the same period. (All these figures are from the latest monthly issue of Energy Trends, which is an official publication of the Department of Energy).
The resulting difference in the share of domestic consumption—37 per cent. for electricity, 47 per cent. for gas—is in itself not nearly large enough to justify
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large increases in gas prices—this year, next year and the year after—as a means of reining back consumption. But whether or not it is so justified, this objective could perfectly well be satisfied by a tariff which charged a high price above a certain basic standard of consumption, but which left the basic cost unchanged. At present I understand that the average annual consumption of the 15 million gas-using households is 550 therms a year, or 137½ therms a quarter. It would be perfectly easy to adopt a system already in force in many other countries, including such paragons of capitalist virtue as Japan—where they have not only a two-tier but a three-tier system—under which a lower price is charged for a certain basic consumption—say, the first 150 therms a quarter—and an appropriately higher price, which could be 30 or 50 per cent. higher, is charged for consumption in excess of this amount.
This would avoid the consequence described by the Director of the National Consumer Council—to which the noble Earl has already alluded this afternoon—
"The old and the poor will be deprived of heat so that there is more of it available for those who can afford to pay for it".
It is for this very reason that I fear such a solution is unlikely to commend itself to Her Majesty's present Ministers, for it is likely to produce the very opposite of the results which they seek—it would reduce economic inequalities instead of increasing them. Rightly or wrongly, our present Ministers believe that the way to national salvation lies in making the poor poorer and the rich richer.
A noble Lord: No!
Lord KALDOR: They have set about the task of reversing the major historical trends of this century and intend to dismantle the Welfare State. I very much agree with what my noble friend, Lord Strabolgi, said on this point: they are only at the beginning of this process. The Chancellor and other Ministers have repeatedly asserted that the cuts which have already been made are only a foretaste of things to come. They have set about this task with a verve and determination which stand in sharp contrast to the policies followed by all other industrialised Western countries. Indeed, one has to go as far as Chile to find a contemporary

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parallel for such a systematic attempt to favour a wealthy minority of top people at the expense of the majority of the nation's citizens. But, in bringing about higher productivity or increased prosperity, the Chilean experiment under Pinochet, however much it may excite the admiration of at least some noble Lords opposite, was a failure and not an example to emulate.
To return to the Government's proposals, these extend to electricity as well as gas, but none of the arguments used for gas justify raising electricity prices by 25 per cent. when gas is increased by 29 per cent. I suppose electricity had to be included because misery loves company—it would have been unfair to leave it alone. Yet it goes a long way to offset the Government's declared objective of giving incentives for the use of electricity in preference to gas.
Indeed, there is some justification for encouraging the use of electricity from a long-run point of view, since we shall be wholly dependent upon electricity, whether generated by coal or nuclear fuel, after the supply of oil and gas is exhausted. That is bound to happen some day, even though the day may be far more distant than is now estimated, since we do not know how much more gas and oil will be discovered in the future. But, as Keynes said:
"In the long run we are all dead".
I may add that he said those words long before the atomic bomb was thought of.
A further argument which finds support with the Prime Minister and with some noble Lords on various Benches around this House is that because oil was made so dear at the behest of the Arab sheikhs, it is our bounden duty to economise on energy in all its forms, in fairness to other countries, which are not so lucky as we are in possessing a lot of coal as well as a lot of oil and natural gas, if for no other reason. But does this argument really hold water? Thanks to Nature or to the Almighty, but very little to the policies of successive Governments, this country is in an almost unique position of facing the prospect—alone among major industrialised countries in the world—of being more than self-sufficient in energy, if not for ever at least for many years to come.
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That being so, our natural comparative advantage should lie in the development of energy-intensive industries, in the same way as our comparative advantage was in iron and steel and the heavy industries based on coal in the nineteenth century. We should go in for this and leave other countries which have little by way of indigenous fuel supplies—countries such as France, Japan and Germany—to concentrate on branches of activity which require comparatively little energy. But that would require a complete reversal of our present policies; it would require us to expand our steel capacity instead of shrinking it so drastically, and it would require us to subsidise coal, gas and even oil to industrial users in this country, instead of using the oil and gas as new sources of taxation for the Government.
The question which the Government need to answer is why they do not subsidise coal in the same way as our partners in the European Community. It would ensure a medium-term demand for coal, the lack of which may cause a shrinkage in the coal-mining industry for which this country would have to pay dearly later on. It would also serve to offset the uncompetitiveness of much of British industry caused by the prevailing high exchange rate and would, incidentally, go a long way towards solving the problems which beset the steel industry.
5.17 p.m.
Baroness GAITSKELL: My Lords, I should like to congratulate my noble friend, Lord Strabolgi, on the excellent speech he made in starting this debate. I shall be very brief because, following my noble friend Lord Kaldor, I feel rather inferior. I am surprised that the noble Earl, Lord Gowrie, should be so complacent about the sharp increase in gas prices, for no good reason except that the Conservatives seem still enamoured of the short, sharp shocks which they like to impose on the country. This shows a great divide between the political parties, and it was made very clear by the remarkably good debate in the other place yesterday, and by the excellent contribution on the Labour side in this debate.
The short, sharp shock extended to the most vulnerable of poor families. The true champions of the family have abandoned them, it seems, because no one

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goes on more about the family than the Conservatives. Some rise in gas prices is understandable and the British Gas Corporation are aware of this, and they know that any gas increases must, or should, be phased out. The Labour Party, with courage, slowed down gas prices, always bearing in mind the poor families and the pensioners, because 60 per cent. of pensioners are known to have their homes under-heated. Everyone knows that these rises are thinly disguised taxes.
The great divide between the political parties is shown up through their individual ways of dealing with the recession. Is that surprising, when the heroes of the Conservatives are the monetarists, Sir Keith Joseph and, in the United States, Milton Friedman? They are the messiahs of the monetarist movement. I am deeply agnostic about these economic messiahs. Their policies lead people only to the human scrap heap and create mountains of unemployed people. I do not believe that there is a great future in their recommendations or their policies and measures and the fact that this Conservative Government revere them fills me with doubt about any propositions that they put forward. I do not believe that any country can prosper today with measures that multiply unemployment. That is as much as I want to say on these issues.
5.21 p.m.
Lord LUCAS of CHILWORTH: My Lords, one of the nice things about following the noble Baroness, Lady Gaitskell, is that one can always congratulate her upon the sincerity of what she has to say, even if one does not necessarily agree with it. The noble Baroness is always sincere in what she has to say. However, I should like to turn from the more intricate subject of the debate to the rather more ordinary.
My first criticism of the Government's actions with regard to gas and electricity is the appalling presentation of their case, with the probable exception of the opening speech of the noble Earl, Lord Gowrie, this afternoon. But he went so fast that I shall have to read the report of it tomorrow, to see whether that should be the exception. Certainly, people outside Parliament do not understand why these rises have to be
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made, and made in the manner in which they are being made. I find that the marketing of this idea is quite appalling. The people whom they employ in public relations should look to something in this connection, but certainly not to their laurels.
Also, I find it quite extraordinary—and I certainly have not heard any explanation—that Her Majesty's Government feel fit to interfere in a nationalised industry, in as direct a matter as pricing. So often one hears questions asked in your Lordships' House and the Minister answers quite blandly, and I think quite fairly," Ah! This is for the management or the executive of the industry to answer and we do not interfere." But when it suits them, the Government apparently can. If there were an energy commission—and I think it was my noble friend Lord Ferrier who spoke about this—then one might feel that there was some justification for Government interfering in what can only be called the domestic affairs of an energy producing industry. So I find that strange. When the British Gas Corporation has not asked for this kind of increase and may well have wished to act in a different way, I find it even more odd that it has been over-ruled.
The noble Earl gave explanations which were rather complex, but I do not think it is fair to liken the Electricity Board to the Gas Board, to BNOC or to any other board, because the accounting systems in the public sector industries are totally different. One cannot draw fair comparisons and, therefore, a number of questions that are asked—for example, where does the surplus revenue end up?—can never be satisfactorily answered. So even if one accepts in good faith what the Minister has to say, or indeed what the Government say elsewhere, there remains a sneaking thought outside that the truth—at least, the whole truth—is not being told.
I can certainly accept, although I do not remember it, that from the end of the First World War up to the beginning of the second this country adopted policies of cheap food, cheap energy and cheap wages and we were shielded from the real effects of the world. So be it. But bit by bit during the post-war years, and for a variety of reasons, cheap food and cheap energy have disappeared. Cheap wages still remain, and I think that this is a

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tragedy. Cheap wages are not just the amount of money we are paid. It is a question of what we get for them. If we got more for what we are paying, there would be some left over and we should all get more. But, for a variety of reasons, it does not work in that way.
The fact is that industry, which has little chance in the next 15 or 20 years of changing its fuel supply from gas to something else, will have to absorb increases which are equivalent to 12½or 15 per cent. on its wage bill. That seems to me to be absolutely disastrous, because it will defeat an object of providing more wages and—and this is more likely—a great number of small and medium size businesses will go completely out of business, with all the problems that will ensue.
My last point, which has been mentioned by previous speakers, concerns the absence of a comprehensive fuel energy policy. We have had so many debates about conservation and have discussed the alternatives, and yet the only thing that Governments appear able to do is to impose punitive practices as deterrents. There is no encouragement at all to conserve anything. All the encouragement is to save the pocket. I can remember when I used to be in the petrol business, and during the Yom Kippur war the price of petrol went up by 8d per gallon overnight. It was such a savage rise that consumption dropped markedly for about 12 months. Then the 8d did not seem to be very important, and a few pence on this or that did not really matter. Certainly, various people—perhaps the oil companies, perhaps the Exchequer—get richer by all these small increases, but there is little effect on the overall consumption.
Somewhere along the line we have to make a far more determined effort, and we must have advisers to help people put into practice that which they know they should do by way of conservation. The reward can then be seen. Furthermore, Her Majesty's Government must produce an energy policy, coupled with a conservation policy, which is understood not just by your Lordships, of whom there are only 300 or 400 here, or necessarily by the other place, but by all the masses of people who cannot understand, and indeed do not want to understand, because
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they say: "That is your job. It is not our job". If they are to go along with the policies, they must be made easy for them to understand.
This is where I started. This is where Her Majesty's Government have gone totally wrong over this issue. I hope that the Minister's opening speech will be widely reported. I hope, too, that when he comes to wind up he will be able to answer some of the comments and criticisms, and that those answers, too, will be widely acceptable and widely reported.
Lord FERRIER: My Lords, before the noble Lord sits down, may I ask him one question? He referred to the desirability of an overall energy policy. Would not the noble Lord agree that this is an immensely complex matter, because anything of the sort would involve the repeal of the legislation nationalising coal, electricity and gas?
Lord LUCAS of CHILWORTH: My Lords, I am sure that my noble friend Lord Ferrier will accept that if I knew the answer to that question I might be speaking from there and not from here!
5.31 p.m.
Lord BALOGH: My Lords, I shall begin by looking at the organisation of the Gas Corporation because some of the difficulties which have arisen can be dated back to wrong decisions taken in past years, especially on the part of the two Tory Governments which we have lately had. Before I do so, however, I must congratulate my noble friend Lord Strabolgi for the way in which he introduced the debate, which gave it its tone. I must also declare an interest—unfortunately, only an intellectual interest. During the 1964–70 Government I was engaged in a long and atrocious battle with the oil companies about the price of gas. This story has been told very well by Dr. Bray in another place, and I would recommend your Lordships to look at it. In the end, we succeeded in getting a price for gas to be paid by the Gas Corporation to the oil companies which was nearer to a cost-plus than what a monopolistically controlled market could have borne.

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The fruit of this victory ran into billions of pounds, and we all thought at that time that it should accrue to the nation and not to the consumers of gas. This could be achieved either by a special tax or by creating a buying organisation which would have bought at the price which was achieved and then sold to a second distributive corporation, which would have retailed it to the consumers. I, for one, favoured the second alternative—the two corporations—because I felt that somebody who was in the business and who did the work was the only person able to control the oil companies, the excellence of which all noble Lords who have heard debates on oil pricing and oil organisation will remember.
May I say in parentheses that the combination of the 1972 licensing round with the recent decision not to allow BNOC its original right to participate in the operating committees in the various fields will again cost the country billions of dollars—at a stroke, my Lords. At a stroke the ayatollahs of the creed of Friedman in the Government have increased the PSBR and have decreased revenue by as much as they want to get out of the parents of children, the sick and so on. At its worst, 60 per cent. of it is on the wrong side of the balance of payments. If one looks at what has happened in this particular instance, the asseverations of the noble Lord, Lord Cockfield, about the central importance of the PSBR seem to be even more ludicrous than before.
I must confess that I myself do not take such a dim view, in principle, of the rise in the price of gas and electricity, as do some noble Lords. I do not see why geography and cleverness in the original choice should result in the subsidisation of well-to-do people relative to others who, poor as they are, are locked into oil and electricity.
It has been suggested that while the achievement of a greater harmony can be thought to be helpful as between electricity and gas, that harmony ought to be brought about by decreasing oil prices. I think that this proposition would fail, because our non-discriminatory arrangements with the EEC mean that we would have to export subsidised oil at a cheaper price, to the detriment of our balance of payments,
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which I am sure nobody would want to propose.
However, the scenario of this gas and electricity price increase was really horrible. The Government did not show any social sensitivity or even technical knowledge. In so far as technical knowledge is concerned, we now have anti-social types of energy tariff. There is a basic tariff, which is at a very high price level, and in the case of slot machines I think that another 30 per cent. goes on top. The rest of it is at a lower price. Obviously, this is the result of the great surplus production of electricity and even of gas in the previous period when the two corporations fought each other in every newspaper and periodical to do down the other and to increase sales. It has absolutely no justification at the moment and ought immediately to be changed. When energy is dear, the basic energy should be cheap and any excess consumption ought to be made progressively dearer.
Finally, measures must be taken and widely publicised relating to heating subsidies to be given to those who would be hit hardest by the rise in energy prices. An unsafe promise was extracted from the Secretary of State, like a bad tooth—though he is not a dentist but a doctor—by my right honourable friend in another place. I think that we shall have to be very careful and watch how this promise is fulfilled. The way in which gas prices have been raised will exacerbate the problem of wage control over incomes policy. That is perhaps the most regrettable part of it, because it can only stimulate cynicism on the one hand and anger on the other. Once more the Government have shown themselves in their true characteristics of technical ignorance and social insensitivity.
5.40 p.m.
Lord SOPER: My Lords, I wish to add my thanks to those already expressed by others at the opportunity which my noble friend has given us to take part in this debate and for the excellent opening speech which he made. I am particularly attracted, of course, to that part of the Motion which has to do with the impact particularly on the poorer sections of the community. It is to that, that I wish to speak.
I appear to be the only representative of the cloth who is to speak in this debate,

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although I have some support already from my ecclesiastical friend. I am quite sure that, were this debate being conducted with the advantage of speeches by a number of Prelates, we should be in a consensus of conviction that there is grave danger that a particular and desolate part of the community is being lamentably ignored; and if it is not impertinent to say so, I wonder whether the Government really understand the conditions under which many members of that unfortunate community are compelled to live. I mean those who are very low paid, those who fall into the poverty trap, and those who are very old and incompetent in many of the affairs which they were able to discharge quite efficiently in earlier years.
I will spend a little time in describing their plight. I know that it is difficult to quantify penury: one man's penury may be another man's affluence, but here are some figures which I think are significant. At the beginning of last year 2,200 households were officially deprived of electricity. During the year 11,500 such deprivations took place within the County of London. Now I know that there are scrimshankers about and that some people may be forgetful, but it is an alarming figure when one adds it to the fact that 400,000 intentions so to disconnect electricity were passed on officially to householders. I cannot measure the degree of deprivation that that must have caused, but as a social worker I know of so many individual cases which supply me with enough evidence to suggest that the poverty line runs through a different section of the community today, and not least the lower paid workers and those who are old. It is a savage increase—and I will interpolate that word lest it should not be included in our debate—that at present this process seems to be accelerating and the prospects are grim.
I will now turn to those prospects for a little. There is something which in many cases is worse than actual deprivation of amenities, and it is anxiety. Where people are old and have much time on their hands and much loneliness to contend with, the likelihood of an increase in that anxiety is unmistakable; and I could give chapter and verse of those whose lives are made miserable, not necessarily by the actual experience
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of privation but by the nagging sense of misery, the sickness of hope deferred and the prospect of further troubles to come, as of course applied to some of those who know that the electricity restraint rate was in fact ended at the end of last year.
But there is even a third element in this particular and dreadful situation for so many people. It is that they feel that the benefits that they may receive, the benefactions which are offered by the Government, are much more in the line of charity than they are in the line of compassion. I see the Minister is shaking his head, but I would ask him to try to put himself in the place of those who regard the various proposals, not specified yet, as something which the Government intend to do. I am sure that people who have come towards the end of their lives are particularly impatient when they are invited to wait for a Government who intend to do things but on whose record very little has yet been done; and in any case I have a rooted objection to the attitude which assumes that people will be grateful for what is offered to them by others in a general environment in which they feel an overall sense of injustice in the system in which they live. Therefore, I ask the Minister to accept at least, whether or not there is statistical evidence to support it, that I could take him to many old people who are resistant to the whole process of going and asking for things, because they believe that such a process is demeaning and they do not intend to do it. They may be foolish, but I respect them and I ask this House to respect them.
Why is this so? We have heard this afternoon again that the monetary policy of the Government demands that you should create wealth before you distribute it, as though the benefactions of goodwill are dependent upon cash. The other day in an interview the Prime Minister ventured into the realm of parable and spoke about the Good Samaritan, and inferred that the Samaritan would have been useless had he not been in possession of cash. This was very poor theology and I regret it the more because the Prime Minister was brought up as a Methodist. But let me just point out as clearly as I can that when the question was asked, "Who is my neighbour?", the answer Jesus gave was, "What does a neighbour do? "And, whether or not that neighbour has

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the coin at the end of the process, he is not prohibited from serving the interests of the man cut down on the road by robbers because he does not possess cash. The Good Samaritan went and tended the man's wounds and put him on his own ass and looked after him. That is part of the wealth that belongs to any community long before it provides the requisite amount of cash to satisfy certain monetary demands.
I believe that is of the utmost importance in the consideration of this present issue. What disturbs me, and I am sure disturbs a great many other people, is that we are living in a society in which the imposition of sacrifices is made upon those who are least responsible for the situation; the sacrifices are required from those least able to fulfil them.
The Earl of GOWRIE: My Lords, if the noble Lord will give way, I really hate interrupting him but the whole burden of our argument is that in this society subsidisation affects those who can afford to pay and leaves increasingly less every year for those who cannot afford to pay. That argument may not be agreed by the noble Lord, but he must at least take it on board and must not argue back as though that argument were not there.
Lord SOPER: My Lords, of course I do not accept that correction. I believe it is a misunderstanding of the primary situation, which to me is that we live in a class society and these various cuts are increasing the acerbity of the class society rather than encouraging the one thing which a Government can expect. A Government can expect the co-operation of those who feel that the burdens are invariously and generously accepted and borne by the community as a whole. We do not live in a community as a whole. Ask any of these old people who are required to deal with these slashing cuts and enormous increases in prices, and it will be found that they will feel the more alienated from the general condition that is at least advertised as a community—the noble Lord may shake his head but these are my convictions and I am not going to be deflected from declaring them. I declare them, my Lords, because I have had some experience
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over many years of endeavouring to persuade people to support justice, which in the first instance is of rather more importance than compassion; and justice is not being seen by those who suffer the cuts and suffer the increased charges from which we are all suffering, but in relatively different degrees.
I accept that the Government are compelled to act in the light of inflationary problems, and for the solution of international issues over which they have precious little control. I agree that conservation is necessary, and I have no debate whatsoever with those who think that everybody should tighten his belt in ways which will increase his own activity and the activity of his fellows. What I object to, and what I believe is highlighted in much of the conversation in your Lordships' House this afternoon, is that this particular measure and this continuing process is increasing the divisions within society rather than beginning to heal them. Until we can begin to create a sense that all are together in this struggle we have no right to ask one group within that struggle to bear the major burden. That is my complaint.
I hope that the Minister—and I have already asked his indulgence because I have an ecclesiastical engagement not unconnected with this matter—will be able to say that those things which are being contemplated as an answer to this particular problem of the indigency and I the poverty of many groups in the community today, will not appear as charity, but will appear as a constructive attempt to spread the area of sacrifice and to share the problem. In that I wish him well, but I have my doubts as to whether or not this is within the competence of a Government pledged to the kind of practices to which they have already been addicted.
5.52 p.m.
Lord GISBOROUGH: My Lords. I must first of all apologise to the House and the Minister that I shall not be able to stay, because I have a previous appointment and I am surprised by the great number of excellent speakers in the debate. At first sight it seems a sorry situation when the Government instruct a profitable nationalised industry making a profit of some £400 million a year further to jack up the

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price of its product by 29 per cent. in three years. However, during the last 10 years retail prices have risen by 240 per cent., coal and electricity by 400 per cent. and oil by 1,500 per cent., but gas has gone up only 123 per cent. Its relative cheapness has led to a huge upsurge in demand, which is accepted, for gas appliances and conversions, and more than one million new customers have been connected within the last three years. Gas now accounts for 20 per cent. of British energy needs against only 2 per cent. 12 years ago. The industry can no longer cope with this increased demand, which contributes to the inability to supply new customers mentioned by the noble Baroness, Lady Stedman.
Demand is still increasing faster than the foreseeable ability to supply it, and this can only lead either to rationing or to very steep price rises in the future. Shortage of gas has already become apparent. For example, on New Year's Day the heavy demand would have closed down supply to many factories that were on interruptable supply contracts had it not been a holiday. Further, cheap gas has reduced the incentive to householders to insulate their houses adequately, to turn down thermostats and to economise, unlike the users of expensive oil, and this has further increased the demand for gas. If low-price demand kept going, the North Sea reserves would be used up by the 1990s and we should soon be back to importing at sky high prices. Long before that, the pre-1975 fields of cheap gas would have run out and we should be into the more expensive newer wells.
While domestic gas prices barely cover historic costs—the price in real terms has fallen by a third over the past 10 years—industrial gas is having to carry the whole industry, and it is said to be the dearest in the world. Yet while much gas is burned for heating, the chemical industry needs three-quarters of a billion therms as feedstock. This feedstock demand will continue, and with no extra substantial gas coming into the system till 1984 this calls for less burning of gas for heating by those who can use oil or coal, to protect the chemical industry and to the employment and wealth it creates.
To meet this problem the Price Commission in its penultimate report advocated that the Gas Corporation should charge
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more rather than less for its gas as being in the long-term interests of consumers. The Commission recommended that the price should be based on the cost of imported Norwegian gas. Mr. Benn said last February that it would not be sensible for electricity and gas prices to fall in real terms, which indicates that he also would have raised prices had he kept his job.
This Government inherited a position of uncertainty in the industry as regards pricing policies and of political uncertainty as regards how to handle the thorny issue of gas pricing. It was probably a mistake for this Government not to tackle the problem sooner, and price control during the last year has helped to ensure that demand exceeds supply, with the problems that this has brought. In a period of energy scarcity price is by far the most effective medium for conservation and no purpose is served by making such a high quality resource available at bargain prices. It is certainly always a very had policy to keep prices artificially low in any field, as inevitably, whether it is gas or whether it is wages, the result is an explosion of price when the time expires. So gas is to be priced up in stages of 10 per cent., but the flaw in this argument is that electricity prices are also going up and gas will still remain relatively cheap. So one could argue that it should go up further. Demand can only be reduced by the expectation of comparability of price to oil at some time in the future.
Gas is a scarce resource and our supply will run out before the North Sea oil wells run dry of oil, and high prices are needed to help finance the heavy investment needed to bring new marginal fields on stream. But even this promised heavy expenditure will not use up all the Corporation's profits, and they should not be pushed into unnecessary investment just because the money is there. Part of the profit should be used to help with grants for insulation to reduce future energy demand. There is still 52 trillion feet of gas in the North Sea, 30 years supply at current demand. But much of this gas is still being bought by the board on 20 year contract at 3 to 4p per therm from the older wells, and obviously it is this lower price paid by the monopoly buyer that has allowed a cheap sale price and a high profit. But the penalty is now a shortage even to existing customers. The price the Corporation

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pays is nothing like high enough to encourage oil companies into more exploration or to make development of existing finds economical.
Last, but most important, there are sections of the community, which have been mentioned over and over again, unable to afford these increases, and it will, as always, be vital for the Government to ensure that the scheme of assistance announced on 22nd October is adequately publicised. I hope they will announce whatever further schemes they have soon, to allay the genuine fears that old people will have for next winter.
5.58 p.m.
Lord LOVELL-DAVIS: My Lords, I should like to start by shooting down one of the many canards this Government has launched into the air, and, incidentally, wing another. The first is that the massive price rises proposed for gas and electricity are being set primarily in the cause of conservation, the key factor, as the Secretary of State said in yesterday's debate in another place. Anyone with any awareness of the massive and complex problems that face us in continuing to fuel our industries, our homes, our means of transport, our whole developing future, recognises the need for the efficient use of energy. It is also clear that without a realistic pricing policy to reinforce the message attempts at energy conservation will be largely wasted. Your Lordships know this; so does the British Gas Corporation, and so apparently do the Government.
So why did Mrs. Thatcher not allow British Gas to raise its prices when it asked to do so last year? Why is she now forcing British Gas to increase its domestic tariff far in excess of the sum the corporation needs to meet its statutory objectives of covering costs and providing for reserves which will at the same time serve the cause of conservation? The answer to the first question, no doubt, has something to do with the presentation of her Government's last Budget; and to the second question, that this is seen as a way for this monetarily obsessed Government to raise money, and a pretty crude and cruel way it is, too.
The Gas Corporation is going to have some hefty profits for the Government
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to heist after the sort of increases that we are in for. What is more, despite what the noble Earl, Lord Gowrie, said, is not this intervention really somewhat at odds with the avowed market economy, noninterference policies which the Conservative Government parade as a panacea for all our ills? As the noble Lord, Lord Tanlaw, has said, if they are going to intervene in this way they might as well scrap the Gas Board and discharge its board and chairman. If they are going to intervene in gas, charging in like the Keystone Cops and creating about as much havoc, why do they not at least try to give some respectability to reneging on their election promises by intervening in a positive way in the British Steel dispute?
Setting aside the Government's right to grab the Corporation's cash——
The Earl of GOWRIE: My Lords, will the noble Lord allow me to take up that point while it is fresh in your Lordships' minds? The Government are in permanent and enormous intervention in the steel industry—intervention to the tune of millions of pounds every year. The question which all Governments have to ask themselves is: When does the intervening have to stop?
Lord LOVELL-DAVIS: My Lords, that is a question that the Government obviously must answer. They are not intervening in any positive way in the British steel dispute: they are allowing the steel industry to get into an appalling condition and they are standing back from it. However, they are quite prepared to intervene in this matter because it is simple and it fits in with their monetarist policies.
As I was saying, I question the Government's right to grab the cash of the Gas Corporation, but I would be interested to know whether the Minister can give us some idea of how the Government propose to use the enormous additional sums which will be swallowed by the Treasury, apart, presumably, from raising the funeral allowance. The only other matter that I think will be fuelled by this latest action is inflation.
If it is conservation that they are after, are the Government proposing to increase the home insulation grants and give real financial support to energy saving? After

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all, a programme aimed at providing simply draft-proofing, hot water tank jackets and adequate loft insulation, might involve a substantial capital outlay, but the savings accruing year after year would rapidly repay the initial cost. It would make national economic sense and at the same time directly benefit those who will be the hardest hit by the new prices—the elderly, the sick and disabled, the low income families, especially those with young children at home during the day. All I can say is that the Government show no signs so far of doing anything of the sort.
On the contrary, we are falling further and further behind the rest of the Common Market—the EEC—in energy conservation. The Prime Minister may go about proclaiming the cause of energy conservation, but the facts are that her Government are busily cutting back on important schemes. The Department of Energy has scrapped a pilot scheme for setting up regional centres advising people on how to insulate their homes. They would have cost £500,000 a year. The Department of Industry has been running a £25 million programme to help businesses insulate buildings and improve boilers. It ends in June and the department say that it will not be extended. The Manpower Services Commission has been paying groups of people to insulate old people's homes free and help get them grants. Last summer the Special Temporary Employment Programme which financed the scheme had its budget halved.
A couple of weeks ago the Department of the Environment published new proposals for increasing energy conservation requirements. They stipulated only three inches of insulation for rooms, in spite of the fact that the Department of Energy has been pressing for four inches for years. Moreover, even the Department of Energy itself is, I understand, considering cutting by half its information staff on energy conservation.
Perhaps it is not such a canard after all. Perhaps all the Government intend to do is to save energy by a process of refrigerating the people. It is a novel, albeit uncomfortable, way of tackling energy conservation, the problems of the aging population, unemployment, the needs of the poor and the sick—all at the same time. It is simply a matter of imposing on us—
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never mind the fact that we are supposed to be the owners of the industries concerned—an extra, totally unreasonable and unbearable burden, when we are already reeling under massive and rising financial demands all round, unemployment, further recession and, in the Chancellor's own words, "a bleak future". How different it all seems from the sunny uplands that we were promised in May.
There is, indeed, a much darker side to these shocking increases in the cost of fuel. I cannot indicate it more clearly than by quoting from the editorial of the Daily Mail—scarcely one of the Conservative Party's harshest critics—of 21st January. It reads
"The argument for gas price rises is firmly grounded in the need for Britain to conserve and to diversify its energy resources. But energy conservation policies, however intellectually elegant, do not pay gas bills. Nor do they explain who exactly is going to benefit from the whacking great excess profits the Government is going to force the Gas Corporation to make.
"The old and the poor cannot be expected to meet in full such punitive increases in their gas bills. They will have to have special help. And the scale and the scope of that help should have been made known simultaneously with the news of the forthcoming price rises. It was not".
The question is: Will it be made known now? At the time of the announcement the Secretary of State for Energy, Mr. Howell, did in fact make some brief reference to giving direct assistance to the poor, but he took good care not to define that assistance. Nor was he more specific yesterday in the debate in another place.
I had hoped that the noble Earl, Lord Gowrie, would be saying something which might help alleviate the very real fears of those who cannot meet their fuel hills now, let alone the bills they are likely to get from next April; and those who have so far been able to scrape along but for whom the next massive increase will be the last straw. This is not the time for general palliative remarks, but for specific assurances for people who are desperately worried and in dire need—those referred to with such understanding by my noble friend Lord Soper.
For truly disadvantaged people, talk of conservation is only a cruel joke. Those of us who have the money to pay our fuel bills, may complain, but we can respond by being more careful in the way we use gas and electricity. The poor can con-

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serve fuel only by putting their health at risk. I believe, as does this party, that the right to fuel, to the warmth and light necessary to survive in reasonable comfort, is fundamental. May I suggest to the Minister that it will not be enough if, in winding up the debate, he lays the responsibility for what is in fact social policy—or lack of it—upon British Gas or the Central Electricity Generating Board and their codes of practice for the payment of fuel bills. British Gas did not want increases of this magnitude. The ultimate responsibility for the problems created for the poor must be borne by the social security system—by the Government.
Recently, in an article in the Sunday Times,David Donnison, who retires as chairman of the Supplementary Benefits Commission in the autumn, asked the question:
Why are the Tories discouraging work, encouraging idleness and weakening the family? That's not what they promised, but it's happening".
He points out that although the Conservative manifesto promised to
"reunite a divided and disillusioned people, to restore incentives so that hard work pays"—
and—
"to support family life"
things seem to be moving in the opposite direction.
"The key developments to watch"—
he writes—
"are those which affect the poor".
Comparing two large poor families, one with the husband in work and the other with the husband unemployed, he demonstrates that it is the working poor who are bearing the brunt of the cuts in benefits which are now being made—in rent and rate rebates, free school meals, free transport to school, grants for school uniform and other clothing. Far from creating incentive by their cuts, the Government are simply on the road to giving some semblance of truth to the myth that many people are better off out of work than in work.
The poorest people of all are those with children and, my Lords, if we are talking of conservation, the most precious thing we have to conserve is the health and wellbeing of our children—all our children. T can think of no more grotesque interpretation of an undertaking to
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"support the family" than to deprive children of the right to be decently fed, clothed, housed and kept warm.
The Conservatives invented the child benefit scheme, and we should return to the original principle that child benefits are part of the fiscal system and should be regularly up-rated to keep pace with inflation. Instead, they too are frozen. They should have been reviewed this April, but now that will not happen until at least November, by which time inflation will have reduced the real value of the £4 a Week benefit to £3 since the last increase in April 1979. That may seem to some on the other side rather wide of the subject that we are debating this afternoon. I and many of my noble friends do not take that view.
At the very least, as the National Consumer Council, among others, has suggested, the price increases should be phased in gradually so that consumers can adapt and plan ahead on a rational basis; and they should offer a more comprehensive fuel allowance scheme which will avert widespread and severe hardship among the poor. But, whatever short-term steps the Government may take—and the onus is upon them to ensure that the elderly the disadvantaged, the unemployed or working poor and their children, are not pushed out into the cold by the fuel pricing policies they choose to adopt—they have a corresponding and wider responsibility which does not seem to be accepted by the noble Earl, Lord Gowrie. It is to protect the poorest and most vulnerable of our people. Only then should they increase fuel prices, not in this arbitrary and excessive fashion, to the levels the rest of us should properly pay.
Lord FERRIER: My Lords, before the noble Lord sits down, he made a comment about the position in the steel industry. Does he bear in mind the monstrous indignities of the Llanwern plant and the Hunterston ore terminal?
Lord LOVELL-DAVIS: My Lords, I am sorry, I did not hear the noble Lord. Will he repeat his question?
Lord FERRIER: My Lords, I said words to the effect that when you are talking about the steel industry, is it not worthwhile bearing in mind the monstrous

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indignities of the Llanwern steel plant, which lay closed for years, and the Hunterston ore terminal?
Lord LOVELL-DAVIS: My Lords, do not know what the noble Lord means by the monstrous indignities of them lying open, I am afraid.
6.12 p.m.
Lord UNDERHILL: My Lords, one thing certain is that the Government's announcements of the extra charges for gas and electricity were a great bombshell to a vast number of people in our country. I am concerned that some noble Lords opposite have referred to the gas increases as being 29 per cent. spread over three years. I may be wrong, but my understanding is that the gas charges will be in two stages this year, 29 per cent. in the coming year; and that electricity will be in two stages, 23 per cent. in the coming year. Perhaps the noble Earl, Lord Gowrie, will make this clear in his reply, because it is clear that some noble Lords opposite disagree with the view that I have just put forward.
It has also been stated by the noble Lord opposite that the increase in gas charges w ill not make a tremendous difference in the cost of living. It was stated in another place recently that the gas prices will only be about 50p a week for the average householder. Before I left for the House this morning I turned up my accounts for last year. My gas and electricity charges, based on the figures I have mentioned, will be an extra £1.40 weekly. I am the average householder; three bedrooms, only two people living there, all the children have gone, and so often I am here and elsewhere, not at home. I wonder whether people understand what £1, or £1·40, really means to millions of families. We can toss £2 over a bar counter and it is gone. Millions of families are still not able to work out how they will pay the mortgage interest increase—and now bang on top of that they have the announcement of gas and electricity charges.
When my noble friend Lady Stedman was detailing quite a number of additional burdens which are either having to be met now or are coming in the future, the noble Earl, Lord Gowrie, said, What has this to do with gas?" It is to do with gas in
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this way. One cannot take gas and electricity charges as though they were isolated. As other speakers and my noble friends have said, it is one thing coming after another which is worrying millions of people. Only today we read in the paper of the Thames water rates going up by 23 per cent. Again it can be said, "That is only an average of £9 a year". But it is these little sums—the £9, the £20, the £50—that are worrying a large number of our people.
The noble Lord, Lord Orr-Ewing, said that local council expenditures do not involve cuts. If they do not involve cuts, perhaps somebody in this House will tell me why local authorities throughout the land are sitting in almost turmoil to see how they can make ends meet and what services they have to cut. That is not imagination on my part; it is what is happening in local councils up and down the country, and I am certain that Members on both sides of the House can confirm that.
What is the Government's justification for what I call swingeing increases, and my noble friend called slashing increases? Whatever it is, they are massive increases in gas and electricity charges. The British Gas Corporation is at present making a surplus of over £1 million a day. The Secretary of State said in another place on 16th January, at column 1651 of the Official Report:
"While the British Gas Corporation may have a large surplus and is efficient"—
I shall remember those words when we have legislation for dismantling other sectors of nationalised industries—
"it does not mean that it is competing for customers. On the contrary, customers are competing for gas …".
The Secretary of State then added that any increase in the surplus will help to reduce public sector borrowing requirement. He said that it is rubbish to suggest that it will be used to subsidise loss-making industries. I presume that "Rubbish" is the sort of reply that will be given to my noble friend Lord Kaldor for his suggestion that, if there is this massive surplus, it might be used for subsidising coal, or it might be used, as others have suggested, in the steel industry.
The noble Earl, Lord Gowrie, during a short debate in this House on the Government's statement on the increased charges,

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also said that any profit in exceess of investment need of the gas industry, which he said will not be considerable, will go to the Exchequer and reduce PSBR. If that is to be the case, can anybody deny that it is not some form of indirect taxation? It must surely be some form of indirect taxation. All of us know that indirect taxation falls more heavily upon the needy than on the other sections of the community.
Government Ministers have also made clear that the British Gas Corporation did not ask for this amount of increase. I understand that what the Corporation sought was an increase to meet expected increased prices that they may be called upon to pay for gas, and that the amount of the increase is deliberate Government policy. It is nothing else but deliberate Government policy. As my noble friends have said, the Government have stated repeatedly that they would not intervene in industrial troubles or industrial matters, but here we have—and I must emphasise this, although others of my noble friends have said it—the Government literally instructing the gas industry on its price increases. They are no longer relying upon market forces which, as has been emphasised in other debates in this House, is Government policy. I must repeat, at the risk of being boring, that if we intervene in gas, why not intervene in steel?
The Earl of GOWRIE: We are, my Lords.
Lord UNDERHILL: I should like the noble Earl to say how we are intervening in steel.
The Earl of GOWRIE: Millions a day.
Lord UNDERHILL: My Lords, we have a situation where a moderate trade union has been forced into an industrial dispute for the first time for 50 years. We have a situation where a moderate and excellent trade union leader is forced into a situation of threatening to defy a recently—I will not say a trumped-up law but a made-up law. This surely is a case for intervention if ever there was one, but the Government are remaining quiet, and yet they can deal with this instruction to the gas industry.
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In all the debates on this matter in this House and in another place, so far I have not heard any reference whatever to the views of the gas and electricity consultative councils. I do not know what they are, but it might be useful if we could know the views of those two consultative councils unless of course they also are being wiped away in this merry pursuit of demolishing every organisation whether it is of help or not.
It has been said that the Government will adjust social benefits for the needy to take account of all these increased charges for gas and electricity. I would make the point that some of my noble friends have already made; namely, that it might be possible to deal with the situation of those pensioners in need and for those on supplementary benefit, but there are large numbers of people who one would not classify immediately as needy but who are in the poverty trap and who become needy. How does one deal with those if we are to deal only with the sort of schemes the Government have so far put forward?
Secondly, I am sure many of us await with interest the details of a Government scheme of help, because we cannot be encouraged by what the Government have done in their own electricity discount scheme. It is argued that more money will be given to fewer people, but the fact is that the Government have found it convenient to reduce the figure from £45 million a year to £14 million a year. That does not give me great encouragement to believe that large sums will be made available to help everyone in need, and surely what we must aim at is to ensure that there is a scheme not only for gas and electricity but for all fuels, so that no one will be in danger of going without heat or light in their homes; and it seems clear to me that price rises must go hand in hand with an increasing discount scheme covering all fuels.
The other justification given by the Government is the question of conservation. I accept that, as far as we are aware at present, gas supplies are finite, but it may well be that new gas fields will be found and that research into the development of natural gas from coal will go ahead very rapidly; things may change. But whatever may be in the future, we know at present that the

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Government's policy is clearly that of rationing by price, and that will hit the less well-off in our society.
Reference has been made to the bad press or bad public relations on the part of the Government and there is no doubt that this increase has had a bad press from all sides of the Press; and I was interested in the proposals of the noble Lord, Lord Kaldor, for differential charging. It is interesting to note that the Sunday Times on 20th January, in a leader headed "Conservation without inhumaneness", said that unless such a policy were followed there would be much inhumaneness in relation to the new charges; and they suggested there should be a system whereby the more gas or electricity one used the more one should pay, that there should be different bands. I do not know whether the Government have examined that. There could be a standard band and, if one used more, the price would increase for the next band, and so on. It is obvious that if such a scheme were adopted, serious attention would have to be given to improvement grants for insulation, because many poorer people live in homes which use more electricity because of the lack of proper insulation.
Certain replies were given to questions raised in a debate in the other place, and I looked at those carefully to see whether the Minister who was replying dealt with those questions, but he made no mention of them whatever and I therefore propose to pose some of the questions that were asked. My noble friend Lady Stedman mentioned some of these, but I feel they bear repeating. It is suggested that expenditure on advertising for the" Save It "conservation campaign is to be severely cut. Will the noble Earl, when he replies, say whether that is correct? If it is correct, why? If it is, it is another example of a foolish and indiscriminate cut.
I have already mentioned the need for improving grants for home insulation. It has been stated that the Department of Energy is to scrap pilot schemes for setting up centres in regional capitals to advise on home insulation at a cost of only £500,000 a year. Is that correct? If so, why? If so, that would seem to be another foolish and indiscriminate cut.
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Is it true that after June the scheme to help businessmen insulate their buildings and improve boilers is not to be continued? If it is not to be continued, why not? If it is to be discontinued, that seems to be another foolish and indiscriminate cut. Finally, is the Advisory Council on Energy Conservation to be continued, or do the Government believe that they have all the answers?
I should like to know, as the noble Lord, Lord Lucas of Chilworth, asked, whether the Government have a clear energy policy. At present we can see increased charges, a regressive tax which will hit the needy, when what we need is a really progressive and forward-looking energy policy for the nation.
6.26 p.m.
The Earl of LAUDERDALE: My Lords, this is the first occasion when I have had the pleasure of hearing the noble Lord, Lord Underhill, speak. I was looking forward to his speech with anticipation and that anticipation was not disappointed. He has of course been exposed to much honourable mention of late, but the subject of that honourable mention is not the subject of our debate today. He asked a number of questions which I think one can summarise in this way: why these swingeing, savage, massive increases in gas pricing while the BGC earns such a surplus and, anyway, why should any of that surplus go back to the PSBR? These are matters to which I shall return.
First, I wish, along with other noble Lords, to thank the noble Lord, Lord Strabolgi, for introducing this debate in his best moderate scowling manner which we enjoy so much, and I know that he was not seeking, as others have done, to over-egg the pudding with too much political rhetoric. This debate is on a very serious matter and is to be welcomed because there has been much misunderstanding, some of it deliberate and some natural. I was most taken by a remark of the noble Lord, Lord Bruce of Donington, when he rose to question my noble friend on his Statement the other day and said, in effect, that what we really needed was for the Government to govern in the interests of the whole country. That is right. By the same token, I believe that energy, like defence,

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is pre-eminently an area which deserves to be treated as an area of consensus and is best not made a political football. The fact that lead-times in energy are of the order of ten years means that Governments seldom get the credit or blame for their long-term decisions.
I have an interest to declare—namely, that I am a director of the Elf-Aquitaine Oil Company, a group which has a 51 per cent. holding, in the Frigg gasfield, providing about 33 per cent. of Britain's present gas consumption at the rate of about 46 million cubic metres a day. But the views which I express are my own entirely. I have not sought the company's advice as to the kind of speech I should make and I do not commit my company in any way. It is worth mentioning before I pass on that the Secretary of State explained last week—for reference, in col. 1656 of the Official Report—first that the producers are unaffected by these decisions to raise the consumer gas price and secondly that the price of gas from the Frigg field is related by a fixed formula to the price of oil.
There has been political pressure for a consensus policy on energy for a very long time and the last Government felt it as much as we do. It goes back to the very earliest days of the last Government. In March 1975 they announced that the domestic electricity price would be raised by more than 28 per cent., which in turn was 10 per cent. above the prevailing rate of inflation. On 6th May 1975 Mr Alex Eadie, an old coal-mining friend of mine who is in the other place, explained, as reported at column 426 of the Official Report:
We need to secure more realistic energy prices, and reduce demands on the Exchequer by eliminating the electricity industry's deficit".
Those were the words of a respected Minister of the last Government in the other place, in May 1975. He said that, I may say, in answer to pleas for old age pensioners, the poor, and so on.
As to gas, the 1976 Budget forced—and I say "forced" deliberately; I chose my words with care—a 10 per cent. increase in gas prices on an unwilling British Gas Corporation, and did so for the express purpose of reducing the public sector borrowing requirement, and said so.
On 17th March 1977 Dr. Dickson Mabon, again replying to pleas about
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pensioners and so on—and I am sure that he is a person whom all of us on both sides hold in great respect and affection—said, as reported at column 251, of the Official Report:
"An increase in gas prices was necessary to reduce the level of Government financing".
Then, my Lords, listen to that love child of the last Government, the Price Commission, and their 1979 report at Chapter 10. I propose to quote as briefly as I can, but I hope sufficiently, because this should go into the wider record that the public reads. The report said:
"We share BGC's view that there needs to be a reasonable relationship between domestic and non-domestic gas tariff…We believe that this means ensuring that all customers pay prices that reflect the underlying costs"—
I shall repeat that: "that all customers"—it does not say only 'the rich'—
"of a scarce and increasingly expensive natural resource. This cannot be done, in our opinion, without paying particular attention to long run marginal costs".
Then it goes on:
"To a considerable extent these costs are dependent on the purchase cost for obtaining gas supplies from the Northern basin of the North Sea, which are themselves related to oil prices".
It continues:
"The estimate of the long range marginal cost value of gas that we have used is the price paid for gas imported from Norway. This is gas imported in order that more British gas can be left in the ground for use in the future".
At this point I interpolate that there has been much complaint about the present Government's attitude to conservation. But having just drawn attention to that, I pass on to a further quotation. The Price Commission's report goes on:
"adoption of LRMC-based prices would not imply that the customers of today would be making sacrifices for the next generation: only that the present generation bears its fair share of cost".
It continues:
"We would not wish to see any significant deviation from the policy of relating the prices charged to industrial and commercial users of gas to the price of oil because we believe that any change would adversely affect the balance between supply and demand in both oil and gas markets".
Finally, the report says:
"The price of gas to domestic users is clearly well below our estimate of long run marginal cost, which suggests that an increase of about six to seven pence per therm would be needed to bring domestic tariffs to our estimates of the marginal I cost levels".

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There I end the quotation, but there is a further passage in the report in which it is said that that difference is between 30 and 35 per cent.
The simple point is that the domestic gas price was frozen from April 1977 to June 1979, which was equivalent to a 15 per cent. reduction in real terms, while the price of crude oil doubled. If the domestic price is frozen indefinitely, supply will run out. Last year some 80 per cent. of the extra supplies earmarked for contract sales to industry by the BGC were committed within three months—I repeat, 80 per cent. About a million new domestic users have been connected in the past three years. The situation has not in any way been assisted or improved by the last Government's delays in approving the Mossmoran processing plant in Fife which, had it been ready and approved, would have taken the associated gas from Brent and would have saved wasteful flaring. The situation was also by no means improved by a tendency to duck the whole issue.
Between February 1974 and April 1979 domestic gas prices rose by about 73 per cent., while the retail price index rose by 110 per cent., that is a real fall overall of 18 per cent., and domestic electricity prices rose 168 per cent., an increase in real terms of 28 per cent.
There has been much confusion about gas supplies running out. The point is that cheap gas supplies are well on the way to running out, and those are from the southern gas fields. The Frigg gas is now at about 14p per therm. Enormous new gas fields were found in Statfjord and in block 31/2 of the Norwegian sector last September. But those are in deeper and more difficult waters—so much more difficult that RhurGas, one of the consortia on the Continent which is very eager to buy that gas, is prepared to try to pipe it and bases its calculations on a figure not of 14p per therm but of about 18p per therm. So to bring that gas, or much of it, to Britain would be very costly. One year's current BGC surplus would not fund more than a relatively short, cheap pipeline. The Frigg pipeline and processing plant did not cost £300 million, it cost £720 million—and that was several years ago; that is equivalent to about two years of the current BGC surplus.
I ask the indulgence of the House to
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listen to one more quotation because I believe that this is a serious, independent assessment from the industry. The Offshore Engineer wrote in November, 1979:
"While it may be difficult for the public to swallow the idea of higher gas prices when the BGC is reporting record profits, the fact remains that last year's surplus would barely be enough to build one short pipeline from the northern North Sea, let alone the complex of gas-gathering lines and possible recompression stations necessary to make an efficient and economical system of gas collection in the central and northern areas of the North Sea. It would be little short of tragic if short-term political expediency … aimed at pleasing the domestic consumer, prevented the BGC from being able to finance new supplies of gas as present reserves begin seriously to decline".
It is worth mentioning in parenthesis what was mentioned by my noble friend Lord Orr-Ewing—that the contract for gas from Algeria is about to run out, and the signs are that Algeria will be asking twice the previous price.
As to inflation, the answer was given very succinctly by the noble Lord, Lord Roberthall, when my noble friend Lord Gowrie made his Statement last week. But, without recapitulating what he said at column 139, may I just remind your Lordships that Mr. Alex Eadie said in 1975, the Chancellor of the Exchequer said in 1976, and Dr. Dickson Mabon said in 1977, that the rises in gas and electricity prices were needed to reduce the PSBR. The 100 per cent. rise in crude oil prices last year has accounted for something like 5 percentage points in the retail price index as we know it.
This Government have inherited not so much a crisis as a chronic malady of indecision and funk.
"Nothing is more difficult "—
said Napoleon—
"and therefore more precious, than to be able to decide".
But I also say, my Lords: Beware of complicated solutions. To be always ready a man must be able to cut a knot, for not everything can be untied. Much of the debate tonight has been on other matters altogether—dismantling the Welfare State; the uncaring society;" savage cuts (I quote the noble Lord, Lord Strabolgi); savage price rises; rises to meet the tax remissions for the wealthy, according to the noble Baroness, Lady Stedman (she is such a nice person; much nicer than her speech tonight);

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helping the better off, and so on. All of that is rhetoric—
Several noble Lords: Nonsense!
The Earl of LAUDERDALE: My Lords, I repeat: all of that is rhetoric, and some of it is humbug. I believe it is designed, and that these two debates have been designed, not seriously to throw light on the problems of the energy industry but to rally faint hearts and hide the gaping divisions of the party opposite.
There is an infinity of political errors which, once adopted, become principles, such as easy emotional preachments about compassion. As one looks back on the past and listens to the Opposition at the present time, one wonders whether there is not, in among their philosophy and political make-up, the thought that politics is a systematic organisation of hatreds if it is not also a principle that all that is not compulsory is forbidden. For us—realism, self-reliance and, as my noble friend Lord Gowrie said,
"Bid the sleeping giant awake to the facts of life and the light of day".
Baroness GAITSKELL: My Lords, before my noble friend (if I may call him that) sits down, may I ask him a very short question? Why is it that when Conservatives speak about "realistic" prices they are always higher than they should be?
The Earl of LAUDERDALE: My Lords, I think the noble Baroness will probably share the recollection of a mutual friend of hers and mine who sits on her Benches, who once said in my hearing that all women are mini-Chancellors of the Exchequer. They all know that at the end of the week sixpence does not go quite as far as it did on Monday.
In our experience, prices go up. They go up whether it is the Tories or the Socialists who are in office. But in this case our energy crisis has struck as it were from outer space by being doubled in a year.
Lord TANLAW: My Lords, before the noble Earl sits down, can he clarify one point? He did not include in his figures the gas fields off the Morecambe Bay, and I would be grateful if he can clarify that one point.
The Earl of LAUDERDALE: My Lords, I am not surprised that the noble Lord, Lord Tanlaw, who is learned in these matters, drew attention to that omission, which was deliberate. The fact is that I have no really reliable facts about it, and I always find—and I must confess this—that when I read of so many trillion cubic feet I can never remember how many noughts there are in a trillion, or whether we are talking about American or British billions. I wanted to say something about Morecambe Bay, but I thought it safer not to do so.
6.44 p.m.
Lord DAVIES of LEEK: My Lords, I am glad the noble Earl did not go on with that, because he had already twitted this side of the House for irrelevancy. When I marched into this debate I thought we were having a foreign affairs debate, because Afghanistan cropped up and the movement in South-East Asia, and then we had "points of reality" and the need for defence. Then, half the House disappeared—I should have liked to have gone with them myself—because there was an important defence meeting upstairs. I, too, am a member of the Defence Group, but I decided that at this moment the realities of the way in which high prices are hitting the poor meant that I should stay in my seat to take part in this debate. Consequently, I have heard the noble Earl boondoggling to the end of his speech—and if he does not know that beautiful American expression "boondoggling", it means messing around and saying nothing.
The Earl of LAUDERDALE: My Lords, would the noble Lord allow me to interrupt him?
Lord DAVIES of LEEK: My Lords, I cannot give way now. Yes, I usually give way, because we have been on committees together.
The Earl of LAUDERDALE: My Lords, will the noble Lord assure me that the word "boondoggling" is not an achronym?
Lord DAVIES of LEEK: My Lords, I did not mean that in a nasty way. I know the tricks of the noble Earl, and he

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hides reality behind his sort of euphoric use of phraseology. Let me get down to brass tacks. What are we talking about? Let us first read what the debate is all about. The debate is:
"To call attention to the huge price increases for gas and electricity authorised by Her Majesty's Government, which, following the severe cuts imposed on local authorities' expenditure, will fall heavily on all consumers but particularly on the poorer sections of the community; and to move for Papers".
Nobody can disagree with that. The fact is that they do hit the poorer sections of the community; and if we talk for a week nobody can defy the logic of that sentence.
There are many men of both sides of this House who have had vast experience—just as much as myself; some 30 or more years in the other place—of the reality and responsibility either of being Ministers or of accepting the realities and responsibility of Government. The chickens have now come home to roost. How is the party opposite using its power? The latest example in the Government's dealings with the Gas Board are strange, and they are bizarre. The Tories tend to carp on about the need to let the nationalised industries stand on their own two feet, without the baleful influence of the politicians. It is all part of the old "Great Britain Limited" syndrome. All would be well if these tycoons and giants were left to manage industry; then, Britain would be all right.
Unfortunately, there are some of us here who lived through the 'twenties and the 'thirties, and we had exactly this monetarism then. I have in my study at home the entire May Report, which I could use and quote today word for word. The economists came up with all sorts of ideas, including ideas for saving money by cuts. We had a 10 per cent. cut in the Army and 10 per cent. cuts in local government. What did it solve? Nothing—because one of the terrible dilemmas of the acquisitive system of society (one can qualify this, so I am not being dogmatic) is that it appears to be able to give full employment only when it is at war or preparing for war. I am not too dogmatic about it, but I want that expression disproved. One would find it very difficult, in the history of European economics, to disprove the fact that the greatest reaction in most employment is when you are re-arming or when you are moving into war. Let us leave it at that.
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On the matter of gas, there has been so much said about it. Let us get one fact straight on the record. The Gas Corporation were told to raise prices, not in line with inflation but 10 per cent. above inflation. Consequently, the claim on this side of the House today, that this is a regressive system of taxation, stands proven. The Government asked for 10 per cent. more than the graph of inflation. Next, we were accused by the noble Earl who has just spoken of increasing prices. Of course we increased prices. But we made a social cushion for the under-privileged and the poor, and a social security system, that has now been destroyed, for them to fall back on. I will give the figures. The Labour Government had an electricity discount scheme which helped 3½ million consumers.
Lord ORR-EWING: My Lords, it lost £4 million.
Lord DAVIES of LEEK: My Lords, it helped 3½ million consumers. The Tories have improved it in typical fashion and now their scheme benefits only 350,000. They argue that it is now more effective; but the figures tell the bleak, bleak truth. The cash involved has been cut by this Government from £45 million (that gave a cushion for the under-privileged and poor) to £14 million. There is no argument about that.
Lord ORR-EWING: My Lords, the noble Lord may be right; but the figure given in the other place was not £45 million. The cost of the existing electricity aid scheme was £4 million. It is printed in Hansard.
Lord DAVIES of LEEK: I am talking of over the period when this was the cushion. The other thing is manifestos. They are wonderful things. Sally Oppenheim, this beautiful girl—actually she is not a rebarbative feminine piece of architecture—during the election walked around with a shopping basket talking about high prices. It was lovely to look at. It brought tears to my eyes. She was seen clutching a shopping basket. Let us be fair, she must have done shopping as I do. And we were told that they would bring the prices down and that there would be wonderful things.
I was in the House, and so was the noble Lord opposite, when that great

927
figure, Sir Winston Churchill, was on that side of the House—and it was in this building—and we were talking about general elections and manifestos. What did he say? You can check me in the Library. He said:
"I do not admit as a democratic constitutional doctrine that anything that is stuck"—
and he emphasised that, stamping his foot—
"into a party manifesto thereupon becomes a mandated right if the electors vote for the party who draw up the manifesto".
He was interrupted there. But the old dragon went on:
"We are all allowed to have our opinions about constitutional matters. If that principle is accepted, why not shove a dozen items in? One can always leave them out if there is not time, or circumstances change. But it is not for our convenience to have a lot to play with, and surely it costs nothing to a party seeking a change or a new deal. Why not add the word etc.' I ask the Lord President and the Chief Whip, why not …".
Then he said that
"in the list of planks of the party platform"
we can put in what we like.
"We could then be told, Do you not see these letters etc.' written at that point in our party manifesto? Does that not give us the right and impose upon on us the obligation to do anything we please?"
That is the position. Here is the manifesto. He is dealing with health—
"The prospect of very high mortgage rates deters some people from buying their homes and the reality can cause acute difficulties to those who have done so. Mortgage rates have risen steeply because of the Government's financial mismanagements. Our plans for cutting Government spending and borrowing will lower them".
That was in their manifesto when fighting the election.
On 1st January, the mortgage rate went higher than it ever has been in its history.
"It is not our intention"—
they said in the same manifesto
"to reduce spending on the Health Service".
Tell me, what is truth? This sanctimonious sincerity! Come on! Party politics is a game to some people. It never was with our people. It was a sad reality.
Lord ORR-EWING: My Lords, I happen to have the 1945 Labour Party manifesto before they nationalised gas and electricity. May I read what it says?
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It talks of the tremendous benefits of public ownership. We do not hear much about that nowadays. It says that public ownership of gas and electricity undertakings will lower charges all round. It has been 168 per cent. since 1974 on electricity. Manifestos are not sacrosanct on either side.
Lord DAVIES of LEEK: My Lords, it gave the British collier the highest wage in history. Instead of being 80th on the list—and I know about it because I come from colliers and farmers—in the pay roll, it came to the top. We saved the mines, as we are losing them today by the policy now followed. We will not have any young men going into the pits unless we are careful. It was fair enough! I think there is a tendency in party politics to fill manifestos unrealistically. It is time for the realities of the world we live in.
I was pleased to find today, on that side of the House, dissenting noises, not following Maggie. What did she say? You must cure this young lady of being so rebarbative. On February 1st on the media she said that some unions are confronting the sick, they are confronting the old; they are confronting the children. "By God! I will confront them". Talk about Amazonian. It was frightening; absolutely terrifying. You should not let a Prime Minister, despite the fact that she is a beautiful lady, talk like that. It frightens people—especially when you know that straight afterwards you cut school meals and cut back local government current expenditure £485 million in real terms for 1980–81; and, over the year, spending no less than £240 million, and chopped off school meals and school transport.
I represented an area where milk, meals and transport are important, with nearly 1,000 square miles and 3,000 farmers, 1,400 of them with under 30 acres and where the children go miles to school. Now some of them will not be able to pay the bus fares. Is this making a nation fit to take leadership in the world? Where are the men coming from who have the ability to go into industry and to deal with the problems of life if you cut at the roots.
I will finish with Ruskin's famous phrase:

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"There is no wealth but life, and a nation's greatest asset is its children".
Certainly, local government expenditure is also being cut in a most regressive fashion, and the day will come when the party opposite—for all its greatness and the great men who have helped to make our history great—will regret this most reactionary Government we have had since the 1930s.
6.58 p.m.
Lord GRANVILLE of EYE:: My Lords, it is always a pleasure to follow my noble friend Lord Davies of Leek, who nearly always charms the House with his speeches. I have listened to most of the speeches in this debate in this House and also to those in another place by the Minister and the shadow Minister. I should like to compliment my noble friend Lord Strabolgi (who also listened to those speeches) on a 13-minute speech which cogently put the case in clear terms. I think there is very little more that one can say at this hour which has not already been said. I should like to refer to part of a letter in yesterday's Times. It reads:
"The Government has promised to help the very poor to meet the cost of the unprecedented cost in fuel prices, but what of the typical pensioner couple whose income is just a little too high for them to qualify for heating allowances?
"Such people have frequently worked and saved hard prior to retirement in order to feel financially secure in old age. To be treated in such a cavalier fashion must bring bitterness to what should be happy years. These are the people who will turn off the heating and suffer the ensuing misery, rather than risk receiving bills they are unable to pay.
"This nation will not achieve the greatness needed to win through our troubled times if it ignores the needs of the old and needy in this way".
The letter was from the Director of Help the Aged. The problem of these people today is very much one of hypothermia Their problem is not about getting a car, a colour television set or a hi-fl which is vastly advertised in all the national newspapers. It has nothing to do with holidays abroad. They are the victims of multiplication inflation, the boundary of which we have not yet seen or even under stood. They are the new underdogs in our social life. Day and night from the middle of December colour television pressurises with high powered salesmanship; day after day it booms out all the advantages of spending holidays abroad
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and all the rest of it—but not for them. It is obvious that we are now—though not in Disraeli's sense—two nations. We have the old, the pensioners and those below the poverty level struggling against inflation on the one side; and, on the other side, we have the entrepreneurs, the well-to-do and—and this is going to be controversial—those with enough industrial muscle to bring in £120 a week, as well as some who, with "moonlighting", are in a class of up to £200 a week.
Ask those who operate the check-outs at the supermarkets in the high streets which people have the notes in their purses. It is certainly not the old people today. In the debate in the other place the Minister—and again today, the noble Earl—said that that Government are considering what concessions they are going to make, and that they are going to announce them well before the period of autumn and next winter when the cost of fuel will be at its highest. I very much hope that they will take note of what the Director of Help the Aged said with regard to those who are just above the social benefit level. Many of these elderly people have earned their social justice in the days of high productivity and in two World Wars. For them it is not a case of chasing a fast buck and holding the country to ransom.
I hope that the Government are not going to leave it until the autumn to make this announcement. I hope that they will make it as soon as they possibly can when they have finished their considerations, so that these elderly people will know what they have to face in the coming winter.
7.4 p.m.
Lord BANKS: My Lords, I should like to join in thanking the noble Lord, Lord Strabolgi, for drawing our attention this afternoon to this very important matter. The increase in domestic gas and electricity prices are, as noble Lords have already said, massive. Increases of 29 per cent. and 22 per cent. respectively are alarming. They are even more alarming when one thinks of them in the context of what is happening elsewhere, when one realises that they come on top of an inflation rate already at 17 per cent.; when they come on top of a steep increase in mortgage interest; when they come on top of all

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that has happened and all that is going to happen to railway fares in this coming year; and when they come on top of all that is likely to happen this year with regard to rates.
Life is becoming very difficult indeed for people on moderate incomes, let alone the poorest. Increases in gas and electricity prices will hit the poorest hardest. We have heard that gas prices are to be increased by the amount of inflation plus 10 per cent. each year over the next three years. Having listened to the debate so far, I do not believe that the Government have justified increases on this scale at this time in current circumstances.
The Government put forward five reasons for increasing the price of gas on this scale. They say first that we must not burn up our reserves of natural gas too quickly. At what speed should we burn it? The Guardian on 18th January, in a leading article, said that it was downright impossible to define the answer to that question. My noble friend Lord Tanlaw said earlier that there has been no information from the Government about a depletion policy. What rate of depletion do the Government recommend? Is it the intention to raise prices higher than other factors might dictate in order to safeguard reserves? That is an important question. If conservation were the only factor, what increase in price would the Government seek? We need to know that.
Secondly, the Government say that low prices cause peak demand with the risk of shortage. How serious are the shortages at the present time? How serious do the Government think they would become over the next three years if there was no increase in the price of gas or if the increase were—shall we say?—half that which is now proposed? These are the questions to which we need the answers. If the risk of shortage were the only factor, what increase in price would the Government seek?
The noble Lords, Lord Strabolgi, Lord Tanlaw and Lord Lovell-Davis, have stressed the importance of limiting consumption by means of insulation. Should not any increase in price be used, as noble Lords have suggested, in part to promote this on a wide scale? What is the Government's reaction to the suggestion
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made by the noble Lord, Lord Underhill, that there should be a higher rate, the more gas that is consumed and that the price should increase in bands?
Thirdly, we are told that gas from new North Sea fields will cost several times more. Presumably this will result in higher prices in due course anyway. If that did not happen, profits would be replaced by losses. Normal commercial considerations would dictate a rise in price and British Gas would not need the Government to tell them that the price should go up. Would the rise necessary to cover increased costs be sufficient to solve also the demand problems? Would that rise be sufficient to produce a rate of depletion regarded as satisfactory by the Government? I think again that we need to know the answer to that question. Should the rise due to economic considerations, due to the rise in prices, when it happens, take care of these other problems, the question is whether it should be anticipated? Assuming it will cover conservation and demand, would it matter, so far as conservation and demand are concerned, if it were not anticipated but left to take its normal commercial course?
We shall be told that it is better to spread the cost so that, by allowing it to begin to rise now, we shall not have so steep a rise at the end; but as against that there are two factors. First, there is the factor that the Government tell us their inflation policy will reduce inflation very considerably indeed in, say, two to three years. They say in effect that if the patient does not die within the next two years the patient will have a very wonderful recovery. If the Government really have faith in that, would it not be more sensible to have their increases in the price of gas at that time rather than now, when the rate of inflation is 17 per cent. and likely to rise further?
The second point is one that has already been expressed: that British Gas did not want such high increases now. That would seem to militate against the argument that the rise that would automatically come eventually should be anticipated at the present time. It is said that British Gas agreed with inflation plus 10 per cent. for the first year, but wanted the rest phased. But that is not how it was expressed by the Secretary of

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State in another place on 16th January at column 1659 of the Official Report, where he is reported as saying:
"… the British Gas Corporation did not express a view in precise terms but took the view that, while it agreed with the aim and objective of moving to economic pricing, for the present year, it would have wanted a somewhat lower figure".
Fourthly, we are told that we should secure a proper balance between supply and demand over all the consumers of gas; and the noble Lord, Lord Kaldor, when he intervened following the repeating of the Statement in this House a week or two ago. drew the attention of your Lordships to what he called "the logical incongruity" involved in arguing that our domestic oil price must be raised to the full extent of every rise in the OPEC price of oil in order to make consumers in this country substitute other fuels for oil. It is now argued that it is necessary to raise the gas price because it has become too cheap in relation to oil. The noble Earl, Lord Gowrie, said it was unfair on consumers of other fuels that gas should be comparatively cheap, but I do not suppose it is much consolation to them to know that the price of gas for gas consumers is going to be raised.
Fifthly, the Government say that a price rise is essential if some of the financial proceeds from our national gas resources are to be secured for the benefit of the nation as a whole. That cannot surely be true at the moment, since there are substantial profits which are helping to reduce the public sector borrowing requirement. Perhaps if we had a gas tax the contribution to Government expenditure might be more direct, but any change in the position where the public sector borrowing requirement is benefiting from these profits would be due to the increased cost of production—but the increased cost of production has already been given as one of the arguments in favour of a price rise, so it would seem that this argument falls.
Having looked at the five arguments, there seem to be a great many questions as yet unanswered, and I remain to be convinced that a case for an increase on the scale proposed has been made out at this juncture and in present circumstances. If the Government intend nevertheless to proceed, what about the impact on the poorest, to which many noble Lords have addressed themselves this
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afternoon? We have discussed in this House on at least two occasions previously the Government's new scheme for helping with fuel bills. Fewer people are helped by it and less money is spent on it, but those who are helped are helped rather more substantially. The figures are: £1 per week for those in receipt of family income supplement and 95p for those on supplementary benefit who have children under five or who are over 75. Those figures, in the light of the increases, will surely need increasing and we have heard that the Government are reviewing this whole subject. I hope they will take into account those who were previously left out—for example, pensioners under 75 and families with children over five on supplementary benefit and pensioners of over 75 on rent and rate rebates.
The electricity discount scheme was far from perfect, but it helped 2 million people who were poor but not poor enough to claim supplementary benefit or family income supplement. A more comprehensive scheme, as the noble Lord, Lord Strabolgi, said, is necessary. In other words, figures have to be increased and the breadth and scope of the scheme have to be extended.
I think it is right to see this problem against the background of what has already happened to the poorest section of the community since the present Government came to power. In an intervention earlier, the noble Earl, Lord Gowrie, seemed to think that it was not relevant; but I think it is very relevant because we are thinking about the people who are going to be most affected by these increases.
One could give a great many examples of what has happened to them, and some noble Lords have already given examples. Let me just give a few quickly. First, child benefit is apparently not be raised until November 1980 at the earliest, and perhaps November 1981. The value will have been sadly eroded by then and, since it is the only way of taking account of children when there are tax reductions, it should have been increased at the time of the last Budget. Secondly, according to statute, long-term benefits, including pensions, should be raised according to increases in prices or earnings, whichever is the higher. There is a shortfall in relation to earnings so far as last Novem-

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ber's uprating is concerned and that shortfall is not to be made good.
Thirdly, in future, long-term benefits, including pensions, are to be related to prices only. If that had applied in the last few years the long-term benefits would be considerably lower than they are now. Fourthly, the previous year's shortfall on short-term benefits has not been made good. Fifthly, consideration is being given, we understand, to ceasing to relate short-term benefits to prices. That would mean a gradual decline in the value of those benefits.
Sixthly, simplification of the supplementary benefits scheme is being proposed on a no-cost basis, although the Supplementary Benefits Commission has stated that the problems of supplementary benefit, which it says is too low, cannot be solved on a no-cost basis. Seventhly, we have heard already reference to cuts in the education system, school meals, milk and transport.
Eighthly, there is the question of the National Health Service and the fact that the increased resources to be allocated to that will fall short of the sum necessary to meet the extra demand caused simply by demographic changes. Then there are the cuts in the personal social services. These are real cuts. Nicholas Stacey, the Director of Social Services for Kent, writing in The Times on 23rd January, pointed out that if they have to cut by 10 per cent. next year, as seems likely, the bulk of that would have to come from closing homes, reducing home help service and cutting back on social workers. The Personal Social Services Council, in their review of what local authorities are doing throughout the country, have reported on cuts in residential care, sheltered housing, day care and meals services. Hostels for the mentally ill are being closed: I have all the details here: we could go on all night reading them out. It is an alarming catalogue and it is utterly wrong, I believe, that the personal social services should have been singled out for such savage cutbacks. These are the very services which are supporting the people who will be most hit by these increases in prices.
I believe there are good grounds for questioning the Government's whole
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philosophy in respect of expenditure cuts. I, for one, do not accept that if you cut down the public sector the private sector will expand. That is a field which perhaps we had better not enter into tonight. Even if it is accepted that cuts are necessary, we on these Benches do not believe that the most deprived, the most vulnerable, should be expected to take their share through cuts in social security and in welfare.
7.20 p.m.
Lord WELLS-PESTELL: My Lords, I should like to begin by saying that I am glad that the noble Earl, Lord Gowrie, is leading for the Government. When we were in office, we were at some great pains to present the things that we introduced in your Lordships' House with reason and with argument. Although on this matter there is no common ground whatsoever between those of us on this side of the House and the Government, one can take comfort from the fact that, however much one disagrees—as I do, and as my noble friends do—with the noble Earl, at least he will be reasonable and will try to pursue an argument. I mention this, because we on this side are getting a little tired of an introduction of arrogance from the Government Front Bench from time to time in our discussions and deliberations. I shall say no more.
Some time ago, when the noble Earl was presenting certain financial matters, he argued that it was necessary to introduce some financial discipline. Today, it is not financial discipline; it is conservation. I suppose that it is a good enough cover to introduce this matter. But we do not accept that the sole reason is conservation; although we accept that this is partially so. While I am on this matter of conservation, I saw on the tape a few minutes ago that the Second Division Oldham Athletic Football Club is having undersoil heating installed at their ground by a Swedish firm, in the close season, at a cost of £60,000. Are the Government really going to allow this? If we really are bent on conservation and if it is necessary, should this be allowed?
I say this in all sincerity to the noble Earl. The real reason for all these increases in gas and electricity prices is what my noble friend Lord Jacques said. It is purely and simply to help the public sector borrowing requirement. When the

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Conservative Government took over, we were told that it would be fixed at £8,500 million. That figure was broken a long time ago. It is now much more than that. So that they have to find ways and means, fair and foul, by hook or by crook, to get money to bolster up the public sector borrowing requirement.
I want to ask the noble Earl why the Government do not take the advice of the newly appointed Chief Economic Adviser to the Treasury. Before he was appointed by this Government, he worked for the London Business School. He argued that a level of public borrowing £3,250 million above the present level would be consistent with the monetary stance of the Government last year. If that is so, why do the Government not take his advice?
Twenty minutes ago, I had almost made up my mind that I would not come to the Dispatch Box to speak this evening. I was appalled, for the first time in 15 years, at the divide that exists between the Government party opposite and my noble friends on this side of the House. I listened carefully to the speakers from the Government side, and I was forced to the conclusion that it is doubtful whether they really know or understand what we are talking about. We are talking about the survival of poor people. No, my Lords, this is not funny. One of the irritating features that I find in the debate today is the large number of noble Lords on the Back-Benches who have done nothing but smirk when my noble friends have been calling attention to the situation as it is. We really must face the fact that there is no understanding between the Government side and this side on the matters which we have been discussing for the last four and a half hours.
This debate, which we initiated, is not a ritual exercise to criticise the Government. It is a measure of our deep-seated concern for those who are badly placed financially, through no fault of their own. We are appalled at the extent of the increases in gas and electricity prices, and at what they will mean not to a small army but a vast army; not only of people living below the poverty line, but those who are living just above it and, more especially, to the 10½ million pensioners—and perhaps I had better disclose an interest. We are shattered that an industry should be required to make a donation to the Treasury,
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which means that millions of people will be indirectly taxed. One can deny this, but when the Gas Board and the Electricity Board do not find it necessary to increase their charges beyond a certain level, and a Government come along and say that they have to be increased not only to a certain level but even further, it can only be a means of getting money by some form of indirect taxation, which the Government can use in any way they want; mainly, I think, to bolster up the Government's monetary policy, which is failing fast and is now in a shambles.
The Government admit that the current account deficit will continue this year at around £2,000 million, with inflation at about 14 per cent. Outside the Treasury, the economic and financial pundits forecast a current account deficit of something like £3,300 million and an average inflation of over 16 per cent. So the Government resort to a particularly reprehensible and, I think, disgraceful action, which will have a very serious effect upon the poor people in this country. At one point, the Prime Minister was aiming at further cuts for this year of something like £2,000 million, but I understand that the Government are now budgeting for cuts in public spending in 1980–81 of about £3,600 million. So instead of a better New Year we are faced with a bitter New Year: the highest unemployment for six years, rising, I suspect, to something like 1,900,000 this year, with an inflation rate, I believe, of about 22 per cent. by June or July. I hope that I am wrong. When the time comes, I hope that the noble Earl will be able to say that I was wrong. A 15 per cent. mortgage rate means that a married man, with two children, earning £5,000 a year is over 16 per cent. worse off as a result of the tax changes, the mortgage rate increase and price increases; while those earning £25,000 a year are 5 per cent. better off—"To him that hath it shall be given".
Lord ROSS of MARNOCK: By the Tories, my Lords.
Lord WELLS-PESTELL: Yes, my Lords, by the Tories. If I may say so, it is quite an achievement in eight months of government. My noble friend was wrong when he said that this is the worst Government that we have had since the

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war. It is the worst Government that we have had since 1931. They lack understanding; they have no feeling; and by these increases and the method they have employed to get them they have lost their integrity.
I want the House to look carefully at the effect of these price increases. They are going to be disastrous for pensioners. Pensioners spend a much higher percentage of their income on heating than any other section of the community. I will give your Lordships the exact figures. A survey which was undertaken recently into family expenditure shows that the single pensioner spends no less than 13 per cent. of his or her income on heating, while couples spend 11 per cent. This is more than twice the percentage that is spent by other people in the community.
The Government have already abolished the previous electricity scheme, and so far as I can find out they have no plans for giving rebates. At present, the heating additions are £3·95, £1·90 and £2·85. These amounts relate to certain health conditions and are payable only to people on supplementary benefit. These rates were fixed following the first rise in electricity prices in 1979. No increase was given in respect of the second increase last year. May I say to the noble Earl that in order to meet that increase, plus the new increase, heating additions will need to be raised by 50 per cent., not by 50p, next November, if not before. It is no good my asking the noble Earl whether the Government will do this. I appreciate that he cannot say yes or no. He can only say that the Secretary of State for Energy has given an undertaking to look at it.
Pensioners' standards of living must of necessity fall. The Government have clearly stated that they will not make up the shortfall in the last pension uprating because it would cost £195 million. Are we seriously asked to believe that the Government cannot find £195 million for the old folk? People on supplementary benefit who run into difficulty with their fuel bills have deductions made from their benefit by the Supplementary Benefits Commission. I wonder whether the Government realise that one in five of the people who have deductions made from
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their weekly allowance from the Supplementary Benefits Commission suffered deductions of £7 a week? This is an indication of the amount of heat that they use. The Supplementary Benefits Commission recently estimated that 60 per cent. of supplementary pensioners are afraid to heat their homes adequately because of the fear of large fuel bills, a point which was made by my noble friend Lord Soper. And he went on to talk about anxiety. I wonder whether any noble Lord opposite, present or absent, has ever had a real anxiety over being short of money?
Lord LUCAS of CHILWORTH: Yes, my Lords, I have.
The EARL of LAUDERDALE: What, my Lords, about the unemployed?
Lord WELLS-PESTELL: I remember, my Lords, another noble Lord opposite talking about being unemployed. When I asked him for particulars he said that he was unemployed for six months after he came out of the army and while he was waiting to go into another job. The question of being short of money and having anxiety is a relative matter. I do not expect noble Lords opposite to understand what it means not to be adequately warm at a time in life when people need heating most. In this field, Tory policy is a policy of no hope for the elderly, many of whom have to end their days inadequately fed, inadequately housed and certainly inadequately warmed.
Lord ORR-EWING: Oh!
Lord WELLS-PESTELL: They believe it now, my Lords. They do not have to wait until it happens. I know that this is the truth. Very few noble Lords opposite have ever done any real social work.
Several noble Lords: Oh!
Lord ORR-EWING: Get on with it!
Lord WELLS-PESTELL: The noble Lord is not going to tell me what to do.
Lord ORR-EWING: Then the House will.
Lord WELLS-PESTELL: That is very nice! I wonder how many noble Lords opposite really understand how some

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people live. The Budget reduced taxation by about £4,500 million, giving 2 per cent. of that amount to the poorest 10 per cent. of the people, and more than one-third of that amount—that is £1,500 million—to the richest 7 per cent. Because of the increase in the cost of school meals, school bus fares, rent, VAT, inflation and the other charges about to be levied, a family of four will be about £9 a week worse off under this Government. Can the Minister say whether adequate provision will be made for pensioners and those receiving supplementary benefit so that they can have what others have got; namely, the means of keeping warm?
The Earl of GOWRIE: Yes, my Lords, of course.
Lord WELLS-PESTELL: May I also ask the noble Earl whether there will be a special spring bonus to assist towards closing the gap caused by the pension shortfall, and whether it will be paid at a time which coincides with the issue of fuel bills, so that it can be used for that purpose? May I further ask the noble Earl whether there will be an increased heating payment to take into account the second rise in 1979 and the new increases, and whether the Government will introduce a discount scheme that is applicable to all who are receiving supplementary benefit and pensions, as well as rate and rent rebates and rent allowances? We on this side of the House cannot and will not sit back quietly while the Government continue to make a frightening and devastating attack on the less fortunate members of our society.
The Earl of LAUDERDALE: Oh dear!
Lord WELLS-PESTELL: Governments have a responsibility to provide for those in need, particularly the aged, and the sooner this Government wake up to the fact that there are enormous numbers of people who will be seriously affected by these colossal increases in gas and electricity prices and they do something about it, the better it will be, not only for this country's name but for the people concerned.
7.40 p.m.
The Earl of GOWRIE: My Lords, the noble Lord, Lord Wells-Pestell, said at
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the beginning of his speech that some little way into the debate he had rather wished that he did not have to wind it up. I must say that it would have been better if he had decided not to do so, in view of a contribution which I can only account for by saying that the noble Lord was in a highly emotional state and was certainly not himself. I would always acquit the noble Lord of unscrupulous political behaviour, but I must say to those who cheered him, at any rate at the onset of his speech—until he went rather overboard, when I noticed a significant diminution in the applause—that it really is unscrupulous and misleading to give people who might be listening to this debate, or who might read about it in the papers, or who might listen to it on the radio tomorrow, the idea that in some way this Government or any other Government do not protect old people from the consequences of price rises. If the noble Lord had listened to my opening remarks he would have learned that domestic gas has fallen in price by over 30 per cent. in the last ten years, and he has only to look at the level of changes in pensions, supplementary benefit and other national benefits, as well as at the level of wage increases in that decade, to see that his remarks were wholly irresponsible and I hope that they will be ignored.
I will concede to him and to the noble Lord, Lord Soper, that a danger exists that people will exaggerate the effects of these price increases by the political rhetoric which has become attached to them, but the noble Lord, Lord Wells-Pestell, did not go any way towards alleviating that danger. In my respectful submission, he tended to inflame it. In a calmer frame of mind in a few minutes I will come back to some of the points he made and which were also echoed by other noble Lords.
I want to deal with one of the central charges against the Government made by many members of the party opposite: the noble Lord himself made it; the noble Lord, Lord Jacques, did; the noble Baroness, Lady Stedman, the noble Lord, Lord Lovell-Davis, the noble Lord, Lord Underhill, and the noble Lord, Lord Banks, and maybe others. Their line was that this is a form of indirect taxation; that the overriding reason for the price increases is in fact to reduce the public sector borrowing requirement. I gave

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as the overriding reason the necessity for energy conservation. Noble Lords would have to convince the Government—it is a matter for debate, and perhaps they could do so—that there was no necessity, in an age of very high energy cost, for energy conservation of this kind.
Neither I nor my colleagues, particularly my senior colleague, my right honourable friend the Secretary of State for Energy, have concealed that while there are compelling energy conservation reasons for increasing gas prices it would be profligate of any Government to lose the PSBR effects of the fact that the British Gas Corporation's profits are remitted to the Treasury. The last Government admitted that and its own price rises were made, as my noble friend Lord Lauderdale demonstrated to the House, with that declared intention in mind. If anybody thinks that this Government have some-how concealed that intention I would refer them to the words of my right honourable friend yesterday, when he said in another place:
"The fact that there are two additional reinforcing arguments for the policy makes it stronger not weaker".—[Official Report, Commons; 29/1/80, col. 1048.]
We are not concealing the effects of the public sector borrowing requirements. As I said in my opening speech, gas is a national asset and it is also a nationalised industry; and if it is making large profits, profits which are surplus to its requirements for its own financing and for the day-to-day decisions of its management (which is of course a matter for that management), naturally they will devolve back to the Exchequer. Various noble Lords have suggested that some sort of excess profits or gas tax has been suggested. I am perfectly prepared to look at that, and so is my right honourable friend. But we must all be clear—as the last Government were clear—that whether the profits of British Gas are left in its name and are looked upon by the public as belonging to British Gas, or whether they are taken away by some form of tax, the net effects on the borrowing requirement are the same.
The "borrowing requirement" is perhaps a technical or jargon phrase, but where does the noble Lord, Lord Wells-Pestell, think that the present level of
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benefits or pensions or social measures, education or anything else in the economy, comes from? It comes from the public sector borrowing requirement, and any methods by which that is reduced will only improve this social policy and not diminish it. So we have no apology to make there and no shame whatsoever.
I also found it extraordinary that the noble Lord, Lord Wells-Pestell, said that there was no common ground whatsoever between noble Lords on my side of the House and the Party opposite. That has been refuted most eloquently and precisely by my noble friend Lord Orr-Ewing, and also by my noble friend Lord Lauderdale. If noble Lords will kindly read their speeches tomorrow they will see that a considerable degree of continuity exists in this, as in many other fields of policy, between ourselves and the last Government.
I am really almost getting exhausted by repeating that the model that we are taking in our broad economic policy at present is the policy pursued when the last Government were in the hands of the IMF, directed by the noble Lord, Lord Lever, by Mr. Healey and by Mr. Joel Barnett. That Government succeeded in one year in taking £4,000 million out of the public sector and inflation immediately started to improve. Unfortunately, under electoral and other constraints they changed that policy; they paid dearly for it in electoral terms, and we are now paying for it in having to wrestle with a great deal worse position on current account than we anticipated when we came to office.
I would reinforce this point, that here, in the general economic policy as well as in gas pricing, and electricity policies, and the Price Commission—a point mentioned by my noble friend—there is a very considerable degree of continuity between the two parties, and it is the purest electioneering at a highly unsuitable time, for the party opposite to suggest that this continuity is not there.
If your Lordships do not believe me, will you study the speech of the right honourable gentleman the shadow spokesman on energy affairs, Dr. Owen, yesterday, when he acknowledged that price increases would have to be made and, as I said in my opening remarks, his view was that a minimum of 17½ per cent. this year would be necessary? The difference between us

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is about the scale and timing and degree of the announcement. The noble Lord acknowledges that, but saying that differences of degree of that kind means that there is no common ground whatsoever is, as my noble friend suggested, rhetoric at best and humbug at worst.
I shall be returning to some of the points raised by the noble Lord, Lord Strabolgi, about insulation and the rest, but I will turn now to one or two specific questions put to me by the noble Lord, Lord Tanlaw. He asked for a justification of the 10 per cent. real price increase, and I should like to clear up any confusion here. We are speaking about price increases over three years of 10 per cent. per year in real terms, that is after the rate of inflation. Before deciding on what targets to set British Gas, the Government considered most carefully the question of domestic gas. As a result we concluded that domestic gas was up to 55 per cent. under priced—the Price Commission, as has been mentioned many times, identified a 30 to 35 per cent. degree of under-pricing. We decided that this degree of under-pricing could not be corrected at one go and therefore we aimed substantially to correct the minimum degree of under-pricing over three years. Many noble Lords, notably the noble Lord, Lord Banks, asked why three years, why announce the bad news now? Our answer is that we wish to give consumers time to prepare for any changes in their budgeting or their attitudes to fuel conservation, insulation and the rest with due warning. We feel that noble Lords who call for a common energy policy, who want a coherent view by the Government across the field of all energy issues, must agree that that is a coherent view to take, to give ample advance warning of what is necessary.
The noble Lord, Lord Tanlaw, echoed disquiet, which I have often heard expressed in this House, that at a time of high gas prices and high energy costs a lot of flaring is going on. May I refer him to the answer given by my noble friend Lord Lauderdale? One would dearly like not to flare, hut that has two difficulties; you have to have a gas pipe nearby, and these are enormously expensive, and while you are installing your gas pipe you are not able to draw any benefits from the oil as well. We have made our policy on flaring clear
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and we have significantly reduced the amount of flaring of gas. To reduce this further we are examining the possibility of constructing a common pipeline to collect gas from the fields which could not justify a pipeline of their own.
I would say to the noble Lord, Lord Tanlaw, that gas is still a good buy and will remain a good buy over the next three years. We would anticipate that it would continue in real terms to be a cheaper form of heating one's house than, for instance, either coal or electricity.
I was asked questions about the extent of the gas reserves. The Government and the British Gas Corporation estimate available gas reserves to be about 70 trillion cubic feet. Current rates of usage is about two trillion feet a year. By the end of the century, therefore, we shall be needing a contribution to our gas supplies from oil based substitute natural gas, and, while that is available, it will be very expensive compared with natural gas. The imbalances I talked about in my opening speech mean that at present there are about 70,000 domestic customers and 4,000 firms waiting for a gas supply. Surely holding down prices, as noble Lords opposite suggest we should, would only exacerbate that situation.
The noble Lord, Lord Jacques, ranged wide into matters of economic policy. He and I have had exchanges about incomes policy many times. Whatever the merits of incomes policy, I have always argued that incomes policy is not available to this Government and it was not available to the last Government either. So we have all got a long way to go—whether forward or backward I leave to your Lordships' tastes in these issues—before there is sufficient consensus in the economy to achieve such a scheme.
My noble friend, Lord Ferrier—may I add my congratulations on his four score years; I have never associated him either with labour or with sorrow—raised the point of insulation grants, and so did the noble Lord, Lord Strabolgi. There are grants of two-thirds—that is, up to £50—of the cost of domestic insulation. We have made a significant shift of policy. People used to have to pay for the work and get receipts before they got the grant, which made it difficult if they were short

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of money in the initial phase. But now receipts are not required, so they can get a grant and use it to pay for the work. All those in favour of insulation should be pleased about that. On energy conservation, the Government recognise the importance in their longer-term energy strategy. An effective energy conservation programme is impossible without a serious approach to energy pricing. Of course, there is an element of rationing by price in any scarce commodity. Our aim is to reinforce that by directing help to those who most need it.
The noble Baroness, Lady Stedman—who seemed, if I am not wrong, to be talking to a rather similar brief as the noble Lord, Lord Underhill; I think Transport House must have been doing its stuff pretty effectively—said that the Government were altogether inconsistent in their treatment of the nationalised industries in terms of steel and the nationalised industries in terms of gas. I have been repeating until I am exhausted—but exhaustion is the ministerial lot and I shall continue to repeat it—that the Government are consistently, constantly and massively, savagely if you like, interfering in the economy through the public sector. In the case of the British Steel Corporation we are interfering to the degree of providing £775 million of other people's money, and the troubles of that industry, which I deeply regret and find largely unnecessary—there are faults on both sides maybe—do not preclude the fact that the Government are intimately involved in the name of the taxpaper.
The issue is, at what point does the taxpayers' contribution have to be overtaken or added to by a contribution by a stripped down and more productive industry? I do not deny that there are many difficulties and headaches to go before that decision is reached. In the case of the British Gas Corporation we are dealing with something quite different, in the sense that we are dealing with an energy source, a finite energy source, and one that cannot be isolated, as noble Lord after noble Lord on this side has said, from world market prices, unless this country, in the shape of the Exchequer, as well as the Corporation itself, is not to be a colossal net debtor.
The noble Baroness asked me a particular question about Becton. I have an
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answer, but in the interests of time, I would prefer, if she will forgive me, to give it to her in writing. She should feel quite free to return to me if in some way she finds the answer unsatisfactory.
My Lords, unlike my right honourable friend the Secretary of State for Energy, I did not have the good fortune to be the star pupil of the noble Lord, Lord Kaldor. No doubt if I had been I should now be the Secretary of State and not a mere Minister. However, one of the pleasures of working in this House is that life is a constant tutorial from the noble Lord. Today he seems to be saying burn, subsidise and be merry, for tomorrow we die. I have noticed, too, that he cited Mr. Powell. Mr. Enoch Powell really has reached the status of a guru in our society, for people of strongly opposing views have got into the habit of citing him in support, but very few people, even those who cite him, appear actually to follow him.
The noble Lord raised the issue of tariffs and asked whether the poor—all of us indeed—would not be helped by the restructuring of fuel tariffs. We have studied this possibility and it was studied by the last Government, but the general conclusion has been that tariff restructuring is not an altogether satisfactory way of helping poor consumers with their fuel costs. The difficulty is that it benefits all consumers regardless of their ability to pay while simultaneously doing significant harm to the considerable numbers of less well-off consumers who already face high bills. Noble Lords may have seen a recent statement on energy pricing policy issued by the nationalised industries' consumers' councils, which were cited in the debate. This also concluded, with us, that tariff restructuring is not the answer to the problems of poorer consumers. But if the noble Lord continues to press his case we will, of course, examine it carefully.
The noble Baroness, Lady Gaitskell, confessed to being an agnostic about economic messiahs, and I really think most of the Government are agnostic too. I do not think it is quite right for her to play the unemployment card, having supported, as she did, a Government which doubled unemployment. This was not wholly their own fault but nevertheless they did it, and the Government have to carry the can

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during their period of office. I can assure noble Lords that we have no intention of equalling that record.
My noble friend Lord Lucas of Chit-worth criticised us on grounds of presentation and he criticised us also for lack of a coherent energy policy. The presentation point has been made by a number of Government supporters. I believe that the short answer—and this is only my own personal opinion—is that bad news is always bad: it is never easy to present it as good. It may be more sensible to present it as necessary and then try to point out what measures one is taking—when one comes to conclusions about them—for protecting those who need protection. We are looking at nationalised industry accounting. I acknowledge, with my noble friend, that all is not satisfactory in that respect.
I should like to make one more personal point. I am a passionate believer in high wages and I feel that many of the economic ills of this country have come from low industrial wages. However, unlike the party opposite I do not think that high industrial wages can be accompanied by a high social wage or a Welfare State on the level which we now enjoy.
The noble Lord, Lord Underhill, and others raised the question of insulation grants and asked me some questions about insulation grants for industrial users. The noble Lord is right in thinking that the industrial grant scheme is not to be extened after its projected life. The present tranche, of course, will continue; the scheme will, however, operate up till that time. The Government have decided not to introduce a pilot advice service on home energy saving, planned by their predecessors. I regret that, but that decision has been taken on grounds of cost. We must decide the most effective way of presenting our case, and we decided against that one.
The noble Lord, Lord Soper, kindly advised me that he would not be able to be present at the end of this debate. However, he made an important point with which I should like to deal. He told us that the elderly do not like having to ask for help as if it were charity. I altogether endorse that, and that is one of the reasons why the help this Government have made available to assist the elderly
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this winter was in the form of automatic heating additions to supplementary benefit, without the need for separate claims. I do not consider—and I am sure that noble Lords opposite agree with me, at least in this regard—that supplementary benefit is a form of charity: it is a benefit awarded as of right. The Social Security Bill, currently being considered in the other place, will extend further the process of entitlement to supplementary benefit by placing all the rules regarding that benefit in the Act.
The noble Lord, Lord Granville of Eye, said that we should make an early announcement regarding fuel cost assistance. Perhaps the Government have left themselves vulnerable by announcing their energy price policy in such good time, although we considered that it was right to do so and to announce it before announcing our concomitant social policy on fuel costing. We must get that right and we must get it effective. We shall make an announcement in good time for people to be able to plan how to manage next winter.
I wish to wind up by saying that I think there is one profound difference between ourselves and the Party opposite. The Labour Party believes in subsidising everyone from general taxation, whereas we believe in subsidising those who cannot help themselves. The gap between those points of view is difficult to bridge, but I have nevertheless enjoyed the debate and found it useful. I shall ensure that all points of substance made by noble Lords on all sides of the House are brought to the attention of my right honourable friend.
Lord KALDOR: My Lords, before the Minister sits down, may I remind him that I asked him a question at the beginning of the debate and he told me that he would supply the answer at the end of the debate? My question concerned the relative prices of gas for industrial and domestic consumers respectively.
The EARL of GOWRIE: My Lords, I am sorry if I missed that point. However, I have a note of it here. The average price to the large industrial consumer, as shown in the latest edition of Energy Trends, is 12.64 pence a therm compared with about 19.6 pence a therm for the

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current domestic tariff. That is misleading because it costs 9 pence a therm more to supply the domestic market—another imbalance here. Most industrial contracts are renewed annually, and British Gas is currently renewing these at about 24 pence a therm. New industrial contracts are in fact being negotiated in excess of 28 pence a therm.
8.5 p.m.
Lord STRABOLGI: My Lords, I think that this has been a very good, hard-hitting and well-informed debate. Having had the great good fortune to hear every speech and to have been on this Bench since 2.30 p.m., I am sure that your Lordships will be glad to hear that I intend to say very little at this stage. I must comment briefly on what the noble Lord, Lord Orr-Ewing, said about the timing of this debate. He implied somehow that we put our Motion down after the debate had been arranged in another place. In fact, our Motion was put down about 10 days ago, long before the debate in the other place. However, it does not really matter. What is important is that the Government must by now realise the amount of feeling that there is in both Houses and throughout the country about these increases. As my noble friend Lord Kaldor said, there has been a barrage of criticism. My noble friend Lord Underhill was perfectly correct when he said that the Government have had a very bad Press.
As a result of this pressure of opinion we welcome the Government's concession—which was described by the noble Earl today—to consider the special needs of the old, the poor and the elderly and those who are just above the extreme poverty level. I agree very much with what my noble friends Lady Stedman and Lord Granville of Eye said about this matter when they drew attention to the plight of many people living on small, fixed incomes, and to the help needed by the aged.
I must make a few comments about the term "rhetoric" which was used by the noble Earl, Lord Lauderdale, who is a friend of mine outside the Chamber. It was repeated also by the noble Earl, Lord Gowrie. We on this side of the House were not just using rhetorical
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terms for the sake of using them, nor playing at party politics. We feel deeply about these matters, and my friends and I were very sincere in our speeches. We hope that the noble Earl will take note of that when we return to the matter.
We shall look forward to seeing the Government's scheme when it is announced, and if it does not go far enough we shall put down another Motion. I must say that it was my noble friend Lord Soper who said that he hoped that any help coming from the Government would be in the line of compassion rather than of charity.
We are also very grateful to the two Liberal Peers, the noble Lord, Lord Tanlaw, and the noble Lord, Lord Banks, for their support. I should like to thank all noble Lords who took part in the debate, especially my noble friend Lord Wells-Pestell for his winding up, and the noble Earl, Lord Gowrie, for the careful attention which he always gives to the various points raised, and for the trouble he has taken to answer them. My Lords, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

READING LENSES AND SPECTACLE FRAMES
8.9 p.m.
Lord RUGBY Lord RUGBY rose to ask Her Majesty's Government whether they will initiate a policy to abolish restrictive practices in the distribution and sale of reading lenses and spectacle frames. The noble Lord said: My Lords, the object of my Unstarred Question in so far as I am concerned, and I believe others who are also taking part, is in no way aimed at reducing the status or the remuneration of professional people engaged in the enormously valuable sciences concerned with the nation's eyesight.
The person to whom, with whom and about whom my address is concerned, is loosely termed "middle-aged" and specifically the middle-aged emmetrope—that is, a person with normal eyesight and with both eyes in balance. At about the age of 50 the great majority of such middle-aged emmetropes undergo a subtle physiological change in their eyesight. That change affects, above all, their ability to

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read the printed word. Because he has normal eyesight, the aging process of the eyes has demanded that the intellectual side of his life would be limited in the extreme without a reading aid. That can take the form of a magnifying lens, or two lenses in binocular form. The history of this relationship—the aging eye, the printed word, the lens—goes back 800 years as recorded by an Italian who wrote:
"I can no longer read without these things called spectacles".
Because of this dependence on this aid to the middle-aged eyesight and the extension it provides into old age, a fruitful and creative boost was given to civilisation. In fact, the early manuscripts of the Bible were copied by elderly scholars because they had magnifying lenses and the spread of the printed word across the face of Europe was accompanied by Jewish pedlars selling reading spectacles, enabling the elderly to read those Bibles—no doubt with the exhortation, "Magnify the word of the Lord".
My Lords, my recent Question as to whether it was ethical to deprive those with normal sight (the emmetrope) of their ancient right to select and purchase magnifying lenses in whatever form and for whatever purpose without compelling them to undergo eye tests by statute—and that is by retail opticians—puts into perspective this long history of that freedom of choice. Imagine Shakespeare's Judge in the Seven Ages of Man whose spectacles played a vital part until just before his days are ended:
"The lean and slippered pantaloon with spectacles on nose".
Anyone telling him that it was wrong to use those glasses without an eye test would certainly have been treated to some choice modern idioms.
Under present legislation no person may sell any optical appliance unless the sale is effected under the supervision of a registered practitioner (medical or optical), and anyone selling an appliance for correcting, remedying, or relieving a defect of sight may be prosecuted, and such is the anatomy of these monopoly powers. It is my submission that the section of the community which is hardest hit is precisely the middle-aged and those beyond middle-age who, as I have said, have normal eyesight and, due to reduction
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in physical and active pursuits, have become more than ever dependent on intellectual and handicraft pursuits.
Having once discovered that they need a reading aid, this optical control can make them commercially vulnerable by denying them these aids unless they admit to being a patient of the National Health Service or private patients, but both categories in essence are incorrect. They are normal. They are certainly not in need of remedial treatment, and they have no defect of the eyes. Such remedial treatment is young by comparison, and heavily indebted to the work and research done by researchers no doubt using reading lenses and microscopes.
This is borne out by Dr. Elsom in the address given to the Worthington Society in 1934 on the subject which was headed The Origin and Development of Spectacles. In his opening statement he says:
"When we remember that at 50 the emmetrope (the person with normal sight) can no longer read small print, nor do fine work, nor indeed near work for very long together, we realise what a marvellous boon these optical aids are to us, both for pleasure and even for our livelihoods."
In other words, if I may interpolate, if the print were larger the aging emmetrope could throw away his glasses. I quote again:
"If it were not for these glasses a large part of the population would be entirely incapacitated from earning their daily bread, not to mention the sufferings of many others with faulty sight of various kinds."
So here is an acknowledged leading medical expert highlighting the two separate sides, and even illustrating his lecture with a slide showing the people buying their glasses at Woolworth's, with the comment,
"No doubt the prospective purchasers had a good deal to do with their choice of lens."
Here, indeed, was private enterprise supplying instant replacement of broken or lost spectacles, and who can foretell what accidents or emergencies can occur? The loss of spectacles can be entirely incapacitating, as the doctor stated in his lecture. At our meeting recently with the Committee of Ophthalmic Opticians this was brought up, and I quote their reply:
"… neither the optical industry nor the professions can so completely change the supply structure in this country as to be able to provide instant replacement of broken or lost spectacles. Depending upon the location, replacement to a known prescription will take between one to

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four days. The remedy, which seems reasonable to me as a regular spectacle wearer, is to have a spare pair of spectacles; ideally, an identical prescription but, if not, the spectacles discarded when the last new prescription was obtained."
In other words, if you are so incapacitated it is due to your own negligence in not carrying a spare pair, and the ophthalmic services see no reason to cater for such emergencies.
The consequence of this attitude is to make people who travel abroad buy their spare pairs of glasses cheaply and quickly while they can. These spectacles I am wearing were bought in New York for about £5. Indeed, under our present restrictive implementation of the Opticians Act it is quicker, and possibly cheaper, to get a return ticket on Skytrain and buy two pairs of reading glasses off the shelf in New York.
The enabling vehicle which paved the way for the Opticians Act 1958 was the Interdepartmental Committee of Statutory Registration of Opticians. They deal under the heading "Consideration of Certain Special Problems" with the subject of bodies corporate supplying glasses to the public, a section of which I should like to quote.
"We think, too, that the supply of glasses by bodies corporate may suggest to the public that considerations appropriate to commercial, rather than to professional, life may sometimes influence the service provided. On the other hand, it is only fair to say that we have received no evidence that these arrangements have led to substantial evils."
There seemed little point in saying this. Nevertheless, their problem clearly was concerned with shutting out Woolworth's, and it was confirmed in Lord Crook's letter which he sent to our Committee that this was in fact their intention.
The moment was indeed opportune after the shortages of the war and then 5½ million spectacles being dispensed free of charge under the National Health Service in 1951. Under such subsidised onslaught no private enterprise could survive. And what about the public conscience being offended by considerations appropriate to commercial, rather than professional, life sometimes influencing the service provided? What deductions do the public draw today? Spectacles displayed in the shop window but no price tags; a compulsory eye test before the sordid com-
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mercial details can be discussed and the price disclosed. Does pressure take place at this time to buy an expensive frame? From all accounts it does, and indeed it would be surprising if it did not. Opticians, if they display in shop windows, are traders like everyone else; but at the same time enjoying the immunity from competition given to them by the General Optical Council. Comparisons may be odious to that body, but nevertheless in that period of pre-war to today, prices have risen by 2,000 to 3,000 per cent. for reading glasses. In those days it took 400 reading glasses to equal the price of a pair of field glasses. Today it takes two or three pairs of field glasses to equal a pair of reading glasses.
There are roughly 60 million people in this country. It does not take much mental arithmetic to guess that about I million people come into the age group of needing a reading aid every 12 months, to swell that vast majority already using these aids. It is indeed a captive market of staggering numbers. These people should be treated as having the power of decision in relation to their optical help by the time they are middle-aged. The 50 year old emmetrope should be a consenting emmetrope and not a victim of a powerful monopoly.
Encourage by all means the regular testing of eyesight without the enforceable MOT, or mandatory optical test. Patients must be seen to be voluntary patients and not coerced in any way into having eye tests; that is only normal medical ethics. Let people who trade in optical appliances be subject to competition and offer free choice and plenty of availability. My Lords, there is much disquiet among the middle-aged and more elderly in what appears to them to be an exploitation of their vital needs, which were better served under free enterprise. For the reasons I have set out, the abolishing of monopoly control on reading glasses is, in my opinion, now urgently sought.
8.20 p.m.
Lord WINSTANLEY: My Lords, I must begin what will be a very brief contribution to this little debate by proudly donning my National Health Service spectacles. While I shall be brief, I must thank and congratulate the noble Lord, Lord Rugby, for drawing the attention of the House to some very

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troublesome, costly and wholly unnecessary bureaucratic muddle which really should be swept away as soon as possible.
As a doctor, I do not think noble Lords will expect me to ask that all the kinds of protection from which the medical and Para-medical professions benefit should be swept away, but there are many matters in which they should. The noble Lord, Lord Ferrier, who was in his place until a few moments ago, has battled hard to get doctors to accept that it is not wholly improper for a chiropractor occasionally to lay his hands upon a patient. There are those who have talked about the monopoly in conveyancing enjoyed by solicitors, but this matter to which our attention has been drawn is important in that it really illustrates the way in which we should look at protection, whether it be for a profession, industry, trade union or whatever. Surely restrictive practices can be justified and allowed to continue only if they exist in the interests of the consumer, customer, client, patient or whoever it happens to be.
The noble Lord, Lord Rugby, talked, and rightly, about the special problem of the middle-aged who suffer from presbyopia, in other words they become increasingly long-sighted. When we first suffer from it, we tend to say there is really nothing wrong with our eyes, just that our arms are a bit short when we cannot get the paper far enough away. They are a group of people who have this problem and meet with this bureaucratic muddle. Like the noble Lord, I have no wish to return to the good old days, if they were good, when one could easily get a pair of glasses by wandering into Woolworth's, rummaging about in a tray and finally picking up a pair of glasses and marching out at very little cost with one's sight instantly restored; that sort of freedom is perhaps dangerous. But there are things which should be done, and soon.
My reason for rising is merely to draw attention to another matter in this field. For many years after the National Health Service was introduced on 5th July, 1948 it was necessary, before a patient could have his eyes tested, for some reason which always remained inexplicable to me as a general practitioner, for that patient to wander along to see his general
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practitioner and get from him a little green form, known as an OSC1, which had emblazoned on it, "I have today examined you and certify that you require your eyes tested". I can certify that the nature of the examination usually consisted of asking, "Do you want your eyes tested?" The answer would be, "Yes", and then one would say, "There you are then, your green form". That wasted a great deal of the patient's and the doctor's time when doctors were having difficulty in coping with unnecessary work.
My point in referring to that is that it took 25 years to get rid of that wholly unnecessary burden on doctors and patients alike. All I can say at this late hour is that if it takes 25 years to get rid of some of the muddles about which the noble Lord, Lord Rugby, talked, I fear there are noble Lords in this House now who will not benefit greatly from this interesting little debate.
Lord NORTHFIELD: My Lords, while my name appears next on the list of speakers, I know that the noble Lord, Lord Orr-Ewing, has to leave. Would he care to speak before me?
8.25 p.m.
Lord ORR-EWING: My Lords, I am most grateful to the noble Lord, Lord Northfield, and I apologise to the House because I shall have to leave before the end of the debate: I cannot leave my wife waiting for me. I promised to collect her at a certain hour and I had no idea that this debate would come on quite so late.
Lord NORTHFIELD: My Lords, can the noble Lord see his wife?
Lord ORR-EWING: Yes, my Lords, I am wearing my National Health spectacles and can see quite well. I congratulate the noble Lord, Lord Rugby, who has taken a great deal of trouble and has produced some amusing comparisons relating to the price of spectacles compared with the price of, for example, field glasses. Like other noble Lords, I got on to this matter because I read in the papers that a person who was selling glasses had been disciplined—that was the word used—by the General Optical Council because he had the impertinence to display in his window the price of a pair of spectacle frames. When we

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saw the General Optical Council their defence was that it would be misleading to put the price on because, in addition to the cost of the frames, there was the cost of the test, the cost of the lenses and the cost of putting the lenses in the frames.
If one assumes that all the public are quarter-wits who cannot protect themselves in anything they buy, and that there is no law—which there is—about incorrect advertising, that is one thing. But a tremendous amount of consumer protection law has been built up since this set-up was arranged by Nye Bevan. If that were not so, you would need to have somebody controlling absolutely everything, and I feel we have gone far too far in looking after the interests of those who test eyes, those who manufacture spectacle frames, those who manufacture lenses and those who put them together, without well and sufficiently enough looking after the resultant price and the consumer who has to pay for them—and as the noble Lord rightly said, there might be one million people a year buying, probably more than one pair of spectacles each.
The General Optical Council seems to think we have the best of all possible worlds. The very fact that noble Lords in all parts of the House are taking part in this debate shows that that is not so. Since I raised the matter I have received a large number of letters saying, in effect, "Thank goodness somebody somewhere is raising this matter. It must be put right". I am sure they are honest people. The last letter I received came only a few days ago and said, "I have just had a pair of replacement spectacles. I admit they are bifocal and I admit they are private, but the bill has come to £106". This has got completely out of hand.
I realise that it takes a long time to put the law of this land right and that Acts of Parliament are unpopular whatever the Government in power, but I wonder whether, in the interests of protecting the consumer from this escalating price, the matter should perhaps now be submitted to the Restrictive Practices Court or the Director General of Fair Trading, who might refer it on to the Monopolies and Mergers Committee, which he is entitled to do under the Fair Trading Act.
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I appreciate that all that takes time, but I hope that, when the Minister replies to the debate—and I apologise that I shall have to absent myself, but I shall read in the Official Report what he and other noble Lords have said—he will give some assurance (not just flannel; we do not want him to say, "We will look at it") and some recognition that the time has come, after the stark examples which have been quoted, when something must be done to make this area of consumer protection far more effective than it is now.
8.28 p.m.
Lord NORTHFIELD: My Lords, I must, like others, declare that I am over 50 and now wear spectacles. Luckily, these spectacles were bought in America for 10 dollars. They are all plastic with plastic lenses, which I gather are expensive here, and I can only say that they would probably cost £30 to £40 in England. This is the kind of racket—frankly, that is a worthy word to use—that we are asking tonight should be remedied. I buy these in America and I now go there with orders from friends to bring back pairs of spectacles for them; people are realising that one can do this abroad, in particular States in America. It is not like rummaging amid a pile of spectacles as one could in Woolworth's years ago. There is a proper stand of spectacles showing the degree of magnification and if one is bright enough to check first in Britain on the degree of magnification one needs as one reaches old age, one can satisfy oneself by getting glasses like these quite cheaply in America. Considering that I have been meeting noble Lords in the corridors in recent weeks who have told me that their spectacles have cost them £60 or £70, no doubt I shall be taking another batch of orders with me when I next go to America in March.
This is a serious matter. The noble Lord, Lord Winstanley, said that it took 25 years to get the green form changed. Well, if he will allow me to say so, it is just 21 years since I fought this battle in the House of Commons. In 1958 there was a Private Member's Bill, the Opticians Bill. I fought that Bill as much as I could in the House of Commons because it included the two aspects we have been considering tonight. At one

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point I moved that a count be held to ensure that there was a quorum present. I did that in an effort to kill the Bill, but it was steamrollered through by a few opticians and a docile Government. A Private Member's Bill which, in my view, has done much good, but also much harm in this particular respect, was allowed through without proper amendment. At that time I moved an amendment on the issue regarding spectacle frames, and I seconded an amendment regarding reading glasses. So I have a pedigree in this matter. That was 21 years ago, and I hope that we do not have to wait 25 years before we get this situation remedied.
It is worth looking back at those debates in 1958 in the House of Commons. I moved an amendment to allow advertisements by opticians in an effort to have price competition on spectacle frames. I said that opticians were two kinds of people. They were professional people whose job it was to provide sight correction lenses; but in our society they had a second function, which was a purely trading aspect of a normal, commercially-produced article—the spectacle frame, many of which were bought for cosmetic reasons. Speaking of the professional status which the Bill gave to opticians, I said that I wanted to prevent the use of that status as a cloak for overcharging for spectacle frames on the purely trading side of an optician's work. I fought this battle for a very long time. Anyone reading Hansard must have thought that it took days. I was doing my best to drag it out and so kill the Bill; I failed.
I made my case on the basis of figures. It is very interesting to see what the figures were in those days. I said that at that time private frames that the optician was buying—I happened to know people in the profession who gave me these figures—were costing about a pound or so above the price of National Health Service frames, and opticians were charging £3, £4, or £5 extra for them; in other words, they were having a 300, 400 or 500 per cent. mark-up on the price of the frames. Without at that time saying that it was a racket, at least I said that it surely left room for price competition to move in and so see whether the 300, 400 or 500 per cent. mark-up was a legitimate margin.
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What was the answer of the promoters of the Bill? There were two answers. One was given by Sir Hugh Linstead, who was then a leading pharmacist in this country. He said that we should entrust all this to the Opticians' Council; they would see that ethical standards would prevent the public from being fleeced. Well, I shall come to that in a moment. The second answer came from the promoter of the Bill, Mr. Russell. His only answer to me, 21 years ago, was that he did not mind an advertisement with prices inside the shop, but please, not in the shop window. If someone did not like the price shown inside the shop, he could go elsewhere.
Of course the answer to that—and we have seen it now over the years—has been governed by the Price Commission in their report on the Dollond and Aitchison Group, and I shall read to your Lordships what they say in paragraph 6.7 when they investigated this group of spectacle makers. They said:
"Anyone who wishes to purchase a pair of spectacles thus has no way of comparing prices charged by different opticians short of obtaining a prescription and then entering their premises and asking a series of detailed questions. In practice very few customers do this, as they tend to buy their spectacles at the optician's where their prescription was obtained".
They are a captive market once they are inside the door, and really they have no way of knowing the position regarding prices. They cannot really say that they will not buy their spectacles there but instead will go to see Mr. So-and-so next door. That would involve all the business of going into the optician's and demanding a lot of the information about prices. We know very well that that kind of competition is in fact nil competition. The customer is a captive once he is inside the optician's shop. The only possible legitimate form of competition is to allow displays in windows, so that we can all see the various frames offered by different opticians.
Let us look at what has happened in the 20 years that all this business has been going on since I lost my campaign against the Bill. We have had the Optical Council, and they have published and had sanctified by the Privy Council a statutory order which was passed through both Houses of Parliament—we are all to blame in this, I might say. It is Statutory Order No. 167 of 1964—at least I think it is

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No. 167. It prohibits the advertising and the display of prices in shop windows. Under the powers in the Opticians Act, as it now is, they have issued rules which have been approved by Parliament.
Since then the Price Commission have investigated the results. There have been two reports—I am not going to quote them at length—one in 1976 and another in 1979 on the Dollond and Aitchison Group, which has 10 or 12 per cent. of the whole market and is the market leader in supplying these goods (as I call them) to the community. It is interesting to see what the Price Commission said about this issue. They said:
"We would draw a distinction between the professional service involved in sight testing and prescribing, and the commercial service involved in supplying goods to the prescription given. Concerning the latter, we consider it important that competition should be permitted to play its part in encouraging efficiency and cost saving. If this distinction is accepted, then the restrictions on price display and advertising appear in a less favourable light. Far from protecting the consumer, they may bolster high cost production methods and high retail margins in the supply of spectacles and their component parts".
That echoes exactly what I had said in 1958.
Even further, let us look at the figures which the Price Commission discovered in investigating, in greater detail than I have been able to do, one major group. It is very interesting; they come out with exactly the complaint that I was making in 1958—a 300 per cent. mark-up on frames. The figures are astronomical. On page 20 the report deals with one frame with a factory gate price of £3.78. By the time it is sold to the consumer in the same group's shops the price is £21 for the frame alone—never mind the lenses. There is another example: a factory gate price of £14.90 becomes £44 when the consumer buys the frame in the shops of the vertically integrated company, Dolland and Aitchison. I do not think that this firm is any worse than any others. They just happened to be picked on for the investigations.
So the Price Commission concluded:
"In our view, judged by the levels of their profit margins, return on capital employed, or cash flow, the four companies [in the D and A group] are earning more than adequate profit. In these circumstances we felt that some restraint on the companies' prices and margins was justified".
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They advocated open price competition with displays in the opticians' windows.
I believe that after all these years, and now sanctified by a couple of Price Commission reports—no matter how much noble Lords opposite doubt the work of the Price Commission—we are entitled to ask what is the Government's view. When the 1976 report came out Mr. Hattersley, who was then a Minister, in the Commons regretted the unwillingness of the Optical Council to modify their rules. Do the present Government regret the council's unwillingness the second time around, after another report, and are they prepared to do something about it?
If they are prepared to do something about it, I shall suggest two ways that I think are real starters. I suppose that one way is to introduce another statutory order repealing the earlier order. Let us repeal the rules laid down by the Optical Council. Let us send them back to them and say, "Parliament is not prepared to underwrite your restrictive practice in this way, and you must put forward more liberal rules allowing some price competition". That seems to be one way of doing it.
The second way is to amend the section of the 1958 Act, which I think is Section 25, which gives the powers to the Optical Council. In the middle of subsection (2) of Section 25, which slightly limits their prohibition powers, we could introduce words which will take away the power of the Optical Council to restrict price display in the shop window instead of allowing it just inside the premises. I would say quite frankly that, if the noble Lord, Lord Cullen of Ashbourne, would give us a nod this evening, there are plenty of noble Lords who would introduce a one-clause Bill tomorrow to amend the 1958 Act in this respect, by altering the powers of Section 25 to take away their prohibition powers in this major respect. I am pretty sure that, given the outcry in the House of Commons as well, we would get that Bill through. I hope we shall not have to come to that, but I think that in the end there will be plenty of volunteers around if all else fails.
I do not want to take much longer, but I want to say two other things. What the Dollond and Aitchison Report by the Price Commission also points out, which is very relevant, is that in America—

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and this is very interesting—which has a market very similar to that in the United Kingdom in respect of spectacle frames, the Federal Trade Commission has overruled State laws which prohibited display and price display. So there is now the situation in America where, because of the abuse, the Federal Trade Commission has in fact forced the allowing of price display in all the States of America—and its report says that it found that prices were lower in the States which were allowing advertising. That is a very good lesson for us. In Germany, of course, prices have to be shown, anyway, by law. So we would not be alone in enforcing the right of opticians to compete, if they so wished, by open price display in their windows.
I conclude with one word, which is to try to say something about what I think are the opticians' objections. When you say to them, "Why are you against all this?", they say, "It is not in the public interest". That, if I may say so, is a lot of codswallop. In other words, I think they are covering up a restrictive practice. But they then have one point in their favour. They say, "How could you do it?"—because of course, the price of the frame is not a clear indication of the price of the complete spectacles. But the answer is not difficult. In a window you could put a note on some spectacle frames saying,
"Frame £5 plus cost of lenses and dispensing fee".
In another part of the window you could have private frames and a note saying:
"Price £5—suitable for National Health Service lenses";
which means that you get them at a very low price. But, no matter how you look at it, so long as you face up to the issue it is possible to arrange a form of price display that gets over the difficulty that spectacles are more than frames; they include lenses and the cost of prescribing and fitting.
I am not going to go into the other issue of the marvellous spectacles which the noble Lord, Lord Rugby, and I buy regularly in America. I think he made the case absolutely on that one, and I will not interfere any more, except to say that in 1958 Mr. Norman Pannell made a speech in the House of Commons and tried then to get some liberalisation. Again,
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it works so well in America that I think we ought now to say this. Thirty years of the National Health Service has taught people, I am sure, to go to an optician when they need to for proper testing if there is a difference in the correction which each eye requires. That is one thing behind us. We have national standards and ways of behaving in these matters now. Anybody who really needs testing will go to an optician; he knows the price will be modest. With that behind us, and with those standards now accepted, we ought to bring back the freedom of the person who loses his spectacles, as I so often do, to go out and buy a spare pair "off the peg", with a simple correction in both lenses, which he can use all the time and need not worry about losing, given that they are so very cheap.
8.45 p.m.
Lord SMITH: My Lords, I can be very brief, for I can express my views on this matter in a very few minutes. If we are concerned with lenses for therapeutic and correctional purposes, as of course we are, then, as the noble Lord, Lord Rugby, has said, under the Opticians Act 1958 these must be prescribed by an optician or by an ophthalmic medical practitioner. Quite clearly, certain restrictive practices apply here. I believe that if we were to go so far as to abolish them this would in fact be much against the public interest. Section 1 of this Act established a General Optical Council and charged it with certain responsibilities—responsibilities for promoting high standards of professional education and conduct among opticians. It was empowered to make certain statutory rules, to which reference has already been made.
In particular, the General Optical Council laid down two rules, the first being that opticians may only test sight and prescribe corrective lenses, and any disease identified must be referred to a medical practitioner. The second one, of course, is that in regard to publicity, where it is suggested that spectacle frames may be displayed but that, in that a skilled examination and the provision of lenses will form the major part of the cost—a greater part than the frames themselves—the prices of completed spectacles should not be indicated. In other words, it should not become a public competition

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in regard to professional skills. I think we may feel that this argument is in fact a somewhat slender argument, and that this second regulation, even if not the Act itself, is deserving of being looked at and, perhaps, altered in some way.
As a doctor, I must confess that the most important effect of the Act itself is that a citizen who observes that his eyesight is becoming less satisfactory cannot merely buy across the counter spectacles which he believes, through trial and error, will improve the situation. He will at least have his eyes examined, and this really is a good thing, because the very first indication—not just one of many signs, but the very first indication—of serious organic illness may sometimes be a failure of vision of some variety, including merely difficulty in reading the printed word. This is no trivial matter, my Lords. I refer in particular, in the eye itself, to glaucoma or detachment of the retina; in the head, of the early effects of a brain tumour; and generally, of the early onset of diabetes or arterial degeneration—and there are many other, less common things one could cite. In all of these early detection may decide the efficacy or otherwise of treatment.
So, as regards lenses for therapeutic and correctional purposes, then, if indeed some have sought to manipulate the regulations improperly for their own profit—in other words, have operated a racket; and maybe this is so—by all means let us try to seek ways of checking this, perhaps by looking at the second of these two regulations and altering that. But not, I believe, by trying to do away with the 1958 Act itself, because I believe this would have serious implications, both for the optical and for the general health of the public, and also for the continuation of high standards of education and professional conduct among optical practitioners. If your Lordships will excuse a well-worn cliché, this would be throwing out the baby with the bathwater.
8.50 p.m.
Lord SEGAL: My Lords, I must apologise for not having put my name down on the list of speakers, but I shall be brief. My sole purpose in rising now is to raise a matter to which I had hoped other speakers might refer. I want to plead for
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something which I have raised on more than one occasion previously in your Lordships' House. It is the provision of reading lenses which would obviate entirely the provision of spectacle frames. Under the present regulations, patients have access under the National Health Service to contact lenses for a very small fee. Admittedly, these would suit only a minority of patients requiring reading lenses; but the cost in suitable cases would be far less than the cost today of complete spectacles with frames and prepared reading lenses. Without pressing the noble Lord at this stage to give a categorical assurance that wider provision will be made under the National Health Service for contact lenses in cases where they are suitable, may I, in the course of this debate, raise this matter in the hope that the Government will encourage the manufacturers of contact lenses to have a rather wider scope than they enjoy at present in the provision of these very necessary lenses for suitable patients?
Another matter which worries me is this. Can the noble Lord give an assurance that the very restricted provision of contact lenses is not due to the opposition of those manufacturers of spectacle frames who, under the present regulations, can reap rather too rich a harvest from the provision of the old-fashioned form of spectacles?
8.52 p.m.
Lord WELLS-PESTELL: My Lords, I will not keep your Lordships for any length of time, other than to say that we on this side feel that the public interest requires that persons should be able to get an efficient and competent service without being fleeced. Most of us are aware that there is widespread concern among people at the cost of spectacles these days. I understand that it is difficult to get spectacles, if they are outside the National Health Service range, for under about £70. I can remember that when I myself went to be re-examined and had to get fresh lenses two years ago, I was asked to pay a premium if I wanted them within a certain period. I asked why and was told, "This is what the manufacturers require". I said that I refused to pay a premium because they had no right to charge it. I got my glasses without difficulty. I feel that there are a number of things which need looking into.

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I am a little concerned—but I am sure there is good reason for it, as the noble Lord, Lord Winstanley, has said—that people should be able to go directly to an optician (and I knew that, because I went direct myself) and that spectacles can be prescribed when perhaps they are not required. We all know that the doctors will tell us that a substantial percentage (I do not know how many) of people who complain of headaches and who go to the optician are probably prescribed spectacles when they do not need them. I am not suggesting that we return to the days when we had to go to the doctor, but I do not think it is a very good move.
The only other thing I want to say is that I think the public could be assisted if the Government could see their way to having a much better range of National Health spectacles. Those I saw were not very attractive. They have not been improved—quite apart from the fact that if one asks some opticians to show one the range, they do not know where they are. Very few opticians, I believe, have them on show in a place where one can readily see them. I do not know whether the noble Lord is in a position to say whether anything is being contemplated about improving the range. If the range could be improved, they could be made more attractive to many young people in particular. The cost is laid down, it is very clear and one would know beforehand if one chose to ask what the cost would be. I should be glad to know whether the Government are contemplating any form of inquiry by the department itself into the provision of spectacles.
8.56 p.m.
Lord CULLEN of ASHBOURNE: My Lords, I am sure the House is grateful to the noble Lord, Lord Rugby, for introducing the debate so entertainingly, and to those who have spoken today from their knowledge and experience of the subject. The debate has ranged widely, covering not only the question of the standard of care which should govern the health and wellbeing of the nation's eyesight but also the matter of price competition and the interests of consumers in the field of optical appliances. I have no doubt that the comments of noble Lords who have spoken in this debate
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will be of immense interest to many outside this House, not just to those with professional interests but also to many of the some 25 million people who themselves wear spectacles.
The "restrictive practices" to which the noble Lord refers are those which stem from the provisions of the Opticians Act 1958. That measure was enacted to ensure that the eye care of the nation could not be entrusted to any person whose knowledge and skills were not of a suitably high standard. Sight is one of the most precious of our senses and it is surely beyond doubt that the safeguards for patients which this Act contains are a proper indication of the value we place upon it. In particular, the testing of sight is not just an exercise to determine whether a patient needs spectacles: it provides an invaluable opportunity for any abnormality to be detected through the examination of the eyes. Such abnormalities may be an early indication of disease not just of the eyes themselves but also, as the noble Lord, Lord Smith, has explained to us, of other parts of the body. It is vital (indeed, in some cases a matter of life or death) that those in the position of being able to detect such abnormalities should be sufficiently skilled to do so and, as is proper, refer the patient for medical opinion and any necessary treatment. Surely, there is no disagreement in this House that the testing of sight is properly reserved to those whose training and standards of practice are suitably regulated in the way the Act provides.
As to the supply of spectacles, the Act is similarly designed primarily for the protection of patients by preventing the sale of spectacles to members of the public by unqualified persons. It would be a retrograde step to return to the days when spectacles could be bought over the counter without a sight-test. Although the wearing of spectacles which have been "self-selected" might not be harmful in itself, their availability could well prevent patients with incipient eye or other diseases being seen by a qualified practitioner. It has been suggested that simple magnifying glasses should be made available for adults to select themselves and purchase. However, many patients need corrections other than simple magnification but, again, their individual needs cannot be properly

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identified until they have had their sight tested by a qualified practitioner. In addition, it is essential that the individual patient's prescription is correctly dispensed by a suitably qualified practitioner whose standards of practice are properly regulated.
It is in the matter of the prices charged for spectacles where most public concern has been expressed. I am sure that most of my noble friends can quote instances from their own experiences or from those of relatives or friends when they have been asked to pay £70, £80 or even £90 for a pair of privately supplied spectacles. This evening we have heard from my noble friend Lord Orr-Ewing of a price of £106.
Not only are these considerable sums of money in absolute terms but they appear to be particularly expensive by comparison with the cost of a pair of spectacles supplied under the National Health Service. In drawing this comparison, I must stress that it would not be valid merely to look at what the patient pays in NHS charges, since NHS optical supply is subsidised from public funds. The amount of the subsidy varies according to the type of lenses supplied. It differs widely as between straightforward, single-vision lenses, where the subsidy is about £1.50, and the strongest bifocal lenses, where the subsidy can be as high as £29 for spectacles costing about £50. The true comparison must be between the prices of privately supplied spectacles and the total costs of NHS spectacles; that is, both the lenses and the frame and the professional fee paid to the optician for dispensing them. For a pair of NHS lenses in a NHS frame, the cost can vary from about £9 to about £50. However, few patients need the most complex and expensive spectacles, so that the average cost of a pair of NHS spectacles is at the lower end of that scale and is about £14.
Lord NORTHFIELD: My Lords, may I interrupt? The figures given to me in a Parliamentary Answer from the noble Lord were even less. It gave the average cost of lenses at about £7.60, and the cost of frames about £2.40. That is only about £10.
Lord CULLEN of ASHBOURNE: My Lords, I can only say that I am giving
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to the House the figures which have been carefully prepared. The noble Lord may have a different source.
Lord NORTHFIELD: It is yours.
Lord CULLEN of ASHBOURNE: Mine?
Lord NORTHFIELD: In an Answer given to me by the noble Lord.
Lord CULLEN of ASHBOURNE: In that case, I must have been wrong the first time. My Lords, the differential between prices for private and NHS spectacles is thus considerably wide. In recent years, we have had two Price Commission reports on this subject about which the noble Lord, Lord Northfield, gave us much information this evening. The two Price Commission reports have drawn attention to the unduly high level of prices charged for private spectacles and to the related matter of the lack of price competition in the sale of optical appliances. This lack of price competition is mainly attributed to the restriction which the General Optical Council lays down in its rules of conduct that, on pain of being struck off the professional register, opticians must not display the prices of optical appliances in the windows of their premises. Although the council do not forbid the display of prices inside opticians' premises, in practice few opticians do so. Thus members of the public are not able to "shop around" and compare the prices charged by individual opticians and are unable to judge the expense they will incur before entering the optician's premises. The General Optical Council maintain that removal of this restriction would not be in the public interest. They contend that the advertising of prices could well result in patients choosing an optician for the cheapness of his spectacles rather than for the quality of his professional service, which is of paramount importance in a primary health care profession.
This key question of competition in the optical market is a matter which the Director General of Fair Trading, under his statutory duties to keep under review monopolies and uncompetitive practices, is examining to establish whether any action under the Fair Trading Act is appropriate. He has not yet completed

973
his consideration of the question. However, there are two related aspects of this question which involve optical practice under the National Health Service. First, it has been suggested that there should be better information available to patients about what the National Health Service provides. In particular, patients should be able to see the type of frames they can have. My right honourable friend the Secretary of State for Social Services is currently considering the question of amending the NHS Terms of Service so as to require opticians to display or show the range of NHS frames to patients and fully inform them of NHS provisions. His department has already issued a new information leaflet for patients which sets out how to use the ophthalmic services and contains illustrations of NHS frames and information about what patients can expect to pay.
Secondly, it has been claimed that in pricing private spectacles, opticians are influenced by a belief that they are insufficiently rewarded for the dispensing which they undertake under the National Health Service. The principle governing the amounts paid to opticians for their National Health Service dispensing is that they should be repaid the costs which they have incurred in providing the service; they receive the cost of the lenses and frames which they purchase and supply and, in addition, are paid fees for the various types of dispensing they undertake. Dispensing fees are negotiated between the Health Departments and representatives of opticians on the basis of periodic studies of the actual costs incurred by a representative sample of optical practices.
Between these studies, fees are reviewed using agreed methods in the light of the movement in general indices of relevant costs and charges in the pattern of dispensings actually carried out by opticians. Fees are paid at a standard rate to all opticians and reflect an average level of costs, so that the belief that they are insufficient may stem from those opticians who have the highest level of costs. In addition, because the last few years have seen a substantial drop in the number of dispensings involving NHS lenses being fitted into private frames, there has been no change in the level of dispensing fees for the last three years. However, the results of studies into the costs of opticians
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are expected to become available shortly and, in the course of negotiations, it is hoped to achieve changes in the structure of dispensing fees which will prevent this situation recurring.
I do not think I have really been asked many questions, and of the ones I have been asked I am afraid I cannot reply to the question which was asked by the noble Lord, Lord Segal, about contact lenses. I was absolutely unprepared for it, although I see a note suddenly appearing on my desk here which says that contact lenses are not generally available and are supplied only under the Hospital Eye Service of the NHS. No doubt my right honourable friend the Secretary of State will be reading this debate and will take note of what the noble Lord has said.
Lord SEGAL: My Lords, I hope I may be forgiven for interrupting, but if they were prescribed by hospitals on a much wider scale they would probably turn out to be much cheaper than the provision of ordinary spectacles.
Lord CULLEN of ASHBOURNE: My Lords, it is well known that Conservatives dislike restrictive practices and have a good record in this respect, abolishing retail price maintenance in the early 1960s and setting up the Office of Fair Trading in 1973, which was sensibly extended by Labour in 1976 to include service industries such as the optical service.
Noble Lords from all parts of the House have expressed strongly held views about the forbidding of price displays in opticians' windows so as to protect the public. They suggest that the restriction operates against, rather than for, the public interest; and I am bound to say that I share this view. In fact I came across a piece of revealing information while preparing myself for this debate. I have learned from the Registrar of the General Optical Council that the principal reason for the council's refusal to change their rules on price display is that they do not know of any method of displaying prices which will not mislead the public or leave them vulnerable to "rogue" opticians. He explained that such an optician could attract custom by displaying frames which were, say, £5 below those displayed by his rivals, and then

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charge an extra £5 or even more for his lenses or for his professional services.
The council would be delighted if a suitable method could be devised. It seems very surprising that this problem is as yet unsolved, particularly as in all EEC countries except the United Kingdom there is no such restriction, and in the Federal Republic of Germany, as the noble Lord, Lord Northfield, mentioned, opticians are already required to display prices; and in Eire legislation requiring price display has been enacted but is not in force.
In conclusion, I should like to assure the noble Lord, Lord Rugby, that while Her Majesty's Government consider it would be against the best interests of patients to abolish the statutory restrictions on the testing of sight and the supply of optical appliances under the Opticians Act, nevertheless they are fully aware that the level of prices for private spectacles and the lack of competition in the optical market give cause for concern. They are satisfied that the current examination of competition in the optical field by the Director General of Fair Trading is the appropriate means of dealing with this matter. I am not able to forecast when this examination will be concluded, but the Director General has told me that he expects to come to a decision within the next three months as to whether the General Optical Council's restrictions are within the scope of the Restrictive Trade Practices Act, or whether to make a reference to the Monopolies and Mergers Commission.

CHILD CARE BILL [H.L.]
Returned from the Commons agreed to.
FOSTER CHILDREN BILL [H.L.]
Returned from the Commons agreed to.
  HOUSE PURCHASE AND TAX DEDUCTIBLE SAVINGS SCHEME
  HOUSE PURCHASE AND TAX DEDUCTIBLE SAVINGS SCHEME
  EEC FLOOD RELIEF FOR THE SOUTH WEST AND WALES
  EEC FLOOD RELIEF FOR THE SOUTH WEST AND WALES