Sitting of 7 July 1980

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

    Cable and Wireless Limited
    Mr. David Atkinsonasked the Secretary of State for Industry if he has any plans to introduce legislation to denationalise Cable and Wireless Limited.
    The Minister of State, Department of Industry (Mr. Adam Butler): In pursuit of their policy of introducing private sector capital into appropriate public holdings, the Government have been looking at the possibility of selling some of their shares in Cable and Wireless. The Government will consider legislation in the light of their eventual decision on the sale of shares.
    Mr. Atkinson: I thank my hon. Friend for his encouraging reply, which I am
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    sure will be welcomed not only by Conservative Members, but by the chairman and board of Cable and Wireless. In view of that company's considerable overseas business, will my hon. Friend assure the House that he will consult overseas client Governments before such legislation is introduced?
    Mr. Butler: I am grateful to my hon. Friend for his remarks. He is right to point to the international ramifications of the sale of shares in Cable and Wireless. I assure him that no final decision will be taken until the views of overseas Governments concerned have been obtained.
    Mr. Ioan Evans: In view of the fact that the private sector is crying out for investment, and that manufacturing investment is decreasing, why are the Government choosing this time to sell off parts of the public sector? Will there be guarantees that there will not be decreased investment in Cable and Wireless?
    Mr. Butler: The hon. Gentleman must not draw conclusions before a decision is reached. I hope that he has carefully listened to and studied my reply. There will he considerable benefit to the public sector borrowing requirement through the disposal of shares in companies such as Cable and Wireless, and that will be of great advantage to the private manufacturing sector.

    Investment
    Mr. Adleyasked the Secretary of State for Industry what further steps he intends to take to stimulate investment in industry.
    The Secretary of State for Industry (Sir Keith Joseph): The Government are pursuing the slow, difficult policies necessary to abate inflation, and reduce the level of interest rates and the degree of crowding out of private industry. I am trying to persuade the trade unions, which urge more investment, that they could transform the prospects for investment and jobs as inflation abates if they would throw their influence into offering employers higher productivity and a rise in the catastrophically low level of real profits on average in manufacturing industry by reducing restrictive labour practices and overmanning.
    Mr. Adley: Is the Secretary of State aware that he will be thwarted, rather than assisted in his efforts, by activities of companies such as the Reed Group, which in my constituency is closing the Shand Kydd factory in Christchurch, and is refusing to negotiate with a group that is willing and able to take part of that factory in order to maintain some of the employment? Is he further aware that the unions are deliberately pushing up wage claims at national level that are creating further insolvency in the company? Will not my right hon. Friend deplore this sort of attitude, which is surely contrary to the Government's intention of encouraging small businesses?
    Sir K. Joseph: There are parts of my hon. Friend's supplementary question with which I agree in general, but I cannot pronounce on an issue which is not known to me.
    Mr. Foster: Does not the Secretary of State agree that the private sector is not investing because the real rate of return is too low? If we are ever to get out of this vicious circle of low productivity and low investment will not central Government need to create a fund to channel North Sea oil revenues into manufacturing industry, particularly into areas of high unemployment, such as the North-East?
    Sir K. Joseph: I agree with the hon. Gentleman that low productivity, high in-
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    flation and low profits are a poor background for greater investment. However, it would not be sensible to try to channel North Sea oil money into investment decisions via the Government, as opposed to via the consumer.
    Mr. Bruce-Gardyne: Will my right hon. Friend agree that over the years the record of State investment in selecting the commercial winners of the future, from Concorde downwards, compares somewhat unfavourably with that of a drunken punter with a bent pin?
    Sir. K. Joseph: I will even give my hon. Friend a puff by saying that his book on the subject, coupled with the words of my hon. Friend the Financial Secretary, should be required reading.
    Mr. John Silkin: Is not a greater deterrent to investment by private sources in this country the Government's own policy in three distinct ways: first, an overvalued pound, second, the highest interest rates in the history of our country and, thirdly, the abolition of exchange controls, all of which together have made it much more profitable for private investment to go abroad or into areas other than manufacturing industry?
    Sir K. Joseph: No, I think that the right hon. Gentleman is wrong on all three counts. The pound reflects the demand for and supply of the currency and is not overvalued in the market in that sense. Interest rates at their supply and demand level are a necessary part of reducing inflation. As for the abolition of exchange controls, contrary to the mythology that is widely believed by some people, including the Opposition and many trade unions, there is to some degree a choice between money and jobs going abroad.
    Mr. Silkin: Is the Secretary of State aware that we disagree with him entirely in his analysis? Is he also aware that he has not answered the question? Is not a greater reason for the present lack of private investment those three aspects of Government policy?
    Sir K. Joseph: The answer is "No", because an attempt to manipulate downwards the exchange rate or interest rates would accelerate inflation, which is the biggest danger of all to investment.

    Central Region of Scotland
    Mr. Canavanasked the Secretary of State for Industry whether he has now reached any conclusions as a result of the meeting held in May between the Under-Secretary of State and representatives from local authorities in the Central region of Scotland about industrial development.
    The Under-Secretary of State for Industry (Mr. David Mitchell): I am giving careful consideration to the arguments raised by the deputation about the changes in regional aids in the Central region.
    Mr. Canavan: In view of the fact that, since that meeting, the unemployment position in the Central region has got even worse, with thousands more young school leavers looking for work and about a thousand more notified redundancies in the past few weeks alone, why are the Government so hell-bent on going ahead with downgrading development area status in some parts of the region? Instead of simply blaming unemployment on the unemployed, is it not time that the Secretary of State realised that he is the biggest single cause of unemployment in this country, because his mad policies are causing the high rate of inflation, the high interest rates and the cuts in public investment which are crippling industry in this country?
    Mr. Mitchell: We shall take into account in our review all the matters that the hon. Gentleman has raised. He may wish to take some satisfaction from the fact that unemployment has risen by a smaller percentage in Scotland than in Great Britain as a whole.
    Mr. Spriggs: Is the hon. Gentleman aware that his right hon. Friend told the Members of Parliament from the North-West group that downgrading of areas represented success? If success means higher unemployment figures in each of the towns concerned in the North-West, how does he—
    Mr. Speaker: Order. The hon. Gentleman may ask about the Central region of Scotland but if he wishes to ask about the North-West he may have an opportunity later.
    Mr. Spriggs: I accept your ruling. Mr. Speaker.

    Inmos
    Mr. Gwilyn Robertsasked the Secretary of State for Industry if he will make a further statement on further aid for Inmos.
    The Under-Secretary of State for Industry (Mr. Michael Marshall): No, Sir.
    Mr. Roberts: Will the hon. Gentleman agree that, although in last week's debates there were differing views on the feasibility of Inmos and the conditions which will be associated with any further money, there was almost complete consensus that the Government now have no choice but to give a second £25 million, and that the delay is merely damaging Inmos and costing additional money?
    Mr. Marshall: The hon. Gentleman, who played a valuable part in the debate, called for a bipartisan approach, but his summary of the debate is a little inaccurate.
    Mr. Butcher: Will my hon. Friend agree that the granting of the second tranche of £25 million could be conditional on all future investment being made from private funds? Might not that course of events make the company more attractive to private funds in the future?
    Mr. Marshall: That is a consideration to be taken into account, but the first step must now be to await the review.
    Mr. Flannery: Will the hon. Gentleman accept that the answer to the debate last week was most unsatisfactory? Major countries throughout the world are investing hundreds of millions of pounds in the silicon chip. This is a potentially lucrative area, as my motion on the Order Paper shows. Will the hon. Gentleman reconsider his decision lest we fall behind every other major country in developing this very lucrative area?
    Mr. Marshall: The hon. Gentleman is venturing down a dangerous path in suggesting that we should have some kind of investment support war on these lines. If he considers these matters more carefully, he will see that, on the matter of inward investment and on the matter of standard chips, under the Government two further projects have come

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    forward from National Semiconductors and from General Instruments, both for investment in Scotland, which are to be welcomed.
    Mr. Archie Hamilton: Will my hon. Friend accept that one of the problems of introducing private capital into Inmos is the great difficulty that private companies have in getting any information from either the National Enterprise Board or Inmos?
    Mr. Marshall: If my hon. Friend has any information on those lines I shall be happy to pass it on, but it is not a view that has been put directly to me.

    North-West
    Mr. Strawasked the Secretary of State for Industry whether he has any proposals to alleviate the economic and social consequences of job losses in industries, other than the steel industry, in those areas in the North-West where such losses have been concentrated and substantial.
    Mr. Arthur Davidsonasked the Secretary of State for Industry, in view of the economic and social consequences of the substantial and concentrated job losses in the North-West, what plans he has to alleviate the deteriorating situation.
    Mr. David Mitchell: As money supply comes adequately under control and inflation declines, it will be seen that our policies have created the conditions for a sustained revival of wealth and job-creating enterprises throughout the United Kingdom, including the North-West.
    Mr. Straw: Is the Minister aware that his answer will be found unconvincing in many areas of the North-West and that it runs wholly against the experience of that area over the last 12 months? Is he aware that, while the population of Blackburn is only 2 per cent. of that of the North-West, its increase in unemployment was so great last month that it contributed one in six to the increase in unemployment in the whole North-West region?
    Is the Minister aware that, just as in the steel industry, there are in north-west Lancashire and in Blackburn concentrated areas of job loss which require urgent
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    Government attention? What prospect is there of this Government attention being given?
    Mr. Mitchell: The hon. Member may consider my response to be unconvincing. Time will prove it to have been right. The hon. Gentleman is asking what we can do. In helping to encourage new businesses in the area, including small businesses, we have now entered into an arrangement with the Norwich Union which will ensure that its funds become available for small firms through the use of our counselling service.
    Mr. Arthur Davidson: Is the Minister aware that, while the money supply is coming under control—if it ever does—thousands and thousands of jobs are being lost day after day, and the people who suffer the loss are not, oddly enough, monetarists? Will the hon. Gentleman say how long it will be before he will take some radical action to help an area which has never known as bad a time as it is going through at present?
    Mr. Mitchell: I understand the problem to which the hon. and learned Gentleman is drawing attention, but he has to accept—I am sure he does—that inflation is the greatest destroyer of jobs that there is, and it is essential that the attack on the causes of inflation should be the Government's first priority.
    Mr. Fletcher-Cooke: Has my hon. Friend had an opportunity to consider the case of my constituent, a small business man in Blackburn, who sought the help of the counselling service for his industry and was told by the Department that he would be able to get some assistance if he moved into a special area but that he could not now get it in Blackburn? Will my hon. Friend bear in mind that sort of case when he is considering how regional policy is to work?
    Mr. Mitchell: The whole purpose of our regional policy is to concentrate help on the areas of greatest need. That inevitably means that there is less help concentrated on the areas of lesser need.
    Mr. McNally: Has the Minister seen the letter from the Manchester chamber of commerce which suggests that the true crisis in the North-West is being masked temporarily by a cutback in investment, training and apprenticeships and stock? Is he aware that, unlike the hon. Member

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    for Knutsford (Mr. Bruce-Gardyne), many workers in my constituency, in Fairey, Ferranti, British Aerospace and ICL have every confidence in public investment to protect jobs and back winners?
    Mr. Bruce-Gardyne: They should read the record.
    Mr. McNally: They have.
    Mr. Mitchell: If the. hon. Gentleman wants to do something constructive to help to prevent unemployment, he might care to go back to his constituency and explain that if workers ask for more wages for producing the same amount of goods, the goods will cost more and will become less competitive and jobs will be lost.
    Mr. Trippier: Will my hon. Friend accept my thanks for successfully negotiating a deal with the English Industrial Estates Corporation whereby it will invest in small workshop units up to 2,500 sq. ft. and for negotiating terms with the Norwich Union whereby it will invest its money, not taxpayers' money, in small firms? What interest has been shown in these two schemes?
    Mr. Mitchell: We are expecting to start over 1,000 small units of up to 2,500 sq. ft. in assisted areas during this year. The Norwich Union scheme, like the Post Office scheme, is in its early stages, but a good deal of attention has already been aroused.

    Post Office Monopoly
    Mr. Bruce-Gardyneasked the Secretary of State for Industry whether he has yet concluded his review of the Post Office monopolies; and if he will make a statement.
    Mr. Adam Butler: The reviews of the postal and telecommunications monopolies are nearing completion. My right hon. Friend will make a statement as soon as possible.
    Mr. Bruce-Gardyne: I am grateful to my hon. Friend for that reply. I am sure that he will agree that the review of the mails monopoly has been some time in coming. Will he assure the House that, when my right hon. Friend makes his announcement, he will take note of and act on the fact that the Monopolies and Mergers Commission has already found
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    that a monopoly of the mails acts against the public interest?
    Mr. Butler: There has not been any undue delay in coming forward with policy statements either on the postal or telecommunications monopolies. We hope that statements will be made before the Summer Recess. The report of the Monopolies and Mergers Commission has been studied and is being taken into account in deciding exactly what we should do.
    Mr. Foster: Does the Minister accept that excessively tight cash and borrowing limits are now preventing commercially profitable investment in British communications? Will he consider a more flexible system in this area?
    Mr. Butler: The external financing limit covers matters such as investment, but it is conditioned by a number of factors, including the levels of wage costs and settlements in the industry.
    Mr. Gummer: Will my hon. Friend ensure that he will take into account, when making a decision, in view of all the pressures for the ending of the monopoly, that rural areas will be very expensive to supply? Does he agree that we want an efficient Post Office service and that if we were to concentrate on that we would get what we wanted?
    Mr. Butler: I assure my hon. Friend that we want the efficiency and the service for the rural areas.
    Mr. Les Huckfield: Will the hon. Gentleman bear in mind that there is a great concern in rural areas along the lines stressed by his hon. Friend the Member for Eye (Mr. Gummer)? How does he intend to maintain and improve the service that the Post Office provides in rural areas if the service in the inner cities and other profitable areas will in future be subject to competition? Will he also bear in mind that there is great concern about how the monopoly can be preserved, or even diminished, while the service in rural areas is improved even further?
    Mr. Butler: The hon. Gentleman will have to wait for my right hon. Friend's statement, but I ask him not to stir up anxieties needlessly.
    Mr. Maclennan: Will the Minister undertake that before the review is completed he will consult the Post Office Users National Council for its views on this matter?
    Mr. Butler: I assure the House that we have had very wide consultations with the POUNC, the unions and all other interested parties, as far as I am aware.

    Northern Region
    Mr. David Watkinsasked the Secretary of State for Industry if he will make a statement on the level of industrial investment in the Northern region.
    Mr. Dormandasked the Secretary of State for Industry if he is satisfied with the progress being made in attracting industry to the Northern region; and if he will make a statement.
    Mr. David Mitchell: In 1978, the latest year for which figures are available, investment by manufacturing industry in the Northern region totalled £648.7 million—10.8 per cent. of the total for the United Kingdom. The Government's regional policies concentrate help where the need is greatest. Much of the Northern region is a development or special development area where high levels of regional assistance are available to industry.
    Mr. WatkinsAre not the Government's policies pricing investment out of the Northern region? Is the Minister aware that I have received a letter from the chairman of York Trailers, which had 165 redundancies in my constituency during this year, in which he makes the point that what he refers to as the present "usurious interest rates" are his company's main bugbear, preventing expansion? Is he aware that this is in one of the special development areas to which the hon. Gentleman has just referred?
    Mr. Mitchell: High interest rates are a necessary part of dealing with the muses of inflation. It ill behoves the Labour Party, having left us the Augean stables to clear up, to complain about the size of the shovel that we have to use.
    Mr. Dormand: Does the Minister agree that the problems of the Northern region are unique and therefore require special solutions? Is he aware that the
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    disastrous effect of his right hon. Friend's policies is the destruction of business confidence with its long-term effects? My experience is the same as that of my hon. Friend the Member for Consett (Mr. Watkins). Will the hon. Gentleman, as a matter of urgency, seek to persuade his right hon. Friend to accept the proposal put to him recently by hon. Members for the establishment of a Northern development agency? We do not think that it would work miracles, but it would be the first step in the rehabilitation of the Northern region.
    Mr. Mitchell: The proposal for a Northern development agency has been around for a very long time, including the period when the Labour Government were in office. My right hon. Friend is considering the representations that have been made to him. Perhaps I could helpfully add that, to encourage investment in the North-East and in other development areas, interest on European Investment Bank loans has now gone down to 10 per cent. fixed for seven years. That may be helpful to a number of projects.
    Mr. Adley: Is my hon. Friend satisfied with the activities of the financial institutions in the Northern region in providing risk capital for new industrial development?
    Mr. Mitchell: I can assure my hon. Friend that we are doing our best to encourage the banks to extend the frontiers of their lending wherever they can see ways of doing so.
    Mr. Urwin: Is the Minister aware that the Government's industrial policies are having a calamitous effect on the industrial base of the Northern region? We may now be running the danger of creating an industrial wasteland in the North as a result of these policies. Worse still, industry will find itself in an almost irrecoverable position as a result of these policies. Will the hon. Gentleman at least give us some idea of the more objective and conclusive approaches which may be expected from the Government as a result of successive ministerial visits, including his own two or three weeks ago to Sunderland, and all the difficult problems which were presented to him by trade unionists, local government members and Members of Parliament?
    Mr. Mitchell: It is regrettable that the right hon. Gentleman should seek to destroy confidence in that way when those who have examined what we are seeking to do to attack the causes of inflation have great confidence in the success of our policies in the longer term.
    Several Hon. Members rose—
    Mr. Speaker: Order. I appeal for short questions, if possible, and, of course, answers will be short to follow.
    Mr. Thompson: Is my hon. Friend aware that the problems of the Northern region are not unique and that a more even-handed national policy would be welcomed?
    Mr. Mitchell: Yes, Sir.
    Mr. John Silkin: Will the Under-Secretary explain how Government policy of increasing the inflation rate from 9 per cent. on 3 May 1979 to 22 per cent. a year later by means of the highest interest rates that we have ever known, and increasing value added tax to 15 per cent. can actually bring down inflation?
    Mr. Mitchell: The right hon. Gentleman is aware that there is a direct correlation between the time at which one increases the money supply and the time, about 18 months later, when inflation comes through. We are now—and the right hon. Gentleman knows it—on the flood tide of the inflation caused by his Government.
    Mr. Silkin: I am not aware of that and neither is the Minister of Agriculture. Fisheries and Food.

    Ferranti Limited
    Mr. Marksasked the Secretary of State for Industry when he expects to make an announcement on the conditions he will impose on the sale of Ferranti shares by the National Enterprise Board.
    Mr. Charles R. Morrisasked the Secretary of State for Industry what guidance of direction he proposes to give to the National Enterprise Board in relation to the sale of the National Enterprise Board's 50 per cent. shareholding in Ferranti Ltd.
    Mr. Adam Butler: I have nothing to add to my right hon. Friend's statement of 1 July.
    Mr. Marks: The Secretary of State was not very clear about the conditions he would impose on the sale of the 4 per cent. of shares to the work force. Will he have any objections to the purchase of shares by groups of workers? Will he have any objections to the representation at annual meetings of those workers by their trade unions?
    Mr. Butler: It is true that the details of the proposed scheme have not been worked out. This will be done in consultation between the Department and the National Enterprise Board and the company. With regard to representation at the annual general meeting, the purchaser of a share, irrespective of whether it is held in trust, under the Finance Act, for instance, will be able to attend and vote in the normal way.
    Mr. Morris: In the light of the exchanges which took place on the Secretary of State's statement on the Ferranti company, has the Minister given further consideration to the adequacy of the 4 per cent. shares allocated for distribution to the 17,000 employees and staff of the company, who make such a signal contribution to its success?
    Mr. Butler: I think that the amount of shares, which is 2 per cent. of the total, and at the valuation of 530p equivalent to about £2¼ million, will be sufficient.
    Mr. Archie Hamilton: Will my hon. Friend also consider putting the same conditions on those shares sold to the employees—of their not being able to sell them for two years—as will be the case with the institutions?
    Mr. Butler: As I have told the House, we have not yet worked out the proposals, but if, for instance, those shares were put in trust under the relevant Finance Acts, they would have to be held for two years.
    Mr. McNally: While acknowledging that the Minister of State has to operate under the ever-ambitious shadow of the hon. Member for Knutsford (Mr. Bruce-Gardyne), may I ask whether he will concede to the House that, without the intervention of the Labour Government to save Ferranti, the country would have lost a

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    major advanced industry, and the similar companies which could be of service to the country in the future will be left naked in similar circumstances by the present Government's philosophy?
    Mr. Butler: We had a long question and answer session following my right hon. Friend's statement. I think that these points were covered and I have nothing to add to them.
    Mr. Bruce-Gardyne: Just to set the record straight, may I ask my hon. Friend whether he agrees that, had there been greater reassurance in the private sector that those who might have come to the aid of Ferranti when it ran into trouble would be allowed to undertake the necessary rationalisation of the transformer business by the then Labour Government, there would have been no need for the NEB in the first place?
    Mr. Butler: I think that my hon. Friend speaks truth, as so often on these occasions. We certainly hope that in the future the private sector will be able to cope with these situations.

    Footwear
    Mr. Marlowasked the Secretary of State for Industry how many people in his Department are primarily dealing with matters concerned with the footwear industry.
    Mr. David Mitchell: There are nine officials in the relevant sponsorship branch of the Department dealing with, but not exclusively with, the footwear industry.
    Mr. Marlow: Have these officials told my hon. Friend that, for the first time, 50 per cent. of the home market is now being provided by imports, and this on a declining market; that the British footwear industry is a very efficient industry with a reputation for quality second to none, and yet at the moment it has massive redundancies and massive layoff spending; and that this is largely due to the dumping of foreign shoes in this country and the closure of markets, also, in industrialised countries, against British footwear?
    Will he discuss with his right hon. Friend and his right hon. Friend in another Ministry things that can be done so that the footwear industry, for which
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    he has some responsibility, is fairly treated and has a fair industrial base from which to operate in the future?
    Mr. Mitchell: My hon. Friend will be aware that the industry suffers from a shrinking market in the United Kingdom, at the same time as there has been an increase in imports. As to imports being in the form of unfair competition, as soon as we receive evidence to that effect we take action as quickly as possible.
    Mr. Greville Janner: Is the Minister aware that in previous recessions the so-called shrinking market has not affected British footwear because people still have to wear shoes even when afflicted by Tory Government policy? Has not the time come when he should recognise the grim misery in places such as Leicester, which depend traditionally on the footwear industry, and when he should make efforts to see that foreign shoes are not dumped on our market?
    Mr. Mitchell: Both I and the Minister for Trade conveyed to the Brazilian ambassador very frankly our concern at the dramatic increase of exports to the United Kingdom of Brazilian footwear only last week.
    Mr. Trippier: Is my hon. Friend aware that the retail commitment in the footwear industry is virtually non-existent and is certainly not being effectively monitored? Is there not a case for a new retail commitment, monitored by Government, with Government actively encouraging the retailers to buy British wherever possible?
    Mr. Mitchell: That is a matter for the trade. Certainly we shall be happy to co-operate with it in that attitude.

    California
    Mr. William Hamiltonasked the Secretary of State for Industry if he will make a statement on his recent visit to California.
    Sir Keith Joseph: I visited San Francisco from 28 to 30 May to fulfil an invitation to address the Electronics Association of California. Whilst there I met industrialists contemplating investment in the United Kingdom and held discussions with people in the electronics

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    and biotechnology industries. I was impressed by the vigorous and adaptable economy of California, by the wide-ranging employment oppportunities being opened up by microelectronics and by the role of venture capitalists in promoting high technology.
    Mr. Hamilton: Is it not a fact that when the right hon. Gentleman was speaking there, he said, in seeking to attract United States investment here, that we enjoyed—he did not use that word, but that was what he implied—a low wage and good industrial relations society? If that is correct, how does he square that with the brutally crazy concept that he enunciated a week ago, that if workers who are now being threatened with unemployment would seek reduced wages, they could maintain their jobs?
    Sir K. Joseph: But it is true that we have low wages, relatively, in this country, because we have low output, relatively. It also remains true that people can preserve their jobs or price themselves into jobs if they offer to their employers lower unit labour costs, either by way of lower earnings or by higher productivity, or by a combination of both.
    Mr. Kenneth Baker: Will my right hon. Friend consider making one of his colleagues in his Department specifically responsible for information technology, so that he could act as a focal point for the whole of this industry, ranging from microtechnology in schools to new public procurement policies? Is it not clear that in the difficulties that we are facing in the industrial and manufacturing area this particular industry provides some of the greatest opportunities for Britain, where in certain products we have a world lead?
    Sir K. Joseph: My hon. Friend has picked on one of the several suggestions in his recent speech on the subject which is certainly being considered by the Government.
    Mr. Barry Jones: When he was in America, did not the right hon. Gentleman show that he has not yet grasped the enormous damage that his policy has done to British industry? Is he not unnerved by the great tide of redundancies, lay-offs and closures in British manufacturing industry? Is it not likely that when
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    the recession ends our country will suffer the humiliation of having no manufacturing industry to meet supply and of having to import manufactured goods?
    Sir K. Joseph: The precipitation of current problems is well covered by the New Statesman in its leading article this week. The onslaught by trade unions on efficiency, modernisation and profits over recent years has caused the chickens that are now coming home to roost in such abundant numbers.
    Mr. Forman: Does my right hon. Friend agree that one of the lessons of Californian success is the extent to which the State is open to public sector procurement and to a positive relationship between the private sector and the public sector? When will his Department put flesh on the skeleton of the suggestion advanced by my right hon. Friend the Prime Minister some time ago in the "no confidence" debate?
    Sir K. Joseph: It is right that a huge defence programme in America is a vehicle for public procurement of an enlightened order. We are seeking to spread the good public purchasing practices of significant sections of the public sector to the sections that need to learn from it.
    Mr. Les Huckfield: If the right hon. Gentleman was impressed by the capability of the economy of the State of California to generate about half a million net new jobs every year, will he take into account that most recent studies have shown that that is connected not with the tax-cutting activities of propositions 13 and 9 but with the Government's own research and development expenditure through their own budget, through the aerospace industry?
    Sir K. Joseph: There is probably more than one cause in the phenomenon but the phenomenon is impressive.

    West Midlands
    Mr. Hal Millerasked the Secretary of State for Industry what representations he has received about the state of industry in the West Midlands.
    Mr. Winnickasked the Secretary of State for Industry if he will now take steps to reverse the industrial decline in the West Midlands.
    Mr. Adam Butler: In addition to questions tabled by hon. Members, my right hon. Friend has received a number of representations from local authorities and other bodies about the industrial situation in the West Midlands. Industry in that region will benefit from the national measures that the Government are taking to put the economy on a sound footing.
    Mr. Miller: Is my hon. Friend aware that in spite of the fillip to confidence given by the reduction in interest rates this week, there is a widespread feeling in industry in the West Midlands that it is competing on an unequal basis with many imports? Is he further aware that that feeling is aggravated by the suspicion that industry is bearing the brunt of the squeeze on the money supply while public expenditure goes unchecked?
    Mr. Butler: My hon. Friend will know that his constituents' supposition is wrong in that the money supply is very much under control. However, he is right in pointing to the need for that control as a benefit to the private sector.
    Mr. Winnick: Is the hon. Gentleman aware that hardly a day passes without news of further redundancies in the West Midlands, and that dole queues are becoming longer and longer in a once prosperous region? Bearing in mind the remarks made over the weekend by the Minister of Agriculture, Fisheries and Food at the Tory Reform Group, is that not an additional reason why the Secretary of State for Industry should be sacked to ensure some economic and industrial sanity?
    Mr. Butler: The hon. Gentleman knows that the rate of inflation is the greatest enemy of business, whether it is in the West Midlands or elsewhere. It is that battle that the Government are starting to win.
    Mr. Grieve: Does my hon. Friend agree that the salvation of industry in the West Midlands, as elsewhere, lies more than anything else in greater productivity per man and greater productivity at work? Does he further agree that, however much some may complain of imports from abroad, any protective measures would be disastrous for a
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    country that depends on free trade for its living?
    Mr. Butler: There can be no doubt that import controls of the sort advocated by the Opposition would have an effect on productivity would reduce the progress that is being made and would increase prices.
    Mr. Les Huckfield: Does the hon. Gentleman recollect that his hon. Friend the Under-Secretary of State for Industry, the hon. Member for Basingstoke (Mr. Mitchell), referred to growth industries in the West Midlands at the previous Industry Question Time and promptly failed to identify them? Is he aware that since then 1,300 employees of Alfred Herbert have been given their notice and that another large British Leyland closure somewhere in the Midlands is rumoured, apart from the closures forecast by Sir Michael Edwardes? Against that background, will the hon. Gentleman tell the House, especially West Midlands Members, what are supposed to be the growth industries in the West Midlands?
    Mr. Butler: My hon. Friend did not have time to identify the growth industries in the West Midlands at the previous Industry Question Time. However, the hon. Gentleman will remember that during the debate on the West Midlands I drew special attention to two such areas. Many small businesses are expanding and businesses involved in high technology are also expanding.
    Mr. Dudley Smith: Will my hon. Friend confirm his belief that a British car industry should be retained not least because of the thousands of jobs in the car component sector which are dependent on the industry and which are mainly located in the West Midlands?
    Mr. Butler: We recognise the continuing dependence of the engineering component industry and other industries on the car industry in the West Midlands, although there has been an element of diversification in recent years. My hon. Friend is aware of the assistance that has been given to British Leyland.

    Leicester
    Mr. Greville Jannerasked the Secretary of State for Industry whether he

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    will consider extra aid for the economically deprived industries of Leicester; and whether he will make a statement.
    Mr. Adam Butler: It is not possible to get high employment, successful industrial enterprise and economic growth, either nationally or in the regions, simply by paying out taxpayers money in grants and subsidies. Our priority is to overcome inflation and create an economic climate in which industry can prosper.
    Mr. Janner: Is the hon. Gentleman aware that, far from creating a climate in which economic prosperity can grow, he has created one of the deepest gloom in every section of industry in the East Midlands, from knitwear, hosiery and footwear to engineering and confectionery? Every business, large or small, is affected by this misery. Does he intend to sit complacently on the Government Front Bench while our industry decays?
    Mr. Butler: I shall do what I was doing this weekend in my constituency in the East Midlands—namely, visiting companies and factories that are expanding.

    British Steel Corporation
    Mr. Hooleyasked the Secretary of State for Industry what progress is being made with the capital reconstruction of the British Steel Corporation; and if he will make a statement.
    Sir Keith Joseph: As my hon. Friend told the House on 22 May, we intend to introduce legislation in the next parliamentary Session to provide for a capital reconstruction of the British Steel Corporation. The timing, extent and scope of the reconstruction have not yet been determined.
    Mr. Hooley: Is the right hon. Gentleman aware that the £2,000 million of taxpayers' money that has been put into the British Steel Corporation over the past few years has created an industry of enormous modern technological productive capacity? Will it not be an act of folly to massacre that industry, which is capable of producing real wealth to the tune of £4,000 million a year?
    Sir K. Joseph: It is true that the industry has been equipped by the taxpayer to a large extent with massive modern plant. However, low productivity, an under-emphasis on the market and
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    a lack of competitiveness mean that the taxpayer has, to some extent, a bad investment, and part of it will have to be written off.
    Mr. du Cann: Will my right hon. Friend be good enough to keep in mind the suggestion that I made to him a few days ago—namely, that in view of the serious situation in the steel industry, and while recognising the immense problems facing the new chairman, he should seriously consider making a further statement on the position of the steel industry, the Government's intentions towards it and the chairman's plans before we rise for the Summer Recess?
    Sir K. Joseph: I shall bear in mind my right hon. Friend's suggestion. I think that he will agree that not even the parliamentary timetable should truncate the time needed by the new chairman to assess the position.
    Mr. James Hamilton: Will the right hon. Gentleman remember that I have the tube producing side of the steel industry in my constituency? A multi-pass mill is required urgently to enhance expertise in the tube producing sector and to enable it to enter world markets. Is it right that the Government, on behalf of the BSC, are about to announce the hiving-off of the tube manufacturing side to private industry?
    Sir K. Joseph: I do not know of any such intention, but I am sure that the chairman of the corporation will read the hon. Gentleman's question.
    Mr. John Silkin: If the right hon. Gentleman is concerned about keeping a bulk steel industry—I thought that his answer the other day was highly ambivalent—why does he talk about low productivity in relation to the closure of the Consett works? Does he not accept that that plant is viable and extremely well and productively operated?
    Sir K. Joseph: The right hon. Gentleman's party introduced legislation which left decisions on such issues to the British Steel Corporation. It was its judgment.

    OPERATION COUNTRYMAN
    Mr. Christopher Priceasked the Attorney-General when the Director of Public Prosecutions will have reached his conclusions about further prosecutions as

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    a result of the Operation Countryman investigations.
    The Attorney-General (Sir Michael Havers): The director has under consideration at the moment allegations against 11 officers as a result of these investigations. It is impossible to estimate when he may reach a decision in respect of any of them.
    Mr. Price: How does the Attorney-General reconcile his statement in the House earlier this year—to the effect that, although there had been no obstruction by senior officers, there could have been obstruction by junior officers—with Deputy Commissioner Kavanagh's recent statement from Scotland Yard, to the effect that there had been no obstruction by anybody? In addition, how does he reconcile his statement with that made by Mr. Hambleton, the previous head of Operation Countryman and retired chief constable of Dorset, who said that there had been considerable obstruction by junior officers and some obstruction by one senior officer? Does he not accept that such statements should be cleared up before Operation Countryman is brushed under the carpet?
    The Attorney-General: Naturally, I have sought to clear up what has been reported in the press. As regards junior officers, some weeks ago I said in the House that anybody, whether a police officer or not, was entitled to refuse to answer possible incriminating questions that were put by police officers inquiring into criminal allegations. Like any other citizen, he is exercising a right that is protected by the law. That cannot be treated as obstruction. I can see nothing inconsistent about Mr. Kavanagh's statement and my answer. I have had a long interview with Mr. Hambleton. The Director of Public Prosecutions has seen him several times. At no time did Mr. Hambleton give me, or the Director of Public Prosecutions, details of any obstruction of the type reported in the newspapers.
    Mr. Emery: How long has Operation Countryman been in progress? Is it not an inordinately long time? Although everybody wishes to ensure that the police are above reproach, does not my right hon. and learned Friend accept that it does good to no one if such things are allowed to drag on for so long?
    The Attorney-General: It is inevitable that an inquiry of this size, which involves several allegations that have been made by people serving long sentences of imprisonment, should take a considerable time to investigate. Other delays have been caused for other reasons. For example, it was intended to call two persons to give evidence in a case against a police officer. Those two persons were awaiting trial. It was rightly decided that the trials involving the future witnesses should be concluded before the two persons were called as witnesses for the prosecution against a police officer.
    Mr. Jeffrey Thomas: How many more police officers will be investigated by the Operation Countryman team? Is the right hon. and learned Gentleman aware that any attempt to truncate the inquiries will be seen as an attempt at a cover-up?
    The Attorney-General: I can reassure the hon. and learned Gentleman that there is no intention of truncating the inquiry. Eleven more officers are now under investigation by the Director of Public Prosecutions. As the inquiries are in progress it is impossible for the Director of Public Prosecutions or me to estimate how many more cases there will be. Neither the Director of Public Prosecutions nor I intend to call a halt to this inquiry before it has been properly concluded.

    PRIVILEGED COMMUNICATION
    Mr. Greville Jannerasked the Attorney-General why he has decided not to refer the matter of privileged communication to the Law Commission.
    The Attorney-General: The matter was considered by the Law Reform Committee in its sixteenth report, published in 1967. It concluded that the law at that time was broadly right and, as it has undergone no significant change since that date, it is not thought there is any present need for a further review.
    Mr. Janner: Is not the Attorney-General aware that there is grave unease among journalists at the distinct possibility of their being imprisoned if they refuse to disclose their sources? Will not he consider my Bill, which is designed to protect journalists where the public in-

    25
    terest so demands? Will he undertake to introduce such legislation in the next Session, if the opportunity arises?
    The Attorney-General: It would be wiser for the House to await the decision of the other place, which is likely to consider a case soon. In the meantime, there does not seem to be any evidence to suggest that the present law inhibits free expression or, in suitable cases, fails to protect confidential communications. In general, the court must still balance the interests of those involved against the need to reach a just conclusion in judicial proceedings.
    Mr. Archer: Does the Attorney-General agree that the type of balance to which he referred is essentially a political question? Does not he accept that whatever the existing law may be held to be it is ultimately a matter for debate and decision by Parliament?
    The Attorney-General: We cannot comment on the present case, but when it is concluded I am sure that the House will be able to discuss this problem.

    CUSTODIAL SENTENCING POLICY
    Mr. Soleyasked the Attorney-General if, in the light of the recent statement by the Secretary of State for the Home Department on prison overcrowding, the Lord Chancellor will arrange a sentencing conference for magistrates to discuss reducing the use of custodial sentences in cases of social security fraud.
    The Attorney-General: Adequate facilities for sentencing conferences already exist, and full use will be made of these. A single sentencing conference for the entire magistracy, whether for a single purpose or generally, is not a feasible proposition.
    Mr. Soley: Does not the Attorney-General owe it to the Home Secretary to help him face the crisis in our prisons? Is he aware that a man in my constituency was recently gaoled for one month for defrauding the DHSS of £110, despite the fact that he had not been in trouble for 12 years? Does not the right hon. and learned Gentleman accept that as we do not readily gaol people for fiddling expense accounts or income tax, there can be no justification for doing so in such social security cases, where com-
    26
    munity service orders are available? Will the Attorney-General arrange a sentencing conference that will give guidance to magistrates and judges?
    The Attorney-General: Guidance to magistrates will come from sentencing conferences—which are going on all the time—from the presiding judge, from the Lord Chancellor or, more often, from the courts. I remind the hon. Gentleman of what was said in the Divisional Court on 8 October 1979. The presiding judge said:
    "Where persons deliberately defraud the State of social security moneys, an immediate custodial sentence is inevitable and is to be expected where there is a substantial plundering of the public purse."
    Mr. Archie Hamilton: Does not my right hon. and learned Friend accept that, as overcrowding continues, pressures on magistrates to impose shorter sentences, or no sentences for lesser crimes, are increasing? Is not the answer to build more prisons?
    The Attorney-General: Until that situation has been achieved, my right hon. Friend the Home Secretary and others will advise magistrates. Obviously, directions cannot be given. Only advice can be offered. The present tendency towards finding an alternative to custody for less serious crimes is appreciated by the courts.
    Mr. Spriggs: Is the right hon. and learned Gentleman aware that constituents who are charged with defrauding the DHSS are being convicted by magistrates' courts without being given legal aid or advice? Will he take powers to ensure that the poorest people in the land are given the best legal aid in defence of their cases?
    The Attorney-General: I am surprised that that has happened. Generally, legal aid is available to anyone who does not have the means of providing for his defence in a magistrates' court. If the hon. Gentleman writes to me about the cases he has in mind, I shall make inquiries.

    JURY VETTING
    Mr. Dubsasked the Attorney-General if he is now in a position to make a statement on jury vetting.
    The Attorney-General: Following a recent decision of the Court of Appeal I thought it desirable to consult again the Lord Chancellor and the Home Secretary and other interested parties. I have nearly finished these consultations but those with the chief officers of police, which are being conducted through Home Office officials, will not take place until Thursday of this week, 10 July. I hope I shall be ready to make a statement not long afterwards but, in any event before the House rises for the Summer Recess.
    Mr. Dubs: Is the Attorney-General aware that everyone understands his embarassment at finding himself in the difficult position of having given an undertaking, to this House that jury vetting would not take place without his consent when such jury vetting is taking place without his consent? Does he appreciate that we look forward to an early statement so that we can clarify the present muddled position?
    The Attorney-General: I accept that the position is not as clear as I should like it to be. But I reassure the hon. Member that any case which involves vetting with Special Branch records will still be reserved for my decision. In any event, I have said that there is to be no inquiry made at local CIDs except to resolve identification problems when there may be four Smiths involved in a jury list.
    Mr. Grieve: In my right hon. and learned Friend's consideration of this
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    important matter, will he never lose sight of the fact that the administration of justice is not to be polluted or diverted by persons of serious criminal conviction serving on juries? To that extent, jury vetting is essential for the protection of the public and the administration of justice.
    The Attorney-General: That is one of the matters which I shall take into consideration when I reach a conclusion.
    Mr. John Morris: Will the Attorney-General accept that the Opposition welcome his assurance that there will be a statement on this matter before the recess? In his consideration of the statement, will the right hon. and learned Gentleman bear in mind the statement made by Lord Denning in a recent Court of Appeal case that jury vetting is unconstitutional? In view of the disquiet and apparent conflict in decisions, should not this matter come to Parliament for right hon. and hon. Members to decide whether there should be an increase in the classification or any change in those who should be entitled to serve on a jury? Will the Attorney-General consider asking a senior judge to look into the various differences that have arisen and to make recommendations for legislation?
    The Attorney-General: I shall bear in mind what the right hon. and learned Gentleman has said.

TOP SALARIES REVIEW BODY (REPORTS)
The Prime Minister (Mrs. Margaret Thatcher): With permission, Mr. Speaker, I should like to make a statement on two recent reports by the Top Salaries Review Body.
Both reports have been presented as Command Papers and are available in the Vote Office this afternoon.
The first of these reports—the Review Body's fourteenth report—makes recommendations for the salaries of the higher Civil Service, senior officers in the Armed Forces, members of the judiciary and chairmen and members of boards of nationalised industries. The House will recall that in 1978 the Review Body made recommendations for these groups of public servants, which our predecessors accepted but decided to implement in three stages, on 1 January 1978, 1 April 1979, and 1 April 1980. Last year the Review Body recommended an updating of the second and third stages, which we accepted. The third stage has been in payment since 1 April this year. The present report is concerned with the increases required to bring that third stage up to date from the levels appropriate on 1 April 1979 to the levels appropriate on 1 April 1980.
The other report now submitted—report No. 15—makes recommendations for the salaries of Members of Parliament, Ministers and other paid office holders. Last year the Review Body made recommendations that the House agreed should be accepted but should be implemented in three stages, on 13 June 1979, 1980 and 1981. The first stage was paid to all those concerned. The second stage has been in payment since 13 June last for Members of Parliament but not for Ministers and other paid office holders. The Review Body's latest report is concerned with the increases required to bring the second and third stage payments up to date from the levels appropriate on 13 June 1979 to the levels appropriate on 13 June 1980.
The Review Body has arrived at detailed recommendations over the whole field on the basis of all the factors that are traditionally relevant. The Government are grateful to Lord Boyle and his colleagues for their thoroughness and
30
attention to detail, and for all the time and effort that they have devoted to the review.
They recommended increases of 14·6 per cent. in the second and third stage payments to Members of Parliament, and similar increases for Ministers. The general level of the increases that they recommend for the four groups of public servants is about 19 per cent., though they propose larger increases than that for certain categories within these groups. If these larger increases are taken into account, the overall cost of the increases recommended for these groups of public servants would work out at about 26 per cent.
The Government are committed to accepting the recommendations of the Review Body, save where there are clear and compelling reasons to do otherwise. Indeed, my right hon. Friend the Leader of the House told the House some months ago that the Government would accept the recommendations of the Review Body for updating the second stage increases to hon. Members. I should like to explain to the House, Mr. Speaker, why, notwithstanding these commitments, the Government take the view that there are clear and compelling reasons, of a kind that the Review Body could not take into account, for not accepting the Review Body's recommendations in full on this occasion.
The overriding priority to which the Government's economic and monetary strategy is directed is the reduction of inflation. At over 20 per cent., the rate of inflation is unacceptably high, in absolute terms and in relation to the rate of inflation in most of the countries with which we compete in world markets. We shall not be able to make progress in resuming sound economic growth and in reversing the rise of unemployment until we succeed in reducing the level of inflation very substantially. By sticking to our monetary targets we shall bring the rate of inflation down. It is likely to be falling in the next few months, but unless the growth of earnings is broadly consistent with the rate of monetary growth the fall in inflation will be accompanied by a larger rise in unemployment.
Pay increases in the private sector are clearly beginning to respond to the combined pressures of tough market conditions and financial constraints. But the

31
private sector cannot be expected to take the whole of the strain. Levels of pay increases in the public sector must likewise be reduced, if public expenditure is to be kept under control and our monetary objectives achieved. When we are looking to other groups in the public sector to accept pay settlements that fall below what might be suggested by any traditional comparisons with movements of other earnings or of prices, the Government think it right to expect people in positions of responsibility and leadership in Parliament and the public services to act in a way that we hope others in the country will follow.
This is the background to the Government's proposals, to which I now turn.
First, as to Members of this House, we are in the virtually unique position of determining our own remuneration. Our calls to others to show restraint and act responsibly will be judged by what we do ourselves. The Review Body has recommended a parliamentary salary of £12,300 from 13 June 1980 and £13,750 from 13 June 1981. These figures represent an increase of 14.6 per cent. The Government think it right to propose to hon. Members that they settle for a substantially smaller figure. We shall therefore invite the House to approve a resolution to provide a parliamentary salary of £11,750 from 13 June 1980. That represents an increase of £1,025 or 9.6 per cent., on the second stage salary of £10,725, which has been in payment since 13 June last. We propose also to provide in that resolution for an increase of the same percentage in the third stage salary, due to take effect on 13 June 1981, taking it from £12,000 to £13,150.
We propose that the secretarial and research allowance for hon. Members should be increased by 9.6 per cent. to £7,400, with effect from 13 June 1980.
Ministers and other paid office holders are not yet in receipt of their second stage payment. We shall invite the House to approve an order putting into effect the second stage payments recommended by the Review Body last year, increased as for Members of Parliament by 9.6 per cent. save in the case of Cabinet Ministers and my right hon. and learned Friend the Attorney-General. For them, the increase will be reduced to 5 per cent.
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The order will also provide for the same percentage increases to be applied to the third stage payments due to take effect next year.
We propose to adopt the Review Body's recommendation that we should unify the parliamentary salary payable to Ministers in the House of Commons from three rates to a single rate, and we propose that that rate should be £6,930. Although junior Ministers in the House of Lords now receive a secretarial allowance of £1,000, which we propose to increase to £1,100, they do not receive any salary specifically in respect of their parliamentary duties. This is a very real problem, and we propose to consider how the arrangements for their remuneration should be revised to take account of it.
The Government propose that peers' expense allowances, which are related to relevant costs, should be increased as the Review Body recommends.
I turn now, Mr. Speaker, to the four groups of public servants covered by the Review Body's fourteenth report.
The Government consider that they should be expected to accept no less a reduction, as compared with the Review Body's recommendations, than Members of Parliament are being asked to make for themselves. The increase that we are proposing for hon. Members is about one-third below that recommended by the Review Body. We propose that the average, increase for the four groups of public servants concerned should also be about one-third below the general increase of about 19 per cent. recommended by the Review Body. That will bring the overall cost of the increases to these groups down to about 12½ per cent.
This will not be paid as straight percentage increases across the board to all those concerned; it will be so distributed as to mitigate the compression of differentials between the groups covered by the Review Body's report and those directly below them, and within those groups to preserve generally, though, of course, at lower salary levels, the pattern of differentials and relativities recommended by the Review Body.
The result of distributing the, total sum in this way will, in fact, be that most of those at the highest levels—the permanent and deputy secretaries in the Civil Service, the equivalent ranks in the Armed Forces.

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and the chairmen of nationalised industries, will, like hon. Members and Ministers, receive percentage increases in single figures.
The new salary rates for all four groups will be effective from 1 April 1980. The effect of implementing them will be to reduce the cost, as against full implementation of the Review Body's recommendations, by about 50 per cent.
A special problem arises in the Civil Service. When other grades recently received increases following pay research, it was agreed that new salary scales for assistant secretaries and senior principals—the grades immediately below those covered by the Review Body's remit—should not be settled until the outcome of the Review Body's report was known. The results of pay research for the assistant secretaries would take the maximum of their scale above the rate we now propose for under-secretaries. In order to preserve tolerable differentials, it will be necessary to set a lower scale for assistant secretaries from that which would result from the application of the pay research findings. There will also need to be a slight adjustment at the top end of the scale for senior principals.
I will, with permission, Mr. Speaker, circulate in the Official Report schedules showing the current and proposed rates of salary for the main groups and grades concerned. Full details of the Government's proposals will be placed in the Library.
For the groups covered by the Review Body's fourteenth report, who have completed their staging, the rates of salary now proposed will be used for the purposes of calculating pension entitlements. For hon. Members and for Ministers and other paid office holders, pension entitlement will be calculated on the revised third stage salaries.
With regard to the remuneration of nationalised industry board members, the Review Body, in its fourteenth report, questions the appropriateness of its role, and suggests that the Government should reconsider its remit in this respect. The Government share the doubts that the Review Body has expressed. We have therefore decided that this should be the last occasion on which the Review Body is asked to recommend on the remuneration of the chairmen and mem-
34
bers of boards of nationalised industries. In future years, these salaries will be determined by the Minister concerned in each case, with the approval of the Minister for the Civil Service.
I am very well aware that in making the proposals that I have now described to the House the Government will be accused of going back on commitments and breaking agreements, and of failing in their obligations to the public servants concerned, on whose hard work, loyalty and integrity society depends. But they must have regard to their wider obligation to propose what we believe to be right. In present circumstances, the Government believe that these proposals would give fair levels of remuneration to hon. Members of this House and to the public servants to whom they apply, and at the same time measure up to the needs and expectations of those to whom we, in this House, are answerable and who, in the end, have to find the money.
Mr. Foot: Will the right hon. Lady at least understand that the House will accept that she is proposing a series of discriminations against the public service and that the proposals will have to be examined on that account? How, for example, can she reconcile what she has proposed in the statement for the chairman and others working for nationalised industries with the agreement in which she was glorying only a few weeks ago with Mr. MacGregor, appointed to the British Steel Corporation, when she herself enunciated the principle of "Grab all you can" as being the one that she supported? How does she reconcile that proposal with what she is now putting before the House of Commons?
On the proposal made by the right hon. Lady and the Government for Members of Parliament, does she not agree that it involves a direct breach of what was stated from the Government side of the House and from the Government Dispatch Box on behalf of her Government? Does she not agree that she has abandoned that undertaking altogether? Why, in those circumstances, should anyone believe what the Government have to say from the Dispatch Box in the future? When the right hon. Lady says that she is taking the figure of 9½ per cent. as the inflation rate under which increases are to be made, is she not working on

35
the figure of the previous Government and not on the record inflation achieved by her own Government?
The Prime Minister: The right hon. Gentleman has, I think, raised three points. When we appointed Mr. MacGregor we took the view that the steel industry and the difficulties it was then facing, about which we now know even more, deserved the very best person that we could get. We took the decision to get the best person. I believe that that was the right decision.
The right hon. Gentleman says that we had a commitment. Yes, we did, and I explained that in the last paragraph of my statement. I thought that I had better take it directly, before the right hon. Gentleman pointed it out. We have an even greater commitment to the people of this country to recommend what we believe to be right. Thirdly, with regard to what this Government have done to increase the salaries of hon. Members, the figure that we are now recommending, of £11,750, is 70 per cent. more than that which obtained when we came into office.
Mr. Foot: Does the right hon. Lady seriously think that she can escape from undertakings given to the House in the manner that she has done?
The Secretary of State for the Home Department (Mr. William Whitelaw): Yes.
Mr. Foot: I am not asking the Home Secretary.
Will the right hon. Lady explain what factors have arisen since 4 March which enable her to ask the House that she and her Government should be released from the positive assurances that she gave to it, without any modification whatsoever in this sense? What are those factors? When did they come to her attention? In future, may we have the assurance that whenever undertakings are given from the Dispatch Box she will explain all the reasons why they should not be believed?
The Prime Minister: Broadly speaking—the enormous increases in public sector pay that have followed on the
36
various stagings and updatings and to which our attention was drawn by the Select Committee on the Treasury, and the difficulty of keeping public expenditure under control when such vast amounts are going out in public sector pay; secondly, the fact that public sector pay and the increases given are taken into account in the private sector in making their claims for the next pay round. I am asking the right hon. Gentleman, in his distinguished position of leadership, to give a lead. I hope that he will be able to do so.
Mr. Foot: We were quite prepared to give a lead when we were in Government, and we did so across the whole board. When we asked the House of Commons to accept those figures we asked it because that was what was being applied across the rest of the country. I am asking the right hon. Lady specifically what are the agreements reached since 4 March which persuade her that she is entitled, in the House, to commit her Government to a plain breach of faith?
The Prime Minister: I have already answered the latter point. With regard to the right hon. Gentleman's former point, his Government left the salaries of Members of Parliament at £6,897. This Government have already accepted increases of up to 70 per cent. and have proposed a further increase for next year which will bring those increases up to 90 per cent. Will the right hon. Gentleman point to any time when the then Prime Minister agreed to accept the decisions of the Review Body, whatever they were? He never did.
Mr. Foot: Will the right hon. Lady understand that we never gave the House such an undertaking as was given by the Leader of the House? Why is she breaking her word, and why will she not take responsibility for it?
The Prime Minister: I am quite prepared to take, and am indeed taking, responsibility for what I recommend. I notice that the right hon. Gentleman is telling the country that 70 per cent. is not enough.
Mr. David Steel: Do not these decisions represent a remarkable turn-round from the statement of the Chief Secretary

37
only last week in the Liberal Supply day debate, that incomes increases had made no contribution to inflation? If the Government believe that some intervention is now necessary on pay, would it not be better to work out a coherent overall pay policy rather than a series of ad hoc pay policies affecting individual groups? Lastly, sticking within the right hon. Lady's 9·6 per cent. figure for Members of Parliament, could she not engage in some productivity bargaining and arrange for those who have strenuously opposed the disastrous economic policies of the Government to receive more and those who have slavishly supported them to receive less?
The Prime Minister: With regard to what the right hon. Gentleman said about my right hon. Friend the Chief Secretary, public sector pay is the biggest single factor in public spending. Apart from the nationalised industries, it amounts to about £32 billion a year. If we take large increases, that will be observed by others and may have an enormous multiplying effect throughout the economy. We are perfectly prepared to take decisions, and we ask the right hon. Gentleman to follow the lead that we have given.
Mr. du Cann: Does not my right hon. Friend's statement confirm again the fact that the only satisfactory moment at which matters of this embarrassing kind should be decided is at the beginning of a Parliament? While I acknowledge that these matters, at any rate so far as Members of Parliament and Ministers are concerned, are for the House as a whole to decide, and while I acknowledge also that the Government are bound to give a lead, particularly in the serious economic situation that my right hon. Friend described—a lead that many of us will wish to follow—may I put some points to her?
Since Members of Parliament are being asked to accept a reduction in the recommended figure of 15 per cent., and since their remuneration and that of Ministers has been too low for too long, can we not peg the pension figure to what Boyle now recommends? Secondly, cannot my right hon. Friend and the Leader of the Opposition, aided if need be by representatives of the Back Benches, in the interests of the House as a whole now come to a formal and final agreement to
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remove this matter in future from discussions in the midst of Parliaments?
Last, but by no means least, so far as those in the public service are concerned, while one acknowledges again that pay is a substantial amount of total Government expenditure, all of which has to be found by the taxpayer, is it right that we should say to those who accept the huge responsibilities of leadership in the Civil Service, the nationalised industries, the Armed Forces and elsewhere, that they must be singled out and their families penalised merely in order to give an example to the rest of the nation?
The Prime Minister: I am grateful to my right hon. Friend. On his first point, about the matter being settled at the beginning of a Parliament, I doubt whether that could resolve matters for the whole of a Parliament without some revisions during its course. As for the pension figure, we have agreed that pensions shall be determined by relation to the updated third stage—updated by 9.6 per cent. We shall of course catch it up by next year. It would of course have a great effect on any dependants were we to suffer any tragedies among us during this year. That is why we agreed that pensions should be related to pay of £13,150. With regard to a formal and final agreement, I have considered—indeed the Review Body considered—all questions of linkage. I think that it came to the same conclusion as we have come to; in the end it is hon. Members who determine their own pay, and there is no way of escaping that. With regard to public servants, we are talking about the top public servants, dealt with by the Top Salaries Review Body. I believe that it is right to ask people in that position to give a lead to others. I hope that that lead will be followed.
Mr. J. Enoch Powell: Does the right hon. Lady believe that the small reduction that is proposed in the remuneration of hon. Members and of Ministers will result in any diminution in the supply offering for places in this House or in her Government?
The Prime Minister: No, Sir; like would-be miners, they are queuing up.
Mr. Higgins: Is my right hon. Friend aware that the figure of 70 per cent. that

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she gave in answer to a supplementary question is open to gross misinterpretation by those outside the House? The fact is that over, say, the last decade, if the public at large had followed the example of hon. Members, we should probably have no serious inflation problem at all. If we are to agree to my right hon. Friend's recommendations it is important that we should publicise as widely as possible the great degree of restraint that has been shown by the House in the past, and which is now proposed again.
The Prime Minister: The 70 per cent. is the obligation that the Government accepted for the House. If we go back over a decade, 15 years, 20 years, or to 1964, we must take into account the substantial increases in allowances since that time. We used to have to bear on our salaries some of the things that are now taken into account in allowances. If we are looking back over a period, for the benefit of those who have not been in the House for that period, those factors should be taken into account. It should be borne in mind that the average amount taken in allowances exceeds the parliamentary salary.
Mr. Willey: Does the Prime Minister realise that our main objective is to take this issue out of the House? We established a committee to deal with the matter. We are not top salary earners. We referred the matter to the Review Body and we gave it a clear commitment about our attitude towards its recommendations. It has made its recommendations and we should accept them. Is the right hon. Lady aware that her intervention is especially mean, because the Boyle committee points out that the award is substantially below inflation and substantially below other comparative salary earners?
The Prime Minister: On the right hon. Gentleman's first point about taking the matter out of the House, whatever is recommended, by whatever means, the final decision is taken in this forum. I do not see that there is any way of getting out of taking that decision. If we are the 635 leaders of the nation we should not try to get out of taking that decision. The chairman of the review body recommended less for us than for
40
other groups. There are not the same differentials for Members of Parliament, or the increments that occur in some groups in the public sector. That is why he considered the other groups in such detail, and why we have preserved his pattern of differentials and recommendations, albeit at reduced salary levels.
Sir John Eden: Is not the most important commitment that my right hon. Friend has given that to bring down the level of inflation? As there is very good reason to believe that the level of inflation will turn down in coming years, will my right hon. Friend have a second look at the rate of increase proposed for hon. Members' remuneration in 1981? Should that not be lower than that for 1980? Is there not good reason to suggest that it should not be 9·6 per cent., but 5 per cent.?
The Prime Minister: I am grateful to my right hon. Friend. The position is that the three stages were, by resolution of the House, without any further resolution, automatically put into payment on the appropriate date. If we leave the third stage as it is, about £12,000 will come into payment automatically in June 1981. We thought it right to recommend that that £12,000 should be updated by 9·6 per cent. to preserve the differential with the second stage this year. We are the only group that has not yet received the third stage. The second stage of ministerial salaries was never put into any order, and we have to provide for both the second and third stages. The percentages applied to the third stage will be those that I have indicated. That is right and proper. The question will then arise whether those sums should be updated.
I am grateful to my right hon. Friend for putting the reduction of inflation among his top priorities, and also for giving a lead.
Mr. Speaker: I propose to call three more hon. Members from either side.
Mr. Alexander W. Lyon: Is the Prime Minister aware that since 1975, when the House voted that pay should be linked to the assistant secretary level, pay for Members of Parliament has fallen by 30 per cent. in real terms? Because of that, Lord Boyle insisted that before he undertook the review he should have an assurance that the Prime Minister would

41
implement his recommendations. She gave that assurance in unqualified terms in a letter to Lord Boyle last July. Do words still have meaning for the right hon. Lady, or was that just a plain lie?
The Prime Minister: I tried to explain to the House why, although we gave that commitment, I felt it necessary to recommend to the House a lesser amount. I am recommending to the House a lesser amount. It is for the House to decide whether it wishes to accept that. If the House wishes to say that it must receive the total amount, the House is responsible and accountable to the constituents, who, in the end, provide the money.
Lord Boyle's report has been available in the Vote Office for more than an hour. The last paragraph of that report states:
"In making these recommendations we have had in mind the same considerations as in previous Parliamentary reviews. To go further would in our view be unjustified in itself, would extend well beyond our terms of reference and indeed would encroach upon the prerogative of Government and Parliament."
It is the prerogative of Government and Parliament to which we are turning today.
Mr. Montgomery: Is my right hon. Friend aware that there will be widespread support on the Conservative side of the House for the proposition that we cannot expect other sections of the community to show restraint in incomes unless we, as Members of Parliament, also show restraint?
The Prime Minister: I am grateful to my hon. Friend for his remarks. The Government's proposal is reasonable, having regard to all the circumstances. I hope that, having decided that some of our employees should go into single figures and having recommended that hon. Members should go into single figures, that lead will be followed. It is important that it should be followed.
Mr. English: Is it the case that the salary of the Prime Minister's office is about 15 per cent. of that of the chief executive of the Playboy Club? Is the right hon. Lady aware that on the Labour side of the House her estimate of her true worth will be generally accepted? What we cannot understand is why she thinks that the chairmen of our nationalised industries are worth less to the country than the chairman of a gambling club?
The Prime Minister: With regard to the hon. Gentleman's strictures on myself, I treat his remarks as they deserve.
Sir Nigel Fisher: Will my right hon. Friend bear in mind that both Ministers and hon. Members are underpaid in relation to any other comparable Parliament? Nevertheless, most of us are prepared to take our usual place at the bottom of the queue so as to set an example in the public sector. However, the least that we can expect is that Members' pensions should still be geared to the notional figure based on Lord Boyle's report instead of to the lower figure now proposed by my right hon. Friend. That would be in accordance with precedents during the past few years. It would help to sugar the pill that we are being asked to swallow.
The Prime Minister: Hon. Members' pensions are geared to £12,000, which is the figure for the third stage. We are updating that figure to 13,150, which increases the £12,000 by 9·6 per cent. We are gearing the pensions to that figure. To go beyond that would presume upon the results of next year's updating. I do not think that that would be wise. It is right to gear the pensions to the figure that we shall place in the motion that will be put before the House for its approval.
Mr. Ashton: Is the Prime Minister aware that many Back Benchers are concerned about inflation and its effects on the poor? Will she therefore give an assurance that if Back Benchers agree to take 9·5 per cent. she will bring forward the pensioners' pay rise from the last week of November to the first week of that month, so that they will have had to wait only 52 weeks instead of 54 weeks? If we play our part, will she do the same?
The Prime Minister: No. As the hon. Gentleman knows, the two sums are not comparable.
Mr. Kershaw: Was my right hon. Friend not correct in saying that ultimately the House must always decide what the pay and pensions of hon. Members should be? Was not the Boyle Commission an attempt to take the decision away from the House, and are we not now seeing the result of that? Would it not have been intolerable, in present

43
national circumstances, if we had insisted on our last pound of flesh?
The Prime Minister: I am grateful to my hon. Friend. I entirely agree with

Current salary* £

Proposed salary £

Percentage increase Per cent.

MPs (Back Benchers)

10,725

11,750

9·6

Ministers:

Examples:

Cabinet Ministers†

22,325

23,500

5·3

Ministers of State (Commons)

14,812

16,250

9·7

Ministers of State (Lords)

14,955

16,400

9·6

Parliamentary Secretaries (Commons)

11,262

12,350

9·7

Parliamentary Secretaries (Lords)

11,405

12,500

9·6

* Current salary includes second stage of 1979 pay increase.

† Excluding Prime Minister, Lord Chancellor and Lord President of the Council.

what he said. I believe he was saying what I tried to say earlier, namely, that those in positions of leadership must give a lead. That is what we are here for.
Following are the schedules:

Current salaries £

Proposed salaries £

Percentage increase Per cent.

Examples:

British National Oil Corporation:

Chairman

53,500

58,500

9·3

Members

29,250–37,750

33,000–43,000

13·4

British Steel Corporation, Post Office:

Chairmen

48,500

53,000

9·3

Members

28,500–34,500

31,500–39,500

12·7

British Aerospace, British Airways Board, British Gas Corporation, British Rail, British Shipbuilders, National Coal Board, Electricity Council:

Chairmen

44,000

48,000

9·1

Members

23,250–28,750

26,000–32,750

13·0

British Airports Authority, Cable and Wireless, Civil Aviation Authority, National Bus Company, Scottish Development Agency:

Chairmen

31,000

34,000

9·7

Members

18,500–22,500

20,500–26,000

13·4

Percentage increase for group as a whole

—

—

11·6

YOUTH AND COMMUNITY BILL
Mr. Marks: On a point of order, Mr. Speaker. May I draw your attention to an error in Hansard of last Friday 4 July? In column 2034 it reports that there was a vote on a closure motion in a debate on a Government new clause to the Youth and Community Bill. In fact, there was no vote on the closure. It was the Government's proposal which was defeated. I should be grateful if the report could be amended.
Mr. Speaker: The hon. Gentleman is quite right. The Division took place on the new clause and not on the closure. It is correctly recorded in the Votes and Proceedings. No doubt the Editor of Hansard will take note of what has been said and will wish to correct the record.

BILL PRESENTED
  RACE RELATIONS ACT 1976 (REPEAL)
  Sir Ronald Bell presented a Bill to repeal the Race Relations Act 1976; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday, 25 July and to be printed. [Bill 242].

  STATUTORY INSTRUMENTS. &c.
  Ordered.
  That the draft New Bus Grants (Extension of Period and Reduction of Rate) Order 1980 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Waddington.]

  YOUNG PERSONS
  4.12 pm
  Mr. T. H. H. Skeet: I beg to move,
  That this House, aware of the special problems facing young people in contemporary society, affirms the need of the Government to pursue a positive and realistic policy towards youth, to review the provisions of the Education Act 1944 in regard to youth provision, better to co-ordinate all departments' efforts in this field, and to provide suitable financial resources within its expenditure plans through Rate Support Grants and departments' grants for the youth service to discharge its proper role and purpose.
  There are several categories of youth. There are those who aim at self-realisation and an embellishment of their own talents. I regard those as the motivated. They are the broadest group and they will tend to evolve under the pressures and strains of life as they move through their teens into manhood and woman-hood. Problems seldom centre there, though they represent the majority of youth.
  There are those who are subject to some disadvantage not of their own choice—the inadequate, the unmotivated, the physically incapacitated, those lacking shelter following, say, their discharge from prison, the unemployed during a cruel turn of the economic cycle and those belonging to ethnic groups who are subject to prejudice emanating from insensitive or hostile people. There are also those who suffer voluntary afflictions—drugs, alcohol and crime. All 17 million or so of them under 21 form a composite—British youth.
  It is not what we make of them or allow them to make of themselves that counts. Society cannot afford to increase the size of the human scrap-heap. On the other hand, it may rejoice if it has managed, by its ingenuity or its provision, to realise much latent talent. In a myriad of cases, society must condition, encourage, stimulate, motivate and mature those within its charge to promote a real harvest.
  The post-war era has not shown that we have been particularly adept at meeting the challenge of the age. In the United Kingdom there is a lack of co-ordinated effort. The generality of youth is faced by too many Departments involved in various aspects of its life.
  48
  As my right hon. and learned Friend the Secretary of State for Education told a seminar on youth and young people at the University of London Union on 3 March last year, when he was the Opposition spokesman:
  "Many of the current problems with provisions for young people stem from lack of co-ordination—between one central Government Department and another, between central and local Government and between statutory and voluntary bodies."
  I regret that my right hon. and learned Friend is not here today, because I feel that he is a great supporter of the young people of this country.
  The Under-Secretary of State for Education and Science (Mr. Neil Macfarlane): It may be convenient if I tell the House now that my right hon. and learned Friend the Secretary of State had looked forward to taking part in the debate, but unfortunately he has fallen victim to influenza. It remains to be seen whether he will be able to return to London and take his place in the House tomorrow. I know that he greatly wanted to take part in the debate. It may set the scene if I make that clear at this stage.
  Mr. Skeet: I am obliged to my hon. Friend for that information.
  The lead Department is the Department of Education and Science, which appears to treat youth over 16 as of purely peripheral interest. In my judgment, its tutelage over the past 35 years has revealed that youth's dependence on the DES is open to serious question.
  There are, at least five other Departments that may claim responsibility. The Department of Health and Social Security provides social services for the young and the disadvantaged, administering, for example, the Children Acts of 1948 to 1975, the Children and Young Persons Acts of 1933 to 1969 and the Chronically Sick and Disabled Persons Act 1970.
  The Home Office is concerned with delinquent children and community development programmes, especially community service orders, the Children and Young Persons Act 1969 and the crucial Powers of Criminal Courts Act 1973. The Department of Employment is concerned with careers service, which offers vocational guidance to the young under the Employment and Training Act 1973.

  49
  The Department of the Environment provides housing and support and youth activities towards conservation and environmental improvement. It is responsible for miscellaneous Acts, including the Housing Act 1957 and the Housing (Homeless Persons) Act 1977. Finally, the Foreign and Commonwealth Office concerns itself with youth exchanges abroad.
  In my judgment, the demarcation lines between unions are nothing like the demarcation lines between Government Departments. For example, social workers from the DHSS vie with youth workers of the DES. Proper co-ordination need not prove expensive; it could be managed simply through a shift of resources between Departments at both national and local levels.
  Abroad, several countries have tackled their problems more realistically. The Federal Republic of Germany has a Ministry of Youth, Family Affairs and Health. France has a Ministry of Youth, Sports and Leisure. The Netherlands has a Ministry of Cultural Affairs, Recreation and Social Welfare, and Australia has a Federal Ministry of Youth and Employment.
  The options available to the House are either a tight, education-based service or a wider, community-based service. I would opt to combine youth with the responsibilities of the Minister with responsibility for sport, much along the lines of the composite Ministries in the EEC.
  In past years the DES has failed to provide both an education system that is suitable for a modern industrial State and a youth service to meet the challenge of our times. If investment has to be made in men or in institutions there is no doubt in my mind that it should be made in the former, because man may shape institutions and he may act as a catalyst to produce change.
  The success of a nation rests on the ability and talents of its people, but what frequently happens is that their abilities are stultified by bureaucracy, enthusiasm becomes misdirected, and rich energies are spent on purposeless ventures. The new generation will not be ignored. It is more likely to embrace the democratic purpose if it is practised in the art and if it is involved and
  50
  participates in society, if the habit is actively inculcated in earlier years.
  I mention one or two facts about finance, since finance appears to be at the heart of most problems today. In 1978 the number of young people under 21 was 17½ million. In 1978–79 expenditure on education worked out at £8,316 million and £95 million was spent on youth and related services. That works out at 1·14 per cent. For every pound spent on education a penny is spent on the youth service. It is estimated that the cost of vandalism—£100 million per annum, of which £50 million is in schools—is, oddly enough, equivalent to what was spent on youth and related services in 1978–79.
  Among young people over 16 years of age, 32 per cent. of expenditure goes on the top 10 per cent. of the youth population and about 1 per cent. on the remaining 90 per cent. That is grossly unfair. The Secretary of State—who is not here this afternoon, for reasons that have been given—foresaw the problem in his "Cinderella" speech on 3 March 1979. It may be right for me to quote precisely what he said:
  "The Youth Service must surely be the cinderella service of education. More than three decades after the 1944 Education Act, it is still a malformed creature. Indeed, I doubt whether many people realise that the Secretary of State for Education and Science has any responsibility for it at all. And the response of local authorities to the need to provide services and recreational facilities for young people varies enormously. I am whole-heartedly committed to the ideal of a flourishing Youth Service in every part of the country. This must mean allocating adequate funds within the education budget for local authorities to strengthen their youth services in particular by giving support to voluntary bodies, who do so much voluntary work in this field."
  The Secretary of State indicated that he truly recognised the problem of youth and intended to tackle all the problems before him. In May 1980 he said that the Government's expenditure plans assumed that
  "current expenditure on youth and community projects will be held at about the present level both in the case of spending by local authorities and of central support for voluntary organisations. Capital expenditure is planned to fall in both cases."—[Official Report. 13 May 1980; Vol. 984, c. 434]
  The House might be interested to know what has happened. Fortunately, we have the report produced by Youth Service Partners, which said:
  "In these authorities "—

  51
  it surveyed about 75 per cent. of local education authorities—
  "the statutory sector of the Youth Service is being reduced by an average of 9·9 per cent. whilst support for the voluntary sector is being reduced by 13·8 per cent."
  It went on to indicate:
  "The highest spending authority spent 14 times as much as the lowest spending authority on each young person in their area. The lowest spending authority spent approximately 5 pence a week on each young person."
  I emphasise that there is no common standard of provision for young people and that the range of variation in expenditure appears to reflect a different commitment to the youth service by different local authorities. I think that every hon. Member will recognise that the voluntary organisations have made the greatest contribution in the past and that they are the most inexpensive organisations working in conjunction with the youth service. Yet it is that area of activity that is being cut back much more than the statutory sector.
  In the area of social and environmental services about 5 million people undertake voluntary work during the year and about 16 million hours are worked each week. That is equivalent to 400,000 full-time staff jobs, which, in turn, is equivalent to exactly twice the number now employed full-time in the statutory social services.
  That may all appear to be rather technical, involving many figures. I cap my case by saying that I calculate that the grants by the Department of Education and Science for 1979–80, including capital grants, work out at approximately £5·8 million. That is equivalent to the cost of building about two miles of three-lane motorway. Another illustration is that tax revenue forgone due to the extra-statutory concession on the taxation of coal miners' free coal in 1979–80 is estimated at £20 million. That is not far short of the grants made to youth services by the Ministry of Defence, the Department of Education and Science, the Department of Health and Social Security, the Home Office and the Department of Foreign and Commonwealth Affairs.
  Local authorities are obliged to make the greatest contribution of all, but it is a severe indictment of them that they do not recognise that while they are pre-
  52
  pared to cut down provision for youth their expenditure on other matters has gone up significantly, as in their dealings with vandalism and juvenile crime. It is a great pity that the Youth and Community Bill was lost last Friday because of lack of time. That Bill was designed to deal with exactly this situation.
  There are three areas of concern that I wish to mention to the Minister. The total of unemployed young people under 19 is roughly 172,000. That is 11·9 per cent. of all those unemployed. When we compare these figures with those for the higher age bracket we find that the position in January 1980 was as follows: in the age group 25–49 the number of unemployed men was 5·6 per cent., not 11·9 per cent., and the figure for the 50–59 age group was 5·5 per cent. The percentage figure begins to rise significantly among the over-60s. I believe that the House understands the reason for that.
  Special employment and training measures exist and they help youth significantly. The youth opportunities programme, the special temporary employment programme, training in industry and community industry provide 109,000 places out of a total of 314,000 places, which is about one-third.
  I wish to ask the Minister a few questions. Is the YOP programme big enough, in view of unemployment trends, particularly as unemployment affects young people more significantly than other age groups? What happens within 12 months after a young person has emerged from the youth opportunities programme? We had guidance the other day when it was indicated that the percentage of young people entering normal employment on leaving that programme in Scotland was 64 per cent. The remainder had no jobs. They must remain unemployed. The figure in 1978 was higher, at 68 per cent., but in Wales, for example, the figure in 1978 was 67 per cent.—significantly better than the figure of 53 per cent. in 1979.
  The problem therefore arises that, while a part-time palliative is created and young people can go into industry and learn all about work, after they have completed the maximum of 12 months, if unemployment is still high, what will be the next move? Do they go back on the dole, or is further provision to be made? I must

  53
  ask the Minister whether the Government will now unfold further plans to cope with this specific, difficult and urgent task.
  Another point of concern is that the Home Office working party report on fires caused by vandalism indicated that vandalism accounts for the largest percentage of the cost of fire losses. Losses in 1977—the most recent year for which figures are available—was between £80 million and £100 million. That represented about one-third of the cost of fire losses. The number of recorded cases of arson increased from 2,500 in 1970 to 9,400 in 1977. The conviction rate, as one would expect, was between 25 per cent. and 33 per cent. Two-thirds of those who were convicted were children between the ages of 10 and 17. On a more parochial note, the number of detected cases of vandalism in Bedfordshire was more than 1,000, 38 per cent. of which were committed by juveniles.
  I was rather impressed by an observation made by the chief constable of Cleveland, Mr. Christopher Payne, who advocated that the expansion of community service orders under the 1973 Act was probably the way round this situation. Delinquents would, in effect, be making reparation, not in financial terms but in physical effort, and it might make them realise the time and effort required to rectify damage perpetrated in seconds. Prevention of vandalism costs money, and local authorities should recognise that fact.
  If we do not go for prevention of trouble, which we could do by youth provision, we must face two significant things. The cost of keeping a person in local prisons or remand centres is more than £5,400 a year. If he is detained under the security category provisions it costs more than £12,000 a year. On the other hand, he may be kept in a home. There was a significant answer on 3 July this year, which showed that:
  "In the year ended 31 March 1979 the cost to local authorities in England of maintaining juveniles aged sixteen and under in community homes was £166·9 million, exclusive of administrative and field social work costs"— [Official Report, 3 July 1980; Vol. 987, c. 655.]
  Those figures should bring back to the House the importance of the preventive route, that is, more youth provision than that generally adopted by magistrates.
  54
  Young people should be put out on community service orders, which I recommend above all else. At the same time, custodial treatment is likely to be expensive for the State, and I am not certain whether it will do youth very much good.
  The final concern relates to drugs and alcohol. The average age of drug offenders tends to increase, although many younger people continue to be involved. In 1978, the figures were 24 per cent. under 21, and 17 per cent. over 30. The age of notified addicts is increasing. There were 13,394 convictions in 1978, of which 85 per cent. related to cannabis. However, that represented only the tip of the iceberg. The number of people who have tried cannabis is probably about 5 million.
  In England and Wales in 1978, the number of young people found guilty of or cautioned for drunkenness in the 17 to 21-year-old group was 19,871. In my opinion, the best antidote to drugs and alcohol is youth provision and youth involvement.
  I apologise for adducing a lot of figures. It would probably be better if they were read rather than used in the way that I have used them this afternoon. But one is primarily concerned with the future of young people and the way. I mentioned earlier that the House could either make provision for them or make it possible for them to reach their own stature by their own right. That is the preferable course. Once boys or girls are motivated, very little will go wrong with them. On the other hand, if they stray or become detached from society the results are inclined to be totally unsatisfactory.
  Recently, there was a fourth attempt to introduce legislation to reform the Education Act 1944. That failed last Friday. We are faced with a new challenge. What step do we now take? The Minister may have something to say about that. This matter cannot be left where it is. I have a feeling that the Government will do something—because they must—to face the challenge. The situation is getting worse throughout the country. It is no good referring to the many millions of young people who have made their mark in the universities, State schools and elsewhere. We are concerned with the many young people

  55
  who have not succeeded. They could succeed. The material in them is good. All that they need is the encouragement and persuasion, and perhaps the drive, which they could pick up from youth provision.
  I congratulate the statutory workers who are engaged in this sphere as well as the many voluntary organisations throughout the country. They have made a splendid effort. They could do more, but over the course of time we discover that they are receiving less encouragement than they should. Let us hope that the Chancellor of the Exchequer will take the view that if anyone gives money for youth it shall be regarded as a charity that will not attract tax, so that it can be used for that purpose.
  This country is not short of money or ideas, but youth is short of protection. Youth wants a stimulus, and it is for this House to give it.
  4.36 pm
  Mr. Neil Kinnock: I have the unfortunate task of offering my commiserations to the Secretary of State, who cannot be with us this afternoon. His misfortune is doubled, because not only could he not be here to hear the speech of his hon. Friend the Member for Bedford (Mr. Skeet), but it is the right hon. and learned Gentleman's birthday today, a distinction that he shares with Mr. Ringo Starr and my wife. Consequently, today I have more than my usual sympathy with the right hon. and learned Gentleman.
  We have just listened to a fine and well-informed speech. The hon. Member for Bedford did not have to apologise for the use of statistics. The best way of illustrating many of his arguments was to use the kind of figures that he used. We must congratulate him not only on his speech, perspicacity, foresight and luck in coming first in the ballot for Private Members' motions but on the tenacious way in which he sought to get his Youth and Community Bill on to the statute book. Sadly, that came to naught on Friday afternoon.
  Because of the absence of the Secretary of State, we have with us the Under-Secretary, who I understand was largely responsible for the demise of the Youth and Community Bill. However, we
  56
  acknowledge that he was only fulfilling his duty. Despite the fact that that Bill commanded widespread support among Conservative Members, the Government treated it as a means of avoiding any financial implications that might have arisen as a consequence of its enactment. We on the Opposition Benches felt it to be a necessary measure to improve the youth services of this country and a means of taking advantage of the zeal and enthusiasm of young people and those associated with them, including those in the voluntary sector.
  The Government's act in not allowing the hon. Member for Bedford to proceed with the Youth and Community Bill was in some way an Act of infanticide, because I understand that the measure was conceived in the Conservative Central Office and that in many ways it was the product of the Young Conservatives, an organisation which I hold in the greatest possible respect. I hope that Conservative Members understand what I mean. It is a measure of their utter harmlessness that I should hold them in respect.
  It was a well-intentioned Bill, which had remarkable antecedents. It is unfortunate that the Government have sought to use the objections of local authorities to the implementation of the measure which the hon. Gentleman proposed. We all know that the local authorities did not object at all in principle to that Bill but, rather, were fearful of the financial consequences that might arise from it. Therefore, they were caught in the pincers of wanting to implement the sensible proposals made in that Bill and, unfortunately, of being unable to contemplate doing so because of the way in which the Government have treated them by refusing to allocate finances even to enable them to maintain their statutory services in a way that they would like, let alone provide additional services that would be of benefit to youth and many others in the community.
  The motion speaks of the problems of youth in contemporary society, which are many and varied. There are the eternal problems of youth which arise simply from the fact that they are the youngest people in society, and throughout the ages youth's response to those problems has been criticised. They are newcomers to the labour market, and they are new entrants to the consumer

  57
  market. That is a permanent and natural fact which is exacerbated as a problem in any society where the expense of consumption is inflated and where the access to the labour market is constricted. In our contemporary society, with its giddy inflation and accelerating, menacing levels of unemployment, the problems of youth today are greatly compounded by the economic difficulties that are suffered by the whole of society, including youth.
  Added to those problems of consumption and employment is the fact that youth today is the target, as at no time before, of a merciless commercial onslaught by those who seek to dictate fads for profit, who dictate fashions as an indiscriminating part of our consumer force. That means that youngsters with money are exploited, and those without money become disappointed, resentful and alienated. The problems extend well beyond those that are obvious in terms of unemployment into problems of low pay, inadequate and bad housing, and extremely expensive housing, whether it is rented or whether it is acquired on a mortgage by newly married couples. Further problems are compounded for them by the fact that they are, without inviting the problem, at the frontier of the law and order initiatives of the Government. They therefore suffer disproportionately as a consequence of the zealotry that the Government seek to encourage in some areas.
  Whatever the financial background of those youngsters, whether they are in or out of work, whether they have money in their pockets or whether they do not, they have several common needs. They need guidance in order to ensure their personal development, and in this age of advancing technology, where attendance at places of work—even when it is possible—is becoming increasingly less necessary, it should include assistance in the use of extended leisure as well as in the advancement of understanding of the functions, duties and rights of citizenship.
  These young people need improvements in the provision of their education, including the provision of education in post-school years. The record in Britain in that respect is far from glorious in comparison with other advanced economies. These youngsters need training
  58
  in various forms, and in the light of our economic and technological realities, preferably training that is increasingly broad and flexible so that they are not incarcerated in one trade or skill for the remainder of their working lives. Without that, their insecurity during part of their working lives will be increased by the nature of the industrial and structural changes that take place. Above all, these youngsters have a need for work. That is not a stark or Dickensian prospect. I am not trying to play Mr. Gradgrind to the Under-Secretary's Mr. Chokumchild.
  Repeatedly, in every investigation of opinion, whether on a personal level, in conversations with youngsters, in opinion polls, or in studies of the youth papers produced by the various political or voluntary bodies, again and again the proposition is made that youth wants to work as much as it ever wanted to work. It wants interesting work as much as it ever wanted interesting work. It wants training, education, preparation and help to get that work as much as it ever wanted it. I wish to concentrate on that aspect of the problems of youth in contemporary society.
  According to the latest figures, 245,600 young people under the age of 20 are unemployed. That figure includes 187,000 school leavers, and in the latest figures available that total had risen by 137,000.Those young people under the age of 20 constitute 6·4 per cent. of the total labour force, and 16·9 per cent. of all those unemployed. Therefore, there is a massive disproportionate effect of unemployment among the under-20s, as the hon. Member for Bedford pointed out. One in 14 of all young people aged between 16 and 19 is without work. That is an immense proportion of young people who should be able to look forward during this period of their lives, if at no other, with a certain eagerness and a spring in their step as they move from childhood through adolescence into all the responsibilities, adventures and opportunities of adulthood. But for that significant proportion of youngsters, those opportunities are denied and there is no spring in their step as they trudge from potential employer to potential employer, from jobcentre to jobcentre and from employment office to employment office.
  Other problems are obscured by the figures. We are not talking about what

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  the American sociologists call a self-perpetuating culture of poverty. Admittedly, among those youngsters are those with the lowest ability, those from family backgrounds that are of little assistance, and those who live in slums in our inner cities or in remote rural areas, but, increasingly and worryingly, youngsters of above average ability and with academic qualifications are forming a larger and larger part of youth unemployment. We have only to look at the catastrophic fall in opportunities for apprenticeships in industry and commerce that are now taking place to measure the change in the nature of youth unemployment. That is as sad, tragic and alarming for the rest of society as the sheer size of the increase in youth unemployment in our time.
  There are also regional variations in those figures that are frightening. In Merseyside, Scotland, the North-East and South Wales, we are talking about proportions not of 16 per cent. but of 20 and 25 per cent. of young people who are unemployed. The consequence for those areas is a future that is a grotesque mirror of the past. Unless something dramatic is done to change the situation, we shall see in the next generation a mirror of what happened in two previous generations—mass desertion, depopulation and industrial refugees of young ages streaming out of Scotland, Merseyside, the North-East, South Wales and other afflicted parts of the country.
  The figures also disguise the fact that within that general large army of unemployed youth there are sections that are particularly badly afflicted. For instance, we know that girls will suffer worse than boys. We know that blacks suffer worse than whites. We know that handicapped and disabled youngsters suffer much worse than their fit contemporaries. Bad as things are for the fit, white boy, they are immeasurably worse for any of those other groups. The prospects of securing the succour of secure and satisfactory employment for youngsters who are disabled, for girls and for blacks in our society, are extremely remote—so much so that it is not exaggerating to talk of them as young people of the abyss in our time, in the 1980s. When we are talking of figures of 16, 18, 20 and 25 per cent., it is no exaggeration to talk of mass unemploy-
  60
  ment among the youngsters of this country.
  Those are awful facts. Had they been mentioned two or three years ago they would have brought jeers about exaggeration from hon. Members in this House and from people outside. The sad fact is that we are not talking in exaggerated terms as we described the position on 7 July 1980.
  No one can fail to recognise, either, that apart from those huge figures, for every boy and girl appearing in them probably another one will have taken on an unsatisfactory job as an act of economic panic. The inclination, quite understandable and natural in many ways, is not to try to prolong the time spent in school and not to try to delay the jump from education into the labour market by trying to remain in education for the purposes of training or of trying to seek and negotiate a better start in life. The inclination instead is to take the first job that comes along.
  The consequences of that, in terms of dissatisfaction, of alienation, of irresponsibility at work and of industrial delinquency are easy to foresee, but they are difficult to measure in advance. If a young person begins his working life in such unsatisfactory circumstances, and does not take a particular job or seek a profession or occupation by choice, the chances of his being an undesirable or unsatisfactory worker, having accepted undesirable or unsatisfactory work, are that much stronger.
  What have the Government done about it? Given that short, sharp shocks provide no refuge and constitute no adequate policy for dealing with youth unemployment, youth dissatisfaction and the effects of both, what approach have the Government taken?
  The first thing that we have seen is the Manpower Services Commission chopped up and the youth opportunities programme jeopardised in the process. Some frightening figures are being produced in this respect. The Manpower Services Commission's manpower review for 1980, published recently, said:
  "We will be unable to meet the demands on some of our major services"—
  that apparently includes the youth opportunities programme—
  "at a level we consider to be necessary."

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  That is a bland and direct statement. It is backed by a close treatment in the survey itself.
  However, even more fearful is the evidence given to the Select Committee on employment last Wednesday by Mr. Geoffrey Holland, head of the MSC's special programmes, division. It was reported in only one paper, yesterday's Observer. The article by Robert Taylor begins:
  "Only one in four of Britain's unemployed youngsters can expect any help from the Government's youth opportunities programme. This was the startling admission from Geoffrey Holland, head of the Manpower Services Commission's special employment programmes, before an unreported session of the Commons Select Committee on Employment last Wednesday."
  I draw the attention of the House to these figures.
  The article continues:
  "He estimates that there will be 190,000 school leavers still in the dole queue by the first quarter of next year, along with another 237,000 young people under 18, making a grand total of around 427,000. But at the same time only around 100,000 youngsters will be on YOP, 6,000 in community industry, and up to 20,000 in employment as a result of 64-year-olds leaving employment under the job release scheme."
  Those figures are bad enough—indeed, they are the figures that I intended to use in the course of the debate, giving them as an illustration of the fact that the Manpower Services Commission has striven, is striving and will strive manfully to deal with the problem—but the commission knows that it is impossible, on the resources that it has—even though I acknowledge that the Government have met the commission's demand for resources on the basis of forecasts of unemployment—to begin to deal effectively with the dimensions of the problem that it will face, for in addition to those figures—all of them for youngsters under 18—it is estimated that at the beginning of next year there will be over one-third of a million young people aged between 19 and 24 unemployed, in addition to most of those who are in the figure of 427,000 expected by the MSC.
  The prospect of there being well over half a million young people under the age of 24 unemployed in this country at the beginning of next year must horrify hon. Members, no matter on which side of the House they are, on which side of the
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  argument about monetarism, Keynesianism, reflation or deflation, they are, or whether they are wet or dry. They must share the horror that generally exists about the prospect of a whole generation being afflicted to that degree. That should call for the most immediate and effective action. So far, it has not. I understand that appeals are being made within the Government, but nothing has come forward so far in response.
  The Manpower Services Commission had some effective schemes for the youth opportunities programme, which achieved a 68 per cent. placement rate in the spring of 1979. The commission can see that placement rate falling to possibly as low as 50 per cent. or even lower. This programme, which has never promised to provide every youngster with a job on leaving school, has, nevertheless, been able to provide about two-thirds of youngsters with a job, but now it will be able to offer the possibility of youngsters moving out of YOP into jobs to a smaller proportion. These factors will have to be taken into account as the negotiations go on and the urgings take place inside the Government for additional resources for the Manpower Services Commission and the youth opportunities programme.
  Apart from that, the degree to which there has been a falling off by the Government in their commitment to youth is marked by the treatment of the other programmes—the special measures in addition to the youth opportunities programme. Community industry, the longest established, in many ways, of the attempts to meet the needs of the young unemployed, will, in the words of the Secretary of State for Scotland, be maintained at 6,000 places per year. That is in the face of enormously rising youth unemployment.
  The same policy applies to the special temporary employment programme. It will be maintained, to use the Minister's words again, at 12,000. In giving that information the Minister was misleading the House of Commons, for to maintain it at 12,000 is to cut it by a minimum of 2,000, and by as much as 7,000. Indeed, it will fall 18,000 short of the announced target of the previous Labour Government of 30,000 places by this time. That kind of shortfall is dramatic, especially as it is the kind of programme

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  that is especially intended to help unemployed youngsters of 19 to 24 who are at the absolute cutting edge of unemployment or in the most exposed position. It means that only about 1 per cent. of the long-term unemployed in that age group will be assisted by the special temporary employment programme.
  Figures of that sort are bad enough in themselves, but if we add together all the special measures and put them into the training for skills programme for action—known as TSPA, and another of the collection of initials that the Manpower Services Commission seems to spawn—we find that the provision of all those special measures in 1977–78 amounted to 33,414 places, and to 37,225 places in 1978–79. The Government's proposition is that all those programmes added together and the TSPA will provide 24,500 places. That is against a background of massively rising unemployment.
  I am drawing these figures to the attention of the House because I am talking to hon. Members—I include the Minister—who want a major increase in the commitment to youth employment programmes of various kinds and back the demands made by one or two members of the Cabinet for the Treasury to come to its senses and acknowledge the pressure to meet the needs of youth, to develop the youth employment initiatives already taken and to double, if not treble, that provision so that youngsters, who are in no way to blame for our current economic and industrial difficulties, shall not bear the brunt of the consequences of Government action or the condition of the economy. I wish them god-speed in their endeavours, but they will have to get greater numbers and force and a greater sense of urgency and impetus into their efforts before they can persuade the Chancellor of the Exchequer, the Chief Secretary to the Treasury, the Secretary of State for Industry or the Prime Minister to their view.
  In other spheres we have had undertakings from the Government, either in their manifesto or in subsequent announcements, to secure the expansion of vocational training. We have not seen anything in 14 months. We do not have an infant Government now. They are moving on in their second year. The
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  product of the promise on vocational training is nil. The product of the promise to review the institutional financing for youth provision is also nil. We need an additional Government commitment on a major scale to meet the needs of youth. That is vital.
  I hope that the Government understand that the youth opportunities programme cannot be, and is not, a replacement for youth and community services or for the careers service. The two should run hand in hand, gaining increasingly from the support of the Government in the light of the enormous task facing the MSC and local authority-based and voluntary provision in meeting the needs of unemployed youth.
  It is no use the Government robbing the local authorities and hypothecating the finances thus saved into the Manpower Services Commission in one form or another when the total effect is no better and probably even worse. Nor is it any good, as the British Youth Council has pointed out, the Government increasing the throughput of youngsters in various programmes with no additional expenditure, because most of the value of the youth opportunities programme and similar programmes will be lost if it is shortened any further than it is now. Greater use would be made and a greater return would be secured on the financial outlay if those programmes were extended in terms of the experience and opportunities provided for those youngsters.
  One of the worst acts of the Government, indicating their lack of commitment to the cause of youth, was the axeing of the youth service forum. I know that that was in the programme of the killing of the innocents—the mass murder of quangos. I am not a great supporter of quangos. I do not hold them in any particular affection, but this institution could have been increasingly useful. The view of many, of all political persuasions, who have been engaged in the youth service over many years is that for the youth service forum to be erased for no particular purpose seems an unnecessary and wanton act of destruction. It means that we have had no serious commitment from the Government in either an institutional or financial form to the voluntary youth sector, despite their election promises.

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  In many ways the youth service has been at the brunt of the cuts imposed by the Govenment on local government. A paper produced for the Youth Service Partners—it was referred to by the hon. Member for Bedford—showed that 24·3 per cent. of authorities are maintaining or increasing their expenditure—good luck to them—that 44·2 per cent. are cutting spending by between 0·1 per cent. and 10 per cent. and that 31·4 per cent. are cutting spending on youth services by more than 10 per cent.
  I understand why authorities are cutting spending, but I quarrel with the zeal with which some are doing it. I understand that it is because of the impositions and the cuts forced upon them by the Government. If we were not facing a crisis of youth unemployment, with all its social consequences, perhaps that would be tolerable in terms of the good husbandry of local authority expenditure. But, faced with a crisis of these dimensions, with reverberations that go through society, and with the increasing needs of youth for guidance, training, entertainment and leisure, it is intolerable that there should be major cuts in the provision of youth services.
  Perhaps the Under-Secretary will be able to give us some further details of the Government's attitude to the document "Better Start in Working Life". We have had a certain amount of lip-service and the establishment of a committee under the chairmanship of the Under-Secretary of State. However, because it is sitting in secret and, as far as I know, will not publish anything for some months—certainly not until the autumn—it is difficult to make any charitable assessment or analysis of the importance that we should attach to that activity.
  We need an expansion of the special measures and an extension of the unified vocational programme. That is among the most intelligent of the initiatives taken for mixing together all the services and improvements in provision for meeting the needs of youth, taking into account the modern dimension of changes in the nature of our employment market, employment needs and technology in a way that neither the employment service generally nor the education service has hitherto been able to do satisfactorily. We need an additional commitment so
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  that local education authorities are not required to make cuts in essential services to youth.
  I offer two warnings to the Government. First, their reliance on private sector provision to meet the need for youth employment is entirely ill-founded. I say this with regret, but it is a fact that 60 per cent. of the youth employment programme is in the so-called WEEP—work experience on employers' premises—scheme. That is altogether healthy, especially as a useful contact is established and often youth opportunities programme youngsters are able to continue with the firm with which they undertook their WEEP experience. But, as the Under-Secretary of State will know, industry is in a state of collapse. Many firms are contracting their labour forces. The realities of depression, with high interest rates, inflation, an overvalued pound and all the other problems affecting both private and public industry, mean that it will be increasingly less likely that industry will be able to take on youngsters either as full-time employees or under any kind of full-time opportunities programme.
  That is a tragic position, but it arises in large part from the Government's decision to "squeeze" inflation out of the economy. In the process of that squeezing the Government are throttling employment opportunities and the greatest sufferers are young workers, young would-be workers and older workers, as the hon. Member for Bedford showed in his profile on the problems of unemployment.
  One answer was offered by the Secretary of State for Industry. A week last Sunday he said on the radio that people can price themselves into jobs. That is an old story for the young unemployed. There have been frequent periods in our history when, to relieve pressure from wage demands and rising costs, employers have offered youngsters jobs and displaced older workers. The maxim for it is "men's work for boys' pay". Of course, vicious indenture and apprenticeship systems have been built upon the fact that youth labour has always been cheaper than adult labour. I hope that the Under-Secretary will say this afternoon that the Government will not make any attempt to encourage the development of that attitude, because that would only increase the already substantial bridge between the

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  young people of Britain and the remainder of our society.
  What it all means is that the Manpower Services Commission's desire to secure a trebling of employers' offerings to take people on the WEEP schemes has no hope whatsoever of fulfilment. The MSC has already set its hand to the task of trying to find alternative means of generating employment opportunities for youngsters, but unless and until there is stimulation of the economy, a substantial measure of reflation and a substantial measure of recovery, the possibility of young workers, just like old workers, getting the jobs that they should be getting is remote.
  To think that local authorities can make up the difference and replace the private sector as the major sponsor of WEEP schemes is nonsense. There is no possibility of that being done, because here again they are caught in the tentacles of the Secretary of State for the Environment and are denied both the resources and the permission to raise additional funds to undertake their own schemes for work provision for youngsters.
  There are many dangers that develop as a result of the system which the hon. Member for Bedford has described and the problems to which I have tried to draw attention and to which other hon. Members will draw attention during this debate. When we advocate an educational maintenance allowance so that we encourage youngsters to stay in education to improve their qualifications and to serve the country by being better equipped and better qualified for our new technological and industrial demands, and when we advertise that as a means of counteracting unemployment, I do not think that we are featherbedding or mollicoddling youngsters. I think that we are simply trying to come into line with the provisions that exist in so many other countries of similar industrial and economic status.
  It is a horrifying fact that barely 50 per cent. of our 16 to 19-year-olds are in any form of systematic training, whether in school, university, advanced further education or further education, apprenticeships, day-release schemes or the MSC schemes, and we compare hideously badly with competitor countries
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  in terms of the provision for those young people. Obviously, that must change.
  As Mr. Holland pointed out in a speech in Cambridge on Saturday, summing up the choice before the country:
  "Whilst it may be possible for industry and commerce to survive in the short term without young people, in the long term they cannot do so unless the people they employ have increasingly technical skills, welcome change and can readily adapt to new methods. Employers will get none of these things unless they are prepared to offer a very much better deal to young people.
  The same goes for the Government because of the problems of alienation, of uproar, of social dislocation and of resentment on a mass scale that we face if we do not make proper provision for our youngsters in terms of employment, youth services and careers, and in terms of preparing them in every dimension for their lives as adults, citizens and workers.
  Mr. David Hunt: Will the hon. Gentleman turn his mind to what many consider to be the most important part of the motion, namely, that part which deals with the youth service? I accept that he should comment on youth unemployment and those problems, but there are many outside the House in the youth world who were sadly disappointed at the lack of any initiatives from the previous Government. Indeed, some of them saw the hon. Gentleman's appointment as an indication that they could expect some new policies. As yet, he has not announced them. Are we to be disappointed?
  Mr. Kinnock: I have been trying not to follow the mistake of the Conservative Party when in opposition, of making flippant promises about future policy which there is no intention of fulfilling. That is why I have not offered any details. But one of the working groups that we have is that of the education and science sub-committee of the home policy committee of the national executive committee of the Labour Party. [HON. MEMBERS: "Oh."] It is a direct form of democracy, which means that members of the national executive committee and those practised and expert in the youth service can join in a working group and others can tender evidence to that group for the purposes of providing a conclusive policy, which will give us

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  the force and the impetus, one hopes, for getting the kind of resources without which manifesto promises are just words on a piece of paper.
  I hope that the hon. Gentleman will bear with us a little longer. I hope that when we produce the policy we shall enjoy his support in Divisions in the House, which we shall cheerfully force, on the difference between the youth service policy that we shall then have and the one which his Government so sadly lack. I am aware of the hon. Gentleman's expertise and commitment in these areas, and I only wish that his influence was extended and rewarded by the attentions of the Government Front Bench. He is possibly in a better position to achieve that than I am. Perhaps that position may change at some time in the future.
  The remainder of the motion, as the hon. Member for Bedford says, offers any amount of room for consideration of the real problems of youth. Indeed, the way in which it asks for an advance on the provisions of the Education Act 1944 provides scope for a debate in itself. The hon. Gentleman will understand that, in trying to choose objectives, I had to pick just one or two areas to cover. I believe that I am entirely justified, because of the grave situation facing the youth of this country, in choosing to give most attention to the problems of unemployment. I hope that the hon. Gentleman, in his earnestness and in his attention to the problems of youth, will get the reward that he deserves, which is effective and urgent action by the Government to deal with the major problem looming before youth in our contemporary society through the absence of satisfactory jobs, the absence of jobs, and the absence of necessary and satisfactory training and education. If he gets that reward, he will deserve the thanks of the whole country.
  5.17 pm
  Mr. John Lee: No debate on this subject in the 1980s can fail to be dominated by the grim realities of youth unemployment on a scale unknown in this country, probably, since the 1930s. The hon. Member for Bedwellty (Mr. Kinnock) has referred in some depth to this matter. It is a sterile and pointless exercise to look back and apportion blame as between previous
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  Governments, management and the trade unions, and I have no intention of doing that.
  There are, however, four new factors which must now be considered, as compared with the situation during earlier debates on this subject some decades ago. First, we in this country have no conscription. Secondly, we have welfare provision on a greater scale than has existed hitherto. Thirdly, in our inner city areas we have a second generation of ethnic minorities, who are amongst our most disadvantaged. Fourthly, we have a younger generation that is likely to be better educated and more socially aware than in the past. In totality, therefore, we are dealing with a whole new dimension.
  Too often, initials and phrases used in the House have no meaning to the mass of young people. Initials such as "PSBR", frequently used here, are most likely to stand for poverty, sorrow, boredom and restlessness—or, perhaps, rebellion—to unemployed youth.
  The social and political dangers of substantial numbers of unemployed young people cannot be overestimated. Extremists of the Left or of the Right are gathering like vultures. It is true that society has a number of safety nets, ranging from youth groups designed to cater for particular interests, be they sporting, religious, special interests or political interests, to professional youth bodies such as the National Youth Bureau, of which I have the honour to be chairman, through to Government-sponsored industrial training boards via the youth opportunities programme and similar schemes.
  Are those schemes on a sufficient scale to deal with the whirlwind which now approaches? Let us not delude ourselves that British industry, now going through the equivalent of open-heart surgery, will be able to generate the necessary job opportunities in the short to medium term.
  What is required? The Government should establish immediately as a matter of the highest priority a new youth commission to examine the problems, the resources available and the possible course of action open to the Government. The commission should take evidence from all interested bodies—for example, from both sides of industry and from

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  those involved in youth work at all levels. It should accept representations from Government ministries, from local authorities and from the education profession. The commission must report with speed, as time is not on our side. Government action must follow swiftly.
  I personally would favour a three-year Young Britons'-type scheme. I respectfully suggest that something of that nature—a national commitment—is required. It should be launched under the aegis of someone like His Royal Highness the Prince of Wales. The scheme that I have in mind would be very much voluntary in its nature. I suggest that the first year should consist of basic military training with limited annual training thereafter on lines operated so successfully by the Swiss. I know that the Armed Fores would not be too keen, but they have the embryo facilities and the cadre of instructors.
  I suggest that in the second year there should be more community involvement and training with, for example, a choice extending to the fire service, the ambulance service, hospitals, possibly mental hospitals, old people's homes, and especially a new and growing civil defence body, which we should have sooner rather than later.
  In the third year there should be industrial or craft training geared to certain industries. I recognise that that happens now to some extent. I hope that firms would provide facilities if such a scheme were adopted, and that colleges and schools would allow their facilities to be utilised to a greater extent as part of their participation in the training programme.
  I accept that such a scheme would be expensive, but so is youth unemployment. It is expensive in financial terms and even more expensive in human terms. The question is whether we can afford not to embark on a programme of such scale. Young people have many fine qualities, and we in the House have a duty to point the way, to restore pride and a sense of purpose to so many demoralised young people, to provide a ladder from the trough of despair and, above all, to lead the nation in holding out a hand to our youth and saying to them "Your future is our future. We are together, one people."
  5.24 pm
  Mr. Alfred Dubs: Over the past 20 years there has been a threefold increase in the number of young offenders. The increase in the number of young girl offenders has been greater than that for young boy offenders. There has been a great increase in the number of young people going to penal institutions. In 1961, 62,000 young people were taken into local authority care. By 1978 the figure had increased to 101,000. It is known that the majority of young offenders have previously been in local authority care before coming before the courts and getting into further trouble, if they have not been in trouble before going into care.
  Anyone who visits penal institutions and who meets and talks to young people in custody will realise that they are very much like young people who are not in custody, young people who perhaps have not committed any offences. There is a thin line between a young person's becoming an offender and his staying out of trouble. The nature of that thin line must give great cause for concern.
  The number of young people in trouble may still be relatively low. However, it must cause us all concern that the numbers are increasing and that for many young people in inner city areas a crisis is developing. Why is that? There are more pressures on young people in our society now than in the past. Young people have to survive difficulties, strains and stresses which our generation did not have to endure. Schools are finding it hard to cope. Some children become truants and drop out of the school system. That is only part of the difficulty.
  What are the reasons for the genuine crisis facing many young people in our inner cities? The principle reason is unemployment. Many of those who leave school cannot find jobs, or they cannot find jobs related to their skills and achievements. The unemployment figures are bad enough, but there is much evidence that they are an underestimate of the true nature of unemployment among young people. Kids who hang about the streets because they are unemployed are liable to get into trouble. That is more likely to happen if they are on the streets than if they are at work or doing other things. It is also known that the level of

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  unemployment for young kids underestimates the difficulties facing black youngsters, who may find it two or three times more difficult to get work than their white contemporaries.
  Another reason why our youth is in crisis is that boys and girls are maturing earlier. Their needs and aspirations may be very different from the constrained and confined school environment in which they find themselves in their mid-teens. Some of them under-achieve. They enter the adult world at a disadvantage when seeking the more limited job opportunities that are available.
  There is the difficulty of the transition from school to work. It is a factor that must be considered in more detail. Some of the difficulties facing young people arise from the difficult step of moving from their school into work, into a work place for which they are not as well prepared as they might have been.
  Young people feel an alienation from their environment. That is sometimes expressed in vandalism or outbreaks of antisocial and sometimes criminal behaviour. There are perhaps changing parental values and attitudes. Young people fall out with their parents. They leave home because they have rows with their parents and they do not feel able to stay in the parental home. Grandparents and other members of the family are often further away because of housing difficulty, and parents are facing a burden that a generation or two ago grandparents and others were able to share.
  There is a break-up of whole communities consequent upon the way in which we have redeveloped inner city areas. Some years ago a block of slums was being cleared. A brand-new council estate was nearby, but the housing department of the local authority refused to move the slum dwellers in one community onto the new estate. As a result, the community was broken up. That must have been disturbing for the individuals within it.
  Mr. Robert Atkins: I ask a question of the hon. Gentleman in all sincerity. It is a genuine inquiry. I do not dissent from the view that he is advancing about the difficulties of under-privileged young people in inner city areas and the pressures that they
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  have to bear. However, will he comment on some of the reports that, where there has been vandalism, or apparently senseless violence on football grounds, for example, many of the children involved come from normal middle class homes and good backgrounds? They seem to contribute just as forcefully as some of those from deprived areas of inner cities, although in some instances working-class standards are much stronger in their effect on children than middle class standards? Will the hon. Gentleman explore that factor?
  Mr. Dubs: I thank the hon. Gentleman for his intervention. I agree that it is a difficulty. I accept that there is no simple answer. I shall turn to some of the reasons why children from advantaged homes get into difficulties. As I have said, there is no simple solution. It would be facile to suggest that there is one problem that causes young people to get into difficulty and that if it is removed they will not continue to get into difficulties. The situation is much more complicated than that. It is much more difficult and not nearly so susceptible of solution.
  Many council estates contain communities that have been broken up. They sadly lack the facilities that keep young people occupied. Idle young people are more likely to get into difficulties than those who have things to do, and youth clubs and other activities to enjoy. The council estate comes first. All too often facilities are tagged on several years later, if at all. That is another cause of tension.
  During the last 20 or 30 years society has exhibited ostentatious affluence. There has been great emphasis on material goods, which in turn have offered temptation to young people. We have seen a pop culture. The advertising world has blasted at young people. There has been a general commercial exploitation of the young. The more susceptible have been too easily carried away and have got themselves into trouble. It is little wonder that various cults have proliferated, such as those of the punks, skinheads, suedeheads, mods, rockers, rockerbillies, teds, soul cats, rastas and rebels, to name but a few. Such cults are symbols of rebellion and are sometimes worthy and sometimes anti-social and damaging.

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  There is a tendency among the young to become involved in heavy alcohol consumption and drug taking. Solutions are difficult. I am convinced that the solution does not lie in penal institutions. By the time young people are taken into custody it is difficult to help them. We must help them before they get into trouble. Only a labour- or person-intensive means of helping them will work. However, we may not have the resources to do that, even if we become more affluent. We must help as many young people as possible and ensure that they get through the difficult years of their teens. We must prevent them from getting into trouble, so that they achieve a more mature outlook without a criminal record and without the difficulties that such a record involves.
  Some hon. Members have already said that we must keep young people busy, interested and active. The responsibility lies on the Government and local authorities to ensure that there is plenty to occupy them. Those who have nothing to do and who hang about will get into greater difficulties.
  I am not satisfied that we deal satisfactorily with the transition from school to work, and its effect on 15- to 16-year-olds. Teachers are aware that society has not managed to do the best for those in their last year. Young people are often alienated during that last year at school. They drop out, and are more damaged than they would have been if they had left school earlier.
  Mr. Skeet: If we raised the standard of school teachers in the United Kingdom and the way in which they conduct classes, might we not find a solution to the problem? A boy or girl will spend much of his or her time at home but much at school. Should we not place greater emphasis on young persons' preparation for life?
  Mr. Dubs: I do not accept that, if we improve the standard of teaching, we shall solve such problems. We ask too much if we expect teachers to tackle and solve problems that go wider and deeper than the hours that young people spend in particular classrooms with particular teachers.
  Mr. Tony Marlow: Although there is a philosophical divide between the two parties. I have great respect for the hon. Gentleman. I would be interested to hear his views on the subject put forward by my hon. Friend the Member for Nelson and Colne (Mr. Lee). All other countries in Europe have some form of national service. We do not wish to put people in the Army, and so on, but does the hon. Gentleman believe that there is scope for a form of national community service? That service would consist of a voluntary organisation whereby young people could be brought forward on a voluntary basis to work and contribute to society. At that age, young people want to commit themselves, to do things, and to help. Does the hon. Gentleman believe that some centralised, national voluntary organisation could be proposed that had his support as well as ours?
  Mr. Dubs: I am not sure that I have understood the hon. Gentleman's argument. A case can be made for harnessing the energy and enthusiasm of young people. Many young people work on voluntary projects in Third world countries. However, I am not sure that arrangements similar to those involved in national service are the best means of harnessing such energy. Such arrangements might attract those who are already managing and who are not in the difficulties that others face. They might represent a nice option for those who are not in trouble, but they would not tackle the difficulties facing the young offender, or potential young offender.
  There are advantages in tackling differently the last year that 15- to 16-year-olds spend at school, in achieving better links between schools and work, in devising vocational links and in using the last year as a preparation for the step into work. I appreciate the difficulty that some teachers have expressed. Children might be classified as academic or non-academic and that would prove disadvantageous. However, I believe that teachers can make sensitive judgments about whether a young person needs greater vocational than academic preparation. Several European countries, including Germany, Switzerland and Austria have tackled this problem. If we do so too, it will be to the good.

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  We need a wider concept of apprenticeship. At present, our ideas of apprenticeship are confined to a narrow range of occupations. The transition from school to work would be enhanced if apprenticeships were applied to a wider range of occupations. That would give young people a better start in the first and difficult transition into work.
  5.37 pm
  Mr. David Hunt: I congratulate the hon. Member for Battersea, South (Mr. Dubs), as he has proposed a range of imaginative solutions to the problems facing youth in contemporary society. I agree with many of his solutions. I also congratulate my hon. Friend the Member for Bedford (Mr. Skeet). As I said on Friday, on Second Reading of his excellent Bill, he has leapt into the youth scene from other pastures, undaunted and undeterred by personal injury. In those other pastures he had a reputation for specialising. He has now shown a great deal of imagination, and has held extensive consultations with the group working in the youth sector. Such groups have always felt neglected. He has given the House an opportunity to review the problems facing the youth service. Many of those outside the House are deeply grateful to him. He has already acquired an expertise that many have spent a lifetime in achieving. He deserves our thanks.
  My hon. Friend's excellent Youth and Community Bill was not only foreshadowed in the Conservative manifesto in October 1974 but had been introduced previously by three other Conservative Members. When I was national chairman of the Young Conservatives—many years ago—I took a pride in recommending the measure to Members of Parliament. I was deeply sad that the Bill did not manage to reach the statute book last Friday. I pay the same tribute to my hon. Friend the Minister as I paid him on Second Reading. He excited anticipation in the youth world because he made a series of visits to youth organisations in situ. Many of those involved had never seen a Minister before he came knocking on their doors. He has aroused the expectations of those youth organisations, and I hope that he will be able to put forward today a series of imaginative proposals to justify the hopes which have been raised.
  I was speaking just now of the Youth
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  and Community Bill. I happen to have piloted a Bill through the House. It became the Minibus Act. I had Government help in so doing, and I was promised Government time if I could not get it through. The measure had been urged upon me by the youth service, amongst others. This has happened to other Bills: the Estate Agents Bill, the Insurance Brokers (Registration) Bill, the Unfair Contract Terms Bill and many others have had Government support. It does not take much to put a Bill of that nature on to the Order Paper for consideration last thing at night. I hope that we shall have an assurance from my hon. Friend the Minister that, as the Youth and Community Bill is such an important measure and as my hon. Friend the Member for Bedford has acknowledged the right of the Minister to have a commencement clause in the Bill so that it can be implemented at a time when we can afford the provision, the Minister will urge the Leader of the House to make time available for this vital and crucial Bill.
  We are looking on a youth service which is sadly neglected. The Secretary of State, in that famous speech at the University of London Union, described it as the Cinderella service. It has been known as that for far too long. It has facilities which vary considerably between different localities and different local authorities. The Bill promoted by my hon. Friend the Member for Bedford sought to remedy that. But it is a paradox that, at a time when the MSC is receiving increasing funding, the youth service should be getting decreasing provision. I happen to believe that money spent in the youth service is the finest investment that we can have.
  The Minister acknowledged this in a letter to me dated 31 March. He wrote:
  "Within the financial constraints that exist we are doing our utmost to support the Youth Service and, so far as the Government's overall expenditure plans for 1980–81 are concerned, we have not assumed any reductions in local authority expenditure on the Service."
  Against that background, many of us are very worried about the increasing trend of reductions. The British Youth Council sent to many hon. Members before this debate a briefing paper from Youth Service Partners. At a time when 75·6 per cent. of our local authorities are reducing their expenditure on the youth service, it has become alarmingly and

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  urgently necessary for the Government to say something on that vital subject.
  The overall reductions over the whole country are now 6·7 per cent. In many areas—nearly a third of our authorities—the decrease is more than 10 per cent. That is very alarming at a time when provision should surely be increased in line with the MSC's increases, because both have a vital part to play in dealing with the major problems of youth unemployment which were highlighted by my hon. Friend the Member for Nelson and Colen (Mr. Lee). I support what he said.
  Many of us feel that the time has come for a major review of the youth service.
  It is now 20 years since the Albemarle report was published in 1960. The terms of reference are remarkably relevant to the difficulties today. They were
  "To review the contribution which the Youth Service…can make in assisting young people to play their part in the life of the community, in the light of changing social and industrial conditions and of current trends in other branches of the education service; and to advise according to what priorities best value can be obtained for the money spent."
  The report spoke in terms of a buildings-based youth service. Of course, times have changed. I think that we now need a wide-ranging inquiry very much on the lines of Albermarle, for a number of reasons. First, there is the background of youth unemployment. In my constituency it has reached appalling and unacceptable levels. In the Woodchurch estate, where I was on Saturday unemployment amongst young people has reached nearly 50 per cent. That is a frightening figure. I am very glad to see that the Under-Secretary of State for Employment, my hon. Friend the Member for Beeston (Mr. Lester), is listening to the debate. He has demonstrated a remarkable concern for the Merseyside area. I welcome his participation here and I know that, like many of us, he cares about the present alarming situation.
  Youth unemployment in my constituency is returning to the level where it peaked during the period in office of the Labour Government. Therefore, there is a need urgently to find wider solutions, and some of those wider solutions must lie in the need for a community-based youth service rather than a buildings-based youth service. Those working in the youth
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  service have skills, experience and knowledge which are underused, especially in the varying schemes to alleviate youth unemployment.
  There is a need, for instance, for a wider age range. The age group covered by the youth service was last defined in the 1944 Act as young people from the then compulsory school leaving age to the age of majority—in those days, 14 to 21. This has never been redefined, and there is an urgent need to do so. Much youth service provision now deals with the under-14s, especially in the voluntary sector.
  Mr. Skeet: My hon. Friend will appreciate that in the Bill which I presented to the House I redefined the age as being from 12 to 21 and that the Government accepted that.
  Mr. Hunt: Yes. If an inquiry is set up, I shall urge that it should consider whether the age should go even lower, perhaps to the age of 10. I had a meeting with Wirral part-time youth leaders recently, and they argued strongly that they were working extremely constructively with the 10 to 14 age group and that that work was a vital part of their service which they saw as a vital part of the youth service.
  I agree with my hon. Friend. Social trends have shown that provision should start at an earlier age. But there are also grounds for extension at the other end of the scale. The high incidence of youth unemployment places a heavy demand on services. This underlines the need for good leadership, which is more readily found amongst young people who have moved into their twenties. I should like to see the upper age limit at 25. This could be done by having three different groups, probably identified as 10 to 14, 14 to 19 and 19 to 25. But that should be reviewed by any commission which is set up.
  My second reason for wishing to see established such a wide-ranging inquiry is the argument put forward by the hon. Member for Battersea, South. It concerns the last year at school. Here the community and the youth service have a vital part to play. The careers service has failed in many vital respects in preparing youngsters for the real world outside. It is a horrifying prospect that over the past five years we have been having

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  to think of preparing youngsters for unemployment. They have been taught in school that to succeed is to get a job and that to fail is to be unemployed. We have been conditioning them for failure, and that has caused its strains in the community.
  We have to look now at a much wider scale of provision, not just for the last year at school but from the age of 14 onwards, preparing youngsters for a range of options, whether it be in the community—I wish that we could move away from putting so much emphasis on community service for the young; it should be a universal community service—or for much longer-term training and opportunities generally.
  This again ties in with the problem of overlapping Government Departments. We have almost reached the state of affairs where the nation's youth policy is not to have a policy for youth. Surely that is wrong. We have many different Government Departments overlapping, with waste occurring dramatically in many different areas.
  Thirdly, radical new approaches are urgently required to meet the problems caused by the increasing number of alienated and at-risk young blacks. As President of the British Youth Council, I led a delegation earlier this year to see the Home Secretary to warn about the deteriorating situation among youth blacks. It was not a pleasure to see our words come true a few weeks later in Bristol. The greatest problems facing young people are to be found in the inner cities. Those with the greatest problems are the young blacks at risk of alienation, or already alienated.
  My last reason for suggesting that a committee should be established with wide terms of reference is that the time is right. There is no immediate prospect of increasing funds and, although we must take steps to stop the deteriorating situation, now is the most appropriate time to review the whole area about which I have been speaking. Albemarle took 15 months in its review. Perhaps an inquiry lasting a similar period would then be able to report at a time when the Government's economic policies will have worked and provided the funds that will be necessary to implement what I am sure will be a series of imaginative recommendations.
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  There are a large number of gifted people in the youth service, indeed, in the whole youth sphere. Many have much to contribute. It is vital that we tap those resources at this time. Many good ideas have been brought forward that should be seen in their true context. In my constituency, the Birkenhead Council for Voluntary Service has produced a discussion paper entitled "National Service by Choice" which deserves closer scrutiny. A number of other interesting ideas have been put forward. Some have been mentioned in the debate.
  I hope that the Minister will come forward with some imaginative policies. He should seek to support the Youth and Community Bill and to urge that Government time should be made available. He should set up an Albemarle type inquiry and, in addition, produce some imaginative policies that can immediately start using properly the real resources of the youth service. We look to the Minister to bring about a constructive conclusion to what I have already described as a most imaginative debate initiated by my hon. Friend the Member for Bedford.
  5.53 pm
  Mr. Eric Deakins: The hon. Member for Wirral (Mr. Hunt) made some constructive suggestions. I endorse his remarks about the under-use of the resources that exist in the statutory and voluntary youth service—a service which, unfortunately, must be feeling very annoyed and frustrated as a result of the events in the House last Friday. I was present but did not contribute owing to the shortage of time. It is worth stating for the record that the Bill was killed not by the rather subtle filibustering of one or two Tory Back Benchers but by the Government. One looks forward to hearing the Minister's excuses and explanations of how the Government see the way ahead.
  There was wide support on both sides of the House for the Youth and Community Bill. In the one vote on the Bill, on a Government amendment to clause 1, which would have castrated a vital part of the Bill, the Government were defeated by 56 votes to 22. With more time, which I do not think the Government will allow, I have no doubt that hon. Members on both sides will ensure that the Bill gets through more or less in the form in which it came out of Committee.

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  A number of problems have been mentioned, and I want to allude briefly to four. My hon. Friend the Member for Bedwellty (Mr. Kinnock) and others have dealt with these matters in much more detail than will be possible in the time available for my speech. The first problem is the serious employment situation for school leavers and the estimate by the Manpower Services Commission that in the next two years the number of school leavers facing unemployment, as soon as they leave school, will increase by 125 per cent. As the hon. Member for Wirral and my hon. Friend the Member for Battersea, South (Mr. Dubs) have indicated, the situation will be far worse for young blacks in inner city areas. They will get the thick end of the deal.
  The second problem is that of the cutbacks by the Manpower Services Commission as part of the public expenditure cuts forced on it by the Government. I realise that the Prime Minister, only last week in a written answer, said that the youth opportunities programme would be expanded. There are, however, still serious doubts about whether that expansion may not be at the expense of the quality of the programme. I look forward to the Minister giving assurances that the quality will not be diluted in order to finance the increased numbers.
  The third problem which has been mentioned on a number of occasions in the House in recent months is the wide variety in local authority provision for youth services. I shall not go into detail, but the lack of facilities in many parts of the country—I do not make any party political point, as this applies to backward authorities of all sort of political complexions—is a disgrace to a civilised country. Our youth service, as a result of the failure of the Bill on Friday, has no firm statutory basis. It is disgraceful that 110 years after the education service was put on a statutory basis the youth service is still not on such a basis.
  In dealing with the last problem, I follow the remarks of the hon. Member for Wirral and my hon. Friend the Member for Battersea, South. This concerns the education of teenagers, not in their last year at school, but in their last two years at school, at a stage when it is becoming apparent that some will not stand any chance in CSE or O-level examinations.
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  Their teachers will make this fact clear to them, possibly at the age of 14-plus. It has been left to schools to cope with the consequences of teenagers who have no prospects academically and increasingly no prospects of finding a job when they leave school. They are increasingly bored. They are increasingly frustrated. They are, nevertheless, extremely energetic. They are moving increasingly towards forms of rebellion—one can sympathise with the need for rebellion in these circumstances—that often take anti-social forms.
  Hon. Members are aware of the problems of vandalism, delinquency and crime. There is also a growing problem in inner city areas where young whites aged 16 to 17 are turning to racism. They are a potent recruiting ground for the young National Front and the National Front itself. It is tragic that young people should be dragged down these paths of racism as a result of the failure of the education system.
  Mr. Donald Thompson: Does not the hon. Gentleman think that the anti-National Front that is emerging, composed of extreme Left-wing blacks, will prove an equally potent breeding ground?
  Mr. Deakins: I am opposed to racism wherever it exists. I hope that all Members, or at least most of them, share that view.
  In view of the lack of time I should like to put forward four suggestions for the way ahead. I do not expect the Government to agree with all of them, since some at least must involve a modest increase in resources. The first goes back to an idea put forward by the Labour Party—there is no monopoly in good ideas—to provide a guarantee to young people of 16 to 18 of education, training or a job during that time. That would do a great deal to resolve some of the problems.
  Secondly, there must be a bigger increase in resources for inner city areas, especially those housing ethnic minorities, with all the problems involved for teenagers.
  Mr. Kenneth Marks: There should be, not only education, training or jobs, but some sort

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  of guaranteed income. The trouble is that it pays to be unemployed, in many senses. One receives supplementary benefit if one is doing nothing but not if one is following an educational course.
  Mr. Deakins: That would add to the resources. I am not advancing my hon. Friend's proposal here and now, since a Conservative Government are in power and are committed to cutting Government expenditure. However, some additional resources will be needed for this age group, whether distributed in terms of facilities, teaching or training. We need more facilities and resources.
  In inner city areas where local authorities face problems of disaffection among unemployed young people, the youth service and the community relations councils are producing all sorts of imaginative solutions. The schemes, however short-term, need financing, and it is becoming increasingly difficult to get such finance under the urban aid programme, which is also being affected by Government restrictions on expenditure. Even if the Government can do nothing themselves in the immediate future, they should provide more generous facilities for the inner city areas through the urban aid programme.
  The third way ahead that I see is one with which I am sure every hon. Member present—apart, perhaps, from the Minister—will agree. I mention it for the sake of the record. There must be statutory provision for the youth service. The fact that the Youth and Community Bill fell does not mean that a similar Bill will not return next year or the year after if one of us is lucky in the ballot. The Government, whichever party is in power, will have to face the problem and agree to give that Bill the facilities necessary to get it through the House.
  My last suggestion is that we need an inquiry into the education of young people in their last two years at school. I do not know whether there has been a report by Her Majesty's Inspectorate in recent years on the 14 to 16-year-old group, but the problems are becoming more intense, particularly in inner city areas.
  An inquiry would show to what extent the present education and curriculum of those young people are relevant to their
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  needs, concerns and interests and would give details of the financial provision that is made. After all, there are teachers, buildings and facilities. The spending per head on this age group must be at least as much as on any other. What value for money are we getting for that expenditure? If we reorganised the system after an inquiry, would we not get better value for money and better schooling for those teenagers, thus leading to much less disaffection?
  I have no proof—no one can offer proof—of the cost effectiveness of any of these solutions, but can anyone with common sense doubt that vandalism, delinquency and racism will increase among young people as their outlook becomes bleaker? Their needs are being overlooked. Fortunately, they have not been overlooked in this House over the past couple of years, because the youth affairs lobby has done great work in presenting the problems to interested Members.
  Young people are basically our greatest natural resource. If that natural resource is wasted, the fault is ours, here in Parliament. The buck stops here. Let us at least ensure that we live up to our responsibilities.
  6.3 pm
  Mr. John Watson: I congratulate the hon. Member for Waltham Forest (Mr. Deakins) on a speech the majority of which I agreed with. He said that it was impossible to measure the cost-effectiveness of his ideas. Of course it is, but, in this age when we are cutting spending wherever possible, the yardstick of cost-effectiveness should be applied whenever it even dimly appears. If one applies it to the youth service in particular, that service emerges as one of the best bargains for Government action.
  We know with relative precision that it costs £175 a week to keep a young offender in secure care. We know that that sum must be augmented by the cost of clearing up the vandalism which has often landed him there. We do not know and never can know how much it will cost to keep a young offender out of secure care, but there is increasing evidence that less than £175 a week spent on additional youth facilities in the average British town will guarantee that

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  at least one fewer young person will go into secure care.
  Recent evidence from Devon suggests that increased expenditure in a small town of perhaps £75 a week can reduce by one over a year the number of young people who go into secure care. In those circumstances, it must make questionable sense to cut expenditure on the youth service.
  Yet local authorities are on average cutting that expenditure by 11 per cent. in real terms this year and a third are cutting it by more than 11 per cent. In Cumbria, which takes in part of my constituency, the full-time youth staff are being reduced from 41 to 18. Most of the reductions in percentage terms are being made in the voluntary rather than the statutory sector, in spite of all the compliments paid from time to time to the concept of voluntarism.
  Why are these the priorities? I concede that in the past, at least until the advent of the youth affairs lobby, the youth world was not among the most sophisticated political lobbies. There is also a natural reluctance to talk in the simple and crude terms of cost-effectiveness. It is distinctly more fashionable to talk about "personal development", about "assisted maturity", about "community responsibility" and about other undoubtedly worthy sentiments, which, distressingly, cannot be measured.
  But there is another reason—the fact that these reductions are being made by local authorities. It is they which achieve any savings. However, if the result is that more juveniles go into secure care, it is not the local authorities but the Government who pick up the bill.
  I find the local authorities' view understandable. If they are leaned on to save money, they do so. Less understandable is the attitude of a Government who are concerned to save money and who take a small amount from one pocket only to put more into another.
  In 1973, 14,000 school leavers were unemployed; in 1978, there were 140,000 and the figure now is almost 180,000. School leaver unemployment has risen six times as fast as the general rate of unemployment. The Manpower Services Commission forecasts over the next two years a 30 per cent. rise in general unem-
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  ployment but a 125 per cent. rise in school leaver unemployment.
  That dismal picture has been ameliorated slightly by one undeniable success story—the youth opportunities programme. The guarantee that a school leaver can find at least some occupation by the Easter after leaving school has done a great deal for the morale and general sentiment of young people who have been unemployed for months. One is worried by the rumours that constraints on cash and administrative resources may make it necessary for that guarantee no longer to be given.
  I say that for two reasons. First, the YOP is a cost-effective programme. Every extra 1,000 school leavers in the dole queue costs about £5 million a year. Secondly, if there are genuine wider economic reasons why unemployment must increase, let us at least remember that we are dealing with human beings and not simply with statistics. Let us remember the colossal human dignity which is being lost when we talk of 1½ million or 2 million people unemployed.
  A sentiment occasionally articulated in the country—it is sometimes reflected in the House—seeks to blame people who are unemployed for their own predicament and for the economic problems which have led to the loss of their jobs. I doubt whether it is true in any but a small minority of cases, but I am sure that it can never be true of young people who have never even had the opportunity to lose a job.
  Thirdly, I shall recount a simple but Instructive tale about a factory near my constituency in the North-East. It employs 200 people and depends on the skills of printing and engineering. In spite of the fact that in the surrounding areas the unemployment level is more than 10 per cent., the management find it practically impossible to recruit skilled engineers and printers. The firm has to pay them a fortune, bring them in from a long way away and even give then assisted housing. A few weeks ago the fork lift truck driver left, and an advert was placed in the local newspaper. There were 35 applicants for that unskilled job, of whom seven held university degrees—three in sociology, and two applicants had been through teacher-training college. When we hear such a tale, which I have reason to believe

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  is true, it is an indictment both of our careers guidance system and—
  Mr. Marks: What sort of apprentice system has the firm had in the past that it has to look outside the factory for its skilled workers?
  Mr. Watson: I concede the point that the hon. Gentleman is trying to make. It is a reflection upon the attitudes towards apprenticeships both by the trade union and the management concerned. Overall, it is an indication that the allocation of our education resources is completely out of kilter with our industrial needs.
  This has been a valuable debate. I look forward to listening to my hon.Friend the Minister when he replies. I hope that he will address himself to the points that I have raised.
  6.12 pm
  Mr. A. J. Beith: The hon. Member for Bedford (Mr. Skeet) has done the House a service by bringing this matter before it. He has come back fighting after watching his Bill blocked effectively both by Conservative Back Benchers and by the Government. He has come back today with serious and specific proposals, and we welcome that.
  The debate takes place against the sombre background of a record number of youngsters out of work and an appalling forecast from the Manpower Services Commission about the huge disproportionate increase in youth unemployment in future. The hon. Member for Skipton (Mr. Watson) quoted a figure of 125 per cent. for the predicted increase in school-leaver unemployment between 1980 and 1982. The Government could do no better service for youth in the short term than to change the main economic policies upon which they are embarked. They should reduce their reliance on unemployment as a tool of economic policy, reduce their reliance on high interest rates that deter employers from taking on extra labour, and reduce their reliance on heavy cuts in public expenditure that affect so many of the areas in which young people work—not only the public bodies but all the contracting and other firms that depend on public sector work for employment.
  If the Government changed the direction of their policies, using, for example, an incomes policy as one of their tools,
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  they would have the freedom to improve employment for youngsters—without which almost anything else would be of little or no consequence to them. As other hon. Members pointed out, while we have these high levels of youth unemployment the youth opportunities programme is of special importance. We are bound to be alarmed and despondent about the forecast given by the Manpower Services Commission about the inadequacy of that programme to meet the mounting scale of youth unemployment. We look to the Minister, in his reply, to indicate what he proposes to do to ensure that there are some alternative opportunities for the youngsters who will be out of work in the coming two or three years.
  I speak as a Member for a rural area, where the problems are particularly acute. Traditionally, many of our youngsters went away to find work. They now find that they cannot even do that, and that the access to other opportunities to train and improve themselves for work is so much less in rural areas that they are especially disadvantaged. The problems of youngsters looking for work for which they have some qualification are even greater.
  I remind the Government of the problems that they are creating for themselves. I shall quote an example from my constituency, where the Ministry of Agriculture, Fisheries and Food intends to transfer its divisional organisation from Alnwick to Newcastle, thus depriving a small town of about 50 jobs, many of which provide opportunities for qualified school leavers and for which there are no alternatives in rural centres. I ask the Minister to remind other Departments about the importance of considering the employment position in the towns in which their offices and centres are situated. The review of the Civil Service must continue, and in some cases reductions must be made, but I ask the Government to change their general approach so that Departments make local employment conditions effective in any review that they undertake. The Ministry of Agriculture, Fisheries and Food is not doing that in its departmental review.
  In his motion the hon. Member for Bedford pointed to wider issues than youth unemployment itself. He spoke about youth in contemporary society, which is a much wider issue. There

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  is so much that one could say about that, but there is not time to say it in a debate of only two hours. I make the general comment that it is not a desirable object to shunt youth and youth problems into a siding, and to suggest that they are wholly distinct from the problems of the remainder of society and have to be solved in distinct ways.
  An objective of our policies should be to encourage youngsters to recognise our society as one in which they have a place and one in which their future lies. They may wish to change it, but it is theirs. They should not be shunted into a separate series of organisations and societies. I say that despite my great admiration and respect for the work of youth organisations. They are very important. That is why I supported the Youth and Community Bill on Friday and why I support my local authority in Northumberland, which has tried to maintain its youth service and to support the voluntary youth services in many of the ways that the Bill sought to establish more widely throughout the country.
  We must encourage youngsters to accept that our society is theirs to derive some benefit from and to change when they see fit. We must give them the opportunity and the encouragement to participate in democracy and to realise that it is a society in which we expect people to be able to make changes by democratic and non-violent means. If we do not give them the opportunity to do that we invite them to go into channels that will destroy the values that we have sought to defend.
  Mr. Marlow rose—
  Mr. Beith: I should be unhappy to give way, because I have given an undertaking to the Front Bench that I will conclude my remarks in a few moments. Youngsters should be given the opportunity to participate in decision-making in schools, colleges, work and youth organisations so that they develop an ability to present their point of view and a recognition that change can be achieved by democratic processes. That is important to the future of our society. That is why, as well as giving youngsters the right to vote at 18, we should give them the right to stand for election to public bodies. I
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  do not think that that would mean the election of many 18-year-old Members of Parliament, but we might get a few 20-, 21- and 22-year-old Members of Parliament, and even more as representatives of our local authorities. We might become closer to youngsters through their representation on public bodies. It is important that we convey to them that this society can be changed and improved by democratic means and that we shall give them the opportunity to play their full part in doing so.
  As I said at the outset of my remarks, all those matters will seem remote from the youngster who does not have a job. His lack of work is the immediate concern of the Government. It is a concern that the Government cannot effectively show unless they modify the economic policies that are creating such high unemployment.
  6.19 pm
  The Under-Secretary of State for Education and Science (Mr. Neil Macfarlane): It might be for the convenience of the House if I intervene now to respond to the many points that have been raised in this useful debate. The House is grateful to my hon. Friend the Member for Bedford (Mr. Skeet). We have a certain amount of admiration for his capacity to come first in the Private Members' ballot. It enables some of the problems that were raised last week to be put in a different context. I must tell my hon. Friend of the regret felt by my right hon. and learned Friend the Secretary of State, who is unable to be here because of an unpleasant bout of influenza. There is some doubt about whether he will be back in London within the next 48 hours. I am sure that the House wishes him a speedy return. He was most anxious to participate in the debate. I know that he will read the proceedings fully.
  Both the House and youth organisations throughout the length and breadth of the land have every good reason to acknowledge the commitment made by my hon. Friend the Member for Bedford to the young people of Britain over the past year or so and to thank him for initiating the debate. Most of his work has been carried out while he has been the victim of a particularly painful injury—a fact that seemed to generate a degree of levity among Back Benchers.

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  We wish him a speedy rejection of the walking stick and crutches and a return to good health.
  My right hon. and learned Friend wants me to make clear that he supports the terms of the motion. Hon. Members on both sides have made important contributions. Important points have been made about the MSC, the YOP and Department of Employment responsibilities. I shall answer some and try to answer others, and my hon. Friend the Under-Secretary of State for Employment will answer various points in correspondence.
  No one has underestimated the grave problems that young people have faced for many years—the difficulties of obtaining a job, the adjustment to the change from school to adulthood, and the growing pace of change. All involved in education have to ask whether education and training over the past 10 to 20 years have matched the national need. All of us have a view on that matter, and I want to cover some of the key areas embraced by Government policy.
  The Government have been proceeding with work on the school curriculum. We have been considering the development of unified vocational preparation and have set in hand a detailed examination, with local education authorities, of the educational provision for the 16 to 19-year-old group. The hon. Member for Bedwellty (Mr. Kinnock), who was kind enough to indicate that he had another meeting to attend, raised that point, but he seemed to indicate that the review was carried out in secret.
  We are not conducting the review in front of television cameras and microphones, but the review group was acknowledged in a written answer some months ago. I am grateful to the 20 or so colleagues throughout the country who serve on the group, and particularly to the two Labour education leaders from Sheffield and Wakefield. There is no secrecy. It is an important group, and we are hoping to reach conclusions by the late autumn or early winter. We should have liked to complete the report by now, but everyone who has been associated with provision for this age group will understand the problems involved.
  I was particularly interested in the speech of the hon. Member for Batter-
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  sea, South (Mr. Dubs). He confirmed a view that I have held for many years, namely, that we need greater flexibility in our school system up to the age of 16 and in the transfer to other education institutions as well as to the work place. That requires the elimination of the barriers that have grown up over the years and a commitment by all involved to understand some of the complexities that those barriers represent.
  The hon. Members for Battersea, South and for Bedwellty also mentioned apprenticeship training. Employers and trade union leaders have an important role to play in that matter. We are actively pursuing a co-ordinating role in preparing an initiative between schools and industry, and the first of 10 regional conferences will take place in the autumn.
  We have a regular dialogue with our colleagues in other Departments. Hon. Members will recognise that the problem is wider than the responsibilities of one Department. Regular links with my colleagues at the Department of Industry, the Department of Employment and the Home Office are an integral part of my Department's policy, and I am glad to see that the motion specifically refers to better co-ordination in all Departments. My hon. Friend had every right not to be apologetic for the interesting statistics that he produced and the information that he gave about the way in which other Commonwealth and EEC countries organise their provision for youth, leisure and recreation.
  Hon. Members will understand that I am reluctant to stray into other Ministers' territory. I shall try to confine my comments to the realistic policies that we have adopted in the DES and to touch on some aspects of the YOP. I am the last to deny that there is an overlap between Departments. There is a considerable overlap, but there is much good will between Departments and we are trying to grapple with many of the problems.
  The role that education departments are playing in terms of the curriculum is important. We are faced with shortages of mathematics and science teachers and shortages in craft design and technology. There has been a glare of publicity on problems of literacy and numeracy. I add to those categories that

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  of dexterity, which seems to be missing from the curriculum.
  We have responded, as have education departments throughout the country, to public concern about the standards and content of school education. In January we published our consultative proposals for a framework for the curriculum and we intend in due course to publish guidance to LEAs and schools. Our proposals are based on the place that each subject should have in the education of each pupil and on the balance and coherence of the curriculum in relation to the aims of education. Of particular relevance to the debate is the role of school education as a preparation for working life.
  I hope that the conferences later this year, which will involve teachers, unions and the CBI throughout all the regions, will play a great part in bringing a new cohesion to the role of school-industry links, and that we shall find industry marching well over 50 per cent. of the way to tell schools what it thinks they should be producing.
  The number of youngsters in the 16–19 age bracket will fall from its 1980–81 peak by 25 per cent. over the next 10 years. That is bound to concentrate our minds on the organisation of the education provision to meet their needs, because it has such clear and direct implications for the institutions that teach that age group. The aim must be to offer young people as full a range of education possibilities as they can benefit from. One thing is certain; there will have to be much more co-operation between schools and colleges of further education. We are approaching an era of great change over the next decade and we need open minds and flexibility.
  We have learnt much from discussions on the consultation documents "A Better Start in Working Life" and "Providing Educational Opportunities for 16–18 Year Olds". I am the first to acknowledge that we inherited that initiative from the previous Administration, and one of our first acts last year was to announce the continuation of the investigations.
  I preside over the group that has, alas, come to be known by my name, whether I wanted it or not. I hasten to tell hon.
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  Members that I did not call it the Macfarlane review group. I think that that was done by the media. It was set up at the suggestion of the local authority associations and it brings the DES and representative,s of the associations together to discuss those matters. I hope that we shall achieve our objective of producing a report by the end of the autumn or the early winter.
  I turn to unified vocational preparation. There remains the major problem that large numbers of young people who stand to benefit most from continued education and training on leaving school will have none of it. They need further preparation for work, but they are not attracted by the education system's traditional offerings.
  The concept of unified vocational preparation was developed to bridge that gap. The pilot programme of UVP courses has been an outstanding example of collaboration between education departments and the MSC and between colleges of further education and the training system. It confutes the critics who deny that such collaboration is possible. We are seeing encouraging signs and are continuing with the experiment until September 1981.
  By vocational preparation—a theme that the hon. Member for Waltham Forest (Mr. Deakins) mentioned—we mean a combination of education and training based directly on work and covering learning on and off the job. It embraces the acquisition of skills needed to carry out specific tasks at work and the development of attitudes and knowledge that will enable young employees to play their part more effectively in the working community. It also aims, where possible, to lay foundations for further education and training later in life.
  We believe that the teaching methods used in UVP have broken new ground. The trainees have been actively involved in the process of learning and they have learnt to enjoy the process. Employers who have taken part have also been enthusiastic.
  On our visits to Birmingham and Merseyside my hon. Friend the Under-Secretary of State for Employment and I have been impressed by the progress of the schemes. The programme has been a success, which has been hard-won,

  97
  because the full integration of the education and training elements in UVP needs great skill and effort.
  Mr. Marlow: The burden of my hon. Friend's remarks so far, though he may say something different later on, seems to be that people should go from education prepared to go into work, as if our children must leave school at 16 and continue a working life from the age of 16 to 65.
  To expect children to work from the age of 16 is almost barbaric. That is the only concept that we have. There was a time when we had National Service. I am not suggesting that we should have a similar form of National Service now, but it was in many ways educational; it was broadening, and it was great experience for our young people before they went into a full-time job. If there were a scheme of national community service more appropriate to today's needs I wonder whether my hon. Friend would feel that this would be something worth pursuing.
  Mr. Macfarlane: I know that my hon. Friend has deployed this argument in Adjournment debates and that my hon. Friend the Under-Secretary of State for Employment has replied in some detail. I know that my hon. Friend has his rose-tinted spectacles on when looking at his national service days and his Regular Army days. He says that it was rewarding and enlightening. There are some who might have a more jaundiced view of precisely what it was.
  I take the point that my hon. Friend makes about the community context, but I am not sure that he carries me all the way with his argument. He must be allowed to develop that argument himself and I know that given his diligence he will continue to do so.
  Where do we go from here? Inevitably we must reckon with the costs if we are to proceed beyond the pilot stage. We are now analysing the experience of that stage and completing our study of the responses to the proposals for extending the scheme that were canvassed in "A Better Start in Working Life".
  I turn to the youth opportunities programme. What of those who cannot get jobs? That important point has been raised by hon. Members on both sides
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  of the House. I apologise to hon. Members if I am unable to highlight them and their constituencies by name, but I must get on.
  The news media have recently been full of the very serious problems that our young people are facing in getting work. The Government have never pretended that these problems are anything but serious, and I note with deep regret that the numbers of unemployed school leavers have risen so markedly. But the rise in youth and school-leaver unemployment has only recently started after many months of continuous decline when compared with the same months of the year before.
  In January this year, the most recent month for which comparable youth unemployment figures are available over a number of years, the total of young people unemployed was still lower than in any January since 1976. The problem of youth unemployment has been with with us for some years, with a five-fold increase in school-leaver unemployment between the early months of 1975 and 1980. So it is important, first of all, to get the headlines and the problem in perspective.
  Mr. Barry Sheerman: Will the hon. Gentleman give way?
  Mr. Macfarlane: I know that the hon. Member for Huddersfield, East (Mr. Sheerman) comes from an education background, but if he will permit me I feel that I must get on. He has not been present at any stage during the debate. I would willingly have given way on any other occasion. I hope that he will let me get on.
  The problem can be solved in the longer term only by the Government's wider economic measures designed to slow down inflation and restore our international competitiveness—from which increased employment opportunity for all age groups will flow. Opportunities under the programme can increase their self-confidence and improve their skills and their prospects of finding a job. Even in the present economic situation, the record shows that seven out of 10 work experience trainees have found work after completing their period of training.
  The Government and the MSC have renewed for 1980–81 the undertakings

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  given last year to offer places in the programme to all unemployed school leavers and young people unemployed for over 12 months. This is a major commitment at a time of high unemployment and when Government spending needs to be contained. The number of places provided under YOP this year is about 60 per cent. more than was provided in 1978–79, and although there is now an upward turn in youth unemployment the size of YOP more than matches it. This is a measure of the Government's concern for the employment future of our young people.
  I am certainly happy to tell the House that YOP has been expanded by about 30 per cent. since May last year. That is an increase of 25 per cent. in the year 1980–81. The point made by hon. Members about the programme pinpoints the fact that quality is still the watchword of that programme.
  I have spoken about the education policies that we are pursuing, but I want to turn to youth service provision in view of the wording of the motion and the reference that my hon. Friend made in his remarks. I refer to the voluntary sector of the youth service. Hon. Members have paid their tributes. I value very highly, and pay tribute to, the work done for young people by the voluntary sector of the youth service. I find it remarkable how well the youth organisations, with their long histories and strong traditions, are responding to the challenges of our modern society; how they are seeking to give young people a greater say in shaping and organising their activities within each organisation, and how they are encouraging an interest in the institutions of our society and the democratic process, social and political education, and participation in a developing community. These are major themes of the modem youth service, as they were of my hon. Friend's Bill. They are the particular concerns of the British Youth Council, which speaks for all young people in voluntary youth organisations.
  My hon. Friend the Member for Wirral (Mr. Hunt) was kind enough to refer to my reputation and my start in the youth world last year. I know that his own years as president of the British Youth Council were rewarding and I pay tribute to what he has done for that youth
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  movement in bringing it closer to the minds of politicians at national level.
  My hon. Friend may know of the major projects that the council has in hand. One is to develop and disseminate political and social education material and the other is to study local youth councils and assist in their development. Did my hon. Friend know that these projects are funded by my Department? I dare say he did. Our estimate of grant to the BYC in the present year is £62,500. This is £10,000 more than last year and provides for the appointment of two new staff to expand the council's social and political education programme, and a project to promote participation in the Commonwealth youth programme.
  My Department also meets the major part of the cost of the National Youth Bureau, which is the major support agency for the development of youth work. Our grant this year is expected to be in the region of £280,000.
  I pay tribute to the work achieved by the hon. Member for Lewisham, West (Mr. Price) who was the NYB chairman until January this year and I recognise the fruitful work that he accomplished in bringing the importance of the work that that excellent body does in Leicester to the minds of politicians at Westminster. I wish his successor, my hon. Friend the Member for Nelson and Colne (Mr. Lee), good fortune. I know that he will enjoy his dealings with the NYB. We are grateful for his speech today.
  I have found over the years, as has my right hon. and learned Friend, great enthusiasm and commitment with all the youth bodies. I have had about 26 meetings inside 12 months with these organisations and associated bodies. I visited the BYC headquarters, and council members visited me. I visited the NCVYS, the National Youth Bureau, and the youth affairs lobby. They have had talks with me in my office. I have also had talks with the National Association of Youth and Community Education officers and I have spoken at annual general meetings of NAYC and other organisations. I was proud to address a joint national council for voluntary youth services and the Industrial Society seminar earlier this year. I wish to place on record, alongside that of my right hon. and learned Friend, my admiration for

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  the work of these bodies and to guarantee them our continued support and interest throughout the next few years.
  I turn to the issue of youth service provision, because my hon. Friend the Member for Bedford referred to it. How encouraged we were that he kept his remarks down to about 24 minutes to enable me to give a full reply. I have promised to let him have 10 minutes to conclude.
  I have spoken about the education policies that we are pursuing. I must insist, first, that the Government have not only affirmed their commitment to the youth service but have lived up to that pledge both in their manifesto and since. Our expenditure plans allow for current expenditure on the youth service to be maintained at a constant level both in the case of spending by local authorities and central support for voluntary organisations.
  I have listened to the comments of hon. Gentlemen who have expressed concern about the reduction in certain areas, and I am aware of that. In addition, in our public expenditure plans we have provided for expenditure on non-advanced further education to increase this year and next and then remain at the higher level. This means that increased resources will enable enrolments to grow by about 10 per cent. by 1983–84.
  I must not go over the ground covered in last Friday's debate, and I have digressed from the question of expenditure. My hon. Friend referred at length to £80 million or so that is identified as youth service expenditure. I put it that way because many resources feeding into the youth service go unidentified. I think that my hon. Friend would agree with that. It is difficult to identify precisely what the youth service is and to identify what the percentage is of the £8 billion of the total education budget.
  Nearly all of that larger budget is directly relevant to the needs and problems of young people. There is also, of course, the budget of the MSC's youth opportunities programme, which is about £140 million in 1979–80. There are many other subventions from public funds that go to the benefit of the young.
  Many of us get into a certain amount of difficulty when we try to define what we mean by "young" or "youth". My
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  hon. Friend the Member for Wirral referred to the age group 10 to 25. In Committee, we discussed the age groups 14 to 25 and 12 to 25. I think that everybody would have a different opinion if we conducted a poll on it. Possibly there would be a tremendous amount of variety. When we talk about youth, I tend to think that we are talking about someone from the age of 14. That is a critical area in our curriculum survey, because while we talk about the 16 to 19 age group, it is the question of 14 to 19 preparation and the overlap that is of paramount importance. It is something that Ministers in the Department are assessing very swiftly.
  But what I am anxious to see—and, indeed, if I can, to promote—is a much greater contribution to the needs of young people from the private sector. The hon. Member for Battersea, South thought that we would not get too much of a contribution from the private sector. Indeed, the hon. Member for Bedwellty also mentioned that. The Budget announced measures to encourage charitable contributions to voluntary organisations —and that was mentioned by one hon. Member. I am thinking not so much of the private benefactor as of the possibility of tapping the resources of industry and commerce. I believe that there is a potential contribution from private enterprise, which the youth movement has hardly begun to tap.
  I have had discussions with the CBI and the Association of British Chambers of Commerce, because I think that we tend to deal far too much with the multinationals and major corporations. I believe that there must be a dialogue with the smaller organisations to find out what facilities and amenities they can provide, and whether or not they will release their personnel free of any financial penalty if they work in the youth arena and the voluntary sector.
  From my discussions already I believe that the good will is there. The Government have played their part by providing tangible support for the voluntary sector through a variety of measures announced by the Chancellor in his Budget Statement in March. These included doubling the capital transfer tax exemption for bequests to charities, reimbursement of the higher income tax rates on deeds of covenants subject to a ceiling of £3,000 a year, some

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  easement of stamp duty, and reducing the period for tax relief on deeds of covenant from seven years to four years. We think that those measures will cost £30 million in a full year. They are designed to provide the right conditions for substantial growth in the important partnership between voluntary service and the rest of the community.
  Mr. Marks: The tax concessions that the Minister is talking about will help Eton College, which is a charity, but I doubt whether many of the voluntary youth organisations will receive much benefit. Is not their problem that their income lags a long way behind inflation and that people who gave £5 in past years still tend to give £5? Is not the Minister aware that the voluntary organisations are suffering considerably from the cuts imposed by local authorities and because they lag behind the rate of inflation?
  Mr. Macfarlane: Let us hope that anyone from Eton who reads the report of the debate will increase the amount that he perhaps already gives to voluntary organisations in the area. I understand the point that the hon. Gentleman is making, but I hope that he will forgive me if I do not comment in detail now.
  Many more hon. Members wish to speak in this debate, so I want to bring my remarks to a conclusion. I should like to have said more about Government support for young people—for example, the assistance given by the voluntary services unit of the Home Office to community service volunteers and Task Force—and their sponsorship of the young volunteer resources unit at the National Youth Bureau. Support in a financial way has come from the private sector, too. We certainly need more, and it is my objective at the Department of Education and Science, in conjunction with colleagues, to make the private sector infinitely more aware of what its commitment should be to the community in which it is located.
  We believe that we have adopted a realistic co-ordinating role within the confines of existing legislation. The youth organisations know that they can talk with us. I was taken to task by the hon. Member for Bedwellty for winding up the Youth Service Forum, which he seemed to identify as a quango of major
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  proportions. It was created in the mid-1970s. I shall not bother to say why, because I am not certain of the reasons and I was not privy to it at the time. It was certainly just a talking shop, and I far prefer individual dialogue with the individual organisations. On balance, I believe that those organisations know that my door is ever open if they want to come and talk about some of these points.
  We know that the figures for youth unemployment are gravely high. That is no new problem. Difficulties are created by the birth bulge, but the long-term strategy must be an economic one. We all know the problems in the various regions of the United Kingdom that we represent. We know that there will be an impact of the new technology on young people. The education system alone cannot predict the future, but I do believe that the system is well seized of the implications of technological change and is responding appropriately. We have been able to find resources for a national development programme in microelectronics, and we have also allowed for growth in the budget for non-advanced further education. That is another contribution in helping our young people.
  A series of actions are needed by all responsible for youth, but Government acknowledge the part that they have to play. I acknowledge fully the part that my hon. Friend has played over the past year. I know that he feels disappointment that this Youth and Community Bill was lost last week, but he knows my reservations about statutory legislation. He has done a great deal to further the awareness of youth, at all political levels, and we are grateful. For all the reservation that the Government expressed, my right hon. and learned Friend has asked me to say that he in. tends to pursue a review of provision for youth which will include an assessment of the need for legislation during the lifetime of this Parliament—a Bill having regard to the framework of my hon. Friend's Youth and Community Bill, embracing amendments tabled by the Government on Report. Should changes be recommended, discussion with LEAs would be an integral part of the programme, but my hon. Friend knows that I cannot predict the outcome.

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  I conclude by congratulating my hon. Friend not only on coming first in the ballot but on his commitment to our young people. It is of enormous benefit to all those involved in the welfare of young people. It is a fact that those involved number many thousands. It is not one person or one Department who can help the youth service to progress. It has to involve all the representatives of education at both national and local level, employers, trade unions, the voluntary sector and private enterprise. I believe that my hon. Friend the Member for Bedford has gone a long way to helping that partnership by his diligent efforts over the past year and the Government are prepared to accept his motion to the extent that I have indicated.
  6.47 pm
  Mr. Skeet: I listened with considerable interest to the Minister. Only a few days ago we saw the demise of a very important Bill. The hon. Member for Waltham Forest (Mr. Deakins) said that what this country and youth require is a Bill in the nature of that which was presented to Parliament. Not merely did we indicate our views in Committee, when we rejected the proposal put forward by the Government, but last Friday, when the Government put down their own new clause, we rejected it on that occasion, too.
  I am grateful to my hon. Friend for saying that within the lifetime of this Parliament the Government will review all the circumstances of this matter. I hope that at the end of the day they will legislate to deal with the problem. The youth of this country will keep them to that. We do not intend to see the demise of good legislation which would affect more than 20 million people, bearing in mind that since 1944–35 years ago—there have been no new and important provisions on this subject.
  In order to reach that point, other decisions will have to be taken. What about the Wolfenden report on voluntary provision? People have been sitting on that report for some years, but so far there has been no result. What about the departmental review on the Housing (Homeless Persons) Act 1977? A lot will also depend upon that.
  I remember that when I toured the country a gentleman from Bradford said "If local authorities continue to cut, and if the Government do not make pro-
  106
  vision, they will pay the price 10 times over later on". I feel that many people in the coming generation will be disappointed at what has happened. The present economic cycle is not the fault of the Government. It is world wide, and it would have happened to the Labour Party had it been in government at the present time.
  Some of these young people will be disappointed and disaffected. They want an opportunity in life. They have attended courses, they have been to university to learn in order to be able to work, and they now find that there is no work for them. I put the point to the Minister that the percentage of young people entering normal employment in Wales after having completed the programme was 67 per cent. in 1978, and in 1979 the figure had dropped to 53 per cent. Therefore, it is evident that many young people are leaving the programme and going back on the dole. That is not good for youth. The Department of Education and Science and the Department of Employment must work more closely together to provide a satisfactory solution. Youth is looking for a way ahead, and something must be done about it.
  The Minister indicated the immense sums that are being provided. The Department of Education and Science has provided about £5 million, including capital arrangements, but the totality of expenditure by the DES is no more than would be spent on building about two miles of a three-lane motorway. Therefore, we equate two miles of motorway with a provision for over 20 million people. But people count, not things.
  I was interested in an observation that was made recently by a probation officer, who said that he was interested not in statistics but in people, because he worked with them. Educationists must realise that they have to prepare people to enter life and to live life for the rest of their years—to the age of 60, 65 or 70. They must also prepare their students to enter industry and to make their contribution there. That is why I said earlier that the education system in Britain has failed, particularly in its provision for youth.
  At least the supporters of the Bill have done something. People throughout the country who have done something for

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  youth have brought to the attention of the Cabinet and the Prime Minister the fact that something is essential and urgent. Time is not on our side. It was wisely said that we should look at what happened at Bristol and at Scarborough, with the skinheads and so on. Those things occur, but they need not occur. There can be prevention, and if we take the appropriate steps at the appropriate moment, all will be well.
  The Minister mentioned the work that his Department has done for the youth service, but I retaliate by saying that the youth service department has produced evidence to the National Youth Bureau which refutes much of what he said. A recent survey carried out on behalf of the youth service department found that 55 per cent. of local education authorities are planning to reduce their real expenditure on the youth service during 1980–81. Has the Minister been talking about the current year, or the following year? Is he not saying that the youth service departments have done well up to date but that there will be cuts next year? Will more departments be like that in Cumbria? Will some departments be a little better than Cambridgshire? The Minister rightly indicated that local authorities act differently throughout the country. The supporters of the Bill have sought, and I now implore the Minister, to provide a certain standard of provision throughout the country. If the expenditure that can be provided on education is 1 per cent. of total expenditure, why does he not say that 1·5 per cent. or 2 per cent. is a consistent figure, whatever happens?
  Mr. Marks: Does the hon. Gentleman agree that the real culprit is not the Department of Education and Science or the Department of Employment but the Department of the Environment? The Secretary of State for the Environment is forcing local authorities to make these cuts in the youth service. In a crisis such as this, non-statutory powers will enable cuts to be made.
  Mr. Skeet: I appreciate what the hon. Gentleman is saying. That happened many years ago, even when the previous Labour Government were in power. I cannot push two heads together, because I may make an ass of them.
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  My hon. Friend the Member for Nelson and Colne (Mr. Lee) spoke about a youth commission. We have had youth commissions, papers and inquiries. We have had the lot. What we want now is action. Because of the demise of the Bill, and because this problem has been drawn to the attention of the Cabinet, I believe that something will be done. In other spheres of operation, something must be done to win the confidence of youth. The suggestion of a commission is a good one, if we have the time, but we must prescribe the solutions quickly. The Albemarle report made one or two remarkable suggestions. Following that report a body was established, but, unfortunately, it was terminated by the Prime Minister when she was Secretary of State for Education and Science. She may have done so for good reasons. Other bodies have also been brought into being, but they, too, have been terminated.
  In order to reach an appropriate conclusion we need a report on Wolfenden to decide what part the voluntary effort should play in the provision of youth services and whether the emphasis should be on the statutory or the voluntary side. My recommendation is that it should be on the voluntary side. Much information has been provided by youth groups, youth organisations, outside seminars and erudite bodies throughout the country, and it is important that some action should be taken.
  The hon. Member for Battersea, South (Mr. Dubs) mentioned the transition from school to work. That is extremely important, and it was mentioned in the Bill. It is remarkable that at 16 a youth slides into life and is on his own. That is the great cut-off point. But if he enters higher education, the education service looks after him for a few more years. I said earlier that 33 per cent. of expenditure on education would be allocated to those who go on to higher education, but the remaining 90 per cent. of the population are not considered in that category.
  I am bearing in mind that I must be careful not to talk out my motion. I hope that the House will support it. I stress that it is essential that youth should be recognised. It is determined in its course. Those who are prepared to advocate its case will not be dealt a final blow simply because the Government brought about

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  the demise of certain legislation last Friday.
  6.59 pm
  Mr. Marks: The Government's decision to support this motion suggests that they will support motions but that they will defeat any Bill that tries to do anything about the youth service. The Government have taken a hypocritical attitude to youth in defeating the Bill on Friday, and in supposedly supporting this motion today.
  Young people live an insecure and worrying life, even if there is full employment and a sound economic situation. The Government are making things worse for youth. Youth, especially black youth, is having to bear more than its fair share of unemployment. The Government are creating a major crisis for the future. If they expect young people to respect this House and the nation, they must give them the opportunity to attain self-respect.
  Question resolved and agreed to.
  Resolved,
  That this House, aware of the special problems facing young people in contemporary society, affirms the need of the Government to pursue a positive and realistic policy towards youth, to review the provisions of the Education Act 1944 in regard to youth provision, better to co-ordinate all departments' efforts in this field, and to provide suitable financial resources within its expenditure plans through Rate Support Grants and departments' grants for the youth service to discharge its proper role and purpose.

  NURSES (PAY)
  Mr. William Hamilton: I beg to move,
  That this House, recalling that the Prime Minister has said that the Government has a moral obligation to respond positively to the commitment of nurses not to take industrial action, drawing attention to the remarks made by the present Minister of Health, (Official Report, 15 March 1979, Volume 964, column 800), namely, that nurses came within the same category as the police, the firemen and the members of other services which look after our essential needs, and recalling that in the same debate the present Minister of State at the Home Office, the hon. Member for Aylesbury, said that the Government must respond to public opinion and ensure that the nurses receive the kind of treatment that the country is demanding for them and that nurses should be regarded as a very special case (Official Report, column 756), calls upon Her Majesty's Government to translate into practice these noble sentiments of the present Prime Minister and two of her Ministerial colleagues by granting salary increases as generous as those awarded to policemen, firemen, servicemen and Civil List Annuitants in the last two years, without equivalent deductions for living accommodation.
  I want to make one point on nurses' pay. The Prime Minister, some weeks ago, called attention to the fact that the Government had a moral obligation to respond positively to the commitment of nurses not to take industrial action. Two other Ministers have made the same kind of commitment The Minister for Health said that the nurses ought to be treated in the same way as firemen, Service men and policemen. The Minister of State, Home Office, made the same kind of commitment to the nurses. The nurses have been betrayed by the Government in exactly the same way—
  It being Seven o'clock, the debate stood adjourned.

ORDERS OF THE DAY

  CIVIL AVIATION BILL
  As amended (in the Standing Committee), further considered.
  7 pm
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Since Mr. Speaker made his provisional selection of amendments the official Opposition have suggested that with new clause 15 we should take amendment No. 30, Government amendment No. 35, amendment No. 36, Government amendment No. 63 and sub-amendments (a) to (e) thereto, amendments Nos. 37, 38 and 68, and Government amendments Nos. 65 and 51. I hope that this will be for the convenience of the House.
  New Clause 19

  CIVIL AVIATION BILL

    LOST PROPERTY AT AERODROMES
    Byelaws made in relation to any aerodrome under section 3 or 4 of the Civil Aviation Act 1968 (byelaws at local authority and certain private aerodromes) or section 31 of the Civil Aviation Act 1971 (byelaws at Civil Aviation Authority aerodromes) may include provision for securing the safe custody and redelivery of any property which while not in proper custody is found on that aerodrome or in an aircraft on that aerodrome; and any such byelaws may in particular—

    (a) provide for requiring charges to be paid in respect of any such property before it is redelivered; and

    (b) provide for authorising the disposal of any such property if it is not redelivered before the expiration of such period as may be specified in the byelaws.—[Mr. Tebbit.]

    Brought up, and read the First time.
    The Under-Secretary of State for Trade (Mr. Norman Tebbit): I beg to move, That the clause be read a Second time.
    Mr. Deputy Speaker: With this it will be convenient to take new clause 18—Custody and disposal of lost property at aerodromes.
    Mr. Tebbit: I do not think that I need detain the House for long over the clause, which the Government have tabled to take the place of the new clause tabled by the hon. Member for Batley and Morley (Mr. Woolmer). It confers on aerodrome owners a power to make byelaws covering the safe custody and redelivery
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    of lost property at aerodromes. It will allow charges to be made for redelivery to the owner, and allow disposal where the property has not been reclaimed within a reasonable period. The byelaws would require confirmation by the Secretary of State.
    We received representations from the joint aerodromes committee of local authorities and the Aerodrome Owners Association to the effect that the absence of such powers is causing difficulties for some of their members. Substantial amounts of unclaimed property accumulate during the holiday season at a few aerodromes, and the legal position regarding the right to dispose of it is in doubt. The British Airports Authority has regulations, made by statutory instrument, which govern these matters at its airports. The intention is that the Secretary of State will seek to encourage aerodrome authorities to model any byelaws they may make under the new clause on the BAA regulations. Where property may have been lost at either end of an air journey within the United Kingdom, it is clearly desirable that each should be treated uniformly as far as possible.
    Consideration was given to whether the objective could be achieved by making regulations which would apply at selected aerodromes, as the hon. Member's clause would have done. However, this would have created a difficulty of repealing overlapping provisions in local Acts and dealing with the circumstances of the CAA aerodromes in Scotland. The byelaw method carries the advantage that where a strong case for local variations in practice can be made, it will be simpler to introduce them.
    It will, for instance, be necessary to accommodate any byelaws made at Scottish aerodromes to the law of Scotland, and that law is at present under review following a report on lost and abandoned property by the Scottish Law Commission. That is a further reason for making use of the flexibility that the byelaw method offers us. It is a modest but useful provision which some aerodrome authorities have long sought, and I commend it to the House.
    I thank the hon. Member for Batley and Morley for raising the issue by tabling his new clause. I hope that he will be willing not to press it, in favour

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    of the version that I have tabled. If the hon. Gentleman had not tabled his clause, this opportunity to set the position right, or at least to make things easier for aerodrome operators and those who lose their property at aerodromes, might easily have been lost.
    Mr. K. J. Woohner: I am happy to accept the Minister's assurance.
    This is a matter that has concerned the members of the joint aerodromes committee of local authorities, of which there are 22 members. As the Minister said, a difficult situation arises when lost and mislaid property accumulates, often for many years. The local authority airports have not known with any certainty how they can properly dispose of their legal obligations.
    Although I am happy, as I have said, to accept the Minister's assurances, I think that he will not be surprised if I remind him that perhaps on occasions ministerial assurances on certain matters are given somewhat greater flexibility than is expected, just as the motions of Opposition Back Benchers sometimes turn out to be different from what has been expected.
    If, in due course, the powers in the Government's new clause prove to be less than satisfactory, I hope that the Minister will be open to further discussions. He will appreciate that I have not had time to have proper consultation with the airport authority concerned.
    I thank the Minister for his courtesy in accepting the spirit of my new clause and for acting so promptly in bringing forward what we are assured will be a more fruitful clause than mine.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

    ' (5) The following section shall be inserted after section 23 of the Act of 1971— 23A.—(1) It shall be the duty of the Authority to perform its air transport licensing functions in the manner which it considers is best calculated to ensure that British airlines compete as effectively as possible with other airlines in providing air transport services on international routes; and in performing those functions the Authority shall also have regard—

    10

    (a) to any advice received from the Secretary of State with respect to the likely outcome of negotiations with the government of any other country or territory for the purpose of securing any right required for the operation by a British airline of any air transport services outside the United Kingdom; and

    (b) to the need to secure the most effective use of airports within the United Kingdom.

    15

    (2) In considering whether to grant any air transport licence it shall be the duty of the Authority to have regard to the effect on existing air transport services provided by British airlines of authorising any new services the applicant proposes to

    New Clause 15

  APPEALS
  In section 24(6) of the 1971 Act (which deals with regulations governing appeals) there shall be substituted for paragraph (a) the following paragraph—

  "(a) conferring on persons of prescribed descriptions a right to appeal (otherwise than on a point of law) to the Secretary of State from any decision of the Authority with respect to or to an application for a licence;"

  and there shall be inserted in paragraph (d) after the words "paragraph (b) of this subsection" the words "accept a finding of fact made by the Authority" and there shall be deleted the words "have regard in particular to the duties imposed on the Authority by section 3 of this Act" and substituted therefor the following "be required to act in a manner consistent with the objectives imposed on the Authority by this Act as amended. Provided that where the Secretary of State does not accept an earlier finding of the Authority he shall not reverse or vary the decision in question without first requiring the Authority to publish its opinion of the effect of the reversal or variation proposed by the Secretary of State, which opinion shall be formed only after a rehearing by the Authority in accordance with procedures to be established by regulation.". —[Mr. John Smith.]
  Brought up, and read the First time.
  Mr. John Smith: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this it will be convenient to take the following amendments.
  No. 30, in clause 11, page 11, line 37, leave out subsection (2).
  Government amendment No. 35.
  Amendment No. 36, in page 12, line 28, after 'efficient', insert ', reliable '.
  Government amendment No. 63, in page 12, leave out from beginning of line 30 to end of line 45 on page 13 and insert:

  20

  provide under the licence, and in any case where those existing services are similar (in terms of route) to the proposed new services or where two or more applicants have applied for licences under which each proposes to provide similar services, the Authority shall have regard in particular to any benefits which may arise from enabling two or more airlines to provide the services in question.

  (3) Subject to section 3 of this Act and to subsections (1) and (2) of this section, it shall be the duty of the Authority in performing its air transport licensing functions to have regard to the need to minimise so far as reasonably practicable—

  (a) any adverse effects on the environment; and

  25

  (b) any disturbance to the public; from noise, vibration, atmospheric pollution or any other cause attributable to the use of aircraft for the purpose of civil aviation.

  30

  (4) In addition to the duties with respect to particular matters imposed on the Authority by the preceding provisions of this section, it shall be the duty of the Authority to perform its air transport licensing functions in the manner which it considers is best calculated to impose on the civil air transport industry of the United Kingdom and on the services it provides for users of air transport services the minimum restrictions consistent with the performance by the Authority of its duties under sections 3, 22 and 23 of this Act and the preceding provisions of this section.

  35

  (5) In this section—

  (a) references to the air transport licensing functions of the Authority are references to its functions under sections 21 to 23 of this Act and any functions conferred on it by regulations made under subsection (1) of section 24 of this Act; and

  40

  (b)' British airline ' has the same meaning as in section 3(1) of this Act.".

  (6) in section 24 of the Act of 1971—

  (a) subsection (2) (which contains provisions relating to guidance given by the Secretary of State under section 3) shall cease to have effect; and

  45

  (b) at the end of subsection (6) (duties of the Authority to which the Secretary of State is to have regard determining appeals) after the words "section 3" there shall be inserted the words"and section 23A ".

  50

  (7) This section, and the repeal of section 24(2) of the Act of 1971 provided for in Schedule 3 to this Act, shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint; but the day appointed under this section must be later than the date of publication of the first statement of the policies of the Civil Aviation Authority under section 12 of this Act.'.

  Sub-amendment (a) to amendment No. 63, in line 6, leave out ', also have regard' and insert' (a) accept the'.
  Sub-amendment (b) to amendment No. 63, in line 7, leave out '(a) to any'.
  Sub-amendment (c) to amendment No. 63, in line 11, after '(b)' insert shall have regard '.
  Sub-amendment (d) to amendment No. 63, in line 16. leave out from 'licence' to end of line 20 and insert—
  '(3) In section 23(2) of the Act of 1971 (which provides the Authority with powers to revoke, suspend and vary air transport licences) there shall be inserted at the end the words "but only if it is satisfied that the holder of the licence consistently failed to provide an efficient and adequate service in accordance with the terms of the licence.".'.
  Sub-amendment (e) to amendment No. 63, in line 19, after benefits', insert and disadvantages '.
  No. 37, in page 12, line 37, after 'that', insert —
  'taking account of economic considerations and international agreements'.
  No. 38, in page 13, line 7, leave out also have regard, in assessing that effect, to any' and insert:
  'accept the'.
  No. 68, in page 13, line 45, at end insert:
  '(7) In section 5 of the Act of 1971, in subsection (1) at the end shall be added the words "provided that it shall be not less than three.".'.
  Govenment amendments Nos. 65 and 51.
  Mr. John Smith: This group of new clauses and amendments offers the House an opportunity to debate the changes in air traffic licensing policy that the Bill introduces—or perhaps does not introduce, because there is such a confusion of thought at the moment as to what the Bill means and how it is to be interpreted that I think I am entitled to put that gentle qualification at the beginning of my remarks.
  The new clause is an attempt to provide a better method of dealing with appeals. It arises directly out of the decision of the Secretary of State on the licensing of the Hong Kong to London route. It is an attempt to provide a better method of deciding these matters. In particular it draws a clearer distinction between what might be regarded as political grounds for making a decision and the

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  more ordinary grounds on which the Civil Aviation Authority might arrive at a decision.
  The main purpose of the debate will be to consider the whole question of air traffic licensing. Many people thought that we had a satisfactory method of dealing with it before the Bill was thought of, but along came the Government with the Bill. They said "We intend to make a change, not a very dramatic change but an important change. We shall remove from the Secretary of State and from Parliament the power to give guidance to the Civil Aviation Authority as to how it carries out the administration of the policy."
  We objected to that. We have argued about whether the Government or Parliament have the right to dictate principles on which civil aviation licensing is carried out and leaving to the CAA the difficult job of administering it. The Government said that they disagreed with our view, and from time to time the Under-Secretary said in Committee that it would be unfortunate to leave these things to politicians. I wonder whether he has thought about that since, in the light of the decision that the Secretary of State took recently. No doubt the Under-Secretary has had to think about it since then.
  But whatever the merits or demerits of the policy advocated in either side, the Government's position was that the making of licensing policy, as well as its administration, should be left to the Civil Aviation Authority. In a sense, they were building up the Civil Aviation Authority and giving it a wider role—some of it at the expense of the Government and of Parliament. Or so it all seemed.
  We were sailing along with a Bill which proposed this wider, greater and more effective power for the Civil Aviation Authority. There was uncertainty as to what it would mean and there was a certain amount of concern among airline operators as to what new policy the CAA would devise. To meet that concern, the CAA published some guidelines indicating what it thought would be its policy. It turned out to be not all that different from the policy that it had been operating under the terms of the guidance that had been given to the CAA
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  by the previous Government and Parliament. Some people said "Plus ça change, plus ćest la même chose. Very little will change in practice as a result of the Bill.
  Mr. Tebbit: I should like to prevent the right hon. Gentleman from going down a wrong track. That guidance and consultative statement was based on existing, not new, law. The CAA will shortly begin to consult on the basis of the new law when it knows what it is likely to be.
  Mr. Smith: The Under-Secretary has drawn the attention of the House to the monumental task facing the CAA in issuing new guidelines. First, it will have to find out what the law is. It seems that the Government and Parliament do not really know what the law is. Therefore, I do not know who will help the CAA in that task. I shall move on to that point shortly.
  I had taken the House to that stage in the present drama where the Government had indicated that the CAA was to be given a wider role. But suddenly out of the blue the Secretary of State made a decision on the Hong Kong-London route which seemed to controvert the whole system of civil aviation licensing in this country and certainly the policy that the Government were enunciating until that time. In one swift blow. as it were, he changed the whole situation. It was perhaps a matter of accident that the Bill had not got to this stage before that decision was reached and it therefore gave us an opportunity to consider it in greater depth.
  No hint was given by the Government in Committee that they were moving towards a policy of greater competition, if that is what they are moving towards. No doubt the Under-Secretary will tell us what they are moving towards when he replies.
  Certainly, as the Under-Secretary pointed out at various times in Committee, one could not draw parallels between this Bill and the deregulation which was being carried out in the United States of America. After all, as the Under-Secretary pointed out—this is column 813 of the Committee report—the way in which things had been done in the United States was for a deregulation Bill

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  to be passed and then for the Civil Aeronautics Board to carry out the policy that Congress had enunicated. He was implying that if we were to move to a policy of deregulation or greater competition, Parliament should say that was to be the policy and should put it in the Bill so that the CAA would know what to do. There was and is no reference in the Bill to any policy. The position was not that the Government wanted to change policy but that they wanted to leave policy-making to the CAA.
  What happened about the Hong Kong-London route? The Civil Aviation Authority, after considering applications from British Caledonian, Cathay Pacific and Laker Airways, reached the conclusion that only British Caledonian should be licensed on the route in addition to British Airways. In its decision and reasons it set out clearly why it had reached that conclusion. It was operating under the criteria of the existing legislation, although I think it is clear that it would have reached the same decision if the Bill were now law.
  The reason why the Civil Aviation Authority declines applications by Cathay Pacific and Laker Airways is not that there is any prejudice against those airlines—indeed, it made it clear that for most of the purposes of the Act all the applicants qualified—but that it did not think there was enough room on the route for more than one operator.
  One would have thought that was the type of assessment that the CAA was well qualified to make. It listened to the evidence submitted by all the applicants. The only argument for the route being able to take a larger number of carriers was that put forward by Laker Airways. That argument rested on assertions made by Laker about what was called the "forgotten man" at the bottom end of the market. Presumably some parallel was being drawn with the North Atlantic situation. That was gone into in detail by the CAA, and it reached the conclusion that there was no significant charter market for which scheduled services might develop as they had developed in the North Atlantic. The CAA said:
  "The Authority must regretfully regard the forgotten man as a myth. There is certainly no evidence that he is waiting hopefully for
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  the opportunity to travel between London and Hong Kong."
  Having gone into the matter carefully, the CAA rejected the Laker contention, which one would have thought was crucial to the Laker application. The CAA considered the evidence of the other parties; and British Caledonian and Cathay Pacific, in addition to British Airways which already held the licence for the route, argued that there was a limit on the capacity of this route. As that was the view of everyone apart from Laker Airways, it is no surprise that the CAA reached the view that there was some limitation on the range of demand. Indeed, it regarded it as part of its duty not to create excess capacity on the route from the start.
  7.15 pm
  In its decision, the CAA said:
  "The evidence of British Airways, B Cal and Cathay was that the route would not support three carriers although B Cal were willing to live with the presence of two other carriers if this were decided for wider reasons. The Authority agrees with the evidence. Since there is no foreign competition on the route, the Authority has considered whether it should experiment by licensing both B Cal and Cathay and leaving them together with BA to tailor the capacity to experienced demand. However, there must be a possibility that if the Authority were to choose this course, excess capacity would be provided from the outset, the regime would be unstable and one or two carriers would pull off the route. Given the importance of this route to Hong Kong the Authority does not feel able to take this risk. It must be in the interests of Hong Kong that the future regime should be sufficiently stable to secure for it an adequate and reliable service."
  The CAA then goes on to say that the evidence suggests that the licensing of both a second and third carrier on the route would at best result in a suboptimal outcome. On that basis, neither of the new operators on the route would have a sensible operation, and the needs of the consumer would be poorly met.
  That is talking about a situation without Laker Airways coming on to the scene. That is the situation with British Airways, British Caledonian and Cathay Pacific. It is clear from what I have quoted that the CAA went into this matter with some care, reached definite conclusions on the evidence and, assessing it with the experience that it brought to bear upon it, reached a clear view on how the application should be determined.

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  The CAA having made the decision, that was that. But the other parties appealed. The Secretary of State's decision might just have been understood if he had introduced one other carrier on to the route, but he introduced yet another—Laker Airways—and said to Parliament that he was operating on the same evidence as the CAA—I have just referred to some of the evidence—and that in his opinion the CAA had reached the wrong decision and that both Cathay Pacific and Laker Airways should be allowed on to the route.
  Purporting to act on the same evidence as the CAA had used in reaching its decision, the Secretary of State reached a different conclusion and completely overturned the CAA's decision. I should make it clear that he was not giving the CAA a political direction, which he has power to do if some international air service complication or general foreign policy consideration were involved. He could have given a direction to the CAA and used his powers in that way, but he chose not to do so. He professed to have a better understanding of the evidence than the CAA and therefore felt justified in reaching a different conclusion.
  That was a surprising conclusion for the Secretary of State to reach. It was not one that could have been predicted on the basis of what had been said by the Government since taking office and certainly not from the terms of the Bill up until that time.
  The important question is: where do we stand now? An optimist in the Department of Trade issued a press briefing which stated:
  "It has been suggested that the Bill as drafted would not in future allow a decision similar to that taken by the Secretary of State for Trade in respect of appeals about licences for the London-Hong Kong route. The Government believes this to be an erroneous view "—
  one would have thought that if the Government believed that to be an erroneous view, they could have let matters lie and that would be all right—
  "but has decided to clarify the position and put beyond doubt the factors which have to be taken into account when considering application for licences."
  That is why we have amendment No. 63, which introduces more criteria to be used by the CAA. It is not, of course, that there is any need for it, one should understand, according to the briefing from the
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  Department of Trade. If the House were in an impish mood tonight, I should have thought that it could take the Department at its face value and refuse to give it these extra powers, on the simple view that they are not necessary and that we should not be taking up the time of Parliament with them. Perhaps the Under-Secretary will endorse the view which these optimists in his Department have been putting about the place and, in particular, suggesting to the press.
  But where do we stand? This is a very serious matter. I think that civil aviation licensing is the most important function of the CAA. It is a matter of very great importance not just to airline operators but to the travelling public. Do the Government have a policy on the matter? The previous Government had a policy on it. The Conservative Government before them had a policy, I think. Both Governments were both operating under the guidance which the Secretary of State could give to the CAA, and Parliament was consulted as well. When the present Government came into office, we thought that the only change that would take place would be that they would give the policymaking role to the CAA.
  As I say, we did not particularly approve of that, but at least that was explicable—that the Government did not want to make the policy so they would give that role to the CAA. But that appears not to be the case, because from time to time it appears as though the present Secretary of State for Trade wants to be thought of as an open skies Minister, as a man who has opened up this closed world of civil aviation licensing and let the people in, dressed as Mr. Laker. That appears to be what he wants people to think of him. He has been benefiting from editorials in some of the more popular newspapers saying what a bold, ingenious and determined Minister he is, cutting through all the red tape and all the claptrap and allowing cheaper fares to operate on international aviation markets.
  I have not seen the Secretary of State rushing to deny any of these plaudits, or turning them away and saying "It is unfair so to describe me". He seems to be quite enjoying it. I am not so sure that his Under-Secretary enjoys the Secretary of State getting that kind of credit. That might be a rather more complicated

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  matter to investigate. Certainly, from time to time the Under-Secretary must feel very like a monkey when the organ is grinding out a different tune and he has to come to Parliament and offer us his little thoughts on the matter.
  I know that the Secretary of State is presently in Nigeria. I wish him every success there. He told me that he would be there for this stage of the Bill, and I take no objection to his not being present tonight. However, occasionally it would be an advantage if he were to come to the House and tell us what his aviation policy is. It would be an advantage to us, and I dare say that it might be of some advantage to the Under-Secretary as well, because we do not know what the policy is. We have some idea at the beginning. We have absolutely none now.
  Are the Government in favour of more competition? Is that what it is about? Are they in favour of an open skies policy or of a sort of moderate open skies policy—a wider skies policy, or some such phrase? I do not know what it is they have in mind. They should tell us. They should certainly tell the airlines of this country what kind of policy it is that they want followed. They might even be decent enough to drop a hint to the CAA, which has the responsibility, as to what kind of policy the Government think it ought to be following.
  If we were to take the Hong Kong decision as being an example of the Government's policy in operation, that would be an all-comers policy: "If you want to put in for a licence, put in for it. Make as many assertions as you like about what a route can bear. Everyone should be allowed to compete. Let all the applicants get a licence. Do not worry too much if you fail at the first hurdle, because that is only the first stage of a two-stage rocket. You nip round to the Department of Trade as soon as the ink is dry on the CAA licensing decision and get it change by a very obliging chap called Nott, who sits along at the Department of Trade but who does not have much time for the CAA decisions. He is the chap to put it right. Just write a nice letter to him. If you cannot see him, see the other chap there. He is not known to be so keen on the
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  policy, but he can pass it on to his boss, and perhaps you will get there quite easily and quite quickly."
  I wonder if that really is the Government's policy. Do they want to encourage more competition? Do they believe that one should not have regard to the capacity of the route but should let everyone run on it? I suppose that that is the policy. If the Government believe it, they should state it. If they have recently come to that view, they should state the time of their conversion and tell us what it was that led them to that view. It is difficult for us to understand why they now hold that view, because they have kept so silent about it at all stages until now.
  Parliament needs to know before the Bill becomes law, because there are severe dangers, to put it no higher. If the Government now believe in the policy of deregulation, they have been seriously misleading the House up until this stage, and they have got the approval of the House for this Bill, as it has been given so far, on a false prospectus. Therefore, we need to know, the airlines need to know, the travelling public and the whole travel and leisure industry need to know, what is the Government's policy.
  If the CAA, to which the policy-making role has been given, is not allowed to exercise it but is to be cut down on appeal after appeal, is it not time that the Government reversed the whole idea of giving the CAA this responsibility? If they have no faith in the CAA's capacity to devise policy, there is little point in giving it that policy-making role. Will the Under-Secretary address himself to this matter. I am sure that he will have a very wide and interested audience.
  Secondly, what are the implications of this Hong Kong decision? Is it one aberration, something that stands on its own, sui generis, something which can be explained in its own facts and almost entirely in its own circumstances? Or is it the harbinger of things to come? Is it the sort of decision that the Secretary of State would like to see the CAA taking without him having to be bothered about an appeal? Is it, as I say, peculiar to the circumstances, an aberration from the norm, or is it something which will characterise the way in which the Secretary of State handles future applications?
  Mr. Clinton Davis (Hackney, Central): An aberration from Norm is absolutely right.
  Mr. Smith: Yes—an aberration from Norm, if not an aberration from the norm. I think it was probably an aberration from dear old Norm as well.
  The other very important matter about which the Under-Secretary should tell us is where we stand now about applications to the CAA. I think that this is the first time for a very long time, if not the first time ever, that a Secretary of State has overruled a CAA decision in such an all-embracing and cavalier manner. It is not just a difference of interpretation; it is a totally different approach, allegedly on the same facts. I take leave to doubt whether it was on the same facts. I know why the Secretary of State said that to Parliament, though. If he had said to Parliament that he had taken a decision on something other than the same facts, he would have had a case brought against him by some of the disappointed applicants. All that he was doing in Parliament was proofing it against legal challenge rather than telling Parliament the truth. That was just a legal device.
  Looking at the same evidence, no one could have reached such totally opposite views about it. It is not open to any reasonable man to believe that explanation. So the Secretary of State had his tongue firmly in his cheek and half way down his throat when making that statement.
  Mr. Tebbit: That is difficult.
  Mr. Smith: It is very difficult. It is almost as difficult as it is to explain the Secretary of State's policy. That will give the Under-Secretary some idea of the challenge that he has to face.
  What does it mean? Does it mean that the Secretary of State will just take his own view on the evidence and all future applications? What will the future policy on appeals be? Can anyone ever again have faith that he will get a hearing from the CAA and that some respect will be given to the decision that has been arrived at there?
  As I have said, what comes out with crystal clarity from this particular case is not just a slight difference of view or a feeling that the Secretary of State had
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  that perhaps the CAA had not given sufficient weight to one particular piece of evidence. It is such a totally different approach. I suspect that it is as simple as this. The Secretary of State decided that he was in favour of Mr. Laker being allowed on this route and was determined to let him in on this route whatever the state of the evidence was and whatever the view of the CAA. I think that I am not very far from the truth. That was a totally political personal decision arrived at without any consideration of the normal method whereby these things are done, without any regard for the machinery or the rights of the parties, and something which was just brought in and covered with sufficiently careful words when he spoke to Parliament to stop there being any legal challenge of it. That is the present situation.
  Under the new clause we suggest that there is a way of dealing with this matter which is a little better. Parliament ought to consider this, if Secretaries of State continue to behave in this way. It would have been much fairer for the Secretary of State to refer the matter back to the CAA. If he really felt that it had been unfair to Laker, why did he not refer the matter back to the CAA and say "I think that you did not give enough weight to what Mr. Laker said and you should listen to his evidence again." That would have allowed B Cal, Cathay and the other parties, and British Airways, to look into the matter carefully and offer some critique, even a more developed critique, of what had been offered in evidence by Mr. Laker, and the CAA could have had another look at it. If it had reported back and said "Secretary of State, we have reconsidered the issue and we have reached the view that we were right in the first place"—no doubt it would have come to that decision—it would have been crystal clear that the Secretary of State was acting on political prejudice or favouritism, or on some basis of political choice and not a proper evaluation of the evidence.
  7.30 pm
  Mr. Cranky Onslow: The right hon. Gentleman seems to be getting rather obsessive about the Laker angle to the Hong Kong hearing and the decision that emerged. What does he say about the fact that Cathay was originally

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  denied a licence and about the decision of the Secretary of State? Is he to brush that totally aside?
  Mr. Smith: I am dealing with what I think is the most surprising part of the Secretary of State's decision. I think that even the hon. Member for Woking (Mr. Onslow) will concede that it is pretty surprising to subvert the evidence. As the hon. Gentleman knows, Cathay was not asking for such a result. The nature of the Cathay application was that only it in addition to British Airways should be licensed on the route. As I understand it, it was not asking for an openskies policy. I did not want Laker to get a licence; nor did it want British Caledonian to be licensed. Cathay wanted Cathay to be the only competitor. As I understand it, that was the way in which it made its application to the Civil Aviation Authority.
  I can understand more clearly the Secretary of State intervening to allow in Cathay. The market will be less stretched if another one is allowed in than if another two are given licences. That must be so. The hon. Member for Woking has a great capacity for shaking his head in apparent incomprehension. He may not understand what I am saying, but surely it is fairly obvious. If a market is stretched by two operators it will be a damned sight more stretched if there are four operators.
  If the Secretary of State had doubts about any of these matters, he should have referred the issue back for further consideration. That would have allowed the other parties the opportunity of further comment. They had no idea that the Secretary of State was about to reach such a decision. Some of them took action upon the granting of the licence, For example, I think that British Caledonian acquired other aircraft in anticipation of its being able to run the route on the terms on which the authority had granted it a licence.
  As a result of the Government's having made a botch-up of this licensing application we must now wonder whether they have seriously misled Parliament and the industry on the authority's civil aviation licensing policy. Secondly, they have created total uncertainty about that policy. The Under-Secretary of State
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  will have to try to straighten it out and tell us what the policy is. Thirdly, they have upset any confidence that there might have been. There was a considerable amount of confidence in the developing expertise of the authority as a fairminded arbiter.
  I am surprised that the Under-Secretary of State chuckles. After all, he was advertising that the authority was good at carrying out policy and that it should be given responsibility for devising it. He knows that there were difficulties between the authority and the previous Labour Government. However, that Government never over-turned the authority in such a cavalier manner as the present Government have done.
  Mr. Tebbit: I am amused, because I recollect the long hours of debate in Committee when I was saying constantly to the right hon. Gentleman that he should not continue to imply that the authority consisted of a bunch of nutters who would go around tearing everything up by the roots and throwing it about the place. I said that in the event that it got it wrong from time to time, the Secretary of State would have the opportunity to put matters right on appeal.
  Mr. Smith: I do not think that I ever described the authority as a bunch of nutters. On reflection, I am sorry that I did not describe the Secretary of State as a nutter. That would have been not only apt but an accurate prediction of how he would behave. The hon. Gentleman knows that there was no dispute in Committee about the competence of the authority to handle applications or about the expertise that it had developed. The issue in dispute was whether it was right in terms of parliamentary democracy to give it responsibility for making policy. I can understand that the hon. Gentleman wants to return to the old arguments, but he must realise that they are now behind us. It appears that those issues do not divide us. The division represents our inability to understand the policy that the Government are proposing. No doubt the Under-Secretary of State will rise to tell us what the present civil aviation policy is if he can explain it in a word.
  It is hard to understand how a greater botch-up could have been made of anything than the Government have made of something that is not inherently difficult

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  —namely, the devising of a sensible civil aviation policy and ensuring that it is carried out with sense and discretion. Surely that is one of the minor tasks that any Government have to face. However, the Government proposed a change of policy. They had everyone walking down one garden path and then promptly introduced an abrupt change of policy that led to general confusion and bewilderment. It would have been hard to have made a greater mess of civil aviation policy.
  I suggest that the Government take these issues away and think about them rather more clearly. There was no need to put these changes into the Bill. There is no especial relationship between civil aviation licensing and other parts of the Bill. It would have been better if in the first instance the Government had issued a White Paper or a Green Paper and had set out what changes, if any, they wished to make in civil aviation licensing policy. They should have canvassed opinion widely and perhaps had a consultative debate in Parliament. With the wisdom culled from those different sources—there would have been a fair amount of wisdom from hon. Members—the Government could have proceeded with a more intelligible civil aviation licensing policy.
  It is still not too late for the Government to adopt that approach. The only way in which they can effectively recompense those concerned for the total shambles that they have created is to adopt such an approach. That would involve their not proceeding with amendment No. 63 and giving these issues much further consideration.
  Mr. Robert McCrindle: I welcome the fact that new clause 15 has been grouped with a number of additional amendments. That grouping enables me to make one speech instead of the four that I had planned. The bad news is that I shall probably detain the House a little longer on this occasion than I had originally expected.
  I start by directing my attention to the appeals procedure in the new clause. There is no doubt that questions have been asked about the value of the appeals procedure in the new circumstances of air traffic licensing that the Bill under-
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  pins. If there are to be no guidelines from the Government to the CAA, and if that body is to be left to create its own guidelines, an appeal will lead only to a reversal of a CAA decision. If the Secretary of State is prepared, in effect, to overthrow the guidelines that he is requiring the CAA to issue, I fear that the appeal procedure will amount to nothing more than going through the motions. I fear that it will have no real value and will certainly be unlikely to lead to a frequent reversal of CAA decisions. If that is not so, the value of the CAA, on which the Government are placing so much faith, will be undermined.
  That had been my understanding as the Bill passed through Committee. However, we now have the experience of the Hong Kong decision. Whatever else one may say about it, it is not tinkering with a CAA decision; it is positively overthrowing a CAA decision. I understand the considerable pressures that must have been brought to bear on the Secretary of State for Trade to reverse the decision of the CAA on the Hong Kong route. However, in the light of the confusion that now seems to prevail in several quarters about what the appeals procedure is to contain there is a duty upon the Government to spell it out and to clarify it as we come to the concluding stages of our consideration of the Bill.
  It is on record that I said that the Hong Kong decision was not right. I take that view for several reasons. It is correct that two additional carriers may just have survived on the London-Hong Kong route. However, the addition of Laker Airways will mean a scramble for travellers, particularly at the lower end of the fare scale. I hope that the Minister will forgive me for saying that no one —not even the Secretary of State—has convinced me that that additional number of travellers to Hong Kong exists. Even if those travellers were to exist, I would respectfully question whether sufficient hotel accommodation exists in Hong Kong to attract additional visitors. I would question whether there is a reasonable possibility of such accommodation being provided in the near future. That is my first practical reason for questioning whether the Secretary of State has made the right decision.

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  My second reason for questioning the Secretary of State's decision is more fundamental. I do not accept that market forces alone should be the deciding factor. If one of the airlines now authorised to fly the route, namely, British Caledonian, were to go out of business as a result of the decision, there would be wide ramifications. The argument in favour of market forces is good up to a point, but market forces should be qualified and should take account of such ramifications.
  Thirdly, I note the crazy fares. There is no other way of describing the fares now offered competitively by all four carriers. Such fares cannot be sustained for long. If British Airways set their mind to it, they can undercut the other three carriers, because they have the necessary muscle. That cannot be of advantage to British Caledonian, Laker Airways, or Cathay Pacific. For those three reasons, I question the appeals procedure contained in the Bill.
  I respectfully suggest that the CAA is also dismayed by the Hong Kong decision. That is hardly surprising. It thought that it was required, under present and prospective procedure, to assess the economics of running a particular route. It thought that it was required to consider the traffic potential. However, it appears from the decision that the Secretary of State has opted not to take account of such considerations. The CAA also felt that appeals to the Secretary of State would, at the very least, lead to a further approach to the CAA before a basic decision was overthrown. However, the Hong Kong decision has shown that under existing procedure that is not so.
  In the interests of all, the policy should be more clearly spelt out. On the positive side, appeal may involve the prospect of changing a CAA decision. That should not be entirely dismissed. In such circumstances, what price delegating the creation of the guidelines to the CAA? Why not allow the Department of Trade to retain control over setting up the guidelines and restore the understanding of appeals endorsed by the Secretary of State's decision on Hong Kong?
  New clause 15 does not meet my questions about the appeals procedure. I am therefore unlikely to support it as it
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  stands. However, I hope that it will lead to a clearer statement of Government policy on appeals.
  7.45 pm
  I shall consider amendment No. 30 in conjunction with new clause 15. The amendment deals with the guidelines. Either the Department of Trade issues guidelines and there is a worthwhile appeals procedure to the Secretary of State along the lines that I have described or the CAA issues its own guidelines—as proposed in the Bill—and an appeal against those guidelines becomes almost a matter of form. A third option—which I believe we are being given—is that the CAA issues its own guidelines, with a full-blown appeals system in operation at the same time. That would undermine the CAA, in which the Government place so much reliance. In such circumstances everybody will wish to test the CAA line. Government intervention will become greater, not less.
  One of the assumptions behind the Bill is that Government intervention should decrease. However, if my assumptions are correct, Government intervention will do no such thing. Everybody will feel that there is reason to appeal against a CAA decision. I hope that the Under-Secretary of State will reconsider the Government's position on appeals, and their intention to concede to the CAA the right to create its own guidelines.
  I understand the arguments in favour of non-intervention. I do not suggest that the CAA is unsuited to the task that the Government wishes to give it, but international agreements will oblige the Government to become involved. Government success in international negotiation will force intervention in CAA licensing policy. I admire my hon. Friend the Under-Secretary of State's softly, softly, step-by-step, approach to negotiations with European Governments with a view to opening up aviation in Europe. However, if he succeeds, he will be unable to restrain himself from intervening in the creation of guidelines. At its heart, the Bill intends to hand that power over to another body. We should be better advised to leave the issue of loose guidelines in the hands of the Department of Trade and to firm up the appeals procedure in the process.
  I turn to Government amendment No. 35 and amendment No. 36, which stands

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  in my name. I have always believed that aviation policy—no matter which Government are in power—should be based on a combination of competition and stability. I accept that we should open up air routes to "measured competition." However, we should not do so to such an extent that it leads to day-to-day uncertainty about whether an airline will retain its licence. Efficiency and reliability are fundamentally important. Competition should help to achieve that. Uncertainty and a lack of day-to-day knowledge whether an airline will be allowed to continue serving a route will prove damaging. The Government should remove such uncertainty.
  Every carrier needs to apply forward planning. An airline should be able to order new equipment with some assurance that, provided it continues to serve the route adequately, it will not be pushed off that route unceremoniously. Instability will lead to a poorer service for the passenger. The airlines will live virtually from day to day, going only as far as competition requires them to go in introducing an upgrading of their services.
  The subsection that it is the intention of Government amendment No. 35 to remove is in the Bill in the first place because I joined the Opposition in voting along those lines in Committee. I am unrepentant about having taken that step, because I believe firmly that competition is splendid but that it must run hand in hand with some stability for the airlines.
  I seek in amendment No. 36 to add the word "reliable" to make clear my intention in voting with the Opposition in Committee to insert this subsection.
  It is astonishing how widespread has been the support that I have had in being a party to the introduction of the subsection. I have had indications from three very different sources that they are in favour of retaining the subsection that the Government would have us remove. I have had an indication, for example, from British Airways that it is their wish that the subsection remain. Their reason is understandable. They wish to retain the routes that they have at present if they can prove that they are serving them well.
  One would have thought that almost inevitably that would lead to the oppo-
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  site position being taken by such airlines as British Caledonian and Laker. That is not the case. I have had indications from both those independent airlines that they also support the retention of the subsection. They believe that if it remains in the Bill it will give them a chance to break in competitively to routes which at the moment are served exclusively by British Airways. That surely is a demonstration that the subsection reflects an opportunity to compete but at the same time provides some protection against unfair competition and instability.
  It is all too easy to offer massive improvements either in fares or in frequencies in order to get in on routes and then to find it impossible to provide those improvements. It is no good then our turning to the former airline to revive the routes that it previously served. Either it will be no longer there or it will be no longer interested.
  I contend that my approach represents the most balanced one that it is possible to achieve. It would encourage competition. At the same time, it would keep an eye on the instability with which airlines cannot live.
  I understand that the CAA is opposed to the inclusion of the subsection, and presumably it has helped to persuade my hon. Friend that he should move to take it out. If the CAA takes that line because it is worried about the definition of vague terms in the subsection, let us help it. Let us say that we are prepared to meet its objections. But let us, in rejecting the subsection, be careful that we are not creating dangerous instability such as that which I believe will emerge if we are seen to be engaging in overmuch deregulation.
  I turn finally to Government amendment No. 63 and to my own amendments Nos. 37 and 68. The amendments are all about opening up routes and reducing fares through competition.
  I have no hesitation in placing myself foursquare behind the idea that competition should be permitted and that, as a result, fares should be allowed to fall. But I believe sometimes that we are deluding people by pretending that there is some vast opportunity, almost overnight, to reduce fares between London and European destinations. There is, no doubt, an opportunity to make reductions, but it will arise

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  principally at off-peak periods. I am not saying that that is bad. I am not opposed to it. I should like to place on record my warm support for such initiatives as British Caledonian's mini-prix approach. I wish it well. I hope that the Government, in their discussions with other European Governments, will give British Caledonan's approach any boost that they can.
  Although there are opportunities for reducing fares in Europe, reductions can be achieved only if we persuade other countries in Europe to do likewise. No matter what the Secretary of State may feel, I am certain that the Under-Secretary, who has been at the sharp end of these negotiations, will realise that such negotiations are neither easy nor quick.
  I turn, then, to Government amendment No. 63. It calls for an opening up of routes to competition by other carriers. I have no difficulty in agreeing with that. However, it asks the CAA to license two or more carriers in a route where "benefits may arise". That is singularly lacking in precision. Benefits to whom? Obviously the intention is that the benefits should be to the traveller. But will the long-term benefits to the traveller still be as easy to sustain if our action leads to a major dilution of the profitability of the airline?
  I appreciate that the purpose of the amendment is to clarify the Government's competition policy. This was touched on by the right hon. Member for Lanarkshire, North (Mr. Smith). I am very much in favour of opening up these routes to competition. But I hope that the Minister will forgive me when I say that I am not sure that the amendment takes us as much further along the way to clarification of the Government's policy as it should.
  I repeat my theme, which whatever else hon. Members may say against the position that I take I hope that they will concede has been my consistent approach over a long period. The service to the passenger over the long term as well as the short term is extremely important. Anyone can cut fares at a stroke. It is the difficulty of maintaining over a lengthy period the lower fares that competition is alleged to bring about that leads me to put a few question marks around the policy proposed by my hon. Friend.
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  I am convinced more than anything by the American experience over the last few years that too much competition, plus rising oil prices and unrealistically low fares, will result only in plunging profitability. That in turn equals potential disaster, which, in turn, means fewer and not more benefits to the passengers. I think that we should know the yardstick by which the benefit described in amendment No. 63 will be judged and whether the medium term and the long term will have any part to play in its assessment.
  I turn briefly to my amendment No. 68. The simple point that I wish to make is that if the CAA is to be given power to create policy and to lay down guidelines a balancing curb is needed to avoid the numerous appeals to which I have referred. I cannot believe that if the CAA obtains the guidelines and operates under them—in fact, creates its own guidelines—there will be a reduction in the number of appeals. On the contrary, I believe that the number will increase.
  I take this opportunity to say that the CAA has performed very well since it was created. It is no disrespect to it to say that the industry fears that one CAA member sitting in judgment on an application for a route licence is not sufficient. Eminent aviation lawyers Peter Martin and Denis Henry, QC, have both supported that line strongly. Under the present set-up the CAA is given discretion about how many people should form a quorum. The simple basis of my amendment No. 68 is that it should continue to be given discretion but that the minimum number should be three. I would be surprised if the CAA took major exception to this modest proposal.
  I hope that I have said sufficient to make the Government realise that while I continue to be a firm supporter of competition policy I am at least as firm a supporter of the stability of the aviation industry. It is in that spirit that I propound the amendment.
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  Mr. Tebbit: It might be for the convenience of the House if I intervene at this stage. Perhaps, if the House is kind enough, I can add a few words towards the end of the debate to tie up some of the ends. We are discussing in this package a large number of amendments which, to a large extent, are interrelated.

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  The right hon. Member for Lanarkshire, North (Mr. Smith) was a little unkind to me. He tried unjustly, to dissociate me from the plaudits offered to the Secretary of State. Like the Secretary of State, I enjoy a plaudit or two myself. It was most unkind of the right hon. Gentleman to imply that there was some difference between the two of us which meant that I was not worthy to receive the plaudits that the Secretary of State received.
  Mr. Clinton Davis: The Under-Secretary is very much a reformed character. There was a time when he seemed to yearn only for a standing aversion.
  Mr. Tebbit: It is nice of the hon. Gentleman to say I have reformed. He should not necessarily believe it.
  We are not taking civil aviation policy away from the House of Commons. How could we? We are debating it this evening. This is the appropriate way to debate it and to legislate upon it. The problems of the guidance route taken by the Conservative Government in 1971 came to light during the period of the previous Labour Government. I remind the House that this is the only legislation on the statute book that uses the technique or device of offering guidance under the main Act to an authority such as the Civil Aviation Authority.
  It was not surprising that the technique was adopted when the 1971 Act was first passed by the House. After all, the whole concept of the Civil Aviation Authority as a licensing authority was new. Not unnaturally, the House and the Government of the day felt that some guidance of that sort, outside the statute, was desirable, but the problem that arose was that guidance, if it is to go further than what we have referred to in the industry, in shorthand terms, as the motherhood clauses, telling the CAA "Do not forget to be kind to the customer; do not forget to be nice about the environment; do not forget to behave rather well," suffers inherently from the danger of being in conflict with the Act.
  If guidance is important but is not in conflict with the Act, it is not necessary. If it is important and conflicts with the Act in any way, it will be ruled by the court to be ultra vires. That was the fate of the guidance issued by the previous Labour Government. The pre-
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  vious Government had a pretty rough time in many ways over that issue. They were not trying to be wicked in the way that they framed their guidance. They simply hit the rock upon which guidance is likely to founder unless it founders in the opposite direction by meaning nothing except a few nice phrases.
  I was surprised by the right hon. Member for Lanarkshire, North, who should have had at the back of his mind all the time that he was talking about Hong Kong the case of Laker—the remarks made in the past about Laker and the general idea of the lower fare concept and greater competition. His right hon. Friend the Member for Stepney and Poplar (Mr. Shore), who was then Secretary of State for Trade, said of Skytrain:
  "Moreover, having regard to the existing facilities that are available for cheap travel, it would confer no really worthwhile benefits to the consumer."—[Official Report, 11 February 1976; Vol. 905, c. 443–44.]
  That was the basis of the policy towards civil aviation that the right hon. Gentleman's Government pursued. They believed that Skytrain would offer no worthwhile benefits to the consumer. What has the consumer said since that time? He has taken a very different view, and so has the whole civil aviation industry. I was not surprised at the attitude taken by the Labour Government. When the then Secretary of State made his statement that day on the general principle of his aviation policy —he put it time and again in debate—the one person that he never mentioned was the passenger. If this Government's policy on civil aviation can be encapsulated shortly and sharply, it is that they believe that the industry exists for the passenger, not that the passenger exists for the industry.
  The right hon. Gentleman asked about the Hong Kong case. He talked of the matter as though it was deregulation. Of course, it is not deregulation. The right hon. Gentleman should know that. Deregulation exists when it is not necessary to apply for a licence and when one is able to operate freely without any licensing restrictions. That is not the case in this instance. To talk of this as deregulation, whether or not one is in favour of deregulation, is not correct.
  Mr. Clinton Davis: It would help if the hon. Gentleman would clarify the

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  point that he seeks to make. While it is true that there had to be a licensing procedure, is it not right, in relation to fares, that on the Hong Kong route there is a free-for-all? There is no licensing procedure in relation to the assessment of the fares.
  Mr. Tebbit: If the hon. Gentleman is asking whether the Government exist to keep the level of fares higher than the airlines would otherwise offer, the answer is that they do not. The Government allow the airlines to offer the fares which they, in their judgment, think appropriate to the circumstances. The fares are not regulated, but entry to the route is regulated. What is known as deregulation in the United States means that there is no regulation of entry on to the routes. That is the key point. The right hon. Gentleman was talking not so much about fares as about which carriers were allowed on the route.
  Mr. John Smith: Does the Minister expect the House to appreciate that there is much difference between what has happened over Hong Kong and what happens under a deregulated system, namely, four carriers, without restriction on fares, operating on one fairly thin route?
  Mr. Tebbit: The right hon. Gentleman still misses the point. If six carriers had turned up, it does not mean that six would have been licensed. If two more carriers asked to go on the route tomorrow, there is a licensing procedure and they would have to make their case. They would either be accepted or turned down. That is the whole concept—
  Mr. Smith: Or get it on appeal.
  Mr. Tebbit: Or get it on appeal. That is the whole concept of a licensing procedure. No carrier can operate on the route without a licence. It is not deregulated.
  The right hon. Gentleman also affected not to know quite how the Secretary of State had managed to decide on the appeal in the way that he did. If he looks at Hansard of 17 June—not that this is really necessary, because he was present while I, unhappily, was in the United States and not able to enjoy the day at first hand—he will see exactly what the Secretary of State said:
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  "In particular, I was convinced by Sir Freddie Laker's contention that there is a large untapped market for this route if fares are pitched at the right level… I also felt that the authority had placed too much emphasis on the economics of the proposed additional services in the short term, and too little on the benefits to the development of the United Kingdom civil aviation industry generally of choice of service and competition on a route such as this—in particular, competition with other non-British airlines."—[Official Report. 17 June 1980; Vol. 896, c. 1359.]
  Mr. Smith: This is all blarney.
  Mr. Tebbit: The right hon. Gentle-many may say that it is all blarney, but that is the basis on which my right hon. Friend made his decision. The right hon. Gentleman asked whether it should be taken from this that in all future cases where there was a multiplicity of airlines applying for a route, they would be given the rights. I have to remind him that Hong Kong is a cabotage route, but not like other cabotage routes. It is not like London to Manchester or any such route. It is much longer and it is a thicker route. Nor is it like other international routes.
  The rules of the international route game do not apply, because in many cases on international routes a restriction is imposed by the other country—seldom by ourselves—that the traffic should be split 50:50 between the two national carriers, or that if we put on two carriers, our 50 per cent. share must be split between them.
  It is therefore unwise to think that this Hong Kong route decision can be read across in every respect to other decisions that will come before the CAA—or, indeed, will come before the Secretary of State on appeal. It would therefore be helpful if I mentioned a couple of difficulties that I see in the way of accepting the new clause.
  First, the new clause is framed—I do not know whether the right hon. Gentleman intended this; perhaps he did not—in such a way that there will be no appeal to the Secretary of State on a point of law. That means, not that the Secretary of State cannot interfere, but that the unfortunate applicant cannot appeal to the Secretary of State, even if he thinks that the CAA has made an error on a point of law. He has to drag the matter all the way through the courts to achieve his end, when he could achieve it much more

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  simply, expeditiously and cheaply by an appeal to the Secretary of State.
  Mr. Clinton Davis: Again, it would be helpful if the Minister could clarify the matter. Is it not the case that at present if an aggrieved party considers that the CAA has erred in law he might have a right to go to the courts, but, at all events, if he believes that the Secretary of State has erred in law, he might consider that he has a right to go to the courts? Perhaps the Minister could explain the position.
  Mr. Tebbit: Of course the hon. Gentleman is right, but the point is that the new clause would remove the right of appeal to the Secretary of State on a point of law—needlessly so, I believe.
  Secondly, the new clause would require the Secretary of State to accept findings of fact by the CAA. What is a finding of fact? Is a traffic forecast a fact? What exactly is a fact in this sense? As soon as we use such an expression, the question whether something is a fact becomes disputed and once again the matter would have to be dragged through the courts, not for the substance of the appeal, but on whether an appeal could be made.
  Mr. John Smith: The hon. Gentleman may be unaware of it, but the phrase "findings of fact" is used constantly by lawyers, especially in relation to appeal proceedings. If he rests such importance on the meanings of words, he must be careful. If he asks "What is a fact?" some of us may ask him "What is a benefit, and to whom?"
  8.15 pm
  Mr. Tebbit: Yes, but a benefit is adjudged by the CAA. If it judges that there is a benefit but others dispute it, that is a matter that can be appealed. The question whether something was a fact would not be capable of appeal.
  Is the right hon. Gentleman saying that the CAA is incapable of error and that if it says that something is a fact it is a fact? That is the implication of the new clause. I can see the most appalling number of legal wrangles over points of law, points of fact, which were which, whether one had a right of appeal to the Secretary of State and so on. It would be much better not to abridge the
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  rights of applicants to go to appeal, as the new clause would do.
  A further defect is that the new clause would change the duty imposed on the Secretary of State by the 1971 Act when considering whether to give directions as a result of an appeal from a duty to have regard in particular to the duties imposed on the authority by section 3 of the Act to a duty to act in a manner consistent with the objectives imposed on the authority by the Act as amended.
  I think that the intention must be to strengthen the obligation placed on the Secretary of State, but that is unnecessary. The point will be covered by clause 11(6)(b), as amended by Government amendment No. 63. That inserts at the end of section 24(6) a reference to the new section 23A which is inserted by amendment No. 63. It would therefore be appropriate if I dealt briefly with amendment No. 63.
  This amendment arises partly because of an excellent point made by the right hon. Gentleman in Committee. He said:
  "Instead of making amendments to section 3 of the Civil Aviation Act, the simple thing would be to repeal the whole section and rewrite the provisions in the new Bill."— [Official Report, Standing Committee B; 22 February 1980; c. 665].
  He said that if one kept "popping in and out" with bits and pieces the legislation would be much more difficult to read. [Interruption.] Yes, indeed. I am not trying to put words into the right hon. Gentleman's mouth, but I agree with him that it was extremely difficult to read in the way that it was originally drafted. Whatever view one takes of the substance of the amendment, at least the provision will now be clearer to read.
  I took the view that the Bill as drafted should have made it reasonably clear to all those concerned which way it was pointing the CAA. However, the removal of section 3(1)(b) from the 1971 Act—the section which provided that there should be opportunities for competition with British Airways by at least one other British carrier—has led in some people's minds to the belief that our amendments were steering the CAA in a direction which would virtually prohibit dual designation.
  I did not take the view that the Bill as drafted did that, but I think that it is better for the elimination of doubt, so

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  far as that is possible in these matters, to make the position clear. The new section 23A(2), which is the substance of amendment No. 63, sets out the matters anew. The only substantial change appears at the end of the subsection, where it refers to the CAA giving consideration to the benefits that may come from competition. That does no more than put the CAA on notice, in the same way that section 3(1) (b) of the 1971 Act did that there should be the opportunity for competition.
  Section 3(1) (b) was wrong in that it referred only to other British airlines having the right to compete with British Airways. Why should competition be allowed on British Airways' routes and not on those of British Caledonian or Laker? Why should we assume that there should be competition for British Airways by another British carrier between, for example, London and Johannesburg? Even if that was not hinted at strongly, it would have been possible, yet there was nothing in the Act about the desirability of competition for Laker from other British carriers on the London to Los Angeles route. The objective was to make matters fair between all British carriers and to make it plain that, under all circumstances, whoever the carrier on the route, the CAA should consider whether competition would bring benefits.
  Mr. Neville Trotter: Will the CAA also take into account the argument that fragmentation could be disadvantageous to civil aviation? That argument may have been advanced too often, but it sometimes has validity.
  Mr. Tebbit: The argument would have to be set against any benefits from competition, and also the snags that would inevitably occur.
  Mr. Clinton Davis: The new clause specifically refers to benefits. The Minister is arguing that the CAA is entitled to take account of the snags and disadvantages. Why did he not include the words "disbenefit" and "disadvantage" following the word "benefit" when drafting the Bill? That would have made the position clear beyond peradventure. It is the subject matter of an Opposition amendment.
  Mr. Tebbit: It was not necessary to do so. We have not removed from section 3 of the 1971 Act the matters relating to the concern of the CAA for the economic well-being of the industry. The only snag that is likely to arise from competition is that it might be so intensive among British carriers from a share of the market that was artificially restricted by another Government's legislation or policies as to damage the health of the industry.
  The British public do not object to competition in a choice of carriers, or that fares are low, or to anything of that nature. It is appropriate that a reference should be made to the benefits of competition in that context in the way that, in section 3(1)(b) of the Act, there is an implied benefit that might come from competition to British Airways from another British carrier.
  Mr. Davis: Does the position that the Minister is currently adumbrating mean that the CAA, without any amendment being required, is entitled to take, into account snags and disadvantages that relate to other matters—for example, the unavailability of hotel accommodation or the saturation of an airport at the other end of the route? Can the CAA take those matters into account under the current legislation? If not, how does the potential legislation deal with it?
  Mr. Tebbit: Those matters would not be taken into account directly, although it is not for me to say which matters the CAA should take into account. Clearly, if there were insufficient accommodation it is likely that the traffic would not flow. That would be one of the matters that the CAA would take into account when considering the amount of traffic on the route. It might influence the answer that it gave to the appeal.
  The hon. Member for Hackney, Central (Mr. Davis) mentioned hotels, as did my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle). The "hotels in Hong Kong" argument can easily be overstated. Will all the traffic between London and Hong Kong, or even much of it, want to stay in hotels? Nobody has discovered that. Will it be what is called "visiting friends and relations" traffic? A great deal of it will be and will not require hotel accommodation. Will

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  some of it be drawn by Cathay Pacific from other places in the Far East? Will Laker draw traffic back through London from Europe to Hong Kong? How quickly can Hong Kong build hotels?
  Mr. John Smith: Very quickly.
  Mr. Tebbit: The right hon. Gentleman says "Very quickly". A hotel could be built in Hong Kong during the time that it takes the CAA to make a major route application, for it to go through appeal, and for a couple of arguments in the House during Adjournment debates. We should not underestimate the ability of Hong Kong in that sense.
  Mr. Barry Sheerman: The Minister is wriggling rather visibly on this matter. Is he not avoiding the issue? All the experts and authorities have suggested that the route will be overcrowded by full carriers. He has not, and neither has the Secretary of State, brought forward any evidence that that is not the case.
  Mr. Tebbit: The Secretary of State said in the House that he gave more weight to the Laker forecast of traffic than to the other forecasts.
  Mr. Sheerman: That is a lot of expertise.
  Mr. Tebbit: It is a lot of expertise. Who was right about Skytrain to New York, and who was wrong? Sir Freddie Laker was right and the Labour Government were wrong. Who was right about Skytrain to Los Angeles? Sir Freddie Laker was right. He is operating that service successfully. If I were asked to choose between the expertise in air transport matters of the hon. Member for Huddersfield, East (Mr. Sheerman) and, with the greatest respect, the right hon. Member for Lanarkshire, North and Sir Freddie Laker, I would think that Sir Freddie knew as much about it as either the right hon. or the hon. Gentleman.
  Mr. John Smith: It is not my expertise, that of my hon. Friend the Member for Huddersfield, East (Mr. Sheerman) or that of any other hon. Member that is in question. The Minister knows that the CAA examined that argument closely and came to the conclusion that Hong Kong was in an entirely different position from the North Atlantic. It gave
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  specific reasons for reaching that decision. The hon. Gentleman must perceive that there is some expertise on the economic policy side of the CAA. What is wrong with the authority's argument on the facts given to it? Where did it go so badly wrong?
  8.30 pm
  Mr. Tebbit: In the opinion of my right hon. Friend the Secretary of State and myself, the CAA put too much emphasis on one forecast rather than another. It is not unusual for a Minister to differ from the CAA and to act accordingly. Let me remind the right hon. Gentleman of what the Labour Secretary of State said about the Skytrain licence:
  "The CAA…would prefer the licence and designation to be kept in being and, more generally, that wider discretion should be left to the licensing system in the control of long-haul scheduled services. However, I see considerable disadvantage in prolonging the present uncertainty and have accordingly told Laker Airways that its designation will be withdrawn."—[Official Report, 11 February 1976: Vol. 905, c 444.]
  The then Secretary of State was in headlong dispute with the CAA and its experts.
  Mr. Clinton Davis: But the Labour Government made a political decision that dual designation on that sort of route should disappear. If the present Government had announced a different sort of policy and said that they believed in a form of dual designation and in the market philosophy prevailing and had produced a White Paper to explain their policy and what should guide the CAA, that would have been a fair assessment of the position. But they have left the whole area in considerable doubt.
  Mr. Tebbit: The hon. Gentleman objects to the fact that we have overturned a judgment of the CAA that the Opposition like because it looked after British Caledonian, though the Opposition have never before shown much friendship to that airline. The Opposition must reflect on the fact that the previous Labour Government contradicted the CAA over Laker and they must not be surprised if we look at the evidence and come to a different view from the CAA.
  Mr. John Smith: The hon. Gentleman has referred to the evidence that Laker produced. May I refer him to the CAA decision which said that Laker put forward proposals without any convincing evidence? What was the evidence on which the Secretary of State relied?
  Mr. Tebbit: It was the evidence that the CAA did not find convincing. The right hon. Gentleman's predecessor as Secretary of State in the Labour Government did not find Sir Freddie Laker's evidence convincing. Nor did he find the CAA's evidence convincing when it supported Sir Freddie Laker.
  Mr. Sheerman: Will the hon. Gentleman give way?
  Mr. Tebbit: I hope that the hon. Gentleman will forgive me, but I think that I should abuse the procedures of the House if I went on for too long. It would be better for the hon. Gentleman to make his speech later. Perhaps I may have the opportunity to comment on it.
  I cannot accept amendment No. 30 in the name of my hon. Friend the Member for Brentwood and Ongar. It would once again reinstate guidelines. I explained that guidelines did not prove to be a success, and they landed the previous Government in an embarrassing legal tangle which created great uncertainty. It is better that we put clearly in the Act the obligations laid upon the CAA.
  In referring to his amendments Nos. 35 and 36 my hon. Friend said that British Airways, Laker and British Caledonian all liked his amendments but must have done so because they believed that they meant different things. I suggest that that is a good reason why we should get rid of that sort of dubious expression.
  Mr. McCrindle: Is that any different from all the varying interpretations that are placed on the word "benefit" in Government amendment No. 63?
  Mr. Tebbit: It is, in the sense that those who object to our amendment and those who praise it are rather more predictable than the group that my hon. Friend found were all in favour of his stand. I am sure that my hon. Friend agrees that they could not all have read his amendment in the same way. He will
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  have a great deal of trouble persuading me that I should agree with it.
  Amendment No. 37 is not necessary. It seeks to impose on the CAA, when it is performing air transport licensing functions in the manner that it considers best calculated to ensure that British airlines compete as effectively as possible with other airlines in providing air transport services on international routes, a duty to take account of economic considerations and international agreements. They are already covered. I think that that issue of economic considerations is adequately covered in section 3(1)(a) of the 1971 Act. I believe that it is certain that in order to achieve those objectives the authority must take into account economic considerations.
  So far as concerns the duty to take account of international agreements I think that the intention of this part of the amendment is precisely met by the provisions of the new section 23A(1) (a), which is to be inserted into the 1971 Act by Government amendment No. 64. I hope, therefore, that my hon. Friend will feel able to withdraw that.
  I would also resist amendment No. 38. First, it has been dislocated by the changes in clause 11 effected by Government amendment No. 63, if the House accepts it. The purpose is clear enough. It is intended to secure that the CAA should accept, rather than have regard to, advice given by the Secretary of State with respect to the likely outcome of international negotiations for the purpose of securing rights required for a British airline to operate on an international route.
  I think that that is unreasonable. The amendment is based on the false premise that the CAA might wilfully ignore the advice given by the Secretary of State. I do not believe that that is so. I think that that amendment springs from former criticisms by Opposition Members that the CAA is liable to act in a capricious manner. I do not believe that that is likely and I do not think that this amendment is necessary or desirable.
  Mr. Clinton Davis: This is quite an important issue. If it becomes clear, as for example it did in relation to the Scandinavian air services agreement, that the Minister is of the view that a certain outcome will result from those negotiations,

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  why should it not be incumbent upon the Civil Aviation Authority to accept that advice? What difficulties would arise as far as the Minister can see? What the Minister is arguing is that the CAA would not act capriciously in that context. But why not make the matter clear beyond peradventure, since in relation to the Scandinavian air services agreement the CAA sought to avoid, as far as I can recall, the advice of the Secretary of State.
  Mr. Tebbit: Yes, indeed, and I think that, perhaps, the hon. Gentleman is still a bit sore about that particular occasion. However, he will recollect that the Secretary of State had his way in the end over that matter, which had been fully and thoroughly ventilated. I think that it was for the benefit of the industry generally that it was so ventilated. I do not think that the CAA was capricious. It may have been a little obstinate in making its point. It may even have thought that the Secretary of State's advice was advice that it should take note of and have regard to rather than accept in its absolute entirety straight away at the first shot. I recollect that we had a long debate on that matter in Committee. I remain of the opinion that we should leave the position as it has been for the past nine years or so.
  My hon. Friend also referred to amendment No. 68, which concerns the quorum of members of the board for licensing applications. Briefly, I do not think the House should legislate to provide that the quorum should be not less than three. If we did that it would require that there should be a quorum of not less than three members in relation to a wide range of the authority's responsibilities covering not only air transport licensing but such functions as the registration of aircraft, certification of operators of aircraft and the licensing of pilots. That would impose an unnecessary and severe burden which would, probably, be unworkable. But I assume that it was not the intention of my hon. Friend to go as wide as that and that he really wishes to relate it to a quorum for air transport licensing functions only.
  The present position is that under regulation No. 6 of the Civil Aviation Authority regulations of 1972 an unopposed application to grant, revoke or vary a licence may be granted on behalf of the authority by one board member or even by an employee. I think that
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  that is reasonable where there is no objection. Where there is an objection, or where the authority refuses the application or grant in terms other than those requested, section 5(1) of the 1971 Act applies, and regulation 6(1) provides that the quorum shall be one board member.
  We are not unsympathetic to the thought in my hon. Friend's mind, but there are two points that I should like to make. The first is the one that I have already mentioned, that it goes too far, even in respect of air transport licensing, and the second is that it need not be done in this way.
  I share what I assume is the belief that in general it is undesirable to have CAA hearings conducted by one board member sitting alone, and that is a view which is shared by the authority itself. The evidence is that in the great majority of instances, the more important and difficult cases have been heard by more than one board member. The occasions when a member has sat alone have been rare and at times of particular difficulty, and are not expected to reoccur frequently.
  The authority is limited to a maximum of 12 board members and it has a wide range of functions to perform. Therefore, in practice, only about half the board membership can be involved in licence hearings. The proposal that there should always be three board members would be a distinct departure from the practice which has been normal, and in many cases I do not think that it would be justified.
  We could make a change to the size of the quorum by an amendment to section 6(1) of the CAA regulations of 1972, and those regulations are under review at the moment. The Government are certainly ready to look sympathetically at the possibility of increasing the quorum from one to two, but I do not think that a quorum of three would be practicable, nor would it be desirable to impose it on all occasions. In those circumstances, and knowing what is in my mind on these matters, I hope that my hon. Friend will feel able not to press that amendment.
  Mr. Onslow: Can my hon. Friend also confirm that before any change is made it will be desirable that the opinion of the Council on Tribunals should be sought? Since some comments were

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  made by that body following the criticisms to which my hon. Friend referred, I understand that the CAA has been in touch with the council, and it is desirable that its opinion should guide whatever changes may be made.
  Mr. Tebbit: My hon. Friend is right We shall certainly take note of the opinions which are expressed by the council. I hope that the Council on Tribunals will be satisfied with the changes which I have it in mind to make.
  Having dealt as best I can with the purpose of some of the amendments and set them in context, it may be for the convenience of the House if I now sit down and allow the debate to go on unimpeded to some extent by the cross talk between the right hon. Gentleman and myself.
  Mr. George Foulkes: I am beginning to understand the frustrations of the airline pilot, as I have been sitting here ready for take-off for about 45 minutes and have been delayed for what are called "technical reasons". I am sure that the House will appreciate the helpful comments made by the Under-Secretary. I was sorry not to have been present for the previous part of this Report stage. Appropriately enough, for most of the time I was up in the air—literally, not figuratively, which some of my colleagues seem to think I am from time to time.
  I am sorry in one respect that we have not had the excitement that we had in Committee. There we had an exciting time, with allusions to polecats, blue herrings and grandfather rights, which took us into all sorts of flights of fancy. Now that we are on Report, and given that we must take account of the Hong Kong decision, it is perhaps appropriate that we should be more serious.
  8.45 pm
  It is pleasant and reassuring that, as in Committee, we have here the independent and individual thought of the hon. Member for Brentwood and Ongar (Mr. McCrindle). That brings me to amendment No. 35, which recalls an historic occasion in Committee when the Opposition won—not a frequent occurrence but one that is always pleasant when it
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  occurs. That historic occurrence was brought about by the wisdom and bravery of the hon. Member for Brentwood and Ongar, who joined the Opposition in defeating the Government. I understand that the Government's ire is raised —their having lost in Committee—whether they are lobbied by the Civil Aviation Authority or whatever.
  In Committee I learnt a lot, as did my hon. Friend the Member for Perth and East Perthshire (Mr. Walker). It became clear that an air transport licence was more valuable to an airline than real estate. Air transport licences should not be given and taken casually and frivolously. It also became clear that if an airline does not use a route that it has been granted it will not have any grounds for complaint if the route is withdrawn. But, as the hon. Member for Brentwood and Ongar said, where airlines have large investment programmes, financed either by Government or by private investment, it is important for people who support that investment to know the prospects of the airline. In that context the routes that they operate are their most valuable asset. Therefore, after careful consideration the Committee reached the conclusion that this clause should be included.
  I hope that there are 50 friends of the hon. Member for Brentwood and Ongar present, who are equally wise and brave and who will follow him through the Division Lobby with the Opposition, and repeat what we achieved in Committee or the Floor of the House. However, I am not optimistic that that will happen. Perhaps that is a flight of fancy.
  This discussion is more important now because of the Government's decision on the Hong Kong route. I support new clause 15. In Committee my right hon. Friend the Member for Lanarkshire, North (Mr. Smith) said that there was a lack of thought and lack of preparedness and consultation on this matter. I support the argument that the Bill should be held over for further discussion and consultation.
  I should also like to raise one or two points that my right hon. Friend the Member for Lanarkshire, North did not raise in Committee. Unusually, I quote

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  the Under-Secretary of State in support of my arguments. In Committee he said:
  "If the Civil Aviation Authority were collectively to go out of its mind, presumably there could be scope for abuse. On the other hand, if that were to happen there is an appeals procedure which would come into effect if suddenly, contrary to what we have required here, the Civil Aviation Authority began to act in an arbitrary manner,".
  He then gave a good and helpful example, He said:
  "If, say, the authority licensed four British carriers on a route where there was clearly only traffic for one, that would not be in the best interests of the industry." [Official Report, Standing Committee B, 26 February 1980; c. 682.]
  We have British Airways saying that there is not room for four, we have British Caledonian saying that there is not room for four, we have the Civil Aviation Authority saying that there is not room for four, and we have Cathay Pacific saying that there is not room for four. It is not, with respect, the Civil Aviation Authority that is going collectively out of its mind; it is the Government, and perhaps, individually, the Secretary of State.
  Mr. Michael Colvin: Surely the hon. Gentleman is not saying that all four carriers will be forced to operate. It is up to them to decide for how many there is room, once the licences are granted. If all four want to operate, good luck to them, but if one of them says, "Four will be too many", let that airline back down.
  Mr. Foulkes: I am talking about the position described by the Under-Secretary of State. He was not saying that the CAA would force them. He said that licences would be granted. I shall ask the Under-Secretary a question in relation to that. I understand that one airline has announced its intention to start. I shall come to that in a moment.
  The Under-Secretary says that the Secretary of State put great store on the evidence presented by Sir Freddie Laker. I hope that the Under-Secretary will tell us when Laker Airways is to start on the Hong Kong route. When is it to put its money where its mouth is? When is it to put its aircraft where its mouth is? I shall be very interested to see.
  Mr. Tebbit: It is not for me to say when Laker will start his services. It is
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  not for me to say whether he should start his services. It is only for the Government to say that, if he so wishes, alongside the other carriers he has the right to start his services.
  The hon. Gentleman found a passage that I thought somebody might find—and suitably misinterpret—because, of course, the point is that I referred to a route where there was enough traffic for only one carrier. The Civil Aviation Authority found that there was traffic for two. Both Cathay and British Caledonian gave evidence in Hong Kong that there was traffic for three. We found that there was enough for four.
  Mr. Foulkes: I think that the Under-Secretary's intervention helps my argument. I agree with him; it is up to Laker. But since the Secretary of State said—and the Under-Secretary repeated today—that in overruling the Civil Aviation Authority the evidence that he took account of above all else was that of Sir Freddie Laker, I shall be interested to see when he will start operating that route. The Minister made light of the problem of hotels, which was mentioned by the hon. Member for Brentwood and Ongar, and said that they could be put up in a few weeks. Perhaps they can. Perhaps we have a new phrase for "jerry-built"; perhaps we should say "Hong Kong-built" if they are to be constructed that hurriedly.
  We are talking about the possibility of four jumbo jets coming in daily to Hong Kong, which is already overcrowded. I estimate that that means about 1,800 people coming every day just from London. That is the kind of quantity that we are talking about.
  I turn now to other aspects of the Hong Kong decision. I was particularly disturbed by one small aspect of it. I refer to the announcement regarding the Hong Kong route. I was present in the House when it was made, at about 4.30 pm. The next day, when I opened my copy of The Times, I found on page 3 not what is to be found on page 3 of some other newspapers but a full-page advertisement for that flight that Cathay Pacific is running to Hong Kong.
  I may not know a great deal about the airline industry, but I know enough about the newspaper industry to be able to say that it is quite impossible to plan, to

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  organise and to have inserted a full-page advertisement in The Times as quickly as that. I should like to know when Cathay Pacific was informed of the decision, when it was intimated that it would be successful, and how, as a result, it was able to get that carefully planned advertisement with all the details in The Times. I do not know a great deal about breach of privilege, but it seems to border on it.
  Mr. Tebbit: As the hon. Gentleman knows, I was not in London when the decision was announced. However, I can assure him that any intimation to any of the carriers was given, at the earliest, in confidence only immediately before the House heard it. I doubt whether Cathay Pacific heard it before the House. It would have been possible for it to have had alternative copy available—either a protest advertisement or the advertisement saying that it was about to start.
  Mr. Foulkes: I accept that assurance without qualification, but it seemed strange to me and to some of my colleagues. So, also, was the fact that the announcement was made on the day that the Secretary of State was guest at the Hong Kong Association dinner. However, I am sure that that also was fortuitous.
  I should like to raise another point on the Hong Kong decision, namely its effect on Caledonian Airmotive and jobs in Ayr, the constituency of the Secretary of State for Scotland, and in my constituency and that of my hon. Friend the Member for Central Ayrshire (Mr. Lambie), who is present.
  After the announcement on 17 June the right hon. Member for Western Isles (Mr. Stewart) asked the Secretary of State what effect it would have on the Caledonian Airmotive operation at Prestwick. The Secretary of State said:
  "I do not believe that the right hon. Gentleman's latter statement is correct. I have read a statement made by Mr. Kelvin Kellaway, the managing director of the plant in Scotland to which the right hon. Gentlemn referred. I believe it to be an accourate report. On Friday he was alleged to have dismissed the fear that the right hon. Gentleman hs enunciated. He said that:
  'the plant had been planned before British Caledonian was awarded the Hong Kong
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  licence. The possible loss of work—about 6 per cent. of the total expected business—was easily within the business fluctuations fore-case.'
  That is what he is reported to have said. I have no reason to believe that that is an inaccurate report of his views."—[Official Report, 17 June 1980; Vol. 986, c. 1363.]
  It may not have been. That was Kelvin Kellaway, who runs that operation, but he does not understand the overall finances of British Caledonian, and particularly Caledonian Airmotive, as was made clear on Thursday. Adam Thomson, who is in charge of Caledonian Airmotive as part of his responsibility to British Caledonian is reported in The Scotsman of last Thursday as follows:
  "The Government's decision to allocate the London-Hong Kong route to four airlines rather than two as expected will delay the creation of jobs at the new Caledonian Air-motive factory at Prestwick, according to Mr. Adam Thomson, chairman of Caledonian Airways.'
  It will delay jobs. This chap knows what he is talking about. He is in overall charge. The decision will delay the provision of jobs in an area where unemployment is already far too high.
  A number of us who are concerned about the airline industry recently spoke to a staff member of IATA. He gave us an account of the effects of deregulation in the United States. The Under-Secretary of State contended earlier, and no doubt will contend again, that this is not deregulation. But it is effective deregulation. As my right hon. Friend the Member for Lanarkshire, North said, it has the same effect as deregulation. The effect of deregulation in the United States has been that hundreds of routes have been lost. Many remote areas of the United States previously served by airlines are now no longer served. Those of us who represent peripheral areas out-with the main centres of population should be particularly concerned about this matter.
  Another effect, contrary to what was expected, is that the profitability of the airlines, which it was thought would increase by concentrating and competing on particular routes, has decreased. The airlines' experience would be against deregulation and against this kind of effective deregulation.

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  I have gone on for longer than I had intended, mainly because of the comments that have been added to what I have been saying. As I have said, what the Government are suggesting is indica-
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  tive of the fact that on this issue, just as on many others, they are guilty of what they accuse the CAA of being guilty of—going collectively out of their mind.
  9 pm
  Mr. Onslow: In Committee, the hon. Member for South Ayrshire (Mr. Foulkes) picked up a few things as he went along, and we have got to know his style. He has been fairly characteristic tonight, particularly in his peroration. However, I was particularly interested to hear his moving appeal to the House to support the amendment made to the Bill by my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle)—who is not in the Chamber at present. I have to say to the hon. Member for South Ayrshire that I regret not having been in the Committee when that was discussed. Unfortunately, I was abroad at the time. I hope that if I had been there I would have been able to persuade him, if not my hon. Friend, that if one has an amendment which gets the support of British Airways, British Caledonian and Laker Airways, there must be something rather imprecise about it, because it is impossible for them all to support an amendment of this kind if they all think that it means the same thing.
  Quite clearly, from my conversations not everyone whose support my hon. Friend prayed in aid thinks that the amendment means the same thing. When we have a piece of proposed legislation which is capable of interpretation in two such wholly different ways, I think that it is quite a good idea to remove it from the Bill. I believe that that would be the right course for us to take.
  However, I agree with one thing that my hon. Friend said. That was when he made an appeal for a clearly spelt out policy. I welcome Government amendment No. 63 for precisely that reason. It gives us a clearly spelt out policy. I believe that when the Bill came before the House first and when the Bill was going through the Committee, most of us knew very well what we were trying to do. That was to create a situation that was more satisfactory than the one which the previous Act left. How, in heaven's name, the right hon. Member for Lanarkshire, North (Mr. Smith) can describe that situation as satisfactory I do not know.
  We wanted to get a more satisfactory situation. Broadly, we wanted to get less
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  intervention and more competition. Thank goodness that the Hong Kong appeal came along, because that had the effect of concentrating everyone's mind and, I think, of making many people understand that the legislation itself needed clarification of the kind it has now got. I mean no criticism of my own Front Bench when I say that, but in my experience of several Civil Aviation Bills, they tend to get better as they go through Parliament, and this one will clearly not be an exception.
  I welcome the Government's amendments, and with one particular thought in mind. That is a saying coined by an old friend of mine—who my hon. Friend the Under-Secretary will also know—Citizen Tony Lucking, a great expert on air travel, who maintains through thick and thin that airlines are for passengers. It is probably just as well to start from that proposition when we consider any civil aviation legislation. Airlines are not for airline operators or aircraft manufacturers. They are not for employees of either. They actually exist to serve passengers. If they are not doing that properly, they are not fulfilling their proper function.
  I do not make any apology for repeating that or for saying that Government amendment No. 63 now sets out in a systematic and ordered way the various duties which the House will want the CAA to observe when it comes to consider how it allocates licences. I do not believe that it is the CAA's function to ration capacity. I do not believe that it is the CAA's function to try to outguess the airlines. It is unfortunate that from time to time the CAA has appeared to do that. But certainly there will be no reason and no excuse for its doing so in the future.
  Mr. Michael Neubert: Will my hon. Friend give way?
  Mr. Onslow: I shall not give way. I am sorry. I want to be brief. Others wish to speak. I hope that my hon. Friend will excuse me.
  The situation that we were in danger of having, and a situation which the right hon. Member for Lanarkshire, North appeared to regard as satisfactory, is one in which the CAA really knew best. It decided how much capacity there should

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  be. It decided precisely how airlines should be making money. The more one examines that, the less satisfactory it becomes.
  Objections concerning Hong Kong hotels have attracted a certain amount of attention this evening. Those objections fall to the ground when we consider that an airline that wants to set itself up with hotel capacity in Hong Kong is hardly likely to do so before it is given a licence. It is much more likely to do so if it thinks that it will be able to fly passengers to Hong Kong.
  It is wrong for the CAA or for anyone else to say "The hotels are not there. Therefore, they never will be there. Therefore, there never will be anywhere for passengers to stay when the service comes into operation." These are not judgments that we are competent to be making or should be making. In the original Edwards report, which I am sure everyone has read from cover to cover, great emphasis was placed on one feature of civil aviation operations that we do not hear much about now—namely, the connection that was supposed to exist between financial stability and operational safety. It was widely accepted in the Edwards thinking that that was so. There is no reason why it should be so or should be allowed to remain so.
  The prime function of a licensing authority should be to license safe airlines. The way in which the CAA tackles the problem should not be based on examining the accounts of an airline. It should ensure by physical inspections that its operations, equipment and crew standards are all that they can be. That is a development that we should recognise and welcome.
  As airlines are for passengers, it is only reasonable that competition should be in the interests of passengers. There are those who talk about measured competition. The measuring is to be done by whom? It should not be done by the CAA. Competition should be measured by the fair system that allows an airline operator to apply for a certain route if he thinks that he is able to offer a reasonable operation. If he satisfies the licensing authority, he should be able to obtain the route. It is up to him to justify that judgment. As my hon. Friend the Mem-
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  ber for Bristol, North-West (Mr. Colvin) said, an operator does not have to operate any route. The fact that licences have been issued for the Hong Kong route does not make it compulsory for anyone to fly it. That should be recognised.
  I think that we have made progress tonight. I do not wish to appear to patronise my hon. Friend the Under-Secretary of State. The Bill will be much better if the Government's new clause and amendments are accepted. I hope that the response of the aviation industry will cease to be as inward looking and pessimistic as some have suggested it should be.
  The way in which independent airlines and British Airways have risen to the challenge does them credit. I have no doubt that they will continue to adopt that approach. I should much rather hear about British Caledonian renewing its application for lower fares to Europe than hear others dwelling upon the possible unemployment consequences if British Caledonian cannot use the aircraft that it has bought.
  Surely the right response is to go out and win more business, to serve passengers and to blast the Secretary of State into doing something to obtain lower fares from Britain to Europe—namely, to make it possible to fly from London to Glasgow or Paris more cheaply and more conveniently. That is what the industry is for and that should be the prime purpose of a licensing system.
  Those who have discussed these matters with the airlines—especially with the CAA—will, I am sure, have found no mood of despair as a result of the Hong Kong decision or the changes in the Bill that are now proposed. I believe that the CAA welcomes the amendments. It is prepared to live with them and it regards them as a positive and unqualified step in the direction of more competition. It welcomes them on those grounds. We are not likely to be told by anybody that that is a mistaken view.
  We have made progress in introducing the amendments, clearing our minds and clarifying Government policy. By achieving less intervention and more competition passengers will benefit. The airlines that serve them best will benefit, and that is as it should be.
  Mr. Sheerman: My remarks will be brief. However, as a member of the Standing Committee, I could not let the opportunity pass without commenting on new clause 15 and on some of the Under-Secretary's responses. Members of the Committee were puzzled by the amount of time that elapsed between the conclusion of Committee proceedings—an occasion for great celebration by hon. Members of all parties—and discussion of the Bill on the Floor of the House. When we heard the Hong Kong decision and witnessed the remarkable Government amendments on Report, we understood more clearly what had been going on. Reading between the lines, it seems that the Government embarked on a Bill of whose purpose they had no idea. Having got two-thirds of the way through the Committee stage, they suddenly realised that the direction that the Bill was taking was not one that they had intended. Perhaps it was the brilliance of Opposition Members—although I am too bashful to suggest that—or the brilliance of one or two Conservative Back Benchers that led the Government to understand the nature of the Bill.
  The Government were, and still are, suffering from a central dilemma. They do not understand the Bill's implications for civil aviation. The new clause brings home the schizophrenic nature of the Government's thinking. The root of the problem is that two philosophies run through the Government's thinking. The Bill represents a microcosm of the Government's policies. Running through the Bill is a desire to import free market competition, with its ensuing thrusting, fighting and competing, in order to reduce fares to the consumer. Perhaps the Secretary of State holds that desire more dear than does the Under-Secretary of State.
  The idea that the free market is the end runs throughout the Bill. In Committee we heard another voice that desired a well-regulated and Governmentfree—even politic-free—CAA to administer that industry. It appeared that the Government could not decide whether they wanted to import free market forces, or whether they wanted regulation by a CAA that was free from political interference and ministerial dabbling, and that could administer the industry without hindrance.
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  When we heard the Hong Kong decision, we realised that one voice that had spoken loudly in Committee had been taken over by another. Perhaps the Secretary of State suddenly realised that part II of the Bill would not produce the effect that he desired. Perhaps he saw the implication for the decision on the routes to Hong Kong.
  As a consequence, we saw a massive Government rethink, and it has been embarrassing for the Under-Secretary of State to hear the comments and the revelations which Opposition Members have made. My hon. Friend the Member for South Ayrshire (Mr. Foulkes) pointed out how, without thinking, the Minister had given the exact example where such a decision would have been nonsense. It was exactly that kind of nonsense that the Government announced at the time of the Hong Kong route decision.
  9.15 pm
  The overturning of the CAA ruling makes nonsense of much of the Bill, which tries to give strength to the CAA and to make it a more powerful and independent body for the regulation of civil aviation.
  Again, it is a confusion of models with which the Government get into trouble. I mentioned earlier when we discussed British Airways that the confusion was between having or not having a British Petroleum model. In the area that we are discussing at the moment, it is a confusion about what competition means in the aviation industry.
  We are put into an unhappy position if we deal with an industry that by its very nature cannot have the free market model applied to it. Government supporters know that that is precisely at the root of their problems. The hon. Member for Brentwood and Ongar (Mr. McCrindle) knows only too well when he talks about the aims of the aviation industry that any realist knows that its success must lie in the pursuit of competition and stability.
  Perhaps I may bore the House for a moment by using that rather clumsy terminology which economists have been known to employ from time to time. The problem facing the Government is that this is an industry which by its very nature, in the interests of the consumer, in its own interests and in the interests of all concerned in it must be an oligopoly.

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  It must be made up of a few large carriers. The great danger is that if too much competition is injected into it, the oligopoly will be destabilised. At the moment, it is working well in the consumers' and in the airline operators' interests. But if there is destabilisation, there will be a brief period of intense competition. It may last for six months or even for three years, and it may be very good for the consumer to travel cheaply to Hong Kong, Los Angeles or New York. But, if the oligopoly is destabilised, after a short period there will be a reversion to what no one wanted in the first place, which is total monopoly. That is what many of us on both sides of the Committee argued, and we will continue to argue it.
  The Government must have the intellectual ability to understand that the airline industry is an oligopoly and that that oligopoly is a very delicate balance to maintain. I suggest that that danger becomes very real if these amendments are accepted. The delicate balance will be upset.
  There is no virtue in trying to be the Freddie Laker of the House of Commons. It is no use saying "I am the Secretary of State for Trade. Fly me." Hon. Members say glibly that they are in favour of the passenger. Do they really believe that any Opposition Member is not in favour of the passenger? The passenger is the person whom we represent. My own interest is in one aspect that is not mentioned in the Bill. I am concerned with passenger safety, and I hope that the Minister will find time to pay a little more attention to that aspect.
  We are all in favour of the interests of the passenger being accorded high priority. But the passenger will not thank the Minister or the Government who intervene in this delicate balance, finishing up, after a few heady days of tripping here and there, with a monopoly that can charge what it likes, when it likes, leaving the consumer with no choice at all. The consumer would prefer a choice of regulated competition between a few main carriers to having to travel with one carrier and having to pay its price.
  World aviation is in an unstable period. The Government should recognise that fact. It is an unstable period not only due to events beyond this Government's control but also because of actions by the Government in the last 14 months.
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  The Government's decision on the Hong Kong route, together with elements of the Bill, have made international aviation more unstable. The taxpayers have a stake in British Airways. Yet, at a time when stability is at a premium, the Government are making the base of British Airways more unstable. The consumer will be diddled by a Bill that undermines the value of his investment in British Airways. I urge all hon. Members to give serious consideration to the Opposition's amendment and to vote for it.
  Mr. Bill Walker: I am delighted to have the opportunity to speak on this part of the Bill. I was interested in the comments of the hon. Member for South Ayrshire (Mr. Foulkes). The hon. Gentleman and I were learning as the Committee stage proceeded. I hope that one is always learning. I remind the hon. Gentleman that I have a long and lasting interest in Prestwick. There have been three loves in my life—politics, aviation in all forms, and the third I leave the hon. Gentleman to decide.
  There are sound reasons for not accepting new clause 15. It states:
  "Provided that where the Secretary of State does not accept an earlier finding of the Authority he shall not reverse or vary the decision in question without first requiring the Authority to publish its opinion of the effect of the reversal or variation proposed by the Secretary of State, which opinion shall be formed only after a rehearing by the Authority in accordance with procedures to be established by regulation."
  When that is linked to what the same new clause says about inserting the words
  "accept a finding of fact made by the Authority "
  I suggest that this is not the way to look after the best commercial interests of airlines and the best interests of potential passengers or the Government. They cannot be catered for in this way. It is a lawyers' charter, providing more work for lawyers. In contrast, I welcome Government amendment No. 63, which lays down the clear rules we have been seeking. The amendment says
  "in performing those functions the Authority shall also have regard—

  (a) to any advice received from the Secretary of State with respect to the likely outcome of negotiations with the government of any other country or territory for

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  the purpose of securing any right required for the operation by a British airline of any air transport services outside the United Kingdom; and

  (b) to the need to secure the most effective use of airports within the United Kingdom."

  My mind always turns to Prestwick when I read paragraph (b). It is important to makes the best possible use of our fine airports, many of which are under-used.
  In his definition of "oligopoly" the hon. Member for Huddersfield, East (Mr. Sheerman) must have included the Cooperative Society, since it required stability and a protected market share to survive. Look what has happened. Because it was inefficient and lacked the management and marketing skills of the other High Street stores, it has watched its share of the consumer purse go down year by year. It is not in the consumer's best interests to protect any part of the market.
  Because aviation licensing is important, I am glad that the Government have shown how they feel about it by the way in which they have dealt with the Hong Kong run. They have shown that they are prepared to allow real and meaningful competition, instead of the protected and sham competition that we have seen in civil aviation for far too long, with the interests of the passengers the last to be considered when framing future airline policy.
  I hope that the experience gained in the operation of the Hong Kong run, of a number of airlines offering a competitive service, will be a guide to the CAA and the airlines in their future deliberations and decisions. I believe that it will also provide a guide to all who consider appeals in future.
  Airlines and potential passengers can obtain considerable benefits from increased competition and from the more effective use of British civil air transport and airfields without damaging the economic viability of the competing airlines. It is not in any of our interests that that viability should be damaged. I do not believe that it will be, provided that the airlines are prepared to meet the competition.
  Who can deny that the presence of Laker Airways on the North Atlantic route has had a dramatic effect on fares? That has been good for the airlines and
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  for the consumers. Who can deny that the potential presence of Laker Airways on the Hong Kong route has already influenced pricing policy on that route? No one can deny it. I therefore welcome the Government's attitude to route licensing and particularly amendment No. 63.
  Mr. Trotter: It is almost incontrovertible that the change proposed by the Government to allow more than one British operator on a route has come about as a result of decisions by the Civil Aviation Authority since the Bill was published. I accept what the Minister said about the new provision reading better than the old. However, there is an important change in this guidance—that is how we must see it—to the CAA that in future it should have regard to the possibility of more than one British operator on a route.
  The Secretary of State has taken a bold decision on Hong Kong. I believe that, for the reasons hinted at by the Minister. This is a cabotage route. The opportunities for the development of the flow of passengers are enormous as a result. I do not think that 1,800 passengers a day between Europe and the Far East is a large number. That is what we are talking about—the two gateways to and from the Far East.
  Not long after the fares to Hong Kong come down we shall see a substantial distortion of the traffic in our favour—for instance, if passengers from Amsterdam to Manila find it much more economical to travel via London and Hong Kong than to go direct. The opportunities for the number of passengers are great, and all four airlines will be able to make a success of the route initially. I say "initially" because we shall see in the Far East what happened in the North Atlantic after the introduction of Skytrain. We shall see the other services between Europe and the Far East inevitably introduce lower fares. There will be an initial rush of traffic, but there will be difficulty in maintaining it in the following period.
  9.30 pm
  I looked up the fare for flights over the Atlantic. It is a confusing picture. More than 60 fares between London and New York are quoted in the ABC. It is not easy to see who offers the best value,

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  because there are many different conditions attached to the various fares. There is no doubt, however, that the initial reduction has set a pattern not only between London and New York but between Europe and North America. I think that we shall see the same happening in Hong Kong and there will be a permanent benefit to passengers.
  I turn to the decision of the CAA about a number of applications for European routes. I wonder whether the Government have also had in mind the decisions of the CAA in that respect. Some of those routes are under appeal to the Minister, and he may not be able to say a great deal tonight because of the sub judice aspect. The British Caledonian application for mini-prix would have provided a standby fare of 80 per cent. less than the normal fare, at £15·50 from London to Paris, London to Brussels or London to Amsterdam. That is the sort of fare that I and other hon. Members want to see. That is aviation for the man in the street.
  Mr. McCrindle: I endorse my hon. Friend's remarks. However, for the sake of accuracy, will he concede that the only way in which one could travel between London and those centres at the price that he mentioned is by travelling off-peak? I am not complaining. I wish, for the sake of accuracy, to record that that would be a necessary condition.
  Mr. Trotter: My hon. Friend is absolutely right. It would be at limited times, and perhaps even on limited days. But it gives people the opportunity to fly to Paris who would not otherwise be able to do so.
  Mr. Michael Brown: Is my hon. Friend aware that only last week I travelled from London to Brussels at off-peak times, on both the outward and return journeys? There was no opportunity for a reduced rate. I paid the full fare of £113.
  Mr. Trotter: I am obliged to my hon. Friend for his intervention. From time to time I go to talk to the EEC Commission. It is an expensive business for those of us who have no way of reclaiming the fare. I would be prepared to plan my journey to go on a limited basis such as the mini-prix standby.
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  Laker applied for a Skytrain-type service to many places in Europe. Britannia Airways put forward an interesting suggestion that, as the scheduled operators were able to take charter passengers for half the load on their planes, there was no reason why charter operators should not be able to take scheduled passengers for half the load on their charter planes. I come from a regional centre, and I can affirm that that suggestion would be of particular benefit to the regional airports, which could not expect a scheduled regular service to many destinations. Air UK also applied for services to a number of places on the Continent. The four airlines applied for routes to the Continent. British Caledonian obtained a small proportion of the number of routes for which it applied, but nobody else obtained any. I wonder whether that decision by the CAA was taken into account by the Minister in deciding to change the new clause and insert the requirement for competition to be taken into account in future.
  I have mentioned a number of airlines by name. However, it is important that in the House we should not argue for any particular airline because it has a certain personality at its head, or because the pretty stewardesses wear an attractive uniform, or because its engines are maintained in one part of the country or another. We should argue on behalf of the passengers. That is the only way that we should approach the question of who flies where on British airlines. Who gives the best value for the passenger?
  It is interesting to note that British Airways have introduced a £99 fare to Hong Kong, which goes by the appropriate name of "Firecracker". That is different from the fare to Newcastle. Before I rose to speak I extracted from my wallet a single ticket to Newcastle, which cost £42·50. That is not a Firecracker fare. I am not sure what would be the appropriate description.
  Mr. Michael Brown: A damp squib.
  Mr. Trotter: That would be more accurate, but I do not think that the airline would get far by advertising a fare with that name. On the basis of the fare to Newcastle, the Hong Kong fare should be about £1,000, not £99.
  I wish to concentrate on fares to Europe. The fare to Zurich is £99 single,

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  for 480 miles. According to the ABC, the cheapest return fare is £100. Therefore, at the cheapest it is £50 each way to Zurich—a distance of 480 miles—while £99 is the cheapest fare for the 6,525 miles to Hong Kong. In other words, £1 buys 10 miles of travel on the Zurich route but 65 miles on the Hong Kong route. A great deal of improvement could be made in lowering fares to passengers in Europe. That is where our efforts should go in the immediate future. The BCal mini-prix suggested a standby fare of £21.50 to Zurich.
  There have been references on both sides of the House to safety. It is right that that should be the first requirement of any authority dealing with civil aviation. The trade and industry Sub-Committee of the Expenditure Committee in the previous Parliament started to look into fares on domestic services. The inquiry was frustrated by the election, but I asked the first question of the chairman of the CAA at the first session. I asked whether there was any correlation between safety and fares. The answer was categorical, to the effect that there was none whatsoever, and that the licensing of the safety side of airlines was quite independent of the economic side. That was the answer that I expected, but I was pleased to have the confirmation. Safety is a red herring when we are talking about fares.
  I must refer to the attitude of foreign Governments. We can press my hon. Friend the Under-Secretary for changes on what happens between London and Newcastle. Changes in the fares are within the power of the CAA, but that is not the case on routes between London and Zurich, Paris, Amsterdam or other destinations on the Continent. There must then be agreement with the foreign Government as well as with our own.
  Earlier this year I spoke to a number of foreign airlines and foreign Governments. It was interesting to see the contrast with our own situation in Britain. European countries have only one airline each—Holland has KLM, Germany has Lufthansa and Switzerland has Swissair. The relationship between each airline and its Government is very close, and when talking to the airlines and the Governments one almost gets the impression that one is talking to the same people. We
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  have a great problem in persuading a foreign Government to bring fares down as we wish unless their airline also wishes it.
  One comes away from such meetings with an impression of the strength of the British industry in a number of directions. Germany, Holland and Scandinavia have no problem about who flies scheduled services. They each have only one carrier. We have the same problem as do their Governments of getting the right to fly into a foreign country, but we then have the additional problem of having to decide whether it is to be Laker, British Caledonian, Air UK, British Airways or one of the other operators that exist as a result of the strength of the British aviation industry and the initiative shown by its operators.
  Mr. Gerry Draper, the commercial director of British Airways, said in evidence to another place:
  "The principal frustration of British Airways lies in the field of persuading other Governments and airlines to recognise that change has taken place in the needs of the consumer."
  It is wholly to the credit of British Airways that they are taking the lead among the major national European airlines in seeking to bring about a reduction in fares. It is a pity that their "Channel hopper"—a £20 fare to Paris—was not approved by the French Government. Presumably Air France did not approve and therefore the French Government did not approve.
  I hope that British Airways will continue to press, not just in Europe but elsewhere, for the reduction of air fares. In this context I mention Australia. That is a place where fare reductions are also badly needed. I believe that the best way for British Airways to preserve their present network is to take a lead—as, to their credit, they are doing—in seeking a reduction of fares and in persuading their long-established partners in other national airlines that such reductions are necessary.
  The factors taken into account by European Governments are extremely complex. In Germany, for instance, I was told that their railways were an important factor, because there was a great deal of political support for German railways and that if there were a fare reduction on short flights into neighbouring countries it would spill over into pressure for

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  low fares on internal air services in Germany. So the railways there are an obstacle to lower fares. I was also told that in Germany they did not need a Laker. I doubt whether that is a correct assumption, but it is an assumption against which one must start to discuss the issues with them.
  The problem at the moment is that ever-increasing fuel costs make it more difficult for fares to be reduced in the way that we are seeking. At the same time one cannot help commenting on Government charges for navigation and airport security. I was told recently by a British operator that of its operating costs for a one-hour flight 25 per cent. was taken up by security charges before the plane got into the air. That is a problem. All those factors work against low fares.
  There is a definite need to ensure maximum competition, which must be our aim. In evidence given in the other place the CAA said that it did not believe that we would see lower normal fares until there was more competition. I do not think that the CAA has always been courageous enough in seeking that competition and I believe that my hon. Friends the Ministers are right in persuading the authority that it must do so. There must be a united approach by Government and the CAA. I welcome the revelation in the evidence given by the CAA in the other place that there is to be an exchange of letters between the Government and the CAA about their roles once this Bill becomes an Act. Perhaps my hon. Friend will expound a little on that tonight.
  We have an outdated system of air fares in Europe. There is a need for experimentation, and I believe that my hon. Friends will see to it that that experimentation is carried out through the implementation of the Bill.
  Mr. Michael Colvin: It is a pleasure to follow my hon. Friend the Member for Tynemouth (Mr. Trotter), who has successfully shot at least two of my foxes. That will enable me to be comparatively brief.
  The debate on new clause 15, Government amendment No. 63 and the amendments grouped with it provides the opportunity to invite my hon. Friend the
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  Under-Secretary to say a word or two about the general lines for air transport policy, which my right hon. Friend the Secretary of State will attempt to pursue on appeal. I welcome what my hon. Friend has already said. No doubt he will be saying more later.
  I would like to ask my hon. Friend one particular question about aircraft type. I wonder whether aircraft type will be taken into consideration when dealing with appeals and also when licence applications are made the CAA applies the provisions in the Bill concerning the need to minimise, as far as is reasonably practicable, any adverse effects on the environment and any disturbance to the public arising from the use of aircraft as specified in subsection (3).
  If aircraft type is taken into account, there are important implications for the European Airbus since that aircraft is probably the quietest and environmentally the most acceptable wide-bodied jet presently on the market and is a project in which this country has an important stake. The Secretary of State has just made a decision about the London-Hong Kong route. Some people would describe that judgment as Delphic. I would call it Solomonic. Others have been less flattering, but the air traveller is, I am sure, absolutely delighted. It remains to be seen how the route works, but it is certainly a solution which is well worth trying.
  Opposition Members have said that that decision has left the industry wondering where it stands. I think that it stands like a bird let out of the cage of over-regulation. The big question now is: will the bird fly or has it forgotten how to fly?
  An open skies policy may be all right for flights to a Crown colony, but is it applicable to other routes? If only we had more Crown colonies today. If only there was as much of the map of the world still coloured pink as there was when I was doing my geography lessons at school, the licensing of airlines, from the British point of view anyway, would certainly be a great deal easier. Alas, those good—or perhaps bad—old days are gone. Now, the twin hurdles of nationalism and protectionism must be overcome, and we must recognise that the various world markets which could open up for British airlines vary tremendously.

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  9.45 pm
  A policy for the North Atlantic may be quite wrong for Africa, and a policy for the Far East would probably be wrong for South America. That is why I think that the Secretary of State is quite right not to lock himself into specific guidance to the CAA.
  I should like to look briefly at one specific market which probably offers Britain greater opportunities than any other—Europe. We have just seen the excellent report by the House of Lords Select Committee on the European Communities entitled "European Air Fares". That showed that air fares in Europe are much higher than in the United States, in some cases more than twice the cost for single fares. That is not entirely because fuel is cheaper in the United States or that some of the charges, such as en route navigation facilities, are carried by the Federal taxpayer. Nevertheless, the difference is significant and the absence of true competition in Europe must be an important factor in this high air fare market.
  In Europe, most countries have nationally-owned airlines, and take steps to protect them from competition. Surely that is against the competition provisions of the Treaty of Rome. Therefore, a major task for the EEC is to achieve as soon as possible a market environment in which fair competition can flourish, at least among member States. I am sure that the House welcomes the work done towards that objective by my hon. Friend the Under-Secretary, who is doing his best to ensure that the Europeans match their words with actions.
  We heard what the EEC had to say about the development of European air transport services when the Commission published its official memorandum on this subject in July 1979. That contained four very important objectives. It called for a total network of air services unhampered by national barriers, financial soundness for the airlines with lower costs and higher productivity, the safeguarding of the interests of airline workers and an improvement in conditions of life for the general public. The memorandum concluded that:
  "The Community should follow an evolutionary method in tacking these issues and avoid changes which would not leave sufficient time for adjustment."
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  It is debatable whether evolution or revolution is the right method for change in the civil aviation industry. Laker on the North Atlantic was certainly revolutionary, but perhaps we must tread more softly in respect of Europe.
  In accepting those broad parameters, it should be possible to aim for a Europe-wide network of services which were regular, reliable, free of discrimination or artificial restrictions and at a price which everyone could afford. I would have preferred the EEC objectives to have said more about the needs of airline passengers, but, alas, they did not.
  There need now be no barriers at all to such services if the will to achieve them exists. That must come from the operators and the Government involved. In their report on European air fares, their Lordships said:
  "It is frustrating to see proposals by airlines for cheap and advantageous fares and services being refused by the civil aviation administrations of Member States of the Community".
  It almost seems as if some national Governments and their civil aviation administrations are doing their best to prevent progress. Far too often, the interests of the consumer seem to be second to national prestige. Surely the Community should be promoting competition in the area of civil aviation, as it does in other areas, in order to enable airlines to satisfy the demand which is known to exist.
  I am sure that the House will applaud the Government's determination to lead the way in Europe, and the efforts or our airlines to blaze a trail with enterprising schemes that will widen markets and increase efficiency. The application by British Caledonian to start its mini-prix services between the United Kingdom and 23 cities in Continental Europe should be followed by other airlines.
  The aeroplane is said to be fulfilling the same role in the twentieth century as the railway did in the nineteenth century. The aeroplane has transformed our way of life. Travel enriches the mind, and surely scheduled, cheap, air travel should be available to all. It should no longer be the prerogative of the rich or the business man. In Europe, more travel will lead to a greater understanding

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  between members of the Community, and we should all welcome that.
  I applaud the determination of our Government and our industry to lead the way. That is why I support wholeheartedly the Government's free enterprise attitude to civil aviation, as exemplified in the amendment that we are now debating.
  Mr. Clinton Davis: Rarely can the perambulations of the hon. Member for Wells (Mr. Boscawen) have produced such insignificant results. The debate ended on a curious note. The hon. Member for Bristol, North-West (Mr. Colvin) referred to birds in cages. I suspect that he was referring to the fact that the Government have laid an egg. We are dealing with a capricious decision that was taken by the Government—a whimsical decision. I suppose that the Secretary of State was trying to show that he has a whim of iron, but he has shown a scant regard for the Civil Aviation Authority, and for its ability to assess evidence.
  Of course the right hon. Gentleman has asserted that his decision was nonpolitical. He is left with no recourse. If he were to say that he made a political decision and that he did not invoke the appropriate parts of the Civil Aviation Act to justify that, he would be opening himself up to a severe rebuke. So the Government camouflaged it all, and they deny it. That is to be expected.
  In this instance the Secretary of State has asserted that he has performed his quasi-judicial role. I do not believe it. It was more quasi than judicial. Effectively, he is saying that the evidence that was carefully scrutinised by the Civil Aviation Authority does not conform to his taste, and, therefore, it can be forgotten.
  Tonight the Minister has not begun to assert that there is any real evidence in favour of Laker upon which he is able to rely. He has completely overlooked the assertion of the Civil Aviation Authority that there was no convincing evidence about the size of the bottom end of the market. He is not criticising politicians. He is criticising people whose objectives are to assess the evidence before them. The Minister went on to pray in aid the great results that have been achieved on the North Atlantic routes. It is as well
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  to consider what the Civil Aviation Authority said about that:
  "On the North Atlantic it seems that Sky-train caters mainly for those passengers who previously travelled on charter flights. The rate of traffic growth on the North Atlantic does not suggest generation of any significant growth of traffic. The rate of growth in the period after the introduction of Skytrain was consistent with that of the two previous years, taking schedule and charter together. There was no dramatic increase."
  The authority says that in relation to Hong Kong there is no significant charter market from which scheduled services can divert traffic, and that the forgotten man must regretfully be regarded as a myth.
  By his decision the Secretary of State has left British civil aviation in turmoil. He has declined to indicate—it would have been open to the Government to do so in a White Paper—what is the civil aviation policy of the Government. He has declined to indicate that tonight. He has preferred to enunciate a policy of some kind in a decision on appeal, inconsistent in many ways with the policy adumbrated by the Under-Secretary of State. The Under-Secretary of State, in contrast to the great fanfare of trumpets from the Secretary of State, regards it as a gentle, persuasive policy of liberalisation. Indeed, he said, in relation to an intervention from the hon. Member for Brentwood and Ongar (Mr. McCrindle):
  "I certainly agree that there is still continuing today almost de facto a spheres of interest policy. I say 'almost'; I choose my words wisely. That may well continue in some areas for the reasons which I have set out. But it is for the Civil Aviation Authority to decide."—[Official Report, Standing Committee B, 6 March 1980; c. 840.]
  Is it for the CAA to decide or is it to be for the Minister to decide on appeal? I suppose that we can expect the next major announcement on civil aviation policy at the 1981 Dragon Boat dinner in the Secretary of State's reply to the toast to the visitors, but it is scarcely a satisfactory way of announcing the Government's policy in this regard. I believe that the Secretary of State has treated the Civil Aviation Authority with a derision that it does not deserve.
  We are entitled to ask—we have not had a response from the Minister—where the authority stands now. Are we back to the old days, when we had the Air Transport Licensing Board hearings, representing a sort of pantomime, with virtually

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  every case going to appeal? That was where the effective decisions were made.
  That is the risk that we are facing at the present time because of the curious and eccentric way in which the Minister has approached the matter. As my right hon. Friend said at the beginning of the debate, by his actions the Minister has overturned the logic of his own Bill. We were told that he wanted to give the Civil Aviation Authority extraordinarily wide powers—powers that rendered it unaccountable to Parliament. He has now gone to the other extreme by making it almost an irrelevance, or a creature of the Secretary of State. Perhaps he hopes, as a result of this decision, to cause the authority in its future pronouncements to fall in line with the general philosophy that the Secretary of State has expressed, without being under any duty to follow a pattern that is set out in an Act of Parliament or that is referred to in an Act of Parliament—because that is the right way in which the authority should approach these matters.
  I do not deny that new clause 15 is unsatisfactory in many ways. It has enabled us to debate the issue, but it has also enabled us to focus attention on the fact that the Secretary of State acted in a political sense. The way in which appeals are at present conducted is very unsatisfactory if that is to be the case.
  I entirely agree with the observation made by my right hon. Friend that the Secretary of State should have remitted that part of the decision affecting the Laker issue to the Civil Aviation Authority for adjudication so that it could have been tested and so that the other parties in the case could have represented their views and cross-examined as necessary.
  Why has amendment No. 63 been introduced at so late a stage? It is not just a difference of nuance; it is a material change in the policy of the Government. We should have had an opportunity to consider it in detail in Committee, but the Government chose not to do that. In many ways it was a very unsatisfactory Committee stage, because there were so many things that we were debarred from considering because of the way in which the Bill was drafted in the first place.
  The Minister claims that there is a lack of precision in the new clause. He cannot allege that and at the same time
  180
  say that the wording of amendment No. 63 is full of precision.
  How can the issue of benefits be properly defined? There is a wide area of argument there. I fear that the result will be that many appeals will come before the Minister. What I fear then is that there will be no certainty—
  It being Ten o'clock, the debate stood adjourned.
  Ordered,
  That, at this day's sitting, the Civil Aviation Bill may be proceeded with, though opposed, until any hour.—[Mr. Boscawen.]
  Question again proposed, That the clause be read a Second time.
  Mr. Clinton Davis: There will be no certainty, no stability. That point was made with great emphasis by the hon. Member for Brentwood and Ongar in a fine analytical speech.
  What is the Government's aviation policy? What consistency is there between the statements made by the Secretary of State and the Under-Secretary? Can this policy vary from day to day? Has the "spheres of interest policy" ended? Is the Civil Aviation Authority to be invested with greater powers or is the real decision eventually to be made by the Secretary of State?
  We have had no answer to these questions. I fear that the Minister will not provide them in the latter part of the debate.
  I have listened carefully to the Under-Secretary's attempts to justify the policy, but I am not very impressed. It is incumbent upon the hon. Gentleman to offer an assurance that the Government will lay a White Paper before the House of Commons in the near future so that the airline industry, the House, passengers and, above all, the CAA may know about the Government's aviation policy.
  In the circumstances, I invite the House to reject Government amendments Nos. 35 and 63, because the Government's stance has been so irresponsible and unsatisfactory.
  Mr. Tebbit: With the permission of the House, I should like to reply briefly to some of the points that have been made.
  I have been in touch with the Civil Aviation Authority since the Hong Kong

  181
  decision. Far from feeling derided, it seemed to me to be in very good heart. There will not be a White Paper on these matters. There is no need for a White Paper. I am sorry if the hon. Member for Hackney, Central (Mr. Davis) and his colleagues do not understand the policy. It has been made clear to them. It is described in essence in amendment No. 63. It is set out clearly for all to see, with the implication that I have always made clear, namely, that the Government favour competition and the customer rather more than the entrenched interests of the operators.
  I should tell my hon. Friend the Member for Tynemouth (Mr. Trotter) that we have supported a number of low fare proposals by British airlines to European destinations, and we shall continue to do so. The problem is to persuade European countries to accept our proposals. Many European countries are still as backward in these matters as are some Opposition Members. The struggle goes on, but we are making progress.
  If my hon. Friend the Member for Bristol, North-West (Mr. Colvin) looks at amendment No. 63, he will find in subsection 3(a) that the CAA is free to take account of environmental factors in hearing licensing applications.
  The hon. Member for South Ayrshire (Mr. Foulkes) and others talked at length about jobs in Scotland and the effect of my right hon. Friend's decision on British Caledonian as though my right hon. Friend had taken British Caledonian off the route, but he has not. Hon. Gentlemen should consider how fortunate they are that I am the Under-Secretary of State and my right hon. Friend is the Secretary of State—
  Mr. Foulkes: And not the other way around.
  Mr. Tebbit: —and indeed, that it is not, for example, the hon. Member for Nuneaton (Mr. Huckfield), who is a Front Bench Opposition industry spokesman, who has any say in these matters, because he said on 11 February 1976:
  "Surely, if British Caledonian cannot survive after this lot, it should not be allowed to do so."—[Official Report, 11 February 1976; Vol. 905. c. 449.]
  182
  That was the Labour Party's attitude, and that is the attitude of one of its Front Bench industry spokesmen.
  The hon. Gentleman also said, on 15 October 1975:
  "I opposed the formation of British Caledonian although its way was paved by a Labour Government. I still believe that we should have only one airline, namely, British Airways.[Official Report, 15 October 1975; Vol. 897, c. 1097.]
  That is the authentic view of the Opposition today. If anyone in British Caledonian thinks that he would get a moment's consideration if that hon. Gentleman had any part in any considerations of aviation policy, let alone industrial policy, if the Labour Party ever came to power, he had better think again.
  I commend the Government amendments to the House and I implore the House to reject new clause 15, which is unworkable, irrational and poorly thought out.
  Question, That the clause be read a Second time, put and negatived.
  Clause 11

GENERAL OBJECTIVES OF CIVIL AVIATION AUTHORITY
Mr. John Smith: I beg to move amendment No. 31, in page 12, line 4, leave out 'any aerodrome Licensing Function' and insert 'its functions'.
Mr. Speaker: With this we are to take the following amendments:
No. 32, in page 12, line 5, leave out from 'function' to end of line 12 and insert
'to take account of the need to minimise disturbance caused to the public from noise, vibration and pollution arising from aircraft operations.
No. 34, in page 12, line 12, at end insert—
'(1A) In exercising any aerodrome licensing function it shall be the duty of the Authority to impose such conditions as it deems reasonably appropriate having regard to the Authority's duty under this subsection.
(1B) It shall be the duty of any person for the time being managing the aerodrome (or to whom the licence in question has been granted) to ensure that the conditions imposed under the Authority's functions set out in the section are complied with.'.
Mr. Smith: The House now has an opportunity in these amendments to consider the relationship of airports to the environment. In Committee we spent a considerable time on this subject. There is obviously a serious balance to be struck between the economic interests that are served by the development of airports and aerodromes and the environmental consequences upon the surrounding neighbourhood and the individuals who live near airports.
Generally, the House has tended to think of this matter in terms of the large airports and the obvious environmental consequences that affect the people around Heathrow, Gatwick and some of the larger airports throughout the country, but I should like to turn the attention of the House to the question of general aviation, which I think is covered by the part of the Bill with which we are dealing.
I say straight away that I think that the members of the Committee owe a considerable debt to the Airfields Environmental Confederation, which has drawn this point to their attention, and which has been very helpful in supplying hon. Members with information and proposals to deal with the problems. I think that the confederation is also to be commended for the fact that it has throughout the argument recognised that a balance must be struck between economic interest, which requires airports to be developed as air travel replaces other forms of travel as an important means of communication in this country, and the environmental nuisances and other things that flow therefrom.
A number of interesting debates took place in Committee. In the Bill the Government put forward a method of dealing with the problem which puts a responsibility upon the CAA to have regard to environmental effects in exercising its aerodrome licensing function. There is some doubt among some commentators, and I think that there exists some doubt within the CAA, about whether the CAA is the appropriate body to undertake a function that involves environmental control. It is much more a technical organisation to deal with matters of airworthiness, air traffic licensing and the like, but I have no doubt that if this is a duty which the House wishes it to
184
carry out it will carry it out to the best of its ability.
The problems that arise over general aviation are in some senses different from those that exist in relation to major airports. Many of the aircraft that use the smaller general aviation aerodromes are not subject to the noise certification legislation, and therefore there is not that protection, and the rights of individual citizens to take proceedings for nuisance are restricted in terms of legislation. Aircraft are specifically excluded from the noise provisions of the Control of Pollution Act 1974. I think that there can exist quite a serious problem, especially where the planning permission that is in use is of some antiquity. In fact, it may be an old wartime aerodrome that is being used to considerable purpose at present, perhaps as a training centre for pilots and the like.
One idea was to establish airfield consultative committees, which were set up under section 8 of the Civil Aviation Act 1968. Where they work they serve a useful purpose, but in many instances they are not as effective as they might be. I respectfully suggest to the Under-Secretary of State that one of the concerns of his Department should be to ensure that the committees are made more effective and that they are used as a genuine method of consultation. Only in that way will we get round some of the problems that exist.
The House should not fool itself by thinking that there is some magic legislative solution to the problem. There will be difficulties however legislation is framed. The Government advanced a set of proposals that were considered with some care in Committee. We have offered two alternative solutions. There is one possibility if amendments Nos. 31 and 32 are taken together. Amendment No. 34 is another possibility. It is clear from these different propositions, which have been sponsored by the Airfields Environmental Confederation, that we do not believe that there is one cure-all method. I think that the Government's general approach is on the same lines.
In the alternative propositions the responsibilities on the CAA are of a general character and do not depend upon the Minister specifying airports to which the obligations are to apply. One of the fears

185
about the way in which the Minister proposes to proceed is that he may not specify a suitable number of airfields. There is concern that he will specify only a small number. Therefore, the impact of the legislation will be small. It is also felt that the provisos in the legislation mean that it will not amount to very much at the end of the day.
I think that the Minister has had an opportunity to consider these matters again since our discussions in Committee. It will be useful if he acquaints the House with how far his thinking has taken him and the extent to which he may be able to meet us.
Mr. Tebbit: I thank the right hon. Member for Lanarkshire, North (Mr. Smith) for the way in which he has put these matters. He has advocated the need to make the consultative committees more effective. I approached the Bill with exactly that objective in mind. To a large extent, the purpose of having the power to specify airports where the CAA shall take environmental considerations into account in considering its licensing policy was to allow the Minister to buttress those arrangements with the ability to specify airports where things were not going right. I have in mind the arrangements that airport operators make to enable them to live in peace with their neighbours. I hope that the fact that I can specify will encourage those concerned to ensure that they go about their business in an appropriate way.
I cannot recommend to the House that it should accept the amendments. I say that for various reasons. If we were to lay the environmental consideration upon the authority in all its functions, as amendments Nos. 31 and 32 would do, we would place the CAA in a dangerous position. That is a proposition that sounds attractive. I thought about it, but decided that it would not work. Litigation by amenity groups could bring the CAA's work to a halt. A new subordinate duty would have been related to a specific responsibility.
I am sure that Opposition Members would not want the authority to attempt to control the noise climate by an artificial restriction on the number of pilots' licences issued. However, this provision would give it the power to do so and
186
it would be possible for amenity groups to seek legal action to force it to do so. We should get into a terrible tangle if we went down that road.
I shall approach amendment No. 34 slightly differently. Article 68 of the Air Navigation Order, as inserted by the Air Navigation (Second Amendment) Order 1977, makes provision for an aerodrome licence to be granted subject to such conditions as the authority thinks fit. The holder of an aerodrome licence is required not to contravene, or to cause the permit to be contravened by, any condition of the aerodrome licence.
Amendment No. 34 would not add to the provisions contained in the order in any material way. In the absence of any reference to the revocation or variation of a licence in appropriate circumstances, it might be held that the authority did not possess such a power. I am sure that that is not the intention of Opposition Members. I hope that they will agree to withdraw the amendment. The nub of the issue is that power will be in the hands of the Secretary of State and he can specify the airfields. Although it will be difficult for the Civil Aviation Authority to carry out such an environmental responsibility, and although I do not wish to overload it, I wish to make it plain to operators of airports that if they do not learn to live in reasonable harmony with their neighbours, I shall not hesitate to use that power.
Mr. Peter Temple-Morris: I do not wish to detain the House, but I welcome the amendments. They give the House an opportunity to discuss a real problem. As a result of thorough Committee discussions the Government have met an objection that was made by many of those who live round airfields, over which there is no control once one has gone beyond the planning laws.
I remind my hon. Friend the Minister, with whom I have corresponded on the subject of Shobdon airport, in my constituency, that many Conservative Members welcome the measure. They are watching proceedings on behalf of their constituents with some anxiety, as they are far from confident about the work of the consultative committees. They welcome the fact that my hon. Friend's

187
ministerial eye will watch over this problem and that he has taken more power upon himself to deal with it.
Mr. John Smith: This has been a short but useful debate. We are encouraged by the way in which the Minister indicated that he would use his powers, and particularly by the deterrent effect of specification. Much will depend on how things work out. It would be unfair to judge the method that the Minister wishes to use before it has been put into practice. He has made several reasonable points
about the amendments. Given the spirit in which the Minister has said that he would like the legislation to be enforced, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: No. 35, in page 12, line 24, leave out subsection (4).—[Mr. Cope.]
Question put, That the amendment be made:—
The House divided: Ayes 146, Noes 93.

Division No. 390]

AYES

[10.15 pm

Alexander, Richard

Griffiths, Peter (Portsmouth N)

Page, Rt Hon Sir R. Graham

Ancram, Michael

Gummer, John Selwyn

Page, Richard (SW Hertfordshire)

Banks, Robert

Hamilton, Michael (Salisbury)

Pattle, Geoffrey

Beaumont-Dark, Anthony

Hannam, John

Pollock, Alexander

Benyon, Thomas (Abingdon)

Haselhurst, Alan

Porter, George

Benyon, W. (Buckingham)

Hawkins, Paul

Proctor, K. Harvey

Berry, Hon Anthony

Heddle, John

Renton, Tim

Best, Keith

Henderson, Barry

Rhodes James, Robert

Bevan, David Gilroy

Hicks, Robert

Roberts, Michael (Cardiff NW)

Blackburn, John

Hogg, Hon Douglas (Grantham)

Rossi, Hugh

Blaker, Peter

Hooson, Tom

Rost, Peter

Brinton, Tim

Hordern, Peter

Sainsbury, Hon Timothy

Brown, Michael (Brigg & Sc'thorpe)

Howell, Ralph (North Norfolk)

St. John-Stevas, Rt Hon Norman

Bruce-Gardyne, John

Hunt, John (Ravensbourne)

Shepherd, Colin (Hereford)

Buchanan-Smith, Hon Alick

Jopling, Rt Hon Michael

Shepherd, Richard (Aldrldge-Br'hills)

Buck, Antony

Kilfedder, James A.

Sims, Roger

Bulmer, Esmond

Knight, Mrs Jill

Skeet, T. H. H.

Butcher, John

Knox, David

Speed, Keith

Butler, Hon Adam

Lang, Ian

Speller, Tony

Cadbury, Jocelyn

Le Marchant, Spencer

Spicer, Michael (S Worcestershire)

Carlisle, John (Luton West)

Lester, Jim (Beeston)

Squire, Robin

Carlisle, Kenneth (Lincoln)

Lloyd, Ian (Havant & Waterloo)

Stainton, Keith

Clark, Hon Alan (Plymouth, Sutton)

Lloyd, Peter (Fareham)

Stanbrook, Ivor

Clark, Sir William (Croydon South)

Luce, Richard

Stanley, John

Clarke, Kenneth (Rushclifte)

Lyell, Nicholas

Stradling Thomas, J.

Cockeram, Eric

Macfarlane, Neil

Taylor, Teddy (Southend East)

Colvin, Michael

MacGregor, John

Tebbit, Norman

Cope, John

McNalr-Wilson, Michael (Newbury)

Temple-Morris, Peter

Cranborne, Viscount

McQuarrie, Albert

Thatcher, Rt Hon Mrs Margaret

Crouch, David

Mates, Michael

Thompson, Donald

Dean, Paul (North Somerset)

Mather, Carol

Thornton, Malcolm

Dorrell, Stephen

Maude, Rt Hon Angus

Townend, John (Bridlington)

Douglas-Hamilton, Lord James

Mawby, Ray

Townsend, Cyril D. (Bexleyheath)

Dover, Denshore

Maxwell-Hysiop, Robin

Trotter, Neville

Dunn, Robert (Dartford)

Mellor, David

van Straubenzee, W. R.

Eden, Rt Hon Sir John

Meyer, Sir Anthony

Waddington, David

Faith, Mrs. Sheila

Miller, Hal (Bromsgrove & Redditch)

Wakeham, John

Fenner, Mrs Peggy

Mills, Iain (Meriden)

Walker, Bill (Perth & E Perthshire)

Finsberg, Geoffrey

Mills, Peter (West Devon)

Wall, Patrick

Fisher, Sir Nigel

Moate, Roger

Ward, John

Fletcher-Cooke, Charles

Morrison, Hon Peter (City of Chester)

Warren, Kenneth

Fookes, Miss Janet

Murphy, Christopher

Watson, John

Forman, Nigel

Mytes, David

Wells, Bowen (Hert'rd & Stevn'age)

Fraser, Peter (South Angus)

Neale, Gerrard

Wheeler, John

Gardiner, George (Reigate)

Needham, Richard

Wickenden, Keith

Garel-Jones, Tristan

Nelson, Anthony

Wolfson, Mark

Gorst, John

Neubert, Michael

Gow, Ian

Newton, Tony

TELLERS FOR THE AYES:

Grant, Anthony (Harrow C)

Onslow Cranley

Mr. Robert Boscawen and Mr. Peter Brooke

Greenway, Harry

Page, John (Harrow, West)

NOES

Allaun, Frank

Brown, Robert C. (Newcastle W)

Crowther, J. S.

Archer, Rt Hon Peter

Buchan, Norman

Cryer, Bob

Ashton, Joe

Campbell-Savours, Dale

Cunliffe, Lawrence

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

Canavan, Dennis

Davis, Clinton, (Hackney Central)

Bagler, Gordon A. T

Carter-Jones, Lewis

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

Beith, A. J.

Clark, Dr David (South Shields)

Deakins, Eric

Benn, Rt Hon Anthony Wedgwood

Cocks, Rt Hon Michael (Bristol S)

Dewar, Donald

Bidwell, Sydney

Cowans, Harry

Dixon, Donald

Dobson, Frank

Lestor, Miss Joan (Eton & Slough)

Silkin, Rt Hon John (Deptford)

Dormand, Jack

Lewis, Ron (Carlisle)

Silverman, Julius

Douglas, Dick

Litherland, Robert

Skinner, Dennis

Dubs, Alfred

Lyons, Edward (Bradford West)

Smith, Rt Hon J (North Lanarkshire)

Duffy, A. E. P.

McCartney, Hugh

Snape, Peter

Dunwoody, Mrs Gwyneth

McCrindle, Robert

Soley, Cllve

Eastham, Ken

McElhone, Frank

Spearing, Nigel

Evans, Ioan (Aberdare)

McGuire, Michael (Ince)

Spriggs, Leslie

Evans, John (Newton)

McKay, Allen (Penistone)

Steel, Rt Hon David

Flannery, Martin

McKelvey, William

Slott, Roger

Fletcher, Ted (Darllington)

McTaggart, Robert

Thomas, Mike (Newcastle East)

Foster, Derek

Marshall, Dr Edmund (Goole)

Thomas, Dr Roger (Carmarthen)

Foulkes, George

Maxton, John

Tinn, James

George, Bruce

Millan, Rt Hon Bruce

Wainwright, Edwin (Dearne Valley)

Gourlay, Harry

Miller, Dr M. S. (East Kilbride)

Wainwright, Richard (Colne Valley)

Hamilton, W. W. (Central Fife)

Mitchell, Austin (Grimsby)

Watkins, David

Harrison, Rt Hon Walter

Morton, George

While, Frank R. (Bury & Radcliffe)

Haynes, Frank

Palmer, Arthur

Wigley, Dafydd

Home Robertson, John

Powell, Raymond (Ogmore)

Winnick, David

Hooley, Frank

Race, Reg

Woolmer, Kenneth

Janner, Hon Greville

Rooker, J. W.

Johnson, James (Hull West)

Ross, Ernest (Dundee West)

TELLERS FOR THE NOES:

Jones, Rt Hon Alec (Rhondda)

Ross, Stephen (Isle of Wight)

Mr. James Hamilton and Mr. Donald Coleman

Jones, Barry (East Flint)

Sheerman, Barry

Lamble, David

Question accordingly agreed to.
Amendment proposed: No. 63, in page 12, leave out from beginning of line 30 to end of line 45 on page 13 and insert—
'(5) The following section shall be inserted after section 23 of the Act of 1971—
23A.—(1) It shall be the duty of the Authority to perform its air transport licensing functions in the manner which it considers is best calculated to ensure that British airlines compete as effectively as possible with other airlines in providing air transport services on international routes; and in performing those functions the Authority shall also have regard—

(a) to any advice received from the Secretary of State with respect to the likely outcome of negotiations with the government of any other country or territory for the purpose of securing any right required for the operation by a British airline of any air transport services outside the United Kingdom; and

(b) to the need to secure the most effective use of airports within the United Kingdom.

(2) In considering whether to grant any air transport licence it shall be the duty of the Authority to have regard to the effect on existing air transport services provided by British airlines of authorising any new services the applicant proposes to provide under the licence, and in any case where those existing services are similar (in terms of route) to the proposed new services or where two or more applicants have applied for licences under which each proposes to provide similar services, the Authority shall have regard in particular to any benefits which may arise from enabling two or more airlines to provide the services in question.
(3) Subject to section 3 of this Act and to subsections (1) and (2) of this section, it shall be the duty of the Authority in performing its air transport licensing functions to have regard to the need to minimise so far as reasonably practicable—

(a) any adverse effects on the environment; and

190

(b) any disturbance to the public;

from noise, vibration, atmospheric pollution or any other cause attributable to the use of aircraft for the purpose of civil avation.
(4) In addition to the duties with respect to particular matters imposed on the Authority by the preceding provisions of this section, it shall be the duty of the Authority to perform its air transport licensing functions in the manner which it considers is best calculated to impose on the civil air transport industry of the United Kingdom and on the services it provides for users of air transport services the minimum restrictions consistent with the performance by the Authority of its duties under sections 3, 22 and 23 of this Act and the preceding provisions of this section.
(5) In this section—

(a) references to the air transport licensing functions of the Authority are references to its functions under section 21 to 23 of this Act and any functions conferred on it by regulations made under subsection (1) of section 24 of this Act; and

(b) 'British airline' has the same meaning as in section 3(1) of this Act.".

(6) in section 24 of the Act of 1971—

(a) subsection (2) (which contains provisions relating to guidance given by the Secretary of State under section 3) shall cease to have effect; and

(b) at the end of subsection (6) (duties of the Authority to which the Secretary of State is to have regard determining appeals) after the words "section 3" there shall be inserted the words "and section 23A".

(7) This section, and the repeal of section 24(2) of the Act of 1971 provided for in Schedule 3 to this Act, shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint; but the day appointed under this section must be later than the date of publication of the first statement of the policies of the Civil Aviation Authority under section 12 of this Act.'.—[Mr. Tebbit.]
Question put, That the amendment be made:—
The House divided: Ayes 147, Noes 92.

Division No. 391

AYES

[10.30 pm

Alexander, Richard

Griffiths, Peter (Portsmouth N)

Page, Richard (SW Hertfordshire)

Ancram, Michael

Summer, John Selwyn

Pattie, Geoffrey

Banks, Robert

Hamilton, Michael (Salisbury)

Pollock, Alexander

Beaumont-Dark, Anthony

Hannam, John

Porter, George

Benyon, Thomas (Abingdon)

Haselhurst, Alan

Proctor, K. Harvey

Benyon, W. (Buckingham)

Hawkins, Paul

Rees-Davies, W. R.

Berry, Hon Anthony

Heddle, John

Renton, Tim

Best, Keith

Henderson, Barry

Rhodes James, Robert

Bevan, David Gilroy

Hicks, Robert

Roberts, Michael (Cardiff NW)

Blackburn, John

Hogg, Hon Douglas (Grantham)

Rossi, Hugh

Blaker, Peter

Hooson, Tom

Rost, Peter

Boscawen, Hon Robert

Hordern, Peter

Sainsbury, Hon Timothy

Brinton, Tim

Howell, Ralph (North Norfolk)

St. John-Stevas, Rt Hon Norman

Brooke, Hon Peter

Hunt, John (Ravensbourne)

Shepherd, Colin (Hereford)

Brown, Michael (Brigg & Sc'thorpe)

Jopling, Rt Hon Michael

Shepherd, Richard (Aldridge-Br'hills)

Bruce-Gardyne, John

Kilfedder, James A.

Sims, Roger

Buchanan-Smith, Hon Alick

Knight, Mrs Jill

Skeet, T. H. H.

Buck, Antony

Knox, David

Speed, Keith

Bulmer, Esmond

Lang, Ian

Speller, Tony

Butcher, John

Le Marchant, Spencer

Spicer, Michael (S Worcestershire)

Butler, Hon Adam

Lester, Jim (Beeston)

Squire, Robin

Cadbury, Jocelyn

Lloyd, Ian (Havant & Waterloo)

Stainton, Keith

Carlisle, John (Luton West)

Lloyd, Peter (Fareham)

Stanbrook, Ivor

Carlisle, Kenneth (Lincoln)

Luce, Richard

Stanley, John

Clark, Sir William (Croydon South)

Lyell, Nicholas

Stradling Thomas, J.

Clarke, Kenneth (Rushcliffe)

McCrindle, Robert

Taylor, Teddy (Southend East)

Cockeram, Eric

Maclarlane, Neil

Tebbit, Norman

Colvin, Michael

McNair-Wilson, Michael (Newbury)

Temple-Morris, Peter

Cope, John

McQuarrie, Albert

Thatcher, Rt Hon Mrs Margaret

Cranborne, Viscount

Mates, Michael

Thompson, Donald

Crouch, David

Mather, Carol

Thornton, Malcolm

Dean, Paul (North Somerset)

Maude, Rt Hon Angus

Townend, John (Bridlington)

Dorrell, Stephen

Mawby, Ray

Townsend, Cyril D. (Bexleyheath)

Douglas-Hamilton, Lord James

Maxwell-Hyslop, Robin

Trotter, Neville

Dover, Denshore

Mellor, David

van Straubenzee, W. R.

Dunn, Robert (Dartford)

Meyer, Sir Anthony

Waddington, David

Eden, Rt Hon Sir John

Miller, Hal (Bromsgrove & Redditch)

Wakeham, John

Faith, Mrs Sheila

Mills, Iain (Meriden)

Walker, Bill (Perth & E Perthshire)

Fenner, Mrs Peggy

Mills, Peter (West Devon)

Wall, Patrick

Finsberg, Geoffrey

Moate, Roger

Ward, John

Fisher, Sir Nigel

Morrison, Hon Peter (City of Chester)

Warren, Kenneth

Fletcher-Cooke, Charles

Murphy, Christopher

Watson, John

Fookes, Miss Janet

Myles, David

Wells, Bowen (Hert'rd & Stevn'age)

Forman, Nigei

Neale, Gerrard

Wheeler, John

Fraser, Peter (South Angus)

Needham, Richard

Wickenden, Keith

Gardiner, George (Reigate)

Nelson, Anthony

Wolfson, Mark

Garel-Jones, Tristan

Neubert, Michael

TELLERS FOR THE AYES:

Gorst, John

Onslow. Cranley

Mr. John MacGregor and Mr. Tony Newton

Gow, Ian

Page, John (Harrow, West)

Grant, Anthony (Harrow C)

Page, Rt Hon Sir R. Graham

Greenway, Harry

NOES

Aliaun, Frank

Dobson, Frank

Lambie, David

Archer, Rt Hon Peter

Dormand, Jack

Lestor, Miss Joan (Eton & Slough)

Ashton, Joe

Douglas, Dick

Lewis, Ron (Carlisle)

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

Dubs, Alfred

Litherland, Robert

Bagler, Gordon A. T.

Duffy, A. E. P.

Lyons, Edward (Bradford West)

Beith, A. J.

Dunwoody, Mrs Gwyneth

McCartney, Hugh

Benn, Rt Hon Anthony Wedgwood

Eastham, Ken

McElhone, Frank

Bidwell, Sydney

Evans, Ioan (Aberdare)

McGuire, Michael (Ince)

Brown, Robert C. (Newcastle W)

Evans, John (Newton)

McKay, Allen (Penistone)

Buchan, Norman

Flannery, Martin

McKelvey, William

Campbell-Savours, Dale

Fletcher, Ted (Darlington)

McTaggart, Robert

Canavan, Dennis

Foster, Derek

Marshall, Dr Edmund (Goole)

Carter-Jones, Lewis

Foulkes, George

Maxton, John

Clark, Dr David (South Shields)

George, Bruce

Millan, Rt Hon Bruce

Cocks, Rt Hon Michael (Bristol S)

Gourlay, Harry

Miller, Dr M. S. (East Kilbride)

Coleman, Donald

Hamilton, James (Bothwell)

Mitchell, Austin (Grimsby)

Cowans, Harry

Hamilton, W. W. (Central Fife)

Palmer, Arthur

Crowther, J. S.

Harrison, Rt Hon Walter

Powell, Raymond (Ogmore)

Cryer, Bob

Haynes, Frank

Race, Reg

Cunlifle, Lawrence

Home Robertson, John

Rooker, J. W.

Davis, Clinton, (Hackney Central)

Hooley, Frank

Ross, Ernest (Dundee West)

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

Janner, Hon Greville

Ross, Stephen (Isle of Wight)

Deakins, Eric

Johnson, James (Hull West)

Sheerman, Barry

Dewar, Donald

Jones, Rt Hon Alec (Rhondda)

Silkin, Rt Hon John (Deptford)

Dixon, Donald

Jones, Barry (East Flint)

Silverman, Julius

Skinner, Dennis

Slott, Roger

Wigley, Dafydd

Smith, Rt Hon J (North Lanarkshire)

Thomas, Mike (Newcastle East)

Winnick, David

Snape, Peter

Thomas, Dr Roger (Carmarthen)

Woolmer, Kenneth

Soley, Clive

Wainwright, Edwin (Dearne Valley)

Spearing, Nigel

Wainwright, Richard (Colne Valley)

TELLERS FOR THE NOES:

Spriggs, Leslie

Watklns, David

Mr. James Tinn and Mr. George Morton.

Steel. Rt Hon David

White, Frank R. (Bury & Radcliffe)

Question accordingly agreed to.

Clause 12

  PERIODICAL PUBLICATION OF POLICIES BY CIVIL AVIATION AUTHORITY
  Mr. Tebbit: I beg to move amendment No. 41, in page 14, line 1, leave out from beginning to 'to' and insert
  'It shall be the duty of the Civil Aviation Authority'.
  Mr. Deputy Speaker: With this we may discuss the following amendments:
  No. 42, in page 14, line 2, leave out 'from time to time' and insert 'on a regular basis.'.
  Government amendments Nos. 43, 44, 64 and 47.
  Mr. Tebbit: I think that I can deal with these matters fairly briefly. [HON. MEMBERS: "Hear, hear."] I am glad that the House agrees with me.
  Amendment No. 41 removes the words
  "The Civil Aviation Authority shall be under a duty",
  and substitutes
  "It shall be the duty".
  That is merely designed to use the same form of words throughout the Bill. Amendment No. 42 requires the CAA to publish its licensing policy "on a regular basis" rather than "from time to time". That is an amendment favoured by my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle). I hope that he will not be too disappointed if I again tell him that I do not favour that amendment. I do not think that the CAA should be required to do this on a regular basis. The first occasion on which it will publish this policy will be six months after the coming into effect of the Bill in general terms, and we do not want it to be publishing policy thereafter every six months; we want it only as publication is needed, when there is a change.
  Amendment No. 43 is consequential on No. 47, to which I shall refer in a moment. Amendment No. 44 is consequential upon the decision to amend
  194
  clause 11, to bring it into force on a day appointed, which is to be after the publication of the CAA policy statement. Had we not made this further amendment we would have landed ourselves in considerable difficulties. That puts the whole thing right again.
  Amendment No. 64 gives effect to the spirit of an amendment moved by my hon. Friend the Member for Brentwood and Ongar, so he has won something, at any rate, in this debate. That allows the Secretary of State to require the authority to publish statements of its policy on particular matters as he may think fit.
  Amendment No. 47, to which I referred, requires the CAA to incorporate in its annual reports any policy statements that it makes during the year. That makes a convenient peg on which to hang, if necessary, a debate on those matters, since there could be a debate on the report of the CAA if the Opposition so wished.
  I ask the House to agree to amendments Nos. 41, 43, 44, 64 and 47, and I hope that my hon. Friend will agree to ask leave to withdraw amendment No. 42.
  Mr. McCrindle: I get the impression that the House will not be disappointed if I restrict my remarks to a few minutes. I should, perhaps, be forgiven if I say that consistently during the stages of the Bill I have tried to put pressure on my hon. Friend the Under-Secretary without, as the House will have noticed, a great deal of success so far.
  Nevertheless, I do not wish to look a gift horse in the mouth. I think that my hon. Friend was saying that though he cannot quite accept amendment No. 42 he feels that the spirit behind it is implicit in his acceptance of one of the other amendments. On that basis, he will be happy to know that I shall not seek to press amendment No. 42.
  Amendment agreed to.
  Amendments made: No. 43, in page 14, line 2 leave out
  '(in such manner as it thinks fit)'.
  No. 44, in page 14, line 7, leave out 'section 11 of this Act' and insert this section'.
  No. 64, in page 14, line 7 at end insert—
  '(2A) If the Secretary of State considers it appropriate to do so, he may by notice in writing require the Authority to publish a statement of the policy it intends to adopt with respect to any particular matter in performing those functions (or any of them); and it shall be the duty of the Authority to publish any statement required by a notice under this subsection within six months of the date of the notice.
  (2B) The Secretary of State may require the Authority to publish a statement of the policy it intends to adopt in relation to any of its functions under section 23A of the Act of 1971 notwithstanding that section 11 of this Act is not yet in force.'.—[Mr. Tebbit.]
  Clause 17

SOUND-PROOFING GRANTS TO BE TAKEN INTO ACCOUNT IN DETERMINING COM- PENSATION FOR DEPRECIATION.
Mr. Tebbit: I beg to move amendment No. 49, in page 16, line 42 after 'made' 'insert' (a).
Mr. Deputy Speaker: With this we may take Government amendment No. 50.
Mr. Tebbit: These amendments extend the provisions of clause 17 to Northern Ireland. Their purpose is to ensure that the relevant legislation in Northern Ireland is consistent with that applying in the remainder of the United Kingdom.
Amendment agreed to.
Amendment made: No. 50, in page 16, line 43 leave out from '1973' to 'corresponding' and insert:
and

(b) in Article 7(3) of the Land Acquisition and Compensation (Northern Ireland) Order 1973;

(which respectively make provision for Scotland and for Northern Ireland '.—[Mr. Tebbit.]
Clause 25

CITATION, COMMENCEMENT AND EXTENT
Amendment made: No. 51, in page 22, line 1, leave out subsection (2).—[Mr. Tebbit.]
Mr. Tebbit: I beg to move amendment No. 52, in page 22, line 7, leave out subsection (3) and insert—
196
(3) This Act, except sections (Extension of powers of British Airports Authority) and (Acquisition of land by agreement by British Airports Authority), extends to Northern Ireland.'.
All that I need say is that this is a consequential amendment arising out of the two new clauses which were agreed to earlier.
Amendment agreed to.

Schedule 3

  ENACTMENTS REPEALED
  Mr. Tebbit: I beg to move amendment No. 55, in page 26, line 6, column 3, at end insert—
  'In section 10(2) the words "(1) or (2)".'.
  Mr. Deputy Speaker: With this we may take Government amendments Nos. 66 and 56 to 58.
  Mr. Tebbit: This too, I am glad to say, is a consequential amendment. It arises from the replacement of section 8 of the Civil Aviation Act 1971, which deals with the borrowing powers of the CAA, by new clause 4. Its purpose is to repeal a reference in subsection 10(2) of the 1971 Act, as amended by the 1978 Act.
  Amendment agreed to.
  Amendments made:
  No. 66, in page 26, line 8, column 3, at end insert 'section 24(2).'
  No. 56, in page 26, line 23, at end insert—
  '1974 c.8.
  The Statutory Corporations (Financial Provisions) Act 1974.
  Schedule 2, paragraph 7.
  1975 c.55.
  The Statutory Corporations (Financial Provisions) Act 1975.
  In Schedule 2, the words, "The Civil Aviation Authority".
  Schedule 4, paragraph 6(a).'.
  No. 57, in page 26, line 24, column 3, at beginning insert—
  'Section 5(1) and (2).'.
  No. 58, in page 26, line 24, column 3, leave out from '1' to end of line 25 and insert
  'paragraphs 5, 6(9(a) and (b) and 9(2).'.—[Mr. Tebbit.]

  Title
  Mr. Tebbit: I beg to move amendment No. 59, in line 7, after '1971', insert
  'to amend section 4 of the Civil Aviation (Eurocontrol) Act 1962;
  Mr. Deputy Speaker: With this we are to take Government amendments Nos. 60 and 67.
  Mr. Tebbit: I am informed by my right hon. Friend the Prime Minister that these are all consequential amendments. They amend the title of the Bill to take account of earlier amendments.
  Amendment agreed to.
  Amendments made:
  No. 60, in line 12, leave out 'and'.
  No. 67, in line 12, at end insert
  'to extend the powers of the British Airports Authority in relation to aerodromes outside Great Britain and clarify its powers in certain other respects; to enable that Authority to acquire certain land by agreement; and to enable the owners and managers of certain aerodromes to make byelaws in relation to lost property found at those aerodromes.'.—[Mr. Tebbitt.]
  Bill to be read the Third time tomorrow and to be printed. [Bill 238.]

  STATUTORY INSTRUMENTS, &c.
  Mr. Deputy Speaker: In order to save the time of the House I propose to put together the Questions on the two motions to approve statutory instruments, that is to say, motions Nos. 5 and 6 on the Order Paper.
  Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory instruments, &c.).

  STATUTORY INSTRUMENTS, &c.
    INSURANCE
    That the draft Insurance (Transfer of General Business) Regulations 1980, which were laid before this House on 2 June, be approved.

    ATOMIC ENERGY AND RADIOACTIVE SUBSTANCES
    That the draft National Radiological Protection Board (Constitution Amendment) Order 1980, which was laid before this House on 3 June, be approved.—[Mr. Cope.]
    Question agreed to.

  NEWCASTLE UPON TYNE (PUBLIC EXPENDITURE)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]
  10.51 pm
  Mr. Mike Thomas: I sometimes wonder whether the Government have any idea of what life is like in the city that I and my hon. Friends who have been kind enough to join me tonight represent. At present, there are 14,000 people unemployed in Newcastle. In some of the wards that we represent, male unemployment exceeds 20 per cent. One out of every five men who are able to work cannot get a job. One in three experiences unemployment at some time during each year.
  Because of the lack of job opportunities, even these horrific and tragic figures understate the problem, for so demoralised are some, particularly women, that they now do not even seek a job and thus do not get into the statistics. That is not surprising when it is realised that for every vacancy there are, on average, 20 unemployed people.
  For some traditional skills the position is almost hopeless. In March, for example, there were 597 unemployed platers chasing just three jobs. For the 460 riggers seeking work there were no vacancies whatever. If we add to that the torrent of redundancies in the area, which are now running at about 8,000 a year and threaten to engulf the region, the position for the city's unemployed can only be said to be very bleak indeed.
  The economic circumstances of the people of Newcastle are not of their making and are reflected in their quality of life. In England as a whole, about 60 per cent. of households—six in 10—have access to a car. In inner urban Newcastle, only one in four has such access. Almost half of all council tenants in Newcastle receive a rent rebate or supplementary benefit, whereas for Great Britain as a whole the figure is under 40 per cent.
  In the city of Newcastle, 38 per cent. of schoolchildren are entitled to free meals. That compares with only about a quarter in all other metropolitan districts. Compared with the rest of the

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  country, Newcastle has substantially higher proportions of elderly people, of registered disabled, of children in care—indeed, of every kind of deprivation and poverty that this country knows.
  What the Government cannot seem to grasp is that all this makes the well-being of the people of Newcastle dependent upon public spending to a major degree —indeed, more dependent than almost any other major city in the country. "Cut public spending" may be a cosy slogan if someone lives in the stockbroker belt and sends his children to a private school, but for the people in Newcastle public spending is the difference between having a job and being on the dole, between living in a decent environment and living in a slum, between an inside toilet and a privy in the back yard.
  Four in 10 jobs in the Newcastle area are in the public service—the National Health Service, local government, the Civil Service, the DHSS office in my constituency and elsewhere. Even in private manufacturing industry about 38 per cent. of the jobs depend upon public spending. Whether they are in shipyards in my constituency—the Walker yard and the Neptune yard—C. A. Parsons, the power plant company, the heavy engineering plants or in the defence industries that are based in my hon. Friends' constituencies, those jobs—38 per cent. of the manufacturing work force —depend upon public spending.
  The Government have accepted that Newcastle has special problems of deprivation and disadvantage by giving a partnership to the city—the inner city partnership scheme. For years, long before the partnership scheme, the special problems of the city—that depressing vicious spiral of low educational attainment, unemployment, poor living conditions, family stress—had been dealt with by the city council, and not without success. In education, the expansion of the polytechnic and the college of arts and technology has dramatically expanded educational opportunity in the city.
  In the social services, delivery of services directly to individuals and families in need has substantially alleviated the problems of inner city poverty. In housing, over the last 10 years the figure of one in five Newcastle households that lacked the basic amenities—a bath in the
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  house, a hot water supply and an inside toilet—has been cut to only nine in 100 households—thank God. That at last puts Newcastle within reaching distance of the national average.
  The reason for my speaking about this subject tonight is the Government's response to these problems. High interest rates and economic recession are making these services even more necessary than in the past—and what are the Government doing about them? They are telling the city council in Newcastle to cut its budget, and despicably—I use the word advisedly—in briefings to the press, because they dare not say it openly, they are saying that if the city council does not cut its services they will take away the inner city partnership money. That is a disgrace, and the Minister should have no part in it.
  On one estimate—the manoeuvrings and the briefings make it difficult to discern what is being said—the Government want to cut £11 million from the city's budget. We may ask why. Is it because Newcastle is a profligate spender and is trying to grow too fast in a time of economic difficulty? No, the facts do not support that. Newcastle's budget has grown by only 6 per cent. per annum in real terms during the last six or seven years since 1974–75, in a period during which the expenditure of local authorities has grown 7½ per cent. Is it because Newcastle has some sort of overweening bureaucracy that is running out of control? No, it cannot be that either.
  When we look at the pattern of spending in the city, we see to its credit that the council has consistently made sure that spending has been concentrated on direct services to individuals and families rather than on administrative growth. An example of that is that if the whole central administration were wiped out tomorrow it would save only £7 million of the £11 million that the Government apparently seek in cuts from the city's budget. Is it because the city is excessively overstaffed? That cannot be. Newcastle employs 500 fewer people than it did a year ago—and that in a city that is under tremendous pressure to increase public service employment because of the benefit that it brings to the community as a whole.
  The truth is that the Government have got themselves entwined in the old national numbers game. Their slogan is "Get

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  the algebra right, get the formulae right, but forget about the problems and the people. Never mind that Newcastle has a different and bigger problem than, say, Nantwich or Newbury; just tell it to get its figures in line." That is what the Government say.
  People in my constituency, in places such as Walker, the community by the riverside and the shipyards, rightly believe that their councillors are better judges of their needs than are the civil servants in Marsham Street. They would like to ask them some elementary questions.
  Why will Newcastle's support from the Government through the needs element of the rate support grant, which is supposed to help and discriminate in favour of inner city areas such as Newcastle, have risen by only 90 per cent., on the Department's own figures, between 1974–75 and 1980–81 when the average for all metropolitan districts will be 117 per cent. and the surrounding districts—for example, South Tyneside—will be 170 per cent., which is almost twice as much?
  I am told—I find this hard to believe, but I have it on good authority—that the formula works on the basis of how many single-parent families the city had in the 1971 census and that if we had a few more single-parent families each would be worth £4,500 to the city in rate support grant. I wonder whether my constituents are to draw the conclusion that the only way to get adequate help for the city from the Government is for there to be a major rise in its divorce rate before the 1981 census or for a number of single young ladies to get into a state which I assume they would prefer to avoid. If this is the result that the formulae, the algebra, the magic figures produce in Marsham Street, the sooner it is abandoned the better. If the rate support grant were fairly calculated, support for Newcastle from central Government funds would be at least £5½ million more than it is—the equivalent of an 11p rate.
  In putting the city's housing to rights, the council has incurred debt charges. Why should my constituents be penalised when Government policy on inflation and interest rates has raised the cost of servicing that debt by one-third since the Government came to office—the equivalent of an 8p rate—and why, in addition, should the council be made to raise an extra 40p in the pound rate for contin-
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  gencies for inflation and interest payments still to come? My constituents ask why the Government, having got them into this kind of mess, are now clobbering them as they try to get out of it.
  Let us look at the potential effects if the Government insist on their pound of flesh. A reduction of the magnitude asked for could be achieved only by a general cutback in services to the public —home helps, teachers, meals on wheels, social work support, whatever one cares to name. If we were to cut education to this degree pro rata, it would mean an end to nursery education, youth services, the whole of the adult education programme and the loss of 300 teachers. In social services, it would mean 35 fewer social workers, 120 fewer workers in residential homes, 160 fewer home helps, and equivalent numbers in other areas would have to go as well.
  Even that draconian programme would not achieve the Government's objectives. As a direct result of pursuing that policy, public spending would rise on unemployment benefit, social security payments, health services and no doubt law and order as youngsters on the dole became more and more frustrated, and, of course, the Government would lose the tax and national insurance payments of those who are out of work.
  I hope that the Minister will have some answers to the questions that I have posed. I speak not with any sense of special pleading but to reflect the anger of the people of a great city at the way in which they are being treated and the determination of all those elected to look after their interests, whether they be Members of Parliament, councillors or in whatever capacity, to ensure that their needs and local democratic rights are not ignored.
  As the nation plunges deeper and deeper into recession, and as we see more problems of unemployment and family problems as a result, the needs of people in places such as Newcastle will become greater, not decrease. I wish that I could believe that the Government understand that. Now is the time for the Government's rhetoric of compassion to be judged against their action. Newcastle has spent a quarter of a century trying to redress the legacy of the Industrial Revolution. It will take more than the Government or the Minister to make us start to set the clock back once again.
  11.5 pm
  Mr. Robert C. Brown: First, I compliment my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas) on initiating the debate and making an excellent speech. He has far from overstated the case. In parts of my constituency—for example, in Scotswood and Blakelaw—the picture is one of almost complete despair. I say "almost" advisedly, because but for the help and support of dedicated people employed by the city council who have worked so hard in the inner city partnership area to give support, the despair, especially among youngsters who have never known the pleasure of gainful employment since leaving school, would have been complete.
  A month ago, as my hon. Friend said, Newcastle had 14,000 unemployed. Within that month what prospect, what future, faced another 1,000 or so school leavers? In addition, there is the certainty that many more adults will be made redundant as the policy of this despicable Government bites harder into what is left of the city's industry and their spending cuts savage still further the 40 per cent. of all jobs in the public services.
  If Madam Flintstone Heart, the Prime Minister, carries out her promise to reduce the number of civil servants by 15 per cent., that reduction in Newcastle alone will mean another 2,000 jobs lost. Surely the Government must realise—if they do not realise it now, the sooner they do so the better—that to limit spending in this financial year on employment and training to last year's level, as they propose, with 21 per cent. inflation and galloping unemployment, and to cut spending next year, is, to put it mildly, indecent and heartless.
  If there were an increase in spending in the next five years of 28 per cent. on regional development grants, selective assistance to industry of 150 per cent., section 8 selective assistance of 85 per cent. and a 40 per cent. increase in industrial training, the Northern region strategy team could create 63,000 new jobs by 1991. However, even that would leave the region with 79,000 unemployed on the basis of the present figure of 142,000 without work in the North.
  The Secretary of State and his minions at Marsham Street must have gone completely bananas. It cannot be heatstroke
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  that is the cause. It is probably water on the brain. The Secretary of State is asking for the city to reduce its spending by '£11 million. Surely, with his extremely privileged background he must realise that it is not possible to turn off public spending like water from a tap.
  Any major cuts in public spending must, of necessity, hurt those who are already suffering most deprivation—the sick, the disabled, the long-term unemployed and old people. If we are to experience famine for two years, those who are grossly overweight because of rich living can live off their fat, but the undernourished will starve. It is as simple as that.
  The personal social services are needed more than ever in Newcastle. The Government's own advisory body, the Personal Social Services Council, recently said:
  "Cuts of the order envisaged by the Government cannot be achieved, in the Council's view, without a serious deterioration in the quality and range of social services…The prospects of those who rely on such services will be diminished to an extent that should be unacceptable in a just society."
  For God's sake, let the Government stop digging the pit any deeper lest they dig so deep that we can never again climb out.
  [11.9 pm
  Mr. Harry Conans: I rise to support my hon. Friends the Members for Newcastle upon Tyne, East (Mr. Thomas) and for Newcastle upon Tyne, West (Mr. Brown), and I thank them for this opportunity to speak. They have both ably put the case. In the short time left to us I should like to say that I see the purpose of this debate as trying to get some answers to the innuendoes that regularly come from the Government.
  During the last 15 years, 10 of which I have spent on local authorities on Tyneside—I understand that the Minister shares a bit of this background—and for six years of which I chaired a major committee, I have found that one of the things that bedevil local authorities is that the circulars that come constantly from the central Government are gobbledegook. Time and again local authorities want to do something, and the central Government put the other side of the coin.

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  In the Northern region—the rate support grant general needs element is supposed to support this; this was the reason for the needs element—we have, overall, a 9 per cent. unemployment rate. But statistics are wont to disguise the actual effect. In two wards of my constituency, the figures are 15 and 20 per cent. This in itself causes a strain on local government finance which the RSG needs element was supposed to take care of. My hon. Friend the Member for Newcastle upon Tyne, East has amplified that point.
  I want to ask the Minister some pertinent questions. Circulars from the central Government normally set a norm rate levy of 199p in the pound. As 150 local authorities have already broken that norm, one can only assume that the norm has now risen beyond that. If the alteration is to 155p, 20 local authorities, including that of Newcastle, have broken that. Perhaps the Minister will say tonight what is the present norm. Will he say whether that will be static, so that local authorities that try to implement Government policy, even with the best will in the world, will have something to go by?
  I should like to mention the immoral blackmail of local authorities. Governments of all colours have honoured the inner city partnership agreement. That reflected the spending allocation from the Government. In Newcastle's case, the total sum is about £2·8 million in the current year. That is £0·7 million from the local authorities and the balance is made up by the Government. We then read a speech—again an innuendo with no facts—delivered by the Secretary of State to the Association of District Councils on 27 June, in which he said:
  "I am also considering the support of central Government to inner city authorities under the programme and partnership arrangements."
  Perhaps the Minister would like to tell us what that means.
  I should like to remind the Minister of some of the priorities of the partnership agreement which the Government honoured. One was to encourage industry and commerce. For Newcastle, where unemployment is high, that is a good thing. Another was to improve living conditions.
  This is immoral blackmail of, and the imposition of a penalty on, an authority
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  that is already badly off and is trying to do its best. Perhaps the Minister will give us some answers that will last not just for today but for the next month or so. Will he reflect on the fact that we are not begging? We are placing facts before him. Perhaps he will reflect on those facts and give us some concrete answers.
  11.13 pm
  The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg): In eight minutes it is impossible to answer the barrage of statements by Opposition Members the like of which I have seldom heard in an Adjournment debate in the 10 years that I have been in this House. Coming from the hon. Member for Newcastle upon Tyne, West (Mr. Brown), who was a member of the previous Government who, at the diktat of the International Monetary Fund, had to make the most abject crawling to reduce public expenditure, I regard that as sheer nonsense.
  Let me say a few things which indicate that Newcastle has done virtually nothing to help itself. [HON. MEMBERS: "Oh!"] Virtually nothing to help itself.
  Mr. Mike Thomas: Disgraceful!
  Mr. Finsberg: First, we need to look at the manpower situation. The Government have asked for manpower reductions that will be met by natural wastage. The joint manpower watch figures show that although Newcastle employed 2·1 per cent. fewer full-time staff in March 1980 compared with the March 1979 figure, it has since increased its part-time staff by 5·3 per cent. On the face of it, it does not look as though a serious effort is needed to comply with the Government's overall spending targets for local government. We have always operated on the basis of a voluntary relationship between central and local government. The Government value that relationship. Local authorities have always recognised the Government's right to determine the overall level of local government spending. They should be in no doubt that they will threaten that traditional voluntary relationship if they persist, by their plans, in challenging the Government's overall spending plans which are crucial to our economic survival.

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  Let us consider Newcastle. The impact of the cuts depends very much on the decisions of the city council. We have asked for overall reductions, but individual authorities must decide where savings can be made. It has been alleged that Newcastle's high rates are due to the lack of rate support grant. That is rubbish. Newcastle has consistently levied substantially higher rates than the average for metropolitan districts in every year since 1974–75. That reflects high levels of expenditure, not a drying up of RSG.
  In response to the Government's spending targets, Newcastle has referred to the need to tackle the special problems of poor housing in its area. Newcastle's housing investment programme was allocated £18·5 million. Its allocation was enhanced to take account of the special need in the inner area of the city through the concentration of the needs element. This is distributed to partnership and programme, authorities and is part of the Government's policy of bending main programmes in favour of inner city areas.
  Reference has been made to the city's status as a partnership authority. Hon. Members have suggested that it is inconsistent for the Government to give resources in recognition of that status and then to call for reductions in spending by the city. Hon. Members should ask the city authorities whether their actions, in attempting to justify such a high level of spending, may not call into question whether the Government can continue to accept such inconsistency, and whether a flouting of Government policy might not call into question the city council's commitment to partnership.
  Hon. Members might ask the city council a few other questions. The document produced in response to public expenditure cuts states that the fundamental weakness of the local economy is recognised by the city council to be the root cause of many of the problems faced by the people of Newcastle. It is said that economic development has a high priority. Has the city council considered that its actions—in having almost the highest rate levels in the country—may be a deterrent to business and may actively work against that priority?
  I went to Newcastle once a fortnight for 20 years before I became a Minister, and I know something of the problems of
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  Newcastle and of its industry. May it not be that industry and commerce, which will provide the productive jobs that hon. Members say are desperately needed, will set up elsewhere? [HON. MEMBERS: "Name one."] The city's base will be weakened and it will become more difficult to provide the jobs and services that those in Newcastle need. How is such a high priority reflected in the city council's contribution to partnership activities? It puts only 13 per cent. of its partnership allocation into them. Hon. Members would be well advised to tell the city council that it would do better to translate its high intentions into practical actions.
  I shall leave hon. Members with some thoughts. If they believe that it is right to create jobs, the city council should provide a stronger rate base to pay for the services that hon. Members say are needed. It should do so at a lower cost to the hard-pressed ratepayers of the area. (HON. MEMBERS: "Come on" Newcastle is not alone in arguing that special circumstances mean that the reductions are not realistic. In virtually every case that I have come across, the consequences of the cuts have been greatly exaggerated.
  The particular problems of Newcastle and of other cities with severe inner area problems have been taken into account in the Governments allocations. Its problems do not exempt it from the reductions for which we have called. Neither Newcastle nor any other local authority can opt out of the problems facing the country. We sink or swim together.
  What was done by Labour Members—particularly the hon. Member for Newcastle upon Tyne, West during the years that he decorated the Government Front Bench—was to print money, believing that that would solve every problem. It is precisely because this Government are having to rescue the country from the profligate expenditure that the hon. Members encouraged with their votes for 10 years that we have to put matters right.
  I said at the beginning that the tone adopted by those Labour Members present was one that I had not heard in an Adjournment debate for 10 years. When the Conservatives were in Opposition, we tried to look at such matters constructively, realising that there was no way of isolating a particular city from the problems of the rest of the nation.

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  Newcastle, of course, has its problems. That is precisely why in the HIP allocation we put in a special amount for the needs of the inner city area there. We believe that it is only upon the backs of profitable private enterprise that fresh employment can be created. Shuffling around bits of paper does not create fresh employment.
  I have said that the manpower reductions that the Government are calling for can be met by natural wastage. I advise Newcastle city council to examine that matter most seriously. If it does not, it will have only itself to blame.
  Mr. Robert C. Brown: What the hon. Gentleman is talking about means the dole.
  Mr. Finsberg: Natural wastage does
  210
  not mean the dole, as the hon. Gentleman knows perfectly well in his usual more rational moments.
  Hon. Members have not done justice to the hard work being done by the industrialists in Newcastle who are trying to provide jobs but whose difficulty is that growing high rates are forcing them away. Hon. Members should learn that fact of life—
  The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-one minutes past Eleven o'clock.

AGRICULTURE, FISHERIES AND FOOD
  Newport Docks (Sewage Disposal)
  Newport Docks (Sewage Disposal)
  Fisheries
  Fisheries
  Butter
  Butter
  Sheepmeat
  Sheepmeat
TRADE
  Weights
  Weights
  Foodstuffs
  Foodstuffs
  Sewage Sludge Vessel (Newport)
  Sewage Sludge Vessel (Newport)
  Iron and Steel and Motor Vehicles
  Iron and Steel and Motor Vehicles
  Estate Agents Act 1979
  Estate Agents Act 1979
  China and Taiwan
  China and Taiwan
  Insurance Costs
  Insurance Costs
  Japanese Cars (Imports)
  Japanese Cars (Imports)
  Footwear Industry
  Footwear Industry
CIVIL SERVICE
  Government Publications
  Government Publications
  Pay and Conditions
  Pay and Conditions
  Pensions
  Pensions
  Her Majesty's Stationery Office
  Her Majesty's Stationery Office
EMPLOYMENT
  School Leavers
  School Leavers
  Newham
  Newham
  Manpower Services Commission
  Manpower Services Commission
  Employment Statistics
  Employment Statistics
  Special Temporary Employment Programme
  Special Temporary Employment Programme
  Recruitment (Minimum Ages)
  Recruitment (Minimum Ages)
  North-West England
  North-West England
  EUROPEAN COMMUNITY (COUNCIL OF FISHERIES MINISTERS)
  EUROPEAN COMMUNITY (COUNCIL OF FISHERIES MINISTERS)
INDUSTRY
  Gwynedd
  Gwynedd
  Metrication
  Metrication
  New Technology
  New Technology
  Textile Industry
  Textile Industry
  South Yorkshire
  South Yorkshire
  Industrial Common Ownership Finance Limited
  Industrial Common Ownership Finance Limited
  Assisted Areas
  Assisted Areas
HOME DEPARTMENT
  Horserace Betting Levy Board
  Horserace Betting Levy Board
  Custodial Establishments (Refurbishment)
  Custodial Establishments (Refurbishment)
  New Prison Places
  New Prison Places
  Welsh Language Broadcasting
  Welsh Language Broadcasting
  Shoplifting
  Shoplifting
  Departmental Organisations (Wages and Salaries)
  Departmental Organisations (Wages and Salaries)
  Parole System
  Parole System
  Prisons (Overcrowding)
  Prisons (Overcrowding)
  Drunken Offenders (Lancashire)
  Drunken Offenders (Lancashire)
  Parking (Diplomatic Immunity)
  Parking (Diplomatic Immunity)
  Insurance Costs
  Insurance Costs
  Summer Time
  Summer Time
  Abdul Gafvor
  Abdul Gafvor
  Scientologists
  Scientologists
  Parliamentary Constituency Boundaries
  Parliamentary Constituency Boundaries
  BBC External Services
  BBC External Services
  Public House Amusement Machines
  Public House Amusement Machines
  Metropolitan Police
  Metropolitan Police
  Police Radar (Detection Devices)
  Police Radar (Detection Devices)
  Blood Sports
  Blood Sports
  Television and Broadcasting (Merseyside)
  Television and Broadcasting (Merseyside)
HOUSES OF PARLIAMENT
  Parliamentary Papers
  Parliamentary Papers
  LIBRARY SERVICES
  LIBRARY SERVICES
HOUSE OF COMMONS
  Debates on European Community
  Debates on European Community
  MINISTERIAL SALARIES
  MINISTERIAL SALARIES
  INSURANCE COSTS
  INSURANCE COSTS
INDUSTRY
  Laboratory of the Government Chemist
  Laboratory of the Government Chemist
  Iran (Sanctions)
  Iran (Sanctions)
  Rolls-Royce (1971) Limited
  Rolls-Royce (1971) Limited
  JURY VETTING
  JURY VETTING
  British Shipbuilders (Orders)
  British Shipbuilders (Orders)
  DRUG OFFENCES (HOUSE OF LORDS JUDGMENT)
  DRUG OFFENCES (HOUSE OF LORDS JUDGMENT)
IMMIGRATION
  (Habeas Corpus Applications)
  (Habeas Corpus Applications)
  IRAN (SANCTIONS)
  IRAN (SANCTIONS)
  COURT SHORTHAND WRITERS
  COURT SHORTHAND WRITERS
  Ambulance Services
  Ambulance Services
  LEGAL AID
  LEGAL AID
WALES
  Area Health Authorities (Ancillary Staff)
  Area Health Authorities (Ancillary Staff)
  Local Education Authorities (Non-teaching Staff)
  Local Education Authorities (Non-teaching Staff)
  Pop Festivals
  Pop Festivals
  Nuclear Waste
  Nuclear Waste
  Port Talbot
  Port Talbot
FOREIGN AND COMMONWEALTH AFFAIRS
  Chiangmai (British Consulate Property)
  Chiangmai (British Consulate Property)
  Official Visitors
  Official Visitors
  United Nations Conference on Disarmament
  United Nations Conference on Disarmament
  Republic of Ireland
  Republic of Ireland
  Libyan People's Bureau
  Libyan People's Bureau
  Insurance Costs
  Insurance Costs
  United Nations Decade for Women
  United Nations Decade for Women
  Albania (Gold)
  Albania (Gold)
  Angola
  Angola
  Taiwan
  Taiwan
  Afghanistan
  Afghanistan
EUROPEAN COMMUNITY
  United Kingdom Receipts and Payments
  United Kingdom Receipts and Payments
  Budget
  Budget
ENERGY
  Coking Coal (Wales)
  Coking Coal (Wales)
  Alternative Energy Sources
  Alternative Energy Sources
  Natural Gas
  Natural Gas
  Nationalised Industries (Surplus Property)
  Nationalised Industries (Surplus Property)
  European Community (Energy Costs)
  European Community (Energy Costs)
TRANSPORT
  M25 (Public Inquiry)
  M25 (Public Inquiry)
  Public Expenditure (Roads)
  Public Expenditure (Roads)
  Child Pedestrians
  Child Pedestrians
  Road Accidents
  Road Accidents
  Transport Authorities
  Transport Authorities
  Radioactive Material Transportation (Keighley)
  Radioactive Material Transportation (Keighley)
  Driving Tests
  Driving Tests
ENVIRONMENT
  Radioactive Waste (Disposal)
  Radioactive Waste (Disposal)
  British Waterways Board
  British Waterways Board
  Property Services Agency
  Property Services Agency
  Conservation and the Countryside Heritage
  Conservation and the Countryside Heritage
  National Parks
  National Parks
  Smoke Control
  Smoke Control
  Shorthold Tenancies
  Shorthold Tenancies
  Fireproof Barriers
  Fireproof Barriers
  Special Housing
  Special Housing
  Tenants' Charter
  Tenants' Charter
DEFENCE
  Russia (Military Expenditure)
  Russia (Military Expenditure)
  United States Forces
  United States Forces
  Polaris (Modernisation)
  Polaris (Modernisation)
  Tornado Aircraft
  Tornado Aircraft
SCOTLAND
  Household Statistics
  Household Statistics
  Electorate
  Electorate
  Rates
  Rates
  Area Health Authorities (Ancillary Staff)
  Area Health Authorities (Ancillary Staff)
  Local Education Authorities (Non- Teaching Staff)
  Local Education Authorities (Non- Teaching Staff)
  Nuclear Power Station (Torness)
  Nuclear Power Station (Torness)
  Civil Service Accommodation
  Civil Service Accommodation
  Holyrood Palace
  Holyrood Palace
  Home Insulation
  Home Insulation
  Sheep (Guaranteed Prices)
  Sheep (Guaranteed Prices)
SOCIAL SERVICES
  Children in Care
  Children in Care
  Industrial Action (Days Lost)
  Industrial Action (Days Lost)
  St. George's Hospital
  St. George's Hospital
  One-parent Families
  One-parent Families
  District General Hospitals
  District General Hospitals
  Supplementary Benefit
  Supplementary Benefit
  Medical Research Workers
  Medical Research Workers
  Members (Correspondence)
  Members (Correspondence)
  Supplementary Benefit Recipients (Home Help Services)
  Supplementary Benefit Recipients (Home Help Services)
  Disabled Persons
  Disabled Persons
  Byssinosis
  Byssinosis
  Reconditioned Invalid Vehicles
  Reconditioned Invalid Vehicles
  Fluoride
  Fluoride
  National Health Service (British Nationals)
  National Health Service (British Nationals)
  Oil of Bergamot
  Oil of Bergamot
  Breathalyser Apparatus
  Breathalyser Apparatus
EDUCATION AND SCIENCE
  European Studies
  European Studies
AGRICULTURE, FISHERIES AND FOOD
  Sugar
  Sugar
NATIONAL FINANCE
  Fleet Street Tax Amnesty
  Fleet Street Tax Amnesty
  Manufacturing Output
  Manufacturing Output
  Output Statistics
  Output Statistics
  Inland Revenue and Customs and Excise (Leeds Experiment)
  Inland Revenue and Customs and Excise (Leeds Experiment)
  "Economic Trends"
  "Economic Trends"
  Tax-free Attendance Allowances
  Tax-free Attendance Allowances
  Company Savings
  Company Savings
  Insurance Costs
  Insurance Costs
  Companies (Appropriation Account)
  Companies (Appropriation Account)
  Exports Credits Guarantee Department
  Exports Credits Guarantee Department
  Manufacturing
  Manufacturing
  Index-linked Pensions
  Index-linked Pensions
  Special Grants
  Special Grants
  Customs Clearance Systems
  Customs Clearance Systems
  Disabled Persons
  Disabled Persons
  Home Loans (Tax Relief)
  Home Loans (Tax Relief)
  Motability
  Motability
  Disabled Persons (Tax Incentives)
  Disabled Persons (Tax Incentives)
  Higher and Further Education
  Higher and Further Education
  Personal Allowances
  Personal Allowances
  Development Land Tax
  Development Land Tax
  Mortgages (Tax Relief)
  Mortgages (Tax Relief)
  Textiles (Illegal Imports)
  Textiles (Illegal Imports)
  Fishing Industry
  Fishing Industry
  House of Lords (Attendance Allowance)
  House of Lords (Attendance Allowance)
NORTHERN IRELAND
  Vehicles (Road Checks)
  Vehicles (Road Checks)
  Forster Green Hospital
  Forster Green Hospital
  Ulster Hospital
  Ulster Hospital
  Police (Powers of Arrest)
  Police (Powers of Arrest)
  Harland and Wolff
  Harland and Wolff
  Murders
  Murders
  Gaelic Athletic Association
  Gaelic Athletic Association

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

ANTI-POVERTY: EUROPEAN PROGRAMME
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what decision was reached by the Council of Ministers on 9th June on the funding of a European anti-poverty programme.
Lord CULLEN of ASHBOURNE: My Lords, at its meeting on 9th June, the Council deferred a decision on the European Commission's proposal for an interim extension of the anti-poverty programme until the next Labour and Social Affairs Council meeting in November. Most member states, including the United Kingdom, indicated that they would be in favour of an interim programme of the kind suggested by the Italian Presidency of the Council as an alternative to the Commission's proposal; but one remained opposed to any further programme in this area until the Commission had produced a report on the current activities, as it is required to do by a Council decision taken in 1977.
Lord BROCKWAY: My Lords, while thanking the Minister and welcoming the decision to defer, may I ask whether it is not the case that the wide range in the European Parliament, extending from the British Conservatives to the Communists, supported the funding of this proposal? Would not its deferment mean that we should lose pilot projects in Wolverhampton, Glasgow, London and Wales? Did our representatives support the Italian proposal for the modest £3 million to be spent on these projects over the next two or three years while devaluation was being considered?
Lord CULLEN of ASHBOURNE: Yes, my Lords, but there is some doubt about what would happen to the projects the noble Lord referred to if their funding from the Council ceased. It is probable that those projects funded by the Home Office, which are now 50/50 between the Council and the Home Office, would be continued by the Home Office. Four different projects are covered by the Home Office; two by the Scottish Development Department; two by Northern Ireland and one by the Department of Trade in Wolverhampton.
Lord BROCKWAY: May I ask the Minister whether it would not immensely extend the prestige of the European Community if it did something to deal with the poverty problem in Europe which an investigation has shown has similar causes in practically all the European countries?
Lord CULLEN of ASHBOURNE: Yes, my Lords, but I think it is true to say that many of the projects started by the Council have been directed more towards helping social casualties than the actual provision of cash to deal with poverty in cash terms.

TRAFFIC LIGHTS: THE RED SIGNAL
2.40 p.m.
Viscount MOUNTGARRET: 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 provision could be made to allow motorists to take a left turn at all traffic lights showing red but giving priority to pedestrians and traffic from the right but not so as to contravene any sign showing a one-way system.
Lord MOWBRAY and STOURTON: My Lords, the Government are not, for road safety reasons, contemplating this. In the United Kingdom a red light has always meant "Stop" for all drivers, whether they propose to turn or go ahead, unless a green arrow signal points to a permitted direction of travel. To permit

847
a left turn against a red signal could devalue the message and threaten road safety. The rule about the red light signal which I have mentioned applies also on the Continent, and indeed the Vienna Convention on Traffic Signs and Signals, to which we conform, does not permit movements against red signals in the absence of positive arrows.
Viscount MOUNTGARRET: My Lords, I thank my noble friend for that reply; but is he not aware that the practice I mention is widely used in America and I believe also in many other countries? Would he not agree that to produce a few more green arrows would be advantageous? Also, would he not agree that to implement such provisions would be of great assistance in easing congested traffic flow?
Lord MOWBRAY and STOURTON: My Lords, the North American experience in practice has been studied very carefully, but it is our view that the disadvantages in road safety would more than outweigh any possible advantages to be gained in respect of traffic flows. My noble friend has hit me on the head when he says that these things would be possible with accompanying arrows. That is possible now: but in this country, we try where possible to have round roundabouts at junctions, which keeps the traffic flow easier.
Lord LEATHERLAND: My Lords, may I ask the noble Lord an easy question? As the economy is now showing a red light, will the Government take a left turn in its policy?
Lord MOWBRAY and STOURTON: My Lords, we are going full steam ahead on a green light.

OLYMPIC TEAM: LOCAL AUTHORITY SUBSIDY
2.43 p.m.
The Earl of KIMBERLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government
848
what action they are taking with local authorities who are giving cash support to the British Olympic Association from the local rates.
The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT(Lord Bellwin): My Lords, local authorities have certain powers to undertake expenditure of this kind, but before doing so they must satisfy themselves that they are acting within their powers. The Government have no power to intervene in these particular decisions; nor is there specific action for us to take against the authorities concerned. I hope that local electors and ratepayers who disagree with what their elected local authorities are doing will continue to make their feelings known to them.
The Earl of KIMBERLEY: My Lords, I thank my noble friend for that Answer. In view of Her Majesty's Government's efforts to cut public expenditure and the fact that most of these councils have increased their rates this year, would he not agree that the money might better have been employed on buying some new school books? Secondly—and what is probably more important—could my noble friend comment on the fact that payments of this kind at the moment are ultra vires and, therefore, would members and officers of these local authorities be liable to a surcharge?
Lord BELLWIN: My Lords, it is for local authorities themselves to decide their own priorities. But the electorate should be left in no doubt that authorities which give cash to support the Olympic team are giving that preference over other demands on resources. Some may feel that this is a strange priority, when those authorities complain about difficulties which they claim to be having in reducing their expenditure. As to the second part of the question, I cannot comment on an issue which is currently before the courts. However, it is surely right to say that it is for each local authority in the first instance to satisfy itself on the legality of its actions.
Lord BRUCE of DONINGTON: My Lords, will the noble Lord bear in mind that the imports from the USSR into the United Kingdom, and the exports to the

849
USSR from the United Kingdom, have gone up significantly in comparison with a similar period last year?
Lord BELLWIN: My Lords, with respect, I feel that that has nothing to do with the Question.
Lord ELLENBOROUGH: My Lords, is my noble friend aware that national ratepayers' associations up and down the country, and certainly one with which I am closely connected, utterly condemn this action and consider, as a matter of principle, that it is utterly wrong for councils to use money for this purpose, because it does not directly assist the ratepayers; indeed, to the contrary it means an added burden to the rates?
Lord BELLWIN: Yes, my Lords; I am aware of the feelings expressed by my noble friend and there are many who would concur with them.
Lord PARGITER: My Lords, would the noble Lord not agree that any ratepayer who feels aggrieved has power to ask the district auditor to investigate these payments?
Lord BELLWIN: Yes, of course, my Lords.
Lord GRIDLEY: My Lords, may I ask my noble friend this question on policy: Would he inform the House what right is possessed politically for Labour-controlled boroughs or councils to use ratepayers' money to thwart—which is what it amounts to—a facet of the foreign policy of Her Majesty's Government? Have they any remit from central Government that they may act in this manner?
Lord BELLWIN: My Lords, there is in fact a power under Section 137 of the Local Government Act 1972, which enables local authorities to incur expenditure up to the product of a 2p rate in any one year on purposes which are
"in the interests of their area or any part of it or all or some of its inhabitants,"
or on contributions to certain funds. Whether this applies to Olympic donations is a matter for the local authority to consider in each particular case.
Lord SHINWELL: My Lords, may I ask the noble Lord the Minister a question which, although it may not be directly related to the original Question, has a bearing on it, on a subject which I am sure is concerning many Members of your Lordships' House and the public? If any of our athletes who have decided to go to Moscow are maltreated in any fashion, can they claim any protection from our Embassy people in Moscow?
Lord BELLWIN: With great respect, my Lords, I fear that that is very far from the Question. I should have thought that any kind of assistance, to which the noble Lord refers, is that to which any person at any time going to another country would be entitled to expect.

AFGHANISTAN: RED CROSS RECOGNITION
2.47 p.m.
Lord GRIDLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows
To ask Her Majesty's Government what steps have been taken to secure the recognition of the International Red Cross in Afghanistan, and the return of their representatives to that country.
Lord TREFGARNE: My Lords, previous Governments in Afghanistan have recognised the status of the International Red Cross and the present régime have not taken any steps to alter the situation. It is for the International Red Cross to decide whether delegates should return to Afghanistan.
Lord GRIDLEY: My Lords, may I ask my noble friend this question? Can he inform your Lordships what action has been taken by Her Majesty's Government, in concert with other Governments or countries, to secure the return of the International Red Cross to Afghanistan as soon as possible? My question to him directly is to ask him what action has been taken in international forums to secure the return of the International Red Cross representatives, who do a magnificent job of work and whose

851
presence in the country must be very badly needed at the present moment.
Lord TREFGARNE: My Lords, as I said in my original Answer, it is for the International Red Cross themselves to decide when they should return to Afghanistan. I think that my noble friend does the International Red Cross no service if he suggests that they are subject to pressure by this Government or any other.
Lord GRIDLEY: My Lords, I am not asking for any pressure to be put upon the International Red Cross. The International Red Cross have to be recognised, and, apparently, the only way that they can be recognised by the authorities in Afghanistan is through the force of international opinion.
Lord TREFGARNE: My Lords, again referring to the original Answer which I gave to my noble friend, I indicated that previous Governments in Afghanistan have recognised the international status of the IRC, and no change has occurred, so far as we know, to that position.
Baroness HYLTON-FOSTER: My Lords, would the noble Lord agree that any publicity or pressure at the present moment would be likely only to hinder the International Committee of the Red Cross in the very delicate negotiations which are taking place?
Lord TREFGARNE: That again, my Lords, is an internal matter for the International Red Cross, but I am sure that the noble Baroness is right.
Lord GORONWY-ROBERTS: My Lords, while appreciating most profoundly the honourable concern of the noble Lord, Lord Gridley, may I ask whether the Minister would agree that, unless and until the international authority of the Red Cross approaches the Government with a view to making representations, whether jointly or diplomatically, to the present Afghan Government, it is not for the Government to move?
Lord TREFGARNE: My Lords, that is certainly correct, but we hope that the
852
International Red Cross will be able to return to Afghanistan as soon as possible.

BUSINESS
Lord DENHAM: My Lords, with the leave of the House, at a convenient moment after 3.30 my noble friend the Leader of the House will repeat a Statement on the Top Salaries Review Body, Reports Nos. 14 and 15.
It may also be for the convenience of your Lordships if I announce that dinner will be available this evening at the usual time.
The Report stage of the Employment Bill will be adjourned at approximately 7 o'clock for about an hour. The Euro-control (Immunities and Privileges) (Amendment) Order and the International Organisations (Immunities and Privileges) Miscellaneous Provisions Order will be taken during the adjournment.

MAGISTRATES' COURTS BILL [H.L.]
2.52 p.m.
Bill read 3ª.
Schedule 7 [Consequential amendments]:
The LORD CHANCELLOR The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone) moved Amendments Nos. 1 and 2:
Page 102, line 22, after ("rules"") insert ("in the second place where those words occur")
Page 113, line 8, leave out paragraph 101 and insert—
("101. In section 25 of the Attachment of Earnings Act 1971—

(a) in subsection (1), in the definition of "rules of court", for "section 15 of the Peace Act 1949" substitute "section 144 of the Magistrates' Courts Act 1980"; and

(b) in subsection (6) for "Part III of the Magistrates' Courts Act 1952" substitute" Part III of the Magistrates' Courts Act 1980".").

The noble and learned Lord said: My Lords, there are two amendments standing in my name, and, with the permission of the House, I shall move both of them together. They are both minor drafting amendments to Schedule 7 to the Bill, which deals with consequential amend-

853
ments to other legislation. The first corrects an oversight in a reference to Section 33(4) of the Criminal Justice Act 1925, where the relevant words occur twice. The amendment makes it clear that the reference to the present Bill is inserted after the second occurrence of the words.
The second amendment which I am proposing updates the Attachment of Earnings Act 1971 by substituting references to the present Bill for references to earlier legislation. I beg to move both the amendments standing in my name on the Marshalled List.
On Question, amendments agreed to.
Bill passed, and sent to the Commons.

HIGHWAYS BILL [H.L.]
Bill read 3ª, and passed, and sent to the Commons.

EMPLOYMENT BILL
2.54 p.m.
Report received.
Clause 4 [Unreasonable exclusion or expulsion from trade union]:
Lord ELWYN-JONES Lord ELWYN-JONES moved Amendment No. 1:
Page 6, line 8, after first ("or") insert ("with the leave of the Employment Appeal Tribunal")
The noble and learned Lord said: My Lords, the purpose of this amendment is to limit the additional burden which will fall on the Employment Appeal Tribunal as a result of the Government's insistence that an appeal shall lie to the Employmert Appeal Tribunal on questions both of fact and of law arising from any decision of an industrial tribunal under subsection (8) of Clause 4, which deals with exclusions or expulsions from a trade union. The amendment which I move proposes that an appeal on questions of fact shall be allowed only with the leave of the Employment Appeal Tribunal itself.
It is very rare in employment law to find an appeal on questions of fact going from an industrial tribunal to the EAT. Industrial tribunals are well qualified to decide questions of fact, consisting as
854
they do of legal chairmen, with two laymen with considerable industrial experience on the employers' side and on the employees' side of industry. Industrial tribunals have proved themselves to be well capable of fulfilling what have been described as the functions of an industrial jury. That is how the court of appeal has described it, and so have other judicial bodies.
Industrial tribunals have had massive experience as judges of fact. In the course of 1979 they adjudicated as many as 35,253 cases of unfair dismissal. As I ventured to say during the Committee stage of the Bill, theirs is an important and well-tested jurisdiction. Indeed, at the Committee stage we on this side proposed that there should be no appeal from an industrial tribunal to the EAT on questions of fact, but in a Division the Committee did not accept our view.
I venture to submit that we need to reduce the amount of litigation which is taking place and not to multiply it. I have heard the noble and learned Lord the Lord Chancellor say that on many occasions about many jurisdictions. Recently there have been many judicial pronouncements deprecating the multiplicity of appeals in employment law cases. In the case of Hollister v. The National Farmers Union, the noble and learned Lord, Lord Denning, said:
"It is not right that points of fact should be dressed up as points of law so as to encourage appeals. It is not right to go through the reasoning of these tribunals with a toothcomb to see if some error can be found here or there—to see if one can find some little cryptic sentence".
While that observation is addressed most directly to the vice of dressing up points of fact as questions of law, it indicates a discouragement of appeals on the part of the appeal court itself.
It is important to recollect what an appeal on a question of fact would involve. It would mean a rehearing of all the facts of the case. Parties, witnesses, counsel, solicitors will all have to come to London, unless it is a Scottish case—I was reproached for having overlooked that important fact during the Committee stage—for the hearing of the appeal. Whereas there are 70 industrial tribunal centres situated around the country at locations convenient to the places in which most industrial relations disputes

855
arise, it is rare indeed that the appeal tribunal sits in the provinces. So here there is considerable potential dislocation and expense involved. Attendances of witnesses from a distant factory or workplace which may be the locus of the dispute could well cause a good deal of disruption in the output of the place of work. It could well be the case that some of the witnesses might hold key positions in the workplace, so this process could involve a great deal of difficulty for the production side of industry.
Secondly, the time factor is of some importance. Appeals under this branch of industrial law will be of the most urgent character, since they will often be accompanied by strike action. If they were encouraged by the process of a right to appeal on fact without demur, by allowing appeals without leave, pressure would develop to delay further pressing dismissal cases which would be awaiting hearing before the employment appeal tribunal, and the system of appeals and the function of the tribunal could well become clogged. Between March of 1976 and March of 1977 883 cases were appealed to the Employment Appeal Tribunal, so your Lordships will see that it is already a very busy appellate tribunal.
Another factor which should be borne in mind is that appeals will be a very costly business. As I have said, it is a rehearing; all the parties and lawyers and everyone else concerned will have to make a second appearance and, as at present at any rate, the muliiple costs would be irrecoverable. Another factor which is of some importance is that the cases in this part of the law are likely to be the focal point of a great deal of publicity. They will be held in a charged and contentious atmosphere, and there could well be a temptation to conduct appeals for propaganda purposes when the merit involved in the appeal on fact could be very small, or indeed non-existent; and our submission on this side of the House is that a sieve to prevent unmeritorious cases being pushed through to appeal is an essential and valuable safeguard.
After all, to impose a condition requiring an appellant to obtain leave to appeal to an appellate body from the appellate body itself is not a novel requirement
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in the administration of justice. It exists, for instance, in several spheres of the work of the Court of Appeal itself. The reason for such provisions restricting the right of appeal by requiring the consent of the appellate body before the appeal can be brought, I submit are obvious. It is clearly desirable not to clutter up the court system with what may well be, on examination on leave to appeal, quite unmeritorious appeals with no substance. Already, as I have ventured to say, the appellate system is subject to as much strain as it can reasonably take. The requirement which the amendment proposes of obtaining leave on questions of fact from the EAT could well result in hopeless cases being stopped before the expense, the disruption and delay of a full rehearing of the case are incurred. I submit therefore that from the point of view of the administration of this jurisdiction this is a valuable sieve, and it will surprise me greatly if this amendment is rejected. I beg to move.
Lord WIGODER: My Lords, would the noble and learned Lord be kind enough to help me before he sits down? Are there precedents for giving an appellate tribunal a discretion to grant leave to appeal on questions of fact?
Lord ELWYN-JONES: My Lords, in the work of the Court of Appeal there are various areas where the authority of the court of appeal is itself required. The difficulty that we are in here is that there is no appeal on fact from industrial tribunals at the moment. This is an innovation. I think we were fortunate in receiving the support of the Liberal Benches when we sought to exclude appeals on fact, so there is not much experience in deciding this matter; but certainly it is within the competence of the Court of Appeal to intervene.
The LORD CHANCELLOR: My Lords, I did not put the Question before, because I think that theoretically the noble and learned Lord had not resumed his seat. The Question is, that the said amendment be agreed to?
The LORD ADVOCATE (Lord Mackay of Clashfern): My Lords, as the noble and learned Lord has pointed out, in Committee there was a question of

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whether or not there should be an appeal on fact to the Employment Appeal Tribunal in the particular cases with which this amendment is concerned. In Committee the view was taken by a considerable majority that appeals on fact in this very limited and important area should be allowed. In our view, the amendment which now seeks to impose as a condition that the leave of the Employment Appeal Tribunal should be obtained before an appeal proceeds on a matter of fact is an unnecessary complication. In our view, in relation to a matter of fact it is better, if there is to be an appeal on fact, that the matter should be open to the Employment Appeal Tribunal to apply its own discretion in deciding how the procedure is to go on, and it should not be a requirement that leave should be required.
As the noble and learned Lord pointed out, some ingenuity has been expended upon dressing up points of fact in order that they may look like points of law, and it would be most unfortunate if there should be a particular requirement of this kind, which would just add to that very exercise. I should like to support the view which I think was implicit in the question raised by the noble Lord, Lord Wigoder, about the difficulty of a requirement of leave in relation to matters of fact. I believe there may be precedents in other spheres but I think that the existence of an appeal in fact makes it difficult adequately to apply such a requirement as this.
I should perhaps just add, in case it was suggested that we were not appreciative of the work of the industrial tribunals, that there is no intention whatsoever to denigrate them in any way. The appeals in relation to which this clause arises are very important, sensitive cases in which it is thought that a second appeal on fact is appropriate. I would invite your Lordships not to agree with this amendment.
Lord ELWYN-JONES: My Lords, I am surprised and disappointed by that answer. If the clause becomes law as it stands, there will be no opportunity by the employment appeal tribunal to have, so to speak, a preliminary view of what may be a hopeless matter; so they will have to listen to what may be days of evidence—or at any rate a considerable
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expenditure of time on evidence—in a hopeless cause. I should have thought that the Employment Appeal Tribunal itself would be pleased to be given this opportunity of a preliminary sieve before the whole business of a retrial with, as I have said, potentially several busy witnesses from industry being called. It would be valuable to have this opportunity. The Bill as it stands gives no opportunity at all, and I invite the noble and learned Lord the Lord Advocate to think again on this matter.
If I may say so, it really is time we had some response from the other side of the House to these practical suggestions, which are not of a wrecking character but of a constructive and helpful character, and at the beginning of what is obviously going to be a highly disputative Report stage the noble and learned Lord the Lord Advocate might have made the ground a little easier and the atmosphere a little sweeter if this very sensible provision was complied with.
3.9 p.m.
The LORD CHANCELLOR: My Lords, I wonder whether I may say a word to the noble and learned Lord. I hope he will not take offence at all, but I thought of one or two things when I heard the debate in Committee and I have been reflecting upon this matter in consultation with others. The difficulty is this: both my honourable friend in the Lower House and the noble and learned Lord who has spoken think it is necessarily the case that in appeals on fact all the witnesses must come again, so I am perhaps in a minority of one if I question that dogma; because the noble and learned Lord will know even better than I that in every High Court case and in most county court cases there is an appeal on fact brought by way of a rehearing, and the witnesses do not come. I promise the noble and learned Lord that I will let the appeal tribunal themselves know what he has said before Third Reading. I do not think he will get a different answer.
In the meantime, I should like him to carry away two thoughts of mine, if he will be so good. The first is that, of course, both sides can appeal. One must not necessarily assume that the party which will appeal is that whose case is more attractive to one of the two disputants

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in this Bill rather than another. The second thought is that if you have got a tribunal of both fact and law deciding the case, and then you can appeal from it as to fact by leave and as to law by right, you are probably going to dress up more points of law as points of fact that way than any other; and even if you do not the position will be reached, of course, that you try to get the appeal on fact and then have a second bite on law, because you will be able to do it by right. It may be that the Government's judgment in this matter is the more practical one. I promise that what the noble and learned Lord has said will be conveyed, by my department or that of my right honourable friend, to members of the tribunal, but I do not think we will be able to help him very much at this stage any further.
Lord ELWYN-JONES: My Lords, with the leave of the House, may I make one observation in reply to that clear willingness of the noble and learned Lord to help up to a somewhat limited point, if he will allow me to say so. We are in a difficult situation here. If the Bill becomes law, there will, of course, be no appeal on grounds of fact in unfair dismissal cases. That in itself is going to create a sense of discrimination against the employee sacked by his employer. However, perhaps I am entering now into matters we have traversed on the previous occasion. But it is a point of substance and an important point, psychologically at any rate. I do not know how far the noble and learned Lord the Lord Chancellor is willing to go in endeavouring to assuage my anxiety about this matter, which I do think, if I may say so without being pompous, is in the interests of the administration of these tribunals. Will he be willing at any rate to consider this matter between now and the next stage of the Bill? It is an important matter. It is not a matter of party controversy, save to the extent that it brings in the discrimination as between unfair dismissal cases and this. If the noble and learned Lord the Lord Advocate, on that degree of indication from the Woolsack, is prepared to say that the Government will consider this, I will gladly ask for leave to withdraw the amendment.
The LORD CHANCELLOR: My Lords, one of the problems about being
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on Report is that one is divorced from one's friends by a great gulf, rather like Dives and Lazarus, so I can only by leave of the House say this. I will report what the noble and learned Lord has said. My judgment was against him on Committee and is against him now, but it is not fair to turn these things down when obviously the noble and learned Lord has a very firm view. I must tell him, not secretly but publicly, that I was aware of the anomaly to which he refers, that in 35,000 cases of wrongful dismissal there is an appeal on law only. I am very conscious of that, but I do put this thought in his mind, if I may. He mentioned it in Committee, but he did not mention it in his earlier observations. I do happen to know that there have been occasions when the Employment Appeal Tribunal has found itself rather constrained by the limitation in those cases. I doubt if I could take delivery of appeals from 35,000 cases. I rather suspect that this jurisprudence, which we want to work its way up into a coherent body of law, will probably yield less than 100. I doubt whether I could take delivery of 35,000. If I were to start with a tabula rasa, I think perhaps I would remove the anomaly in the other direction.
Lord ELWYN-JONES: My Lords, is there merely to be a stone-wall silence from the Government Front Bench on this in the light of the exchanges which have taken place?
Lord MACKAY of CLASHFERN: My Lords, the Lord Chancellor's speech is very much more authoritative than anything I could say about it.
Lord ELWYN-JONES: My Lords, as I understand the implication of what has passed, it is that there will be further consideration of this matter before Third Reading and at Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.15 p.m.
Lord McCARTHY Lord McCARTHY moved Amendment No. 2:
Page 6, line 20, after ("rules") insert ("other than the non-payment of a subscription owing and due to the union and payable by members or a section of members of the same class as that person").
The noble Lord said: My Lords, this is the one about lapsing, and once again we are trying to be practical and helpful. We are returning to an issue which we raised on Committee stage, where we thought we had had some assurance from the Government that they would reconsider their position. But, as the House will know, nothing has come from the Government side on this, and therefore we feel justified in pressing the case again in a slightly different way.
The House will know that we are dealing here with subsection (8)(b) of Clause 4 under which it states:
"if under the rules of a trade union any person ceases to be a member of the union on the happening of an event specified in the rules, he shall be treated as having been expelled from the union".
We have been seeking in the Committee stage to make a distinction, which is a distinction in the practical world of trade union affairs, between expulsion in that sense and lapsing. Therefore, we are trying to insert after "rules",
"other than the non-payment of a subscription owing and due to the union and payable by members or a section of members of the same class as that person".
This would have the effect of excluding the application of that subsection where the sole reason for the person ceasing to be a member of the union was that he had not continued to pay his subscription to the union.
When this issue was raised at Committee stage we had some support, not simply from this side but also most notably from the noble Earl, Lord De La Warr, on the other side, who said:
"I feel inclined to advise my noble friend …'
—that is, the Government spokesman—
"… to consider the amendment sympathetically. The case for it has been well enough argued for me simply to add that the amendment seems to be all right and should be examined by the Government".—[Official Report, 3/6/80, col. 1408.]
What we are asking the Government today is if it has been examined why has there been no movement. The noble Lord, Lord Lyell, replying for the Government said (cols. 1408/9):
"We believe there could easily be a loophole here, and, thus, a problem. It seems to me the noble Lord has found what I would call a limbo or no-man's land where somebody has ceased to be a member of a union through the nonpayment or lapsing of subscriptions … Reservations have been expressed all around the Chamber
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in particular by my noble friend Lord De La Warr, and for that reason we shall take away the amendment and consider it, with the hope of having something to submit on Report".
Yet today nothing has been submitted.
We are not suggesting that there should be in this very narrow amendment any challenge to the jurisdiction of the tribunals in relation to this Bill in respect of refusal to admit. We are not disscussing that. We are not challenging the jurisdiction of the tribunals in this amendment for all sorts of disciplinary offences, refusal to obey instructions, refusal to pay fines, electoral malpractices—any general expulsion rule of a union. We are simply saying in those cases where there is a non-payment of dues, where in the trade union world what one is discussing is lapsing, or running out, or being struck off the books. We are suggesting that at least since the time of the Bonser case the courts themselves have introduced very strict rules about the conditions under which people can be lapsed. They must only be lapsed by people authorised under the rules of the union to lapse them; they can only be lapsed in ways that take into account the requirements of natural justice; they can only be lapsed by very clearly specified rules, and if the rules are not clear and not specified then the courts will read such rules into the rule book.
So, we are not suggesting that there should not be any legal control over lapsing; we are suggesting that it is quite wrong and quite impractical and will lead to a great deal of practical difficulty if people can come to tribunals simply because—as is the case in the great majority of instances when people are struck off the books of unions—they have lapsed their subscriptions. I beg to move.
Lord ROCHESTER: My Lords, I was not one of those who, in Committee, spoke on this particular amendment. But, like the noble Earl, Lord Dc la Warr —who I see is about to take his place—I feel some sympathy for what the noble Lord, Lord McCarthy, had to say on the last occasion and I took comfort from the response of the noble Lord, Lord Lyell, at that time. I think that I see the distinction between expulsion and what the noble Lord, Lord McCarthy, called "lapsed membership". As I have said, to that extent I feel some sympathy with what the noble Lord has had to say and I

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hope that it may evoke some positive response on this occasion from the Government.
Lord LYELL: My Lords, as the noble Lord, Lord McCarthy, has pointed out, an amendment similar to this one was tabled in Committee in your Lordships' House. And, as the noble Lord, Lord McCarthy, carefully read out, it was I, in fact, who undertook to reconsider the position. I hope that the noble Lord and the House will note that the concluding comments that I made were with the hope of having something to submit on Report.
We would admit that we realise that at first sight this amendment appears very sensible and reasonable, even more so than the last amendment submitted in Committee. For instance, if any member of a club fails or ceases to pay his dues he has only himself to blame if his membership ceases. But, as your Lordships will be aware, great concern was expressed by noble Lords opposite during the Committee stage and the Government have reviewed with great care all the arguments that were made at that time and, indeed, that have come to light surrounding this particular and rather complicated matter.
However, we have reached the conclusion that the approach incorporated in the Bill is the right one and that it will not, in spite of what was spelt out at length and in detail by the noble Lord, Lord McCarthy, in practice give rise to the sort of cases which are evidently in the minds of some noble Lords opposite.
This particular amendment would have the effect that, where an individual's membership of a particular union lapsed automatically through the non-payment of his subscription—that is, without positive expulsion—there would be no right of complaint of unreasonable expulsion. For a number of reasons we believe that that would not be right.
The first relevant reason is that different unions have differing rules as to how virtually the same event is to be regarded under their own rules. For example, one union may provide for automatic lapsing of membership if subscriptions are long enough in arrears, while another union may have rules which provide that the member is liable for expulsion in exactly
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the same circumstances. In other words, in the one case he is expelled and in the other he is merely liable to that particular state of affairs. We think that it would be anomalous that in the first case where the member is expelled there would be no jurisdiction for a tribunal to deal with an aggrieved member who felt that he had a reasonable and justified explanation for his arrears, and that he should not have been treated as no longer a member, whereas in the latter case, where he is liable, he would be able to complain of unreasonable expulsion.
The second reason—although I would not necessarily suggest that it will occur—is that it is possible that unions could avoid jurisdiction under this particular clause by exploiting mistakes which could result in the non-payment of subscriptions. Perhaps a mistake, a perfectly feasible error, in the check-off system could provide a union with an opportunity to treat someone who might be worthy of expulsion as having lapsed. That person would not be able to complain to a tribunal of unreasonable expulsion.
Finally, I would strongly emphasise that what we are talking about here is the jurisdiction of the tribunal. It does not follow that tribunals—and at this point I would remind your Lordships that they are very respected and very experienced bodies—will find explusions unreasonable where, for example, a member has deliberately refused to pay his union dues. Certainly it is more than likely that where a misunderstanding has arisen, conciliation officers, who see every application to a tribunal, will be able to resolve the issues and obviate the need for any tribunal hearing. I hope that that has been a reasonable explanation. I am afraid that I cannot necessarily commend the amendment to your Lordships.
Lord McCARTHY: My Lords, I am very disappointed with the Government's reply. With respect, as I understand it, they have given us two pseudo-reasons for rejecting the amendment. The first relates to trade union rule books. I note that the Government do not quote any trade union rule books. There are trade union rule books where people have a "trip", were they are liable to expulsion. However, if people continue not

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to pay their subscriptions they are automatically lapsed from the union. That is exactly the same as would be the case—as the noble Lord himself said—as regards any bowls club or tennis club. So I do not see that we can base a distinction on whether some unions have trip rules and others do not.
As regards the check-off, I must say that unions do not want to expel people because they make mistakes. If they make mistakes in the check-off and people are told that mistakes have been made in the check-off, then people will be readmitted to the union. In any case, if someone were expelled from a union on the basis of a mistake in the check-off and it was said that they were "run-out", then I would say that that would not stand in the ordinary common law position.
Therefore, I do not see how either of the cases which the noble Lord has put up in ally way shifts our position. I do not want to press the amendment because we have many other amendments to come. However, we shall have to take into account the Government's attitude on this amendment, and maybe others, when we come to our amendment on the clause as a whole.
On Question, amendment negatived.
3.29 p.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 3:
Page 6, line 33, at end insert ("or to an agreement between the Trades Union Congress and a trade union affiliated to it or between two or more such affiliated trade unions connected with procedures established by the Trades Union Congress concerning the admission or expulsion of members of such trade unions.").
The noble Lord said: My Lords, I beg to move Amendment No. 3. This is an amendment of a much more modest character than some that were put forward by my noble friend and myself in Committee. It relates to that part of Clause 4 dealing with the new jurisdiction of the tribunals to determine what is and what is not a lawful expulsion or exclusion from a trade union. It deals with Clause 4(11), which provides that:
"Any provision in an agreement shall be void in so far as it purports to exclude or limit the operation of, or to preclude any person from presenting a complaint or making an application under, this section",
with an exception in terms of certain conciliation proceedings. The amendment would wish to add to that exception agreements between the Trades Union Congress and its affiliated unions and between affiliated unions relating to TUC procedures—especially, of course, the so-called "Bridlington Procedure", although today it is better known as the Trades Union Congress Disputes, Principles and Procedures as revised at the last congress.
Although this side of your Lordships' House received no assurances in Committee, nevertheless what was said by noble Ministers in Committee gave us some hope that the matter would be considered again on this very modest basis: that at least those arrangements of the Trades Union Congress should not start off at the starting line under this clause as being void in law, in whole or in part. I say "in whole or in part" because at one stage in Committee, on 3rd June, I was quite rightly corrected by the noble and learned Lord the Lord Advocate. He reminded me that provisions in agreements are to be void in so far as they limit the operation of Clause 4. The noble Lord also said, if I may take merely two statements from 3rd June, at columns 1379 to 1380, speaking of the Bridlington procedures:
"… I give the unreserved assurance that there is no intention whatsoever in this Bill on the part of the Government to undermine those procedures".
He said a little later:
"A tribunal, under the provisions of Clause 3"—
Clause 3 as it was then; now Clause 4—
"and particularly Clause 3(5), will have to determine whether, in all the relevant circumstances, a trade union has acted reasonably in excluding or expelling a person. The tribunal, therefore, will of course include in its consideration the question whether the action was taken in pursuit of the Bridlington procedures or similar arrangements".—[Official Report, 3/6/80; col. 1379, 1380.]
I make one point on that quotation, and that is that of course if the procedures of the Trades Union Congress are void, then the tribunal will not include within its consideration the question whether what happened accorded with those arrangements. It is partly to avoid the argument on that matter that this amendment is put forward. How would it work in practice? Bridlington works in practice by way, first, of a union seeing whether the principles have been

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observed. Let me take a very simple case where a union, perhaps by mistake or inadvertence, has poached a member from another union. A complaint may be made, and if, after the various conciliation procedures of the Trades Union Congress have been gone through, no agreement can be found, then the matter may he referred by the general secretary to a disputes committee of experienced trade unionists with no direct interest in the matter for consideration under the regulations; and under the regulations the disputes committee may make an award.
That award, under the rules of the Trades Union Congress, which are contractual, is binding upon each affiliated union. In most of the affiliated unions' rule books there is what is called the model rule, which gives them power to exclude a member if that is necessary to effectuate the decision or award of a disputes committee set up by the TUC machinery. That is the machinery which at the present time saves an enormous amount of difficulty, problems, and days lost which otherwise might occur through inter-union problems. I believe it to be common ground between Ministers and this side of your Lordships' House that, without the TUC disputes procedures and committee, inter-unionism and multi-unionism would be a much graver problem. But unless some amendment of this sort is put into the Bill, at an early stage in that procedure the member, who might be at risk of expulsion or refusal to admit, will surely be saying, "Do what you like with the Trades Union Congress machinery, because it appears to purport to exclude or to limit the operation of this section, in the sense that it demands of the affiliated unions that they accept the award and go by it; therefore to that extent the TUC procedures are void".
If that situation is the one which the Government create by the Bill, then they may have to look elsewhere for tens of thousands of voluntary man hours expended by experienced trade unionists who sit on disputes committees to sort out the difficulties of multi-unionism. After all, why should experienced trade unionists who have jobs in their own unions and difficulties in their own unions come and sit on these disputes com-
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mittees under a contractual arrangement when, from the word go, the members or member who is involved may be able to say, "Your procedures are void"?
In our submission, the question for the Government, having looked at the matter again in relation to this much more modest amendment is: would they not take the view that at least the game should begin with the Trades Union Congress procedures being regarded as lawful? I stress that we appreciate that that does not mean that what has been done under a disputes committee award would necessarily always be that which the tribunal decided, because, as the Government insisted to us again and again, the essence of Clause 4 in relation to trade union membership is that that which the tribunal or the appellate courts from it decide is reasonable is what finally wins the day. There is nothing in this amendment in any way to limit the complete discretion of the tribunal to decide that an expulsion of a member from a union is unreasonable and therefore contravenes Clause 4.
What we are saying is that if the Government mean what they say about the desirability of placing this Bill in conjunction with voluntary machinery in such a way that it does not damage the voluntary machineries which save a great deal of difficulty that would otherwise arise, surely, at the very minimum, they would be prepared to say that the arrangements at TUC level should begin by being valid; but the tribunals, of course, would have the final decision on what the reasonableness was of a particular member's expulsion or exclusion from the union. I beg, to move.
The LORD CHANCELLOR: The Question is, that Amendment No. 3 be agreed to. Do I see my noble friend the Leader of the House about to make a Statement? I have just put the Question.

TOP SALARIES REVIEW BODY REPORTS
3.37 p.m.
The LORD PRESIDENT of the COUNCIL (Lord Soames): My Lords, with the leave of the House I will now repeat a Statement which is being made

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in another place by my right honourable friend the Prime Minister. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a statement on two recent reports by the Top Salaries Review Body.
"Both reports have been presented as Command Papers and are available in the Vote Office this afternoon.
"The first of these reports—the review body's 14th report—makes recommendations for the salaries of the higher Civil Service, senior officers in the armed forces, members of the judiciary, and chairmen and members of boards of nationalised industries. The House will recall that in 1978 the review body made recommendations for these groups of public servants which our predecessors accepted but decided to implement in three stages, on 1st January 1978, 1st April 1979, and 1st April 1980. Last year the review body recommended an updating of the second and third stages, which we accepted. The third stage has been in payment since 1st April this year. The present report is concerned with the increases required to bring that third stage up to date from the levels appropriate on 1st April 1979 to the levels appropriate on 1st April 1980.
"The other report now submitted—Report No. 15 —makes recommendations for the salaries of Members of Parliament, Ministers and other paid office holders. Last year the review body made recommendations which the House agreed should be accepted, but should be implemented in three stages, on 13th June 1979, 1980 and 1981. The first stage was paid to all those concerned. The second stage has been in payment since 13th June last for Members of Parliament, but not for Ministers and other paid office holders. The review body's latest report is concerned with the increases required to bring the second and third stage payments up to date from the levels appropriate on 13th June 1979 to the levels appropriate on 13th June 1980.
"The review body has arrived at detailed recommendations over the whole field on the basis of all the factors which are traditionally relevant. The
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Government is grateful to Lord Boyle and his colleagues for their thoroughness and attention to detail, and for all the time and effort which they have devoted to the review.
"They recommend increases of 14·6 per cent. in the second and third stage payments to Members of Parliament, and similar increases for Ministers. The general level of the increases which they recommend for the four groups of public servants is about 19 per cent., though they propose larger increases than that for certain categories within these groups. If these larger increases are taken into account, the overall cost of the increases recommended for these groups of public servants would work out at about 26 per cent.
"The Government are committed to accepting the recommendations of the review body, save where there are clear and compelling reasons to do otherwise. Indeed, my right honourable friend the Leader of the House told the House of Commons some months ago that the Government would accept the recommendations of the review body for updating the second stage increases to honourable Members. I should like to explain to the House, Mr. Speaker, why, notwithstanding these commitments, the Government take the view that there are clear and compelling reasons, of a kind which the review body could not take into account, for not accepting the review body's recommendations in full on this occasion.
"The overriding priority to which the Government's economic and monetary strategy is directed is the reduction of inflation. At over 20 per cent. the rate of inflation is unacceptably high in absolute terms and in relation to the rate of inflation in most of the countries with which we compete in world markets. We shall not be able to make progress in resuming sound economic growth and in reversing the rise of unemployment until we succeed in reducing the level of inflation very substantially. By sticking to our monetary targets we shall bring the rate of inflation down. It is likely to be falling in the next few months, but unless the growth of earnings is broadly consistent with the rate of monetary growth,

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the fall in inflation will be accompanied by a larger rise in unemployment.
"Pay increases in the private sector are clearly beginning to respond to the combined pressures of tough market conditions and financial constraints. But the private sector cannot be expected to take the whole of the strain. Levels of pay increases in the public sector must likewise be reduced, if public expenditure is to be kept under control and our monetary objectives achieved. And when we are looking to other groups in the public sector to accept pay settlements which fall below what might be suggested by traditional comparisons with movements of other earnings or of prices, the Government think it right to expect people in positions of responsibility and leadership in Parliament and the public services to act in a way which we hope others in the country will follow.
"This is the background to the Government's proposals, to which I now turn.
"First, as to Members of the House of Commons. We are in the virtually unique position of determining our own remuneration. Our calls to others to show restraint and act responsibly will be judged by what we do ourselves. The review body has recommended a parliamentary salary of £12,300 from 13th June 1980 and £13,750 from 13th June 1981. These figures represent an increase of 14.6 per cent. The Government think it right to propose to honourable Members that they settle for a substantially smaller figure. We shall therefore invite the House to approve a resolution to provide a parliamentary salary of £11,750 from 13th June 1980. That represents an increase of £1,025 or 9.6 per cent., on the second stage salary of £10,725, which has been in payment since 13th June last. We propose also to provide in that resolution for an increase of the same percentage in the third stage salary, due to take effect on 13th June 1981, taking it from £12,000 to £13,150.
"We propose that the secretarial and research allowance for honourable Members of this House should be
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increased by 9·6 per cent., to £7,400, with effect from 13th June, 1980.
"Ministers and other paid office holders are not yet in receipt of their second stage payment. We shall invite the House to approve an order putting into effect the second stage payments recommended by the review body last year, increased as for Members of Parliament by 9·6 per cent., save in the case of Cabinet Ministers and my right honourable and learned friend the Attorney-General. For them the increase will be reduced to 5 per cent.
"The order will also provide for the same percentage increases to be applied to the third stage payments due to take effect next year.
"We propose to adopt the review body's recommendation that we should unify the parliamentary salary payable to Ministers in the House of Commons from three rates to a single rate, and we propose that that rate should be £6,930. Although junior Ministers in the House of Lords now receive a secretarial allowance of £1,000, which we propose to increase to £1,100, they do not receive any salary specifically in respect of their parliamentary duties. This is a very real problem, and we propose to consider how the arrangements for their remuneration should be revised to take account of it.
"The Government propose that Peers' expense allowances, which are related to relevant costs, should be increased as the review body recommends.
"I turn now, Mr. Speaker, to the four groups of public servants covered by the review body's 14th Report.
"The Government considers that they should be expected to accept no less a reduction, as compared with the review body recommendations, than Members of Parliament are being asked to make for themselves. The increase which we are proposing for honourable Members is about one-third below that recommended by the review body. We propose that the average increase for the four groups of public servants concerned should also be about one-third below the general increase of about 19 per cent. recommended by the review body. That will bring the

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overall cost of the increases to these groups down to about 12½ per cent. This will not be paid as straight percentage increases across the board to all those concerned; it will be so distributed as to mitigate the compression of differentials between the groups covered by the review body's report and those directly below them, and within those groups to preserve, though, of course, at lower salary levels, generally the pattern of differentials and relativities recommended by the review body.
"The Government propose that Peers' expense allowances"—
I think that I have already read that, and I apologise. I just hope that the Prime Minister did not make the same mistake.
"The result of distributing the total sum in this way will, in fact, be that most of those at the highest levels—the Permanent and Deputy Secretaries in the Civil Service, the equivalent ranks in the armed forces, and the chairmen of nationalised industries, will, like honourable Members and Ministers, receive percentage increases in single figures.
"The new salary rates for all four groups will be effective from 1st April 1980. The effect of implementing them will be to reduce the cost, as against full implementation of the TSRB 14 recommendations, by about 50 per cent.
"A special problem arises in the Civil Service. When other grades recently received increases following pay research, it was agreed that new salary scales for Assistant Secretaries and Senior Principals—the grades immediately below those covered by the review body's remit—should not be settled until the outcome of the review body's report was known. The results of pay research for the Assistant Secretaries would take the maximum of their scale above the rate we now propose for Under-Secretaries. In order to preserve tolerable differentials it will be necessary to set a lower scale for Assistant Secretaries from that which would result from the application of the pay research findings; there will also need to be a slight adjustment at the top end of the scale for Senior Principals.
"I shall, with permission, circulate in the Official Report schedules showing the current and proposed rates of salary for the main groups and grades concerned. Full details of the Government's proposals will be placed in the Library.
"For the groups covered by the review body's 14th Report, who have completed their staging, the rates of salary now proposed will be used for the purposes of calculating pension entitlements for all those concerned. For honourable Members of this House, and for Ministers and other paid office holders, pension entitlement will be calculated on the revised third stage salaries.
"With regard to the remuneration of nationalised industry board members, the review body in its 14th Report questions the appropriateness of its role, and has suggested that the Government should reconsider its remit in this respect. The Government share the doubts which the review body has expressed. We have therefore decided that this should be the last occasion on which the review body is asked to recommend on the remuneration of the chairmen and members of boards of nationalised industries. In future years these salaries will be determined by the Minister concerned in each case, with the approval of the Minister for the Civil Service.
"Mr. Speaker, I am very well aware that in making the proposals which I have now described to the House, the Government will be accused of going back on commitments and breaking agreements, and of failing in their obligations to the public servants concerned, on whose hard work, loyalty and integrity society depends. But they must have regard to their wider obligation to propose what we believe to be right. In present circumstances, the Government believe that these proposals would give fair levels of remuneration to honourable Members of this House and to the public servants to whom they apply, and at the same time measure up to the needs and expectations of those to whom we in this House are answerable and who in the end have to find the money."
My Lords, that concludes the Statement.
Following are the schedules referred to above:

Current Salary(a) £

Propose Salary £

Percentage increase %

MPs (Backbenchers)

10,725

11,750

9·6

Ministers

Examples:

Cabinet Ministers(b)

22,325

23,500

5·3

Ministers of State (Commons)

14,812

16,250

9·7

Ministers of State (Lords)

14,955

16,400

9·6

Parliamentary Secretaries (Commons)

11,262

12,350

9·7

Parliamentary Secretaries (Lords)

11·405

12,500

9·6

(a)Current Salary includes second stage of 1979 pay increase.
(b)Excluding Prime Minister, Lord Chancellor and Lord President of the Council.

Current Salary £

Proposed Salary £

Percent-age increase%

Higher Civil Service and Senior Armed Forces Officers

Head of the Home Civil Service

31,000

33,500

8·1

Permanent Secretary to the Treasury

Secretary of the Cabinet

Admiral of the Fleet

Field Marshal

Marshal of the Royal Air Force

Permanent Secretary

28,500

31,000

8·8

Admiral

General

Air Chief Marshal

Second Permanent Secretary

26,000

28,500

9·6

Deputy Secretary

22,500

24,500

8·9

Vice Admiral

Lieutenant General

Air Marshal

Under Secretary

18,000

20,500

13·9

Rear Admiral

Major General

Air Vice-Marshal

Percentage increases for group as a whole

—

—

12·6

Current Salary £

Proposed Salary £

Percentage increase %

Judiciary

Examples:

Lord Chief Justice

37,000

40,000

8·1

High Court Judge etc.

28,500

32,000

12·3

Circuit Judge etc.

19,500

22,000

12·8

Masters and Registrars of the Supreme Court etc.

17,250

19,500

13·0

Percentage increase for group as a whole

—

—

12·6

Current Salary £

Proposed Salary £

Percentage increase %

Nationalised Industries, Chairmen and Members

Examples:

British National Oil Corporation:

Chairman

53,500

58,500

9·3

Members

29,250–37,750

33,000–43,000

13·4

British Steel Corporation, Post Office:

Chairmen

48,500

53,000

9·3

Members

28,500–34,500

31,500–39,500

12·7

British Aerospace, British Airways Board, British Gas Corporation, British Rail, British Ship-builders, National Coal Board, Electricity Council

Chairmen

44,000

48,000

9·1

Members

23,250–28,750

26,000–32,750

13·0

British Airports Authority, Cable and Wireless, Civil Aviation Authority National Bus Company, Scottish Development Agency:

Chairmen

31,000

34,000

9·7

Members

18,500–22,500

20,500–26,000

13·4

Percentage increase for group as a whole

11·6

3.51 p.m.
Lord PEART: My Lords, I thank the noble Lord for the Statement. It is a long Statement, and very detailed, and I can well understand why a slip occurred now and then—a Freudian slip, of course. Never mind, the noble Lord has presented what I think is a formidable report, and one that must be studied by all Members of the House. It is a long and detailed

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report. Here and there it fulfils promises. On the other hand, I believe that there will be difficulties in another place. I am not going to comment too much on another place on this issue, but I am sure that there will be a charge of lack of faith.
Of course, it is always the public sector which really suffers generally in this matter. I personally think that our public servants—and here I have regard to Members of Parliament and noble Lords—are people who really do not exploit the community in any way, and have not been properly recognised over a long period of time. Somehow there is still an attitude of mind in this country that public servants, politicians and others, are overpaid. For what reason I cannot understand.
I am not going to comment now on each detailed item. There will be problems. There is the question of the Civil Service. I am sure that the noble Lord the Lord President, who is responsible for the Civil Service, will have difficulties here. No doubt we shall have to wait and see. I hope that he does not, but I think that he will. There was an agreement about the review body, how it should be altered, but I still think that the new proposals may not work. The idea of having a Minister responsible to the department for pay cuts right across the whole concept that we have had regarding the Civil Service for a long period of time.
I welcome, though, many of the things which affect Members of this House, especially the increase in allowances which are necessary for the reasons which are obvious—the increase in the cost of living. I am glad that this has been tackled openly. I hope that noble Lords will carefully read the document. I am not going to comment any more now on this. We must carefully read the document, and then at some other time we shall have to discuss the details.
Lord WIGODER: My Lords, we are grateful to the noble Lord the Leader of the House for repeating that Statement, and also, no doubt, to the noble Lord, Lord Boyle, who has the invidious task of presiding over the committee which makes these recommendations. We resist from these Benches the temptation to congratulate the Government on the first
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faint glimmerings of an incomes policy which appear to show through this document. It is perhaps sufficient if we say that in the present difficult financial situation it is hard to see how the Government could come to any other broad conclusions except those to which they have come in the course of this Statement.
May I refer briefly to two of the recommendations. First, may I say how much we from these Benches welcome the proposal that consideration will be given to the remuneration of those who are junior Ministers and who serve in your Lordships' House. They face an intolerable burden and it will, I know, have the approval of all parties and those of no party in your Lordships' House if steps are taken to ameliorate that burden.
Secondly, no doubt I should say that noble Lords will want to welcome the fact that the increase in costs which is involved in our coming to the House is recognised in the course of this Statement. Perhaps the noble Lord the Leader of the House will think it worth stressing that the modest sums that are received by your Lordships in the course of working very long hours in this House are not in any way by way of remuneration or reward, and that they are no more than the reimbursement of money actually spent in attending the House.
Lord SOAMES: My Lords, I am grateful to the noble Lords, Lord Peart and Lord Wigoder, for their comments. May I just pick up one or two points. Yes, of course commitments have been made to the Civil Service. The Prime Minister referred in her Statement specifically to Assistant Secretaries and Senior Principals. Also commitments have been made to the House of Commons by this Government. But the situation has changed and the Government regard it as their duty, when it is necessary, to make the necessary adaptations and openly to say, "All right, we are sorry. In the national interest we feel it right that we must go back on these commitments".
I am the first to agree with the noble Lord, Lord Peart, who has indeed himself fulfilled the job of Minister responsible for the Civil Service, on the enormous debt that we owe to the Civil Service for all that it does for us. Here I come to the

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point made by the noble Lord, Lord Wigoder, who queried in a rather quizzical manner whether this was the first step of an incomes policy. In no way is it this. But what it is is the Government realising that they have to live up to their responsibilities in the national interest in regard to the salaries and wages of those to whom they are directly responsible. It is no good saying we are going to leave this entirely to the private sector. The Government themselves must share this, and must be ready to ask those who are in positions of leadership to give a lead in this regard. It is this theme that runs through the whole Statement of my right honourable friend the Prime Minister.
Perhaps it would be for the convenience of the House, following on the question asked by the noble Lord, Lord Wigoder, if I said what are the new recommendations by Boyle which have been accepted for Peers' expense allowances. Overnight subsistence, £23; day subsistence and incidental expenses, £11; secretarial costs, postage and certain additional expenses, £10. As the noble Lord, Lord Wigoder, said, this is the view of Lord Boyle of one thing and one thing only; it has nothing to do with a salary. Noble Lords come to this House and give of their time without any salary at all. This is nothing more nor less than what is seen by Lord Boyle and his board as being necessary to pay the expenses incurred by noble Lords in fulfilling their duties in this House. It is that, and nothing more and nothing less.
Lord TAYLOR of GRYFE: My Lords, will the noble Lord accept that in the nationalised sector the awards that have now been made give rise to certain anomalies? The going rate for increases in many of the nationalised industries at the moment is around 20 per cent. That applies right through up to management level, whereas board members and nationalised chairmen are being awarded 12 per cent. It makes board membership extremely unattractive to executives in various nationalised industries.
Will the noble Lord accept also that the anomaly has been further compounded by the fact that recent appointments in nationalised industries, notably the chairman of the British Steel Corporation and now more recently the chairman of the BNOC, have placed the rest of the
880
nationalised sector out of line, and the present award does nothing to correct that anomaly? Can I have the noble Lord's assurance that the transfer of nationalised industry chairmen and board members from the Boyle regulations to the new review situation will be implemented fairly soon?
4 p.m.
Lord SOAMES: My Lords, in answer first of all to the last question asked by the noble Lord, Lord Taylor, yes, this is the last time that the salaries of the chairmen and board members will be recommended by the Boyle Review Body. Their next round, which will not be before this time next year, will be settled by the Ministers who have a certain measure of responsibility for each particular nationalised industry in consultation with the chairmen, with an overall view, as it were, being kept by the Minister in charge of the Civil Service, to ensure that it is not too much out of line, bearing in mind that indeed the responsibilities of some are greater than others. It may well be that they will not be the same; they are not now and they will not be necessarily the same.
As for the differentials and the problems that arise there, there are, of course, difficulties. The nationalised industries are not the only field where people working below the board get paid more than members on the board of the company. This happens from time to time in the private sector. You can find it in many companies, and indeed it is also most certainly found in Government where I am glad to say that permanent secretaries get more money than their Ministers. Indeed, junior Ministers get paid much less at the moment than a Principal in the Civil Service. This is the way the cookie crumbles, as it were. If they do not like it, I am afraid there is only one solution for them and that is to go. But we do not want them to go and we think that on the whole they will soldier on and continue to do this. But the way to cure this difficulty, frankly, is not for the board members to go up by 25 per cent. but for the others to come down in their wage increases and in their salaries from now on.
Lord BOYD-CARPENTER: My Lords, may I ask my noble friend two questions

881
also on the subject of the chairmen and the boards of nationalised industries on one aspect of which he has just replied to the noble Lord opposite? Am I right in understanding what he has just said and what was said in the Prime Minister's Statement as indicating that the Government on this occasion have not avoided the difficulty which arose in 1975 when the decision of the Wilson Government left a number of full-time executive board members being paid something like £2,000 or £3,000 less than their immediate subordinates, with an immediate effect, of course, of restricting promotion or so-called promotion from below to those boards? On this occasion has this been avoided?
My second question is: while congratulating and applauding the decision to take the chairmen and members of nationalised industry boards out of the Boyle remit, I should like to ask whether the noble Lord really feels and considers, as the Government do not control the pay of anybody else in the nationalised industries, that it is necessary for Ministers, as he has indicated, to exercise direct control over these or whether it would not suffice simply to preserve a reserve power in case some nationalised board or chairman were really silly?
Lord SOAMES: My Lords, I am grateful to my noble friend, Lord Boyd-Carpenter, for the questions he has asked. Where differentials of salaries are concerned, no, the problem has not been cured and indeed to have cured it would have required an increase of salaries to executive board members which would have been beyond what the Government think would be right in the present circumstances.
On the other hand, what we have done is to put the emphasis on board members and whereas the increase of salaries to board chairmen will be of the order of between 9 and 10 per cent., that for board members will be between 12½ and 13½ per cent. So, within what was available in terms of percentage increase, we have put the weight on the executive board members for the very reason which my noble friend has stated, in order to do our best with differentials, given the circumstances.
882
As for the question of the extent to which Ministers should interfere with the salaries of board members in the future, this will of course be for the Minister concerned, together with the chairman. The objective here, and the reason indeed, as noble Lords will see when they come to read the report, and the motives which brought Lord Boyle to suggest that they should be taken out and which brought the Government to be of the same view, were because we wanted market forces to apply to greater effect. This was the main reason, and my noble friend can, I hope, take some comfort from that.
Lord ROBBINS: My Lords, without commenting on any of the detailed proposals which have been revealed to your Lordships' House by the Leader of the House, may I ask him whether, despite his denial to Lord Wigoder, any suggestion of an incomes policy was conveyed by the Statement which he read to the House? Did it not contain an implicit admission of the fact that, where the Government is the employer, directly or indirectly, even the most pronounced monetarist would agree that it would be folly not to have an incomes policy?
May I ask him also whether the measures which have been proposed, austere though they are, do not constitute a recognition that in a small way, whatever they do to inflation, they will certainly have a tendency to retard the increase of unemployment?
Lord SOAMES: My Lords, hopefully it will do more than that. Hopefully it will encourage others to settle for less high wage increases and that will have a major effect on unemployment. I see what the noble Lord is trying to say, and I am not going to accept it because we have a very broad span of increases which have been reported to this House in the public sector in recent times, from 14 per cent. to the nurses down to 5 per cent. to Cabinet Ministers. If that is an incomes policy, it is a very broad one.
What I think we are doing is not pursuing an incomes policy but pursuing—properly so—a sense of responsibility.
Lord BOOTHBY: My Lords, I may have missed it, but may I ask the noble Lord whether Her Majesty's Government

883
intend to implement the belated recommendation in the Boyle Committee's Report that members who served in the House of Commons for a considerable length of time before 1964 should have a pension as of right; and whether he realises that most of us are now dead, and that if he waits for very much longer we shall all be dead?
Lord SOAMES: My Lords, I do not know about the noble Lord but I am alive and no, I am afraid this does not form a part of the Boyle Report, though I know that the point raised by my noble friend is taken. But it is not taken by Lord Boyle: he was not invited so to do.
Lord SHINWELL: My Lords, I failed to gather from the Statement by the noble Lord what is the estimate of the accumulated savings to be effected as a result of the decision taken by the Government. I think we ought to know.
Is the noble Lord aware that the Statement is, in my opinion, far from draconian in the sense that it is really disastrous?— because I recall 1931, when the unemployment benefit was reduced by 10 per cent. and the salaries of Members of Parliament which at that time were only £400 a year were reduced by 20 per cent. and there was a similar reduction for the Civil Service, Cabinet Ministers and all the rest at that time. So it is not as serious as some would suppose.
Lord SOAMES: Taking the first point first, my Lords, I have a figure of £6 million of savings in my head. I must own up to your Lordships, in that whether that applies to Report No. 15 or Nos. 14 and 15 together, I am not absolutely certain, but No. 14 is certainly where the large money is. As I say, the figure I have in my mind is £6 million and I do not think that is far out for the total. As to whether or not it is draconian, it was not seeking to be draconian. As I said and can only repeat, what the Government thought they were doing was performing their duty given the circumstances and fitting in the natural desires of those concerned—in effect trying to match that on the one hand with the national interest on the other.
Lord LEE of NEWTON: My Lords, may I ask the noble Lord to make it
884
quite clear that the expenses of Members of this noble House are purely to cover their own expenditure when living in London and so on, so that people are therefore not misled either by ignorance or by malicious statements coming from another place?
Lord SOAMES: I do not know from whom such statements would come, my Lords, or whether I would have any influence over them in what I say, but of course what the noble Lord asserts is absolutely correct; it has already been said by the noble Lord, Lord Wigoder, and I have confirmed it. This is purely for expenses incurred and there is no element in it of salary whatever.
Viscount SIMON: My Lords, as the noble Lord has given an estimate of the saving, may I ask whether that is a gross figure or whether it takes account of the taxation?
Lord SOAMES: That was a gross figure, my Lords, or at least I hope it was.

EMPLOYMENT BILL
Report stage continued on Amendment No. 3.
4.12 p.m.
Lord ROCHESTER: My Lords, in Committee I supported the amendment to which the noble Lord, Lord Wedderburn of Charlton, referred. I did so because I very much agreed with the principle that trade union procedures should be exhausted before complaints were laid before tribunals, in much the same way that I have great sympathy for the view that procedures as between employers and trade unions should be followed right through before industrial action is taken. In the course of discussion, however, I said that, if that was to happen, it might happen within a reasonable time, and that point appeared to be acknowledged by the Labour Opposition Front Bench, if I recollect correctly. At any rate, I had supposed that for that reason, in any amendment put forward on report, there would be some recognition of the need for a time limit in the observance of union procedures. I therefore wonder why this has been omitted from the amendment, for without it it serves to weaken

885
somewhat the support I would otherwise feel for the amendment, and it seems to become even less likely that there will be that consensus among your Lordships on this matter, for which I was genuinely hoping in Committee, and certainly at that time strongly advocating. I should welcome any enlightenment on that point that the noble Lord, Lord Wedderburn, may care to offer.
Lord MACKAY of CLASHFERN: My Lords, it is important in seeking to deal with this amendment to stress, as I did when I dealt with a somewhat similar point in Committee, that the subsection into which the amendment proposes to insert a reference into what I shall call for short the Bridlington procedures is a subsection which provides that a provision in an agreement shall be void in so far as it purports to exclude or limit the operation of, read short, the rights conferred by the clause. So far I have not heard any justification for the view that the TUC's disputes principles and procedures do anything of the kind; and if they do not do anything of the kind, then there is no need to exclude them from the operation of this provision. The principle of Clause 4(ii) appears to be absolutely self-evident; if you confer general rights by statute, then it ought not be be possible for people to evade that by making private contracts not to exercise those rights, and we understood that we had the agreement of the noble Lord's friends in another place to that principle when the matter was debated there.
As I said in Committee—and I do not withdraw anything of what I said then; some of the observations I made then were quoted by the noble Lord a short time ago—we believe these procedures are valuable and that they have a very beneficial effect in reducing inter-union strife. We also believe that this procedure should not ultimately preclude individuals from making use of their rights under this clause. We have no intention whatever of undermining the Bridlington procedures. A tribunal determining a case of expulsion or exclusion will include in its consideration the question whether the action was taken in pursuit of these procedures or similar arrangements, and there is nothing in the clause as drafted which prevents that. In my view, it is perfectly plain that that is something
886
which is open to the tribunal to do and which the tribunal would take into account. It is worth noting, as I remarked in Committee, that in one relevant case taken under Section 5 of the 1974 Act, which was not a closed shop case, Bridlington procedure was found to be reasonable in its application to that case.
The code of practice on the closed shop which the Secretary of State will issue after consultation with ACAS will certainly contain practical guidance on the significance of the Bridlington procedures. Such codes issued under the Bill will be taken into account by tribunals in determining questions to which they are relevant, as is provided by the clause. Accordingly, as I said, I am not aware that the Bridlington procedures in any way seek to exclude or limit the rights created by these clauses. But if they do, or if in the future they were amended to do so, we believe it is right that only in so far as they purported to limit or exclude the rights created by the statute should they be void. There would never be any possibility of the whole agreement being void, and certainly there is no intention of making it so by any of these provisions. Therefore I do not see, with all respect, how the noble Lord can say there is any danger of the tribunal not being entitled to see whether the decision that has been come to and is under review was a decision come to in accordance with these procedures.
I would emphasise that the Government recognise the usefulness of these procedures and the sacrifices that are made by the people who take part in them voluntarily and give of their time to these procedures, and we wish them to continue and to be successful. There is no intention whatever to undermine them in any way, but we take the view that however valuable, no agreement should be allowed ultimately to restrict an individual's statutory rights. In those circumstances, I invite your Lordships not to agree to the amendment.
Lord WEDDERBURN of CHARLTON: My Lords, we are somewhat disappointed by that response, although not altogether lacking in expectation of it, and I would make three points in reply to the remarks of the noble and learned Lord the Lord Advocate. First, the scale

887
of the problem under this clause is very small. He himself referred to the period between 1974 and 1976, when there was a statutory provision of a more general but similar kind, and only 33 cases and four successful closed shop cases were found by the tribunals in two years, and in the Independent Review Committee, in which my noble friend Lord McCarthy and I play a part, we have had only about 30 cases within the terms of reference in four years. Thus, there is a very small number of cases involved, except in the area covered by the TUC Bridlington disputes principles and procedures.
In reply to the noble Lord, Lord Rochester, may I say that the reason it is not possible to include in this amendment any particular time element is because that would go to the reasonableness of the operation of the procedures. Clearly if someone was expelled or refused admittance and the process undertaken under the disputes procedures took an unconscionable time, that would go to the reasonableness of the exclusion.
The same is true of the point of the noble and learned Lord the Lord Advocate. Nobody is denying that the ultimate right of someone under the clause—albeit we do not like the clause—is to go to the tribunal. But when the noble and learned Lord the Lord Advocate gives an assurance that no part of the present TUC disputes principles and procedures contained in the little booklet is capable of being understood to be void to any extent—it would be rare that I suggested that—he is being a little rash. But there is at least an argument that when a union is bound, and contractually bound, to exclude a member by reason of the operation through the model rule of all these procedures, that could be understood to be some limit which is purported to be placed upon the operation of the clause. I am glad that the noble and learned Lord does not think so. I can only hope that the tribunals, and more especially the appellate courts, will agree with him when the matter comes before them, as I am sure they will. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.21 p.m.
Lord McCARTHY Lord McCARTHY moved Amendment No. 4:
Leave out Clause 4.
The noble Lord said: My Lords, it is with regret that we find that we have to move this particular amendment, which in effect asks the House to leave out the whole of the proposals for unreasonable exclusion. As has been said by the noble and learned Lord, Lord Elwyn-Jones, we have sought to suggest a series of reasonable and helpful ways of making this clause work better. We have tried to point out that the requirements of trade union rule books could be put in jeopardy by the operation of the clause. We have tried to suggest the operation of Bridlington procedures, which, the last time that we discussed this, and indeed today, the noble and learned Lord opposite said the Government like to see work, and think work well. We have tried to suggest that trade union job territory objectives would be affected by the clause, and that all kinds of unnecessary and extremely unwise competitive trade union practices would develop; the forces of trade union competition would grow as a result of certain parts of this clause.
Today in particular we have sought to put forward once again three very modest amendments dealing with the jurisdiction of the EAT, Bridlington, and the question of lapsing. We have been given four different kinds of answer. Sometimes we have been told that the spectres that we have sought to raise would never appear because the tribunals are full of extremely reasonable men, and therefore, although it is always possible to include in the Bill provisions to deal with the fears of the small businessman, one cannot do anything to deal with the fears of the small shop steward; he must trust in the tribunal.
Furthermore, we have been told that some of the practices that we should like to stop ought to go on. We have been told from time to time that the kind of competition involving the right to choose between unions—which some people say is supported by the European Convention decision—is something that the Government would like to see. Therefore we are quite wrong to suggest that the Government should be careful because parts of this clause could make trade union competition, which is the besetting sin of the British

889
trade union movement, much worse than it now is.
Sometimes we have been told that anything that we might suggest, for example, in relation to lapsing, cannot be done, however sensible and practical it might be, because the trade unions might abuse any discretion that we might give and might wheedle people out of their unions by fiddling about with check-off provisions. Sometimes—not today, but previously—we have been told that we must wait and see because all these issues about which we are concerned will be dealt with in the code of practice when it comes.
We are not suggesting—and I would not suggest—that trade unions, where they have closed-shop areas, should be beyond the reach of the law. I would not suggest for example, that where trade unions unreasonably, unlawfully expel people, they should be beyond the reach of the law. Indeed they are not beyond the reach of the law, because the ordinary courts interpret the rule book as a contract between the members, and they apply the rule book in an extremely rigorous way. I would not oppose the kind of statutory tribunal which was proposed in the first instance by the Donovan Commission. It seems to me that these kinds of tripartite tribunal could play a useful role in dealing with these relatively small problems, and that they would be agreeable to all sides.
But that is not what is being suggested. What is being suggested is a series of provisions which we believe will quite unnecessarily and quite unjustifiably select out trade unions in relation to exclusions and admissions in a way which the record does not suggest is necessary, and which the Government, in their own estimate of the size of the problem do not really suggest is necessary. For that reason we must at this time oppose the clause. I beg to move.
Lord ROBBINS: My Lords, if the Opposition decide to divide the House, I shall go into the Lobbies supporting the Government, but I must confess that I am disappointed that so little consideration has been given to these three amendments to Clause 4. Although I find myself ideologically—though not in a friendly capacity—opposed to the noble Lords who are leading for the Opposition, it seemed to
890
me that the case that they put forward deserved more consideration than it received from the Government Benches.
Lord HOUGHTON of SOWERBY: My Lords, I do not think that I am in favour of removing this clause from the Bill. If we remove Clause 4, we must also remove Clause 5, because Clause 5 deals with the compensation element of procedures under Clause 4. On this matter I have taken a perfectly consistent view for a very long time. As I told your Lordships previously I was a member of the Liaison Committee of the Parliamentary Labour Party, the National Executive of the Labour Party, and the General Council of the TUC, which tried to get agreement on a wide range of matters relating to the future policies of a Labour Government. That was in 1973. What emerged from the discussions eventually came to be called the social contract, although, as I have observed previously, in the course of the discussions the trade unions did not at all want the word "contract" to be used. In fact they would not even use the word "compact"; it was to be an "understanding".
Part of the understanding was what a Labour Government should do with the Industrial Relations Act 1971. The trade union view at the time was very simple and direct: get rid of the Act, repeal it in its entirety, finish it. But that became less attractive as we drew closer to the examination of what repeal would mean in those absolute terms. Some parts of the 1971 Industrial Relations Act were in fact re-enacted by a Labour Government, and part of what they did will be considered later when we give attention yet again to clauses relating to the closed shop.
However the relevance of what I am saying to the clause at present under consideration is that in the course of those negotiations there was expressed a very strong view that exclusion or expulsion from membership of a trade union was not a private matter between unions and individuals. Questions of public policy were involved; and, indeed, the more power the unions got and the more agency shops or closed shops they obtained, then the greater the public interest in how the unions exercised their powers and in what opportunities were given to members

891
and individuals to get redress for grievances against unions.
I think my credentials are pretty good. I was a secretary of a national trade union for 38 years; I was a member of the General Council of the TUC for nearly 10 years; I have been chairman of the staff side of the Civil Service Whitley Council and a member of it for a very long time; and I was the secretary of a union which had remarkable success, with the most tolerant constitution and the most agreeable and tolerant relationships between the union and its members. In all the time I was the general secretary we never had less than 90 per cent. paying membership in a purely voluntary trade union, and frequently it went to 95 and 96 per cent. That was because we addressed ourselves to the needs of members and paid attention to their requirements, and followed the course of democracy to the utmost of our ability; and with the voluntary co-operation of a membership of 60,000 or 70,000 spread in 1,100 offices throughout the United Kingdom we had one of the best organised unions affiliated to the TUC.
When it comes to using the rules to exclude a person from membership or to expel an existing member from membership, even if there is not a closed shop arrangement, one has to be careful of the harm one may be doing to the livelihood and to the reputation of an individual member. Therefore I should have thought that what trade unions wished to have was the cleanest possible bill on matters of exclusion and expulsion; and thus it seemed to me—and this is the view I expressed so strongly in the course of the discussions we had in 1973—that the only satisfactory course was to give aggrieved members the right to appeal to an independent tribunal whose work would be public and whose responsibilities would be to the public as well as to the unions and the members concerned.
That view did not prevail. In the end, what was accepted by the Labour Government was the, not desire (I would not use that word) but the willingness of the trade unions to have an independent body of their own. The argument was that trade unionists so feared the law and were so strongly prejudiced against judges and the courts that the only satisfactory
892
court of appeal to them would be one appointed by them; and this is in fact what was done. This tribunal consisted of persons nominated by the TUC; the chairman, I believe, was also nominated by the TUC, but after consultation with the Secretary of State for Employment and the chairman of the Arbitration and Conciliation Service. So far as I know, that body is still in existence. The names of its members I do not know. What has been the extent of the use of this tribunal by aggrieved members I do not know, either. Perhaps I ought to have tried to find out; but it seems to me that a body of this kind ought to be operating more clearly under public observation.
So I feel that this issue now recurs on the Question, Whether the clause shall stand part? Here we have a set of rules and the opportunity of an appeal to an independent tribunal of a more formal character—not a court of law, but a statutory body with powers to award compensation. I am not aware that the trade union committee or board of appeal has the right to award compensation. I have not heard that it has. The Donovan Commission reported, in paragraph 630 onwards, in favour of the setting up of an independent tribunal, and said—I am quoting from paragraph 630:
"In our view the connection between membership of a trade union and employees' livelihoods means that trade unions cannot be regarded simply as voluntary clubs from the members' point of view".
Then they went on to describe the consequences that could follow exclusion from membership or expulsion from membership, especially in a closed shop situation.
I therefore consider that your Lordships' House ought to think carefully before we regard the existing state of affairs as satisfactory. I have no knowledge of complaints made against it. I want to be absolutely fair about this: I have heard nothing to the detriment of the operation of that body. Nevertheless, I feel that as a matter of principle and as a matter of public policy there are occasions when one has to lift procedures to a higher level of public responsibility, accountability and facility for public judgment on the workings of our intricate system of human relationships. All this leads me to feel that it is better to leave Clauses 4 and 5 in this Bill than take

893
them out. I think this is the time to decide once again whether we want one system or the other, and I strongly prefer the one to which I have adhered for the last 13 years.
4.38 p.m.
Lord BOYD-CARPENTER: My Lords, I hope that the noble Lord, Lord McCarthy, will take the excellent advice which has just been given to him by his noble friend Lord Houghton of Sowerby, speaking with the advantage of immense experience, and not press this amendment. The clause may or may not be in perfect form. We have had a good deal of argument, which it would be a waste of time to recapitulate, on precise aspects of it. At Committee stage, apparently, the noble Lord, Lord McCarthy, was sufficiently satisfied with the answers he got not to press his amendments, and I hope he will follow that good habit here. Because there is really one simple justification for this clause, and that is the continuance of a closed shop situation. I agree with the noble Lord, Lord Houghton of Sowerby, that even in a non-closed shop situation expulsion from a union, with the personal and social problems that that can create, is a very serious matter, and I agree with him that it can raise matters of public as well as private importance. But I concentrate on the closed shop situation, because where you have a closed shop, and if they are to continue, expulsion from a union can and generally does mean the loss of your job, and refusal of election to a union can mean the impossibility of obtaining a job you want. That is a matter of major importance, and when an individual is so placed I must confess it offends my sense of justice that anyone should seek to deny him access to an independent tribunal to argue his case.
May I very briefly support that view by recalling to the House a particular case in which I was involved when I sat in another place as Member of Parliament for Kingston-upon-Thames. There came to my regular surgery a printer who had been a member of one of the major printing unions of this country for some years. He had emigrated to Australia for two or three years and, naturally, during his absence had allowed his membership of the English union to lapse, although as a matter of interest he had joined the equivalent Australian one.
894
On his return to Kingston, he applied for and was given a job as a printer on the local newspaper close to his home. There was a closed shop situation there and the particular union refused to accept him in membership. The reason that they gave was not that there was anything the matter with him—he had been a loyal trade unionist in two continents all his life—but they said that they had other members whom they preferred should have that particular vacancy. That seemed to me as the local Member of Parliament an intolerable interference in the right of a man to do a job he wanted and where the employer wanted him. I am glad to say that it was satisfactorily resolved by a discreet indication to the headquarters of the union that Parliamentary pressure and perhaps a measure of publicity might be directed on them if they did not modify their view. By happy coincidence they did. He was duly elected to the union and got the job.
The situation where that kind of thing can happen surely must justify the inclusion of some provision which will afford a man whose livelihood may be taken away, who may be denied the right to work in the trade in which he has a skill, some independent appeal. This surely must be given to him. As a final consolation to the noble Lord, Lord McCarthy, I would remind him—although it should hardly be necessary to remind a member of the Labour Party of this—that taking out Clause 4 is apt to be a very long drawn-out and painful operation.
Lord LEE of NEWTON: My Lords, may I support my noble friends in their amendment. I can never understand, and I have said this before, why people should imagine that some of us spend half our life running around trying to get members into trade unionism in order to kick them out. Clause 4 is, I think, based upon that premise. A short time ago we were discussing in an amendment the issue of a person who has been excluded and who feels that it has been done erroneously. I take the point of the noble Lord, Lord Boyd-Carpenter. It is possible at local level for something of that kind to happen. But I would remind the House that it is also the case—indeed, the case he quoted was rectified by going to headquarters on the matter—

895
that in almost every trade union movement that I know there is the facility for any member who feels that he has been excluded erroneously or by malice to take the matter further.
In my own union we have a final appeal court. Irrespective of whether it is a case against the executive council or against the local district committee or whoever it may be, every individual member has the right to take a case to the final appeal court. That final appeal court is not made up of full-time officials but of rank-and-file members whose sympathies are in the main almost bound to be with the rank-and-file person who takes his case to them. I could give you instances of where time after time they have turned down recommendations of executive councils in favour of the individual. So it seems to me that the possibilities of a person being wrongfully excluded are very small if, which is his right, he takes the use of the rule book to its final conclusion.
On the point about Bridlington, I think that the British trade union movement is in a peculiar position vis-àvis most of the others. We made the mistake in this country of pioneering trade unionism. Many of the mistakes in our compilation of the rules have been avoided by others. The greatest irony is that the British TUC advised and almost set up the modern German trade union movement—in a way that they cannot do with their own members. Industrial unionism—one union, one industry—is by common agreement the right kind of approach to organising. But you cannot do it in Britain. With respect to those of my noble friends who are members of general workers' unions, how can you get one industry, one union, when you have two or three large general unions spread over 30 or 40 industries?
For this reason, I ask the Government to look at this question again. One will often find that a number of trade unions may be organising the same class of labour, the same kind of craftsmen. It is a pity. It is inefficient, but we cannot get to the point of having 12 or 17 unions as in Germany. We are trying, I think, by the amalgamations that are taking place, to reduce the number of unions; but under our present set-up we cannot
896
get to the point that I should like to see: that of industrial unionism. For this reason, I believe that the TUC's Bridlington arrangements, peculiar to this country and to our own unions, are very vital. I am not in the least trying to denigrate the ideas of a tribunal, but I want to feel that people who have spent their lives trying to deal in a sensible way with the problems I have been trying to outline to the House should have the opportunity to do so first.
This is what the TUC are doing about Bridlington, in trying to get accommodation between people of goodwill caught up in a structure which is very difficult to work and difficult to get rid of. I hope that if we are to avoid what could come to a difficult problem as between the contents of Clause 4 here and the TUC's Bridlington arrangements, we can do so without exacerbating a situation which has no need to become ugly but which could become so if we are not careful.
4.49 p.m.
Lord BROOKES: My Lords, I believe that this House would be discharging nothing more than its ancient duty if it were to see these clauses as providing the minimal protection for the dignity and liberty of the subject. I have experienced situations of great tragedy and sorrow in which the closed shop has been misused or has been sought to be misused by enthusiastic and well-meaning trade union officials. I will not bore the House, but I recall that perhaps the best convenor that I ever had to contend with, a magnificent chap who went bald-headed for production and bald-headed for top pay—and if there were more like him in this country today our economic dilemma would not be so severe—was to be cast out of his union because he has a disagreement with its headquarters; and 14 shop stewards finally presented the pistol point to me on the classic and understandable argument that if you do not belong, and do not pay to belong, you have no right to enjoy the benefits of trade unionism. That is a very ancient belief and one not without its merits. But it rarely stands up to the consistent behaviour which has characterised human life when we seek to inflict appalling disciplines on a man and his family for a permissible disagreement.

897
I met that particular situation by asking the 14 men present to raise their hands if they had not been baptised in church and then to do so if they were married. It so happened that they were all married. I inquired whether they had children and whether they had bothered to have them baptised. Then I asked: "How long is it since any of you were last in church? Hands up, over the past five years"? There was only one—a Wesleyan—and a good man at that. Thirteen were consistently enjoying benefits and expecting a decent burial while seeking to exclude a fellow man from his livelihood.
4.50 p.m.
The Earl of GOWRIE: My Lords, the noble Lord, Lord Robbins, told us that though he was disposed to support the Government and resist attempts to remove Clause 4, he did not feel that we had made a case against the amendments. In fact, he was being a little premature because the case, such as it is, is now coming from the Government, though the Government have been somewhat pre-empted in their work, as we also were with secondary picketing during Committee by a splendid speech from the noble Lord, Lord Houghton of Sowerby, as well as from my noble friend Lord Boyd-Carpenter who asked the noble Lord, Lord McCarthy, to attend to what the noble Lord, Lord Houghton, had said.
The noble Lord, Lord Houghton, answered any anxieties that were expressed by the noble Lord, Lord Lee of Newton, that in some way we are downgrading the union's own procedures on matters of unreasonable exclusion or expulsion by saying—and I quote the noble Lord, Lord Houghton:
" Questions of dismissal and exclusion from unions are not just a private matter between unions and individuals, but questions of public policy are involved".
We of course heartily agree with that.
The effect of this amendment is that there would be no right of appeal to an industrial tribunal over unreasonable exclusion or expulsion from a trade union where membership of a specified union is required for employment, in short, in a closed shop situation. Therefore, Clause 4 embodies one of the major changes in the closed shop law which the electorate was promised last year. It will provide a new and easily understood right
898
against unreasonable exclusion or expulsion from union membership in situations where a person's livelihood depends on such membership. We in this context need to look forward to the provisions about picketing because much of what we are doing on secondary picketing involve for their effectiveness these measures against unreasonable exclusion in respect of the closed shop. My noble friend Lord Brookes—with all his experience of industry—made an impassioned appeal that rights of this kind should be retained.
The idea behind this kind of right is not new. The Donovan Commission suggested individuals should have a legal right of appeal to an independent body against exclusion or expulsion. The Labour Government of that day put forward such a right in In Place of Strife. The 1971 Act included it in its provisions on members' rights and Section 5 of the Labour Government's 1974 Act gave individuals a right to complain to a tribunal of arbitrary exclusion or expulsion. Even the last Administration, amending the 1974 Act, appeared to accept the case only to be persuaded, as the noble Lord, Lord Houghton, told us, to try first a new voluntary body, the TUC's Independent Review Committee. In being so persuaded it nevertheless promised to review its effectiveness and come forward with legal provision if necessary.
In our society union membership is often not a voluntary matter. Over 5 million workers are in closed shops and for them union membership is necessary to get or keep a job, or even to pursue a career at all. As the Donovan Commission put it,
"it may well be thought unacceptable that a citizen's livelihood should depend upon the will of a few other citizens being members of a trade union committee or branch committee".
It is unacceptable; and the noble Lord, Lord Houghton of Sowerby, was quite right in saying that therefore large issues of public policy are involved. Of course, union members do have certain common law rights but these are not always clear or easily enforceable and the rights of applicants for membership who are not yet in closed shops are even more doubtful. What we are trying to provide is a much more straightforward right. Noble Lords opposite, notably the noble Lord, Lord Lee, have expressed fears that the work

899
of the TUC Independent Review Committee will either cease or be seriously disrupted. We do not accept that this should be. If the remedies it provides are effective—and it has been stressed in the debate how unions agree to follow its recommendations and reinstate members—then people will want to go on using it and there is no reason why the TUC should wish to discontinue it—and the Government hope they will not wish to discontinue it.
More generally, the provisions allow—as they do in unfair dismissal cases—for conciliation before tribunal hearings; and, as with dismissal cases, this will encourage the use of voluntary procedures where both parties want it. It may indeed lead—as it has done in the dismissal area—to improvement in voluntary procedures. Over a decade ago now the TUC itself laid down a series of principles which affiliates should adopt on admission, disciplinary and expulsion matters. Many unions are still a long way short of these standards and we all agree that there is room for some improvement.
I know the TUC has expressed some fears that this clause will disrupt the workings of their "Bridlington" principles and procedures. The noble Lord, Lord Wedderburn, had something to say on that on Amendment No. 3 and his noble friend Lord Lee of Newton tackled it in respect of this amendment. We understand their concern and we acknowledge that Bridlington is a necessary and important feature of our industrial relations landscape. But we believe their fears are exaggerated here. I do not know of any reported case under Section 5 of the 1974 Act where an exclusion or expulsion in order to comply with a Bridlington award was found to be unreasonable, but I do know of one case in which the tribunal specifically endorsed the application of Bridlington (Bannister v APEX).
However, as the noble Lord, Lord McCarthy, rightly anticipated, we will consider providing satisfactory guidance in the Code which is the proper place where we can satisfy any real fears that might remain; though, as I have argued, I do not think that such fears are substantial. That is why I ask your Lordships to resist the amendment.
4.58 p.m.
The LORD CHANCELLOR: My Lords, before the noble Lord, Lord McCarthy, replies, there is a point which I feel bound to put before the House. In the 1975 legislation the noble and learned Lord will remember that he and I had a difference of opinion about the European Convention on Human Rights. I begged him then to consider its implication on the legislative provisions that he was then supporting. He told me in effect, with his usual courtesy, that I was not right. The result was the humiliating report of the European Commission in the case of the three railway men.
I ask the noble Lords, Lord Wedderburn and Lord McCarthy, to consider seriously not merely the eloquent pleas from almost every quarter of this House, and I ask the noble Lord, Lord Lee of Newton, to consider not merely the eloquent pleas from every quarter of this House, but the provisions of the European Convention on Human Rights. When one is dealing with a closed shop situation, one is not dealing simply with a private club with rules of its own, admirable officers, and operating procedures in private which may be just. I ask the noble Lord, Lord Lee, particularly to remember this. Article 6(1) of the European Convention has these words:
"In the determination of his civil rights and obligations everyone is entitled … to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly, but the press and public may be excluded for all or part of the trial in the interests of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice".
I repeat:
"In the determination of his civil rights everyone is entitled … to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly …".
Well, I know what I think about that. I think that the noble Lord's amendment is inconsistent with the European Convention.
Lord McCARTHY: My Lords, I am afraid we cannot agree to withdraw this amendment. I should like to start very quickly because I do not want to retrace the whole argument as that would abuse the time of the House. It seems to me that the noble Earl, Lord Gowrie, really did not answer the amendment. It is rather strange to say that he would have answered the amendment, because I thought that was the job of the noble and learned Lord the Lord Advocate and of the noble Lord, Lord Lyell. What he sought to answer was why we should not put down this amendment on Clause 4; and I would have thought that, having listened to him, the noble Lord, Lord Robbins, can see what we are up against.
The fact is that we cannot make any dent in this clause even in the most reasonable way. We cannot make any dent in it and therefore, despite the fact that we are not saying—and with very great respect this brings me to what was said by the noble and learned Lord the Lord Chancellor—although we are not saying that there should not be law in this field, indeed there is law in this field. There is law in the common law in this field. If people are expelled unfairly from unions, then they are brought before the common law and given very considerable rights under the ordinary common law; and we have no desire to affect that. This is where the human rights come in, and if they do not come in there we shall discuss it very fully when we come to Clause 7. That is my answer to him.
May I say to the noble Lord, Lord Houghton, that the Independent Review Committee is alive and well and living in Congress House, but it is not for me to defend what it does. Let me say to the noble Lord, Lord Boyd-Carpenter—and this comes back to the same point that I made earlier about the High Court—the fact is that the case he gave could very easily have gone before the common courts of this country and the decision would probably have been the same. In the case that he gave, in fact, of course, it was the union, by conciliation, as I understand what he was saying, which in the end gave the man his card back; and of
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course you could not get a card back under this clause.
Lord BOYD-CARPENTER: My Lords, I am much obliged to the noble Lord for giving way. In suggesting that my constituent should have gone to the High Court, would he just tell me how long that would have taken and what would have happened to him, already unemployed, in the interim?
Lord McCARTHY: My Lords, I do not know how long it would take if you went through this procedure. I am not able to say how long these things take. What I am saying is that in fact the case he was talking about was dealt with by conciliation and the man got his card back. He might have got his card hack from the Independent Review Committee if I am allowed to say that, because we do give cards back—but you will not get your card back under this clause. All you will get is compensation. Therefore, for all these reasons, I am afraid we must press this amendment to a Division.
Lord HARMAR-NICHOLS: My Lords, before the noble Lord sits down, could I ask him: does his argument mean that he does not believe that anybody ought to have their common law rights removed from them by statute?—because it would be important to have his view in view of later amendments.
Lord McCARTHY: My Lords, when we raised the very difficult problem about what would be the relationship between the tribunals and the common law courts in respect of trade union expulsions, I understood noble Lords on the opposite side of the House to say that in some way these would continue. I would want them to continue. My problem is what their relationship will be; but that is their problem.
5.5 p.m.
On Question, Whether the said amendment (No. 4) shall be agreed to?
Their Lordships divided:
Contents, 61; Not-Contents, 167.

CONTENTS

Ardwick, L.

Hatch of Lusby, L.

Ross of Marnock, L.

Aylestone, L.

Henderson, L.

Sainsbury, L.

Bacon, B.

Howie of Troon, L.

Shinwell, L.

Balogh, L.

Janner, L.

Stedman, B.

Beswick, L.

Leatherland, L.

Stewart of Alvechurch, B.

Birk, B.

Lee of Newton, L.

Stewart of Fulham, L.

Blease, L.

Llewelyn-Davies of Hastoe, B.

Stone, L.

Blyton, L.

Lloyd of Hampstead, L.

Strabolgi, L.

Boston of Faversham, L.

Lovell-Davis, L.

Strauss, L.

Brockway, L.

McCarthy, L.

Taylor of Gryfe, L.

Bruce of Donington, L.

McGregor of Durris, L.

Taylor of Mansfield, L

Collison, L.

MacLeod of Fuinary, L.

Underhill, L.

Darling of Hillsborough, L.

Morris of Grasmere, L.

Wallace of Coslany, L. [Teller.]

David, B.

Northfield, L.

Denington, B.

Oram, L.

Wedderburn of Charlton, L.

Elwyn-Jones, L.

Pargiter, L.

Wells-Pestell, L.

Fulton, L.

Peart, L.

Whaddon, L.

Gaitskell, B.

Phillips, B.

White, B.

Glenamara, L.

Plant, L.

Winterbottom, L.

Goronwy-Roberts, L.

Ponsonby of Shulbrede, L. [Teller.]

Wootton of Abinger, B.

Hale, L.

Wynne-Jones, L.

NOT-CONTENTS

Ailesbury, M.

Fairfax of Cameron, L.

Mackay of Clashfern, L.

Airedale, L.

Falmouth, V.

Macleod of Borve, B.

Alexander of Tunis, E.

Ferrers, E.

Mais, L.

Allen of Abbeydale, L.

Feversham, L.

Mancroft, L.

Alport, L.

Forester, L.

Marley, L.

Amherst, E.

Fraser of Kilmorack, L.

Massereene and Ferrard, V.

Amory, V.

Gainford, L.

Merrivale, L.

Ampthill, L.

Garner, L.

Meston, L.

Auckland, L.

Geddes, L.

Middleton, L.

Avebury, L.

Gibson, L.

Monson, L.

Avon, E.

Glenkinglas, L.

Montgomery of Alamein, V.

Balfour of Inchrye, L.

Godber of Willington, L.

Morris, L.

Banks, L.

Gore-Booth, L.

Mottistone, L.

Barnby, L.

Gormanston, V.

Mountgarret, V.

Barrington, V.

Gowrie, E.

Mowbray and Stourton, L.

Bathurst, E.

Gray, L.

Murton of Lindisfarne, L.

Bellwin, L.

Grey, E.

Netherthorpe, L.

Berkeley, B.

Gridley, L.

Norfolk, D.

Bessborough, E.

Grimston of Westbury, L.

Northchurch, B.

Blake, L.

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

Nugent of Guildford, L.

Boothby, L.

Nunburnholme, L.

Boyd-Carpenter, L.

Halsbury, E.

Onslow, E.

Bridgeman, V.

Hampton, L.

Orkney, E.

Brookes, L.

Hankey, L.

Orr-Ewing, L.

Campbell of Croy, L.

Hanworth, V.

Penrhyn, L.

Chorley, L.

Harmar-Nicholls, L.

Porritt, L.

Clitheroe, L.

Harris of High Cross, L.

Rathcreedan, L.

Clwyd, L.

Hatherton, L.

Redmayne, L.

Cockfield, L.

Hawke, L.

Reigate, L.

Cork and Orrery, E.

Hayter, L.

Renton, L.

Cottesloe, L.

Henley, L.

Richardson, L.

Craigavon, V.

Hives, L.

Robbins, L.

Craigmyle, L.

Hood, V.

Robson of Kiddington, B.

Cromartie, E.

Hornsby-Smith, B.

Rochdale, V.

Davidson, V.

Hunt, L.

Rochester, L.

de Clifford, L.

Hylton-Foster, B.

Romney, E.

De Freyne, L.

Ilchester, E.

Rugby, L.

De La Warr, E.

Kemsley, V.

St. Aldwyn, E.

De L'Isle, V.

Kilmarnock, L.

Saint Oswald, L.

Denham, L. [Teller.]

Kimberley, E.

Salisbury, M.

Dormer, L.

Lauderdale, E.

Saltoun, Ly.

Drumalbyn, L.

Lindsey and Abingdon, E.

Sandys, L. [Teller.]

Duncan-Sandys, L.

Linlithgow, M.

Seebohm, L.

Dundee, E.

Lloyd of Kilgerran, L.

Sempill, Ly.

Ellenborough, L.

Long, V.

Shannon, E.

Elliot of Harwood, B.

Lyell, L.

Sharples, B.

Elton, L.

McAlpine of Moffat, L.

Sidmouth, V.

Ely, M.

MacAndrew, L.

Simon, V.

Exeter, M.

McFadzean, L.

Soames, L. (L. President.)

904

905

Spens, L.

Thorneycroft, L.

Vivian, L.

Stamp. L.

Torphichen, L.

Wall, L.

Strathcarron, L.

Trefgarne, L.

Ward of Witley, V.

Strathclyde, L.

Trenchard, V.

Willoughby de Broke, L.

Strathspey, L.

Trumpington, B.

Wolfenden, L.

Swinton, E.

Vaux of Harrowden, L.

Worcester, Bp.

Teviot, L.

Vickers, B.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 5 [Compensation]:
5.15 p.m.
Lord McCARTHY Lord McCARTHY moved Amendment No. 5:
Page 6, line 34, at beginning insert ("Subject to subsection (1A) below,").
The noble Lord said: My Lords, I should like with this amendment to take Amendment No. 6, from the point of view of explanation, since it is Amendment No. 6 which contains the substance of what we are trying to do. The House will remember that when we debated Clause 4 in Committee, we sought to limit the effect of subsection (2) which included the phrase, "or is seeking to be", because we thought that that phrase would widen unduly those who were covered by the clause, so as, in effect, to bring them within the ambit of the clause even if there was no prospect, or no likelihood, of them having any job in a closed shop area. We were unsuccessful in that regard, and so we are returning indirectly to the issue of the ambit of the clause as we now come to Clause 5 on compensation.
We are suggesting—and here the substance of what we are suggesting is in Clause 6—that we should insert a sentence or two to suggest that any
"person whose complaint has been declared to be well-founded"—
that is to say, under Clause 4
"shall not be awarded compensation"—
that is to say, under Clause 5—
"under this section unless he shows either that he was dismissed from employment or that he was deprived of the likelihood of being engaged by an employer by reason of, or where there was more than one reason by reason mainly of a contravention of subsection (2)".
So that compensation would be limited, in effect, to circumstances where there was a likelihood of people getting a job inside a union membership agreement area.
The argument for this is that whereas there might be a case—though we did
906
not accept it in Committee—for someone going to a tribunal to get a declaration, for example, that he should be admitted or readmitted to a union where he was merely seeking to be in employment within the area of the terms of Clause 4, without there being the prospect of an actual job, surely it is only logical to limit the possibility of compensation to the area where there is an actual prospect of job loss or, indeed, where there is some likelihood of job loss. Otherwise, compensation would be, as it were, for potential or possible job loss, and we suggest that it might be extremely difficult for the tribunals to calculate what would be the appropriate compensation. Therefore, we move this very mild amendment. My Lords, I beg to move.
Lord MACKAY of CLASHFERN: My Lords, if I may, I will take Amendments Nos. 5 and 6 together, as the noble Lord, Lord McCarthy, did. Where the individual in question has been admitted or re-admitted to the union after a declaration by a tribunal and he seeks compensation, the compensation awarded by the tribunal will be that considered,
"appropriate for the purpose of compensating the applicant for the loss sustained by him"
in consequence of the exclusion or expulsion from the union. Your Lordships need hardly be reminded that industrial tribunals are sensible tripartite bodies, well versed in industrial relations matters and well capable of deciding what level of compensation is appropriate in each case they are considering.
What this amendment seeks to do is to impose upon them what, in our submission, is an arbitrary restriction. If the person in question has not been dismissed from his employment, or lost his chance of employment because of the exclusion or expulsion, his loss may be very small and the tribunal award will reflect this. But surely it is quite wrong that the industrial tribunal should be barred from making any award in such circumstances. The individual might have suffered loss, and quite considerable loss, without being

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dismissed. For example, he might have been suspended from his job while his complaint was proceeding, perhaps receiving full pay but maybe missing regular additonal pay and bonuses through overtime or incentive schemes. This sort of loss should not be ignored. Surely it would be much better to have a general formula of the kind in the Bill without arbitrary restrictions of this sort.
The same consideration would apply to the Employment Appeal Tribunal enjoying the same character. In this case, the formula is "just and equitable, in all the circumstances", and in our view, it is important that this generalised formula should be adhered to. It is quite easy to envisage cases where the individual will still be kept in his job because the employer values his services; but having been deprived of his union card, his prospects elsewhere in his trade or profession may be very bleak as a result of the union's decision. So we say that the Employment Appeal Tribunal should not be precluded from awarding compensation to the individual specified in the amendment. The individual, through being denied union membership, might not lose his current job but, particularly in a heavily unionised industry, he might be jeopardising his whole career if he ever moved from that job. We cannot see why, in that situation, he should not be entitled to the compensation that this amendment would have the effect of debarring. Accordingly, I hope that your Lordships will not feel inclined to support the amendment.
Lord McCARTHY: My Lords, in view of the lateness of the hour and the length of the Marshalled List, I withdraw this amendment.
Amendment, by leave, withdrawn.
[Amendment No. 6 not moved.]
Clause 6 [Determination of fairness of dismissal]:
[Amendment No. 7 not moved.]
5.23 p.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 8:
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Page 8, line 18, at end insert—
("Provided however that the burden of proof that the employer acted unreasonably shall not rest upon the employee.").
The noble Lord said: My Lords, we now turn to the clause relating to unfair dismissal and to a subject which has progressed, through discussion in another place and your Lordships' Committee, to a point where there is much common ground. At the moment, it is agreed on all sides that the various burdens of proof under Section 57 of the Employment Protection (Consolidation) Act 1978 in an unfair dismissal case first apply to the employee to prove his dismissal and, secondly, apply to the employer-respondent whose onus is to prove one of what are sometimes called the "O.K." reasons for the dismissal, such as lack of capability, misconduct, redundancy or some other substantial reason. Then, in the unfair dismissal case, comes the crunch issue as to whether the dismissal is unfair, which to abbreviate it to one word, means whether it is unreasonbale in the circumstances.
For the last six years, the burden of proving that the dismissal on this third point is reasonable has been on the employer. In Committee my noble friends and I advanced reasons why that should be so. The Government rejected our case and we are not making it again. The Government wish in this Bill to change the words in the relevant section to the words as they stand in Clause 6, so as to allow the decision to be
"determined in accordance with equity and the substantial merits of the case".
The issue which arose in your Lordships' Committee was that the Government maintained, as they have done consistently from the beginning of their working paper proposal, that their wording would mean that the legal or persuasive burden of proof would be in the middle and would not rest on either side. The noble and learned Lord the Lord Advocate put that point to the Committee and suggested that the onus of proof was not very important. On 10th June 1980, at col. 267, he said:
"I, personally, do not see that there is need for an onus of proof"
in such a case. In Committee we argued—in my submission, with good legal authority—that in an adversary system

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of the kind which the tribunal is, it is impossible to have a neutral or middle burden of proof. If the issue has to be tested, we suggested that when you come to the crunch issue and suppose that both sides are silent, then in proceedings of this kind, as opposed to certain foreign jurisdictions, one side will win and one side will lose, and the side which will lose will be the party upon whose shoulders the persuasive, or what is sometimes called the legal burden of proof, lies. It appears, as we saw in Committee, that we cannot persuade the Government of this. They say that the burden of proof will be in the middle—that is, not resting on either side. We have argued consistently, both in another place and here in Committee, that that cannot be so.
If we now accept the Government's statement, and if they accept that our fears are at least reasonable, then to add to the clause a proviso that the burden of proof does not lie upon the employee—which is where it would lie, in accordance with our logic, but in accordance with theirs it does not lie upon the employee—would surely calm the fears, and they are very real fears, in the trade union movement and among workers generally about the change in the burden of proof. They know very well the difficulty of proving the point of unreasonableness in the face of the lack of information that they have about the beliefs of the employer. In your Lordships' Committee I cited a number of cases where those beliefs of the employer are the test of his reasonableness.
Therefore it is, in our submission, a perfectly reasonable proviso to add to the clause. It does no violation to the Government's belief. They believe that the burden of proof does not lie upon the employee and will keep their wording that it shall be determined in accordance with equity and the substantial merits of the case. But since there is a doubt—and not a wholly unreasonable doubt—as to whether that can really be done, this is an amendment which I beg to move in the hope that the Government can do something along these lines.
Lord MACKAY of CLASHFERN: My Lords, as the noble Lord, Lord Wedderburn of Charlton, has said, we have already been over this ground. I certainly appreciate the attempt he has
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made to move somewhat in our direction in the amendment which he has now proposed. Perhaps the most important point which he raised in supporting the amendment was the reference to the adversary system in the tribunal as distinct from a more inquisitorial system. Perhaps the crux of the matter between us is whether, when it gets to the stage of determining whether or not the reason proved for the dismissal is reasonable, the tribunal then has the responsibility of making the adjudication. No question of onus should arise. At that stage the adversarial character of the system is very much less in evidence than it might be at earlier stages, and the tribunal takes over as having a responsibility to decide the matter. Accordingly, the point which the noble Lord makes is not good.
In our submission, to accept the amendment would imply the existence of an onus which we are very strongly disposed to try to get rid of. Accordingly, I doubt very much whether, even from that point of view, apart from any other, the amendment would be an improvement. We believe, as I said before, that there are very few cases in which the formal onus question is of importance. However, the way the onus is expressed in the present legislation is of supreme importance. The department of my right honourable friend the Secretary of State for Employment has received many representations to the effect that the present onus of proof means that employers believe that they are guilty until proved innocent. They are very concerned about the implications that the formal position has for the evidential position. Of course, I quite accept that the terms "guilty" and "innocent" are inappropriate to unfair dismissal proceedings, but it is not easy to convince employers of this. Instead—and I believe this is generally the view—the attitude of employers to the legislation as a whole is coloured by what they believe to be a manifest injustice in the way that the onus hitherto has been expressed. This attitude and the fear engendered by it can be the determining factor in an individual employer's decision whether to recruit an extra worker or not.
Encouraging employers to take on more workers must be our overriding objective and that is why we prefer to retain what has been called the "neutralised onus of

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proof" or the present phraseology which does not really admit the existence of an onus of proof at all at this stage of the determination. Accordingly, I would suggest to your Lordships that our formulation is better to achieve the result. I appreciate the movement in the position of the noble Lord, but I ask your Lordships not to accept even this amendment.
Lord WEDDERBURN of CHARLTON: My Lords, in view of what the noble and learned Lord, the Lord Advocate, has said, I think it is incumbent upon me to reply. There are really three points in what he said. First, he said that in the industrial tribunal system the adversarial character of the proceedings is less in evidence than in some other courts, and with that I would agree. But to build upon that the concept that there is no onus of proof involved in relation to the issue of reasonableness surely flouts the very fundamental description of the tribunal which has been put before your Lordships' House earlier today, of the Court of Appeal's description of the tribunal as an "industrial jury". In putting matters to a jury there has to be an issue, and the onus of proving certain matters in relation to that issue is on somebody's shoulders. I appreciate that the tribunal try to act in a very informal way, but from this side of the House one cannot accept that that is right.
Secondly, I was sorry that the noble and learned Lord, the Lord Advocate, went over the ground about businessmen writing to complain that they were found guilty before they were proved innocent, because we covered that ground in Committee. I will not try to repeat all the things that were said then, although I have all the figures here, but he will know as well as I that my reply to his argument on that front would be what it was in Committee, namely, that every single survey which has been done by every single independent organisation, including the Department of Employment, has shown that this is not an area of complaint on the part of businessmen, even small businessmen, when it is independently investigated.
However, I see that the Government are not going to give way on this matter. I beg leave to withdraw the amendment, but in doing so I express my regret that
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the Bill will change the law on unfair dismissal in a manner which, I predict, in certain types of situation will put an onus of proof upon an unfairly dismissed employee which he cannot possibly discharge and therefore where he will lose his compensation or other remedy. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 [Dismissal relating to trade union membership]:
5.35 p.m.
Viscount De L'ISLE Viscount De L'ISLE moved Amendment No. 9:
Page 8, line 28, leave out from ("objects") to end of line 30 and insert ("to being a member of any trade union whatsoever or of a particular trade union on grounds of conscience or other deeply-held personal conviction or genuinely objects to the political affiliation of a particular trade union.")
The noble Viscount said: My Lords, the Government have all along maintained that had the legislation now before the House been passed into law before the case of the three railwaymen came before the Commission of Human Rights the Government would not have had to defend it. That assertion requires some examination, since so far it has not been supported by argument. Throughout our debates the Government have relied on the bald assertion that the Bill brings our United Kingdom legislation into line with the Convention, but what a pity they did not seek the views of the Commission upon it! They could easily have done so if they had accepted the offer of the Commission to pursue a friendly settlement.
The Government, in their letter to the Commission of 21st September last, have themselves explained how this could have been done. Instead, the Government are I claiming the right to be the sole judge as to whether the Employment Bill meets the requirements of the Convention. Rather than to submit the proposals embodied in this Bill, to what the Government term the normal processes of friendly settlement, they have preferred to defend the case and to plead that the previous Government's legislation did not in fact violate the Convention. Clearly in framing this Bill the Government have not been moved mainly by devotion to the

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principles of the Convention, which enshrines a number of rights which are guaranteed to individuals under that Convention, including the right of association. Rather they have been guided by the exigencies of their political situation at home. If it is proposed that the remedies happened to meet the provisions of the Convention, so much the better; if they do not, that is a problem for another day. If, in the process, this involves defending the case brought before the Commission, thus reconciling the irreconcilable, that is part of the burden which faces any party in office.
As the lesser of two evils, the Government have decided to maintain before the Commission that the Convention had not been violated and that the Government were not responsible for British Rail. The Commission's opinion is against them on both issues and that is why I am proposing this amendment to Clause 7. I believe that the wording of the amendment is consistent with the Government's own election pledges, I believe, too, that justice for numberless individuals who object to the political affiliations of particular unions will be in part at least achieved.
The Commission, in expressing its opinion that there was a violation of Article 11(1), said:
"As regards the individual to whom the rights mentioned in article 11 are guaranteed, these words imply that the worker must be able to choose the union which in his opinion best protects his interests, and if he considers that none of the existing unions does so effectively, to form, together with others, a new union".
The report then continues with these words:
"This is particularly important since unions, as these cases show, may have political affiliations. It is not in dispute that the applicants joining the particular unions available would have had to sign declarations which they could consider to have clear political implications".
The Department of Employment's own interpretation of the words "on grounds of deeply held personal conviction" was made plain beyond peradventure in the notes on the Employment Bill which were issued when the Bill was printed, namely, what was said about Clause 6, now Clause 7.
"This new exemption is not intended to cover those with trivial, superficial or transitory objections to union membership".
The notes continue:
"Nor is it intended to cover those whose objections stem from calculations of financial or other personal advantage, or those with solely political objections to membership".
In this context it must be remembered that at Strasbourg the present Government did not resile from the previous Government's contention that freedom of conscience is a narrow concept of a religious or quasi-religious nature. This interpretation is clearly not broad enough to include objections, however legitimate, on political grounds. The House may remember its Lewis Carroll:
"'When I use a word', Humpty Dumpty said in a rather scornful tone, 'it means just what I choose it to mean—neither more nor less'. 'The question is', said Alice, 'whether you can make words mean so many different things'. 'The question is', said Humpty Dumpty, 'which is to be master. That's all'.".
It is not unknown for departments to contradict themselves when their interests so indicate, although it is usual for them to be oblique in doing so. My view is clear; in matters of doubt, or where Ministers appear to be self-contradictory or evasive, the mastery should lie with Parliament. If Parliament itself is in doubt, it must be the industrial tribunals who have to interpret our language.
Having persisted in Strasbourg in defending the case against their predecessors' legislation, the Government now, in my view, have a duty punctually to comply with the resulting opinion of the Commission. I think the House has a duty to press them to do so, because the country looks to your Lordships' House to be an interpreter of its liberties. Having heard the noble and learned Lord on the Woolsack refer with approbation to Article 6 of the convention in another context, I am hopeful that we shall be able to persuade him to accept our amendment, which seems to be in concert with the intentions of the Commission and very much necessary by the nature of the Bill. I beg to move.
5.43 p.m.
Lord HARRIS of HIGH CROSS: My Lords, I rise from the Cross-Benches to second the amendment moved by the noble and gallant Viscount, Lord De L'Isle, for which I may say support has been pledged and promised from many parts of this House. I shall not develop the European issue, which I think will be

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taken up by others. I want to refer to wider considerations. I make no bones that I would have preferred a rather stronger amendment to breach the closed shop, which in my view is the key to the abuse of power by trade unions, and I was enormously impressed by the contribution from the noble Lord, Lord Houghton of Sowerby, who told us how a good union, the Inland Revenue Staff Federation, with a good man in charge could maintain membership of 90 or 95 per cent. without the recruiting sergeant of legal enforcement of the closed shop.
It seems to me that the nearest we have in this country to a consensus is that the closed shop should be weakened or destroyed, and it is interesting that at the time of the last election an Opinion Research Centre poll was conducted which in the vernacular had a question almost anticipating the wording of this subsection as it would be under this amendment. The question asked by ORC was:
"Do you agree or disagree that people who refuse to join a union for moral, political or other strong reasons should be sacked?"
The answers showed that 85 per cent. of the sample disagreed, and if you single out trade union members responding to the question, 81 per cent. of trade union members disagreed that objectors should be sacked.
The general principle is widely accepted, if I may say so without disrespect, even on the Liberal Benches. But always there are objections to the practical implications. In the Committee, the noble Lords, Lord McCarthy and Lord Wedderburn, advanced three counter-arguments to the general principle that the closed shop should be set aside. I am going to summarise the arguments and, if I may, summon up briefly witnesses who should carry special conviction on the Labour Benches. The first argument of the noble Lords at the earlier stage was that all workers benefit from union membership and therefore all should be made to contribute to the funds of the union—the so-called "free rider" plea.
My first witness is someone who would be perfectly at home sitting between the two noble and professional Lords on the Labour Front Bench, Professor Clegg. In an otherwise justly forgotten paperback which he wrote some 10 years ago called
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How to run an Incomes Policy, he wrote:"
"If the purpose of trade unions is to get more for their members, then it is possible to argue that trade unionism has been, and still is, a gigantic hoax. Of course, trade unions negotiate pay increases but pay increases also occur in industries and undertakings where unions do not negotiate. Pay goes up in countries where unions are strong and in countries where unions are weak".
The second counter-argument was that the demand for the closed shop sprang from what the noble Lords call the sense of "common obligation" to which union members and union leaders attach great importance. My second witness on this matter is a former chairman of the TUC, now a Member of this House, who said he did not:
"… believe that the trade union movement of Great Britain can live for much longer on the basis of compulsion. Must people belong to us or starve, whether they like our policies or not? No, I believe the trade union card is an honour to be conferred, not a badge which signifies that you have got to do something whether you like it or not. We want the right to exclude people from our union if necessary, and we cannot do this on the basis of 'belong or starve'."
Those words were spoken in 1955 by Mr. Geddes, now Lord Geddes of Epsom, and I did write to tell him that I had this quotation in mind to use in this debate.
More recently—if you think 1955 is a long while ago, or you may think that was an aberration by a trade union leader—we had the testimony of a trade union leader I was personally proud to count as a warm friend, who was a predecessor of Mr. Bill Sirs as General Secretary of the Iron and Steel Trades Confederation, Sir Lincoln Evans, who wrote in a remarkable essay in 1970 entitled Responsible Trade Unionism as follows:
"Let the law-makers concentrate on three things: the legal enforcement of agreements, the right of anyone to belong or not to belong to a union, and means to take the brutality and violence out of picketing. The law can or should do no more nor less than this".
We come to the third counter-argument which is echoed by many businessmen and by some noble Lords on the Government Benches; the argument that efforts to prise open the closed shop would not be fully effective and would merely drive the closed shop underground. My final witness is none other than the noble Lord, Lord McCarthy, in his more scholarly guise, as author of a book entitled The Closed Shop published in 1964. On page 265 he addressed himself to the

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plausible argument that we should not try to correct an abuse because we may not always succeed. Against that view the noble Lord then quoted an American authority, Professor Seymour Martin Lipset, that in labour legislation at least:
"… the significance of law does not necessarily lie in the extent to which it is obeyed. One of its major functions is to set a moral code or standard which society considers proper but whose parts can be violated within certain limits … People may engage in illegal or immoral actions, but the fact that they know these actions are illegal reduces the extent to which they occur".
So, my Lords, I urge what I think is a modest amendment, as a significant widening of the grounds on which a worker can avoid joining a union or can abandon trade union membership—for example, after that notorious 14th May political day of action; he can not join or abandon a union and not be punished by dismissal without compensation. It seems to me that in strengthening this clause we would, in the words of Professor Lipset quoted by the noble Lord, Lord McCarthy, some years back, be making explicit a standard of freedom in which our fellow countrymen overwhelmingly believe. It is a standard which, as I have said at earlier stages, is upheld widely in Europe; it is upheld most specifically in Germany, where open and non-political unions have proved far more effective than British trade unions in advancing the true welfare of their members.
Lord McCARTHY: My Lords, before the noble Lord sits down I should like to say that it is nice of him to quote me, however selectively, but will he quote himself again? He mentioned, I think, the ORC Poll, but as I understood it—and I am asking for clarification here—he conflated three different reasons which people had for saying that they should not be in a closed shop. I think he said: moral, political and conscience; and he added the three reasons together and made 85 per cent. That is not fair—is it?—for one question.
Lord HARRIS of HIGH CROSS: My Lords, I was quoting an ORC Poll conducted in April 1979. The single question was—
Lord McCARTHY: My Lords, there were three reasons.
Lord HARRIS of HIGH CROSS: Yes, my Lords, but the single question was:
"Do you agree or disagree with the following: People who refuse to join a union for moral, political or other strong reasons should be sacked?"
I was arguing that moral, political and other strong reasons was not a bad summary of what this subsection would say if we accepted the amendment we are now debating.
Lord DUNCAN-SANDYS: My Lords, those who have tabled this amendment consider that if an employee refuses to join a trade union on the ground that it is affiliated to a political party with which he disagrees, and that it as a result he is deprived of his job, he should be entitled to claim compensation for unfair dismissal. The law as it now stands does not provide that protection, and its failure to do so is regarded by the European Commission of Human Rights as constituting a breach of the obligations accepted by Britain under the human rights convention.
The question which concerns us is whether the words "deeply-held personal conviction" in Clause 7(2) of the Bill adequately remedy this deficiency in the existing law. This is a matter of legal interpretation on which serious doubts have been expressed. As has been pointed out by the noble Viscount, Lord De L'Isle, the Notes on Clause 7 originally issued by the Government in order to explain to us the meaning of the Bill stated that the words "deeply-held personal conviction" did not cover purely political convictions. On the other hand, when the Government issued a revised edition of these notes, they entirely omitted this reference to political convictions—a most important matter.
It would seem, therefore—and I can think of no other explanation—that between the issue of the two versions of the explanatory notes the Government must have had doubts on this point. In order to clarify the position I should like to ask the noble and learned Lord the Lord Chancellor, when he replies to the debate, if he would be good enough to answer two specific questions. First, will he say whether it is quite definitely the Government's intention that the phrase, "deeply-held personal conviction" should include political convictions? If—as I sincerely hope—the answer is an unqualified, "Yes", then I should like

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to ask what is the objection to making this clear beyond doubt by accepting our proposed amendment.
Earl DE LA WARR: My Lords, for the avoidance of doubt I should like to start by saying that I am on totally common ground with my noble friend Lord De L'Isle, my noble friend Lord Duncan-Sandys and the noble Lord, Lord Harris of High Cross, in that I, like them, hate and detest every aspect of closed shops and believe them to be monstrous intrusions into the personal liberty of men and women. But, having said that, I must now stick closely to the amendment. I must congratulate my noble friend Lord Duncan-Sandys, in that he has actually talked to the amendment. If I may say so with respect, my noble friend Lord De L'Isle and the noble Lord, Lord Harris of High Cross, ranged across somewhat wider ground.
I feel that I must take up my noble friend Lord De L'Isle on the question of the three railwaymen—about which my noble and learned friend will be talking later—because for the life of me I cannot see how the European Court, whose avenging angels are sitting almost now to consider these very weighty matters, can be influenced one way or the other by this little change that has been produced by my noble friend. Indeed, my noble friend has gone in for quotations so I shall go in for one also and use the words of the immortal Burns and say that this amendment appears to me, after what we have heard from my noble friend, to be no more than a wee tim'rous mousie.
The noble Lord, Lord Harris of High Cross, went little further in giving any real arguments as to why he thought that this little amendment would do so much as regards the great sweeping objections which he produced to the whole principle of the closed shop. My noble friend Lord Duncan-Sandys has asked some very specific questions but he has not asked them of me. I look forward to hearing my noble and learned friend's answer.
However, before I conclude, I should like to draw your Lordships' attention to a document entitled Industrial Relations Legal Information Bulletin produced by Mr. Michael Rubenstein. These periodicals
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are looked at very carefully by chief executives, and certainly by most directors and personnel managers in industry, because they are their bible, as it were, towards how to conduct industrial affairs when they impinge on the law.
I should like to read one extract which deals with this clause. It is headed "Grounds for objection". It says:
"The most important decision taken by the Government was to provide protection for those who object to a particular trade union. The words 'grounds of conscience or other deeply-held personal conviction' indicate that the objection can be on grounds other than conscience and a political objection to the policies of a particular union will almost certainly suffice".
He ends by saying:
"Although the new statutory test is a subjective one, unless the courts construe the words more narrowly than their ordinary meaning (and it is difficult to see the Court of Appeal taking that road), it is improbable that many employees—particularly if they engage a legal representative to structure their case—will be unable to articulate a deeply-held personal conviction for not joining a particular union".
That is just one opinion, but it is the opinion of a very learned man whose views are listened to with great respect by very many people who are concerned with these matters in industry. I therefore beg leave to commend his views to your Lordships. It is for that reason and the other reasons I have adduced that I would suggest to the Government that they need take no notice of this amendment and that they should leave the Bill in this respect precisely and exactly where it stands now.
Lord ROBBINS: My Lords, I will not detain your Lordships for more than two or three minutes, but I should like to ask the noble Earl, Lord de la Warr, on what grounds he bases his objection to the words which have been added. He described it as a poor little mousie.
Earl DE LA WARR: A timorous little mousie.
Lord ROBBINS: A timorous little mousie. Why be afraid of it? Why be afraid of being explicit with something which, on his own confession, he thinks could be constructed by a clever lawyer, and would be constructed by a clever lawyer defending a person who had objected on grounds of deeply held

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personal conviction? I find myself very much perplexed by the attitude of the noble Earl.
I feel justified in interposing at this stage. I myself would go all the way with the noble Lord, Lord Harris of High Cross. I go all the way with the declaration of the noble Earl at the beginning of his oration. I dislike the closed shop. I dislike the penumbrae of producers' monopoly which inheres in the idea of the closed shop; and not only in the idea of the closed shop but in certain professional practices, too. Frankly, I am completely perplexed at what the noble Earl said at the conclusion of his speech when he exhorted the Government to pay no attention to this elucidation of a point which he himself has emphasised. I make this protest, having in debate on the Second Reading actually praised the Government for proceeding gradually. But proceeding gradually is one thing; explaining the elucidation of the Government's own phrase which might be put on it by a clever lawyer is another thing. My perplexity remains.
6.3 p.m.
Lord HOUGHTON of SOWERBY: My Lords, we must bear in mind that what we are debating is the question of fair or unfair dismissal, because that is the issue in this clause. This Bill is providing—
Lord DUNCAN-SANDYS: My Lords, may I interrupt the noble Lord? I do not think that is the issue. The issue is: what do these words mean?
Lord HOUGHTON of SOWERBY: My Lords, I am coming to that in a moment, because in my opinion this debate has already gone far wider than the terms of the amendment and much wider than the subject we have under discussion, which is: should dismissal as the result of a closed shop agreement be regarded as fair or unfair dismissal? In this clause we are providing conditions which would make it unfair dismissal, and the grounds for making it unfair dismissal would be a conscientious objection on religious grounds to belonging to a union, or a deeply held personal conviction against doing so, or an objection to joining a particular union. This is what we are talking about. I think if
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we widen this to include the European Convention, the attack on the closed shop and other matters that have been raised in the debate so far, we shall get into very deep water indeed.
I would say that the debate so far is giving weight to the view that was taken in another place when this matter was being debated there some years ago, that when once one gets away from religion as the conscientious basis for claiming exemption from the conditions of the closed shop one gets in very deep water indeed. What I was advocating the whole time, as noble Lords will remember, was for the right to have a secular conscience. That was what I was advocating—that it was possible to have a deeply held personal conviction as strong as anybody's conscience based on religious grounds. If we get away from that, then I fear we shall be in serious difficulties.
The amendment says that the deeply held personal conviction shall be extended to include objection to the political affiliation of a particular trade union. Amendment No. 11, which we shall come to later, takes exactly the opposite view. So we have the two opposing points of view—one which says that politics can be brought into it and the other which says they cannot. I think that in defining a deeply held personal conviction we can do no more than let words stand on their own when they come to be considered by the tribunal concerned in relation to a particular case. If we attempt to extend the meaning of these words we shall only confuse ourselves and the tribunal as well. Men of wisdom, experience, impartiality and integrity will arrive at the best judgment they can as to what is a deeply held personal conviction. In certain circumstances that conviction may be influenced by one factor more than another.
As I said earlier, what distresses me is that if one professes a particular religion one's viewpoint is accepted without further inquiry or argument, but if one says one has a deeply held personal conviction one is questioned, it is probed into, there is an attempt to extend the meaning of the words in one direction or to prohibit them from being extended in another, and one wishes to God one had a religious conscience instead of a deeply held personal conviction!

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Tribunals are there to judge these matters. I take your Lordships back to the tribunals which had to hear appeals by conscientious objectors for exemption from active combatant service. Not always did they accept the plea of religion. They went into that sometimes, because to some people religion and the beliefs that are attached to particular denominations are sometimes a veneer and not a deeply held personal conviction. On the other hand, a deeply held personal conviction has no veneer; it has no label; it has no credentials; it has to stand on the meaning of words in relation to the circumstances and beliefs of a particular individual. So I plead for rejecting this amendment, as later I shall plead for the rejection of Amendment No. 11, because I think politics have to be left out of it altogether in definition. Leave the tribunal to decide what in their view contitutes a deeply held personal conviction.
I should like to make one final point. We must not overlook the provisions of the Trade Union Act 1913, which gives to any member of a union the right to claim exemption, without giving any reason, from the payment of the political levy. If this amendment was to confer upon all those who have claimed exemption from payment of the political levy a prima facie claim to be covered by its terms, then there is not the slightest doubt that we should plunge the whole trade union movement into confusion and turmoil at the present time.
We should not be able to get through that situation merely by passing an amendment to this Bill. Of course, it is true that the Trade Union Act 1913 did not deal with the question of the use of the name of the union by those who paid the political levy and who could be affiliates to a political party. That may have been a shortcoming of the legislation at that time. Indeed, it is possible in theory and it may be quite near to it in practice in some cases, that where less than one half of the members of the union are contributing to the political levy, nevertheless, the name of that union can be used in all conversation and publicity as if the union were affiliated to the political party; whereas the affiliates are those who are subscribers to the political fund, although under the law they are given the
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right to use the name of the organisation because by vote they have included political objects within the objects of the union. That makes it perfectly respectable as a denominational unit from a political point of view.
Therefore, there are serious difficulties here if we stray from the straight and narrow, and the straight and narrow is to stick to the words that are in the Bill. Many attemp's have been made to put them there; many criticisms have been made of the possibility of the tribunal having great difficulty in deciding what the words mean. But unless we confine ourselves to the religious basis for conscience and do not stray beyond it, we are bound to embrace some of these problems in the interpretation of the words and the decisions of tribunals. Therefore, with great respect to your Lordships, I think that the hardliners should go to cover and the hawks should go to rest, and allow men and women of commonsense and goodwill to reject this amendment and get on with the Bill.
Lord MONSON: My Lords, before the noble Lord, Lord Houghton, sits down, perhaps I could put one point to him. At the beginning of his speech the noble Lord implied that the European Convention on Human Rights was an irrelevance. With respect, it is not an irrelevance. The United Kingdom was one of the first countries to ratify the convention, which of course, has nothing to do with the EEC. This amendment is merely an attempt to ensure that the United Kingdom lives up to its solemn obligations.
Lord HOUGHTON of SOWERBY: My Lords, I think that the noble Lord will find from the record that I did not use the words "irrelevant" in relation to the European convention. I do not think that I used the word "irrelevant" at all. I intended to say that the implementation of the convention to this and to other branches of our social and political life goes far wider than the narrower issue which is within the amendment before the House.
Lord ROCHESTER: My Lords, the Liberal Benches were mentioned by the noble Lord, Lord Harris of High Cross, and I feel that it is incumbent upon me

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to say just a few words, but they will be a few words. As I understood it, the noble Lord claimed that the principle underlying this amendment had the support of Liberals. To the extent that he meant that my noble friends and I had at Second Reading and at the Committee stage consistently said that we regard the principle of the closed shop as being intrinsically illiberal, he is right.
However, I also made it plain on both occasions that in my view at least it will not help to deal with the problem if legislative action is taken which goes a step further or a step faster than is acceptable to the general body of trade unionists. I do not propose to go on talking about the principle of this matter beyond saying that, but would rather deal with it briefly as a former practitioner in this field.
In my view—and the noble Lord, Lord Houghton, has made some reference to this—these two amendments in the names respectively of the noble and gallant Viscount, Lord De L'Isle, and the noble Lord, Lord McCarthy, illustrate very well the widely differing views on this matter with which the Secretary of State has had to contend in drafting this Bill. Viewing the problem from opposite poles, they both seem to me to suffer from an approach which is too narrow. One of the effects of the amendment of the noble Viscount is, if I may say so, that if it were implemented, in my view it would weaken and fragment the trade unions which, for better or for worse, we now have, when most people in industry think that we already have too many of them. Even as this subsection is at present worded—and here again I am in sympathy with what the noble Lord, Lord Houghton, had to say—in my opinion tribunals will have difficulties enough in determining what are genuine grounds of conscience or other deeply-held personal conviction for people not being members of particular trade unions, without having them added to further by the passing either of this amendment or, as I hope not to speak again on the amendment of the noble Lord, Lord McCarthy, his.
I should like to see this whole problem of trade union power tackled as constructively as possible by encouraging all those who are now members of trade
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unions to take a more active part in their proceedings, in electing their officers and in determining their policies. We should not then have to worry about the political affiliations or the political objects of particular unions, because the members themselves will have made sure from within that they are not controlled by people having alien political views. I am sure that this more positive line is the one on which we should concentrate, not least in welcoming the proposed code of practice on the closed shop so that it commands the widest possible support. Meanwhile, let us give this clause, as it now stands, a fair wind. Then we may at last be able to get on with the only thing that really matters in this field; the improvement of human relations in British industry.
Lord WEDDER BURN of CHARLTON: My Lords, to a degree this amendment is a discussion between the Government and those who frequently sit behind them plus some of the noble Lords on the Cross-Benches. But it is perhaps important to say one or two things from this side of the House. The noble Lord, Lord Houghton, has expressed so well the difficulties into which this Bill was bound to fall when it went beyond the line of religious objection in the closed shop situation, or at any rate beyond the line of religion and conscience for those who would not call themselves religious. The deeply-held personal conviction has always carried the difficulty about how far it will allow for political objection, and I shall not refer to the rather differing statements of the noble Earl and the noble and learned Lord on this matter, because it is very easy by a slight difference of phrase to give a different emphasis to the solution of that very difficult problem.
We of course would be against the objection being valid to a dismissal in a closed shop situation of this kind for the reasons that the noble Lord, Lord Houghton, has given so forcefully. To some extent, we would agree with the noble Lord, Lord Rochester, with whom I very much agree that the problem of democracy inside the trade union movement is a matter of great importance and the area through which the issues should be solved. I would also stress that since 1913 there has been in this country an accepted solution to a problem which

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besets some other trade union movements in different forms; namely, the relationship between the trade union movement and political activities.
An amendment of this kind could only be in the result—whatever the intention—a covert manner of re-opening the settlement of the Trade Union Act 1913. There have of course been differences over the years about whether there should be contracting in or contracting out, but the settlement of the Osborne case in 1913 I had thought had long passed the point of being re-debated. If noble Lords want to debate that again then they must put that down and open out the whole debate, because this amendment raises the issue of the place of the 1913 Act.
The other thing that I would wish from these Benches to put on record is a brief statement in connection with the report of the Commission on Human Rights in the case of the three railwaymen. I am very aware of two factors in doing this. First the time, and secondly the complexity of the issue—and the third factor being to my knowledge that the noble and learned Lord on the Woolsack is likely to speak after me. He will, I hope, therefore forgive me if I make the points broadly with references so that any noble Lords who do not agree with my statements can at least look them up.
First, the Commission's decision is not the end of the road in determining what is meant by Article 11 of the Human Rights Convention. The matter of course will go to the courts. I have little doubt that the Government themselves probably hope that at least a different form of reasoning will be used by the court even if the result is similar. I say that because there are various ways in which such an article can be interpreted. That is Article 11(1) giving right and freedom of association, including the right to form and join trade unions.
The minority in the Commission took what, in my view, is the sensible view that the ordinary meaning of "to join" cannot conceivably also include the right not to join. That was the view, interestingly enough, of the British member and of two others, including the Danish. It is not merely a matter of Euclidian logic what the right to join and the right to associate means; it is a matter which
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involves value judgments that often relate to an industrial culture as well as to a legal culture.
Secondly, the majority of 14 did not say what many noble Lords wished they would say, that the right to associate and the right to join implied a right not to join across the board. Indeed, in two places, in paragraphs 157 and 166, the Commission expressly says that it is not interpreting Article 11 as including a right not to join. In paragraph 165 the majority say that the situaution might well be different from the case before it had the workers been engaged after a union membership arrangement or a closed shop had been in operation.
Clearly they do not decide the case in what is sometimes called "the German manner", because German lawyers and trade unionists have, through the course of their thinking and development, accepted that the words "freedom to associate" implied the words "freedom to dissociate". The majority of the Commission say nothing of the kind, and in fact expressly reject that interpretation.
The decision of the Commission is based, in paragraphs 160 and 161, upon concepts which derive quite clearly from a culture which both legally and industrially is very different from the Scandinavian culture on the one side, the German and ours as well, from especially the French and Italian legal and industrial culture based upon political pluralism of unions; that is to say, based upon the concept that history has given us a communist union, a socialist union, what used to be a Catholic union but is now normally a radical and lay union as well; various unions of political denominations. Therefore, it is perfectly natural in that kind of culture and that kind of law. Indeed, the French constitution states that each person shall have the right to choose his trade union. Of course! Because if your trade unions represent different political parties then it is perfectly natural that that is the way you operate, and you do not have something like the 1913 Act.
The majority report is based on the concept that each worker should have the right to join or form any union that he wishes to associate in because of his political beliefs. As has already been pointed out in your Lordships' House, that concept if applied to the British situation

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would magnify multi-unionism in a manner which is quite absurd. I cannot believe that the Government, although they will wish for a similar result, will not wish to challenge the reasoning of the Commission when the matter goes to the court.
I add to that a second point which must be put upon record. The Labour Government before May 1975 advanced to the Commission the further defence, as it were, against the charge of breach of the convention, based upon Article 11, paragraph 2. That is the concept that the right of association and joining trade unions may be made subject to restrictions which are prescribed by law and necessary in a democratic society for the protection of the rights and freedoms of others. I appreciate that this Government do not agree with the political judgment of the previous Government on that matter, but it is a matter of regret that this Government withdrew that submission in their final submissions to the Commission.
It is a matter of regret that the present Government did not, as it were, allow the Commission at least to consider the submissions of the previous Government based upon the concept that the rights of individual trade unionists also must be balanced against the rights of non-unionists when one is considering, in particular, this rather strange concept to us of each man having the right to form his own political trade union. I can only hope that when the Government argue the matter before the court at least they might allow, perhaps by way of some amicus or in some other manner, that this argument be put to the court and not simply shaded from its eyes.
On that basis, having said something about the convention, I return to the basic point before your Lordships' House that we of course do not like the Bill in the form in which it is put forward in terms of deeply held convictions, but if deeply held personal convictions are to advance into the area of political objection then, as the noble Lord, Lord Houghton, suggested, the whole area of industrial relations will become a swamp into which this House and Parliament has helped to push it.
6.27 p.m.
The LORD CHANCELLOR: My Lords, it is perhaps time that I said
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something about this amendment. I emphasise the words in the sentence "about this amendment" because we are discussing an amendment the total effect of which, if I am right, would be to take the words of the Bill and to add to them
"genuinely objects to the political affiliation of a particular trade union".
No one will doubt the sincerity of my noble and gallant friend Lord De L'Isle, nor, if he will allow me to say so without seeming patronising, is there any noble Lord in this House who deserves both epithets better than the noble and gallant Viscount, Lord De L'Isle. Nor will anyone doubt the value of the impressive questions put to me by my noble friend Lord Duncan-Sandys. Before I sit clown !I answer both.
I must first point out, not only to the noble Lord, Lord Harris of High Cross, but to some other speakers, that if the object of this amendment is to widen the terms which we have chosen for the Bill so as to exclude the closed shop, this amendment does not say enough. If the object is, as my noble friend Lord DuncanSandys thinks, that it is to protect political convictions as such, he is just plain wrong. The amendment deals with an objection to the political affiliation of a trade union, and that is not the same thing as a political opinion. I shall come back to the political opinion later because my noble friend's questions related to political opinion, but the amendment does not relate to political opinions; it relates to political affiliations of a particular trade union, and I shall come to deal with this too.
No-one will complain that members from all sides of the House should have felt it proper to contribute to this debate because, at least in my view, this bundle of clauses, beginning at Clause 4 and continuing through Clause 7 to other clauses, gives rise to a debate about a particular application of human rights.
My noble and gallant friend has somehow persuaded himself that the Commission decided something different from what is in the Bill. He complained that the Government had not argued to the contrary and had not given reason to the contrary. I will try to persuade him that this is wrong, but I must tell him that he has not given, at any rate to me,

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any intelligible reason whatever for thinking that the words in the Bill do not in fact conform with the report of the Commission, for what it is worth; and to that I will come.
But I must first of all correct him on a point of fact. Of course, I do not know what went on before the Commission. Perhaps he does, but I do not, because I am told that what went on before the Commission is confidential. I am told categorically that it is quite incorrect that there could have been a friendly settlement, as he thinks there could have been, if the Government had submitted the Bill to the Commission's scrutiny. We in fact put forward for the applicants' consideration that the Bill exactly met their points, but the applicants—not the Commission—were unprepared to accept this. So on the facts my noble and gallant friend is in error.
Of course it is true that no friendly settlement can decide a point of law. It is also true that, as the noble Lord, Lord Wedderburn, said, the Commission cannot decide a point of law. The only thing which can decide a point of law is the court, and the case has not yet gone to the Court. Whether the Court will agree with the Commission or whether it will agree with the minority judgments, or if it agrees with either and on what grounds it will form its judgment of agreement, is totally uncertain, to my mind.
I must again correct what I think was a misunderstanding on the part of my noble friend, because he appears to have thought that what the Commission or the majority of the Commission decided was that in some way or another Article 11 prevented a closed shop. Here I must quote one sentence from the majority report, and one is enough. According to the Commission's interpretation, Article 11 neither prohibits nor allows the system of closed shops in general. That is all I can get out of it on that subject.
My Lords, so far as I am concerned this Bill, this bundle of clauses, is a bundle of clauses about human rights and of course the words in the Bill are intended to conform with the provisions of the European Convention. That is what they are there for, and I respectfully think that they do. In this part, the Bill is concerned
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about the human rights of those innocent third parties who, without fault of their own, have been caught up and injured by industrial strife, in this connection by the results of a closed shop situation. That is the clause with which we are dealing.
May I make the somewhat startling suggestion to my noble and gallant friend that instead of—and he will forgive my using the phrase—muddling himself up with the very difficult legal argumentation of the Commission, which, for the reasons I have given, he has got entirely wrong, he looks at the Convention itself? It was looking at the Convention itself which led me in this House to tell the last Government that I thought they would get into trouble with the Commission, and they did get into trouble with the Commission. I think I am entitled, therefore, to appeal to my noble and gallant friend to look at the words of the Convention with me, because I have some right to speak about it. I have proved right in the past, and I think I may be right in the present.
First of all, I invite him to look at Article 9, because if you look at the Bill you will see that it contain the words
"grounds of conscience or other deeply-held personal conviction".
Now, I may be wrong about this—one does get wrong after attending innumerable Shadow Cabinet meetings and Cabinet meetings, as those who have attended either will confirm—but I believe that I thought of those words "deeply-held personal conviction". I may be wrong, but they do not look to me like the words of a parliamentary draftsman; they look to me like the English language. I dare say if Mr. Merriam played them on the Basingstoke computer he would find that they were an authentic work of William Shakespeare.
But, my Lords, they mean what they say. They do not come from legal textbooks; they came from my heart—that is where they came from. They are not words of art; they are ordinary dictionary words and they bear their ordinary dictionary meaning. They give rise to questions of fact and degree and, as the noble Lord, Lord Houghton of Sowerby, said, questions of fact and degree are questions for the industrial tribunal, under this Bill, to decide. But these are not the convoluted language of the industrial tribunal. I may be wrong in

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thinking that I invented them, but I think I did and if I did not my right honourable friend did.
I must add this to my noble and gallant friend. It worries me not a little that some noble Lords who later on are not slow to quarrel with the language of the parliamentary draftsmen should begin to cavil now when they come across words which any ordinary man can perfectly well understand. The words "grounds of conscience or other deeply-held personal conviction", are the sort of language that English was meant to be, and it is not the technical language of the legislator.
Having said that, I ask, where did I get it from? May we first of all look at Article 9? Article 9 says that everyone has the right to three things:
"… freedom of thought, conscience and religion; this right includes freedom to change his religion or belief, and freedom, either alone or in community with others and in public or private, to manifest his religion or belief in woship, teaching, practice and observance.
"Freedom to manifest one's religion or beliefs shall be subject only to such limitations as are prescribed by law and are necessary in a democratic society in the interests of public safety, for the protection of public order, health or morals, or for the protection of the rights and freedoms of others".
Three things: freedom of religion, freedom of conscience, freedom of belief. They are not the same thing, they are three different things, although conscience, at least in my judgment—and in this I agree with the noble Lord, Lord Houghton of Sowerby—of course includes religious beliefs.
Now the words of the Bill which was introduced by the Labour Government and with which I fought in the last Parliament are confined to "freedom of religion". That is what I object to. It gives freedom in a closed shop situation to Jehovah's Witnesses or the Plymouth Brethren, but it does not give the right of freedom to the conscientious agnostic or even to the rubber-conscienced member of the Church of England who does not think his religion either imposes or does not impose an obligation to join a trade union. "Deeply held personal conviction" is intended to exclude the trivial, the frivolous, the self-interested, the prejudiced or the spiteful, but the words are not intended either to restrict the deeply-held personal convictions of the
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individual or of the legitimate rights of trade unions.
I would say in passing—although it has absolutely nothing to do with the broad question—to the noble Lord, Lord Harris of High Cross, that he may object to the closed shop, but I go at least as far as the noble Lord, Lord Rochester, about it and I think probably as far as other noble Lords; but none the less, even when we were legislating in 1971, we did not attempt to exclude it. On the contrary, we recognised there were unions such as the National Union of Seamen who could not effectively organise themselves with a workforce scattered across the world, and it turned out, rather to my surprise, but certainly to the agreement of this House, and I think of the other place also, that the same was true, but for totally different reasons, of the actors' profession in Equity. It is all very well to accuse us of going against the convention, but we might take another look at two more clauses of it. Article 11 says:
"Everyone has the right to freedom of peaceful assembly and the freedom of association with others, including the right to form and to join trade unions for the protection of his interests. No restrictions shall be placed on the exercise of these rights other than such as are prescribed by law and are necessary in a democratic society in the interests of national security or public safety, for the prevention of disorder or crime, for the protection of health or morals or"—
and these are the material words for this purpose:
"for the protection of the rights and freedoms of others".
I wonder whether the noble Lord on the Cross-Benches has really asked himself what is meant by the protection in this connection of the rights and freedoms of others. Despite the adverse criticism we have received from the Labour Opposition, the fact is that this Government do not wish to interfere with the rights and legitimate freedoms of trade unions, and the words "deeply-held personal conviction" seem to me to be admirably suited to achieve the object we have in mind. Of course, as I say, they are not universally embracing; I have said what they are intended to exclude, and I hope they do. But of course they are wide enough to include political beliefs, and here I answer the first question posed by my noble friend Lord Duncan-Sandys; if they are deeply held and personal, political beliefs are, of course, included. And it may be

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that, if they are deeply held, they would include a case where somebody—contrary to my own conviction in the matter and that of my party—chooses not to join a trade union which, in the ordinary course and contrary to what we would like to see, is affiliated to the Labour Party or a fortiori to the Communist Party.
At this stage I must make one point in protection of myself and my party against a misinterpretation. If I were on the shop floor, I should belong to a union. Of course, it would almost certainly be a union affiliated to the TUC, because that is the way unions are in this country. I do not like it, but my father taught me it when I was a small boy and I have held to that belief ever since; and, curiously enough, that is the orthodox Conservative view. Contract out of a political levy, certainly—I believe the political levy is one of the corrupting factors in modern politics—but, things being what they are, of course we have an association of Conservative trade unionists and of course we have consulted them in the preparation of, among others, this clause.
Moreover, I am bound to say that I think this clause is intended to comply, and achieves its intention of complying, with both parts of Article 11, which of course must be read with Article 14:
"The enjoyment of the rights and freedoms"—
says Article 14—
"set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion …".
"Political or other opinion", it says, followed by other words which are immaterial. "Deeply held personal conviction" in my case—and, I believe, in the case of my noble friend Lord DuncanSandys—would certainly include political opinions if they were deeply held and personal to ourselves.
Then my noble friend Lord DuncanSandys asks, "If you really think that, and if you are so certain that your words are wide enough to cover the affiliation to a trade union or political opinions"—or indeed, if I may anticipate what the other noble Lord in the next amendment says—"why not mak sicher (as Robert the Bruce said as he murdered the Red Cummings)? Why not make sure by putting the words in?". How often I
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have heard that argument advanced in Parliament, and I coyly confess that there have been occasions when I have used the argument myself. However, I am sure it is inapplicable here, and that too I have said before. Indeed, it has been said already in this debate—if not by the noble Lord, Lord Houghton of Sowerby, then by the noble Lord, Lord Wedderburn —that if you insert words into a generality which is wide enough to cover almost everything you mean to cover (if you insert words giving one particular example of what is intended to cover a wide spectrum of different things), you destroy the ordinary use of the English language and restrict the general words dangerously and, it may be, even disastrously.
The answer is a technical one, but I shall try to explain it in non-technical terms. If you use words, as I have done in the Bill, which are deliberately wide and then try to spell out one or two—in this case there are only two, this and the next amendment—particular examples on which, for some reason, rightly or wrongly, you wish to set particular stress, you restrict the generality of the general words. You cannot help it. You may not want to, but that is the effect of what you have done. There are two Latin tags which we lawyers use to put the same point. They are both technical rules for the construction of statute: inclusio unius, exclusio alterius, if you include one thing you inevitably exclude another, and the other is the so-called eusdem generic rule. If a general phrase is accompanied by a particular example, the general words are to be construed down in the context as including instances only of the same type as the particular instances enumerated in the example; or as lawyers sometimes also say, parading their medieval Latin, noscitur a sociis, a third Latin tag, which means that you have to read the three bits together.
The words which stand in the clause are wide. They are good English words, and as the noble Lords, Lord Wedderburn of Charlton, and Lord McCarthy, have correctly divined, they are wide enough, at least in my view, to cover both the amendments standing in the name of my noble and gallant friend and the noble Lord, Lord Howie of Troon. It is for that reason that the noble Lords, Lord Wedderburn, and Lord McCarthy, have put down their Amendment No. 11. They

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are right in law, but wrong in principle. My noble friends are right in principle, but wrong in law. So there is no difference between us that I am aware of. The questions will be questions of fact for the trusted application of the experienced members of the industrial tribunals, supervised, as we now know, by the Employment Appeals Tribunal. Do not let us spoil it. Should we turn out to be wrong, there is always the Green Paper. However, although I claim not in the least to be infallible, I am fairly sure that the opinions that I have expressed are better than the doubts to which my noble friends have given rise, and I beg them not to press the amendment to a Division.
Lord RENTON: My Lords, I agree with all that my noble and learned friend has said, but I wonder whether before he sits down he would be so good as to make two points clear. The first is, bearing in mind the doubts that have been expressed during the debate in your Lordships' House about the meaning of "deeply-held personal conviction", can we be sure that the tribunals which have to resolve this question in individual cases will be entirely free from doubt, and what steps may be taken to ensure that they are free from doubt?
The other question goes to the heart of the matter raised by my noble and gallant friend Lord de L'Isle. When we have the judgment of the European Court, and if it indicates that some further clarification of the Bill may be necessary, what chance is there that the Government will ask Parliament to make that clarification?
The LORD CHANCELLOR: My Lords, I did not hear the first question that my noble friend put to me.
Lord RENTON: I am sorry; I am sure that the fault was mine. My noble and learned friend the Lord Chancellor has resolved our doubts as to whether the expression "deeply-held personal conviction" can include political convictions. He has made it abundantly plain that it can. However, doubts were expressed about that point during the debate, and naturally one wonders whether the tribunals which have to decide these matters will be entirely free from doubt in their own minds. That is the first point.
The LORD CHANCELLOR: Yes, I think that we can be sure that they will be entirely free from doubt, but if they are in doubt, there is always the appeal to the Employment Appeals Tribunal, which will resolve the doubt for them. That is what the first debate we had this afternoon was about. Will my noble friend remind me of the second point?
Lord RENTON: Yes, my Lords. My second point was that if the European Court, when it finally decides this matter, having considered the Bill, or, if it has gone on to the statute book, the Act of Parliament, feels that further clarification is needed in our law in order to carry out their decision, will the Government then take action by asking Parliament to amend the law accordingly?
The LORD CHANCELLOR: My Lords, my noble friend rather assumes that the European Court will go further than the Commission and in the direction of my noble friend Lord de L'Isle. It might adopt the minority opinion to which the noble Lord, Lord Wedderburn of Charlton, gave expression, and to which I think three members of the Commission gave certain degrees of expression. But, so far as I know, we will not go back on this Bill if the minority opinion prevails, because that would, I think, be a retrograde step. However, if in fact the court comes to a decision, presumably we shall have to make a statement of some kind in Parliament, and that would be free for debate. The question of whether clarification may be required, and, if so, what kind, must remain in the womb of the future until we know what the court actually decides.
Lord SPENS: My Lords, before the noble and learned Lord sits down, will he resolve one question for me and I think possibly for a number of my colleagues on the Cross-Benches? The noble and learned Lord has said that the words "deeply-held personal conviction" may include political conviction. But can it be turned around the other way? We do not have political convictions on these Benches, but we may object very strongly to joining a union which has political affiliations.
The LORD CHANCELLOR: If that is a deeply-held personal conviction, it

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would not of course coincide with my own opinion, as I explained, but obviously it can amount to a deeply-held personal conviction, and presumably the tribunal would so decide. I prefer the use of the English tongue, and not the convolutions of lawyers.
Lord HARRIS of HIGH CROSS: My Lords, may I ask the noble and learned Lord for a final clarification? I want to ask him about a specific case. If unions make a habit of calling days of action or inaction on entirely political grounds, would I be accused, as hitherto a loyal member of a union—I am being hypothetical—of suddenly inventing deeply-held convictions and all that if I wished to resign, or would political action, persistent action, by a trade union enable members to resign on the grounds of deeply-held convictions?
The LORD CHANCELLOR: My Lords, if the noble Lord will look at the clause, I think he will find that deeply-held conviction includes membership of a particular union.
Viscount DE L'ISLE: My Lords, I think that the House will agree that the amendment which I supported with others has provoked a very interesting debate, and we have had a very interesting speech from the noble and learned Lord who sits on the Woolsack. I have argued with him many times in private and in public, and I hold him in the highest regard and affection, but generally in his argument he succeeds in convincing one of one's ignorance, to begin with, if not of one's malintention. I have studied the convention. I have done my best to understand it. I used the words of the convention because I think that in legislating in Parliament, as a member of the Council of Europe, we ought to pay particular attention to what the convention says. If the court has not decided, when we are legislating on a matter which is germane we ought to pay attention.
I must admit that when I was thinking about what the noble and learned Lord might say I found a very interesting little quotation from a book in which he was talking about the Bill of Rights, and it might be apposite. The noble and learned Lord said:
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"I do not accept that a party government of either colour would hesitate for a moment, with its main programme bills, to insert when it wished to do so, the necessary exempting words: Notwithstanding anything in the Bill of Rights or any other rule of law or statute to the contrary'."
However, I accept the assurance of the noble and learned Lord. I am glad that we got it from him. It was not I who wrote the notes on the Bill, which said that they were specifically not to include political laws. I have read some of the debates in another place in Standing Committee A. I did not think that the Minister of State's views on the matter were very robust. Perhaps the noble and learned Lord will now consult his learned friend in another place and instruct him on better understanding. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.59 p.m.
Lord HOWIE of TROON Lord HOWIE of TROON moved Amendment No. 10:
Page S, line 28, after ("conscience") insert ("or on grounds of a possible conflict with the practice of his professional institution, as defined in a code of professional practice, provided that membership of that institution is limited to persons who have or are seeking a qualification appropriate to the practice of the profession concerned").
The noble Lord said: I intend to speak very briefly about this amendment. First, following the excitement of the last amendment, this one is very low key. Secondly, somewhat unusually, the noble and learned Lord the Lord Chancellor has already replied to the debate on the amendment before it has started, and his reply was extremely interesting except for the fact that I do not command enough Latin, either medieval or modern, to have followed his reply in all its detail.
The EARL of GOWRIE: My Lords, I am most grateful to the noble Lord, Lord Howie of Troon, for giving way. I think there is a general feeling and understanding that we have reached seven o'clock and a sort of climactic moment of the Bill; and, in order that the amendment to be moved by the noble Lord, Lord Howie, should entertain no anti-climax—because what he wishes to attend to is so important—it might be a good thing if we now adjourned for supper and came back to his point later.
Lord HOWIE of TROON: My Lords, before the noble Earl sits down, it might be possible to dispose of this debate in something like 15 minutes. I do not know whether that would change his mind in any way.
The EARL of GOWRIE: My Lords, I am the servant of the House in this matter. I have no desire to dictate to your Lordships when you should have your supper. I was just told your Lordships wanted it at around 7 o'clock.
The EARL of HALSBURY: My Lords, may I observe that I should like to speak on the amendment of the noble Lord, Lord Howie of Troon, but I have taken advantage of the advertised programme to do something else at 7 o'clock.
Lord HOWIE of TROON: My Lords, it may well be that we should go on, and will endeavour to do that. I will begin again by saying that this is a very modest amendment, and it covers ground which we dealt with in the Committee stage and during the Second Reading debate. It covers the principle, at any rate, but it covers it in a much narrower way than we did in our earlier debates. The amendment deals with the dilemma, which is most serious in a closed shop situation, of the conflict of loyalties which a professional man may feel as to his obligations towards his professional institution and to his trade union, where he belongs to one.
It is quite a simple matter. The professional institution may well have rules of professional conduct which would be breached in a case where he were obliged by his union to take industrial action. Were he to breach these rules of professional conduct, he might be disciplined by his institution, whereas, on the other hand, he might also be disciplined by his union for fulfilling them. The narrowness of this amendment as against the one we spoke on at Committee stage is that this now deals only with the question of whether or not professional men should be able to claim exclusion from being obliged to join a union, and it is a special example of the general case to which the noble and learned Lord the Lord Chancellor referred earlier.
The problem here is that many professional men who might conceivably join trade unions willingly none the less fear
942
that this dilemma would put them in an awkward and impossible position. Whether they are right or wrong is really not a matter for us to discuss tonight, but certainly their fears are present and distinct. The point I am making in this very modest amendment is that should a professional man feel this dilemma so strongly that he is unwilling to join a trade union, and if he is dismissed for that reason, he should be able to claim that that is an unfair dismissal, and should he able to claim it with the certainty of being right. That is the reason why I prefer it to be in the Bill rather than out of it; and, while I quite understand the point made by the noble and learned Lord the Lord Chancellor, I would feel much happier, and certainly the professional men to whom I refer would themselves feel that their doubts were set aside, were the law specific in this case. As I say, my Lords, it is a very small request to make, and is, I think, a long way short of the full protection which the professional institutions would really want in this case. It falls far short of what they would regard as natural justice. Because of its very modesty, it is my hope that the Government will be prepared to accept it. I beg to move.
The LORD CHANCELLOR: My Lords, I do not want to pre-empt anything which my noble friend Lord Gowrie is going to say, but I really indicated my own approach to this matter. I think it is in fact the thin end of a fairly fat wedge. I have been a member of a professional institution for the whole of my life, and so has my noble and learned friend the Lord Advocate. I would always put those practices which are based on ethical grounds as matters of conscience with me, and therefore directly covered by the Bill. I know there are certain practices, which have mostly been done away with in my profession—for instance, that you had to charge a special fee for going to quarter sessions—which I am not sure I could put quite so highly as that; and I think they might be too widely protected if one tried to get them within the terms of the European Convention, although some people might hold them as deeply-held personal convictions. My view is that what is a deeply-held personal conviction, what is a matter of conscience, is a matter of fact and degree, and that we had far better leave it to the

943
tribunals to decide whether it is genuinely deeply-held and personal. But I am on the side of the professionals every time.
Lord WYNNE-JONES: My Lords, this is a subject of fairly considerable interest, and I would agree very largely with the remarks that have been made by my noble friend Lord Howie, but I think there is a real problem which in my opinion cannot be resolved by inserting anything into an Act of Parliament, Essentially, what we are dealing with here is the problem of an individual who is a member of a professional association and who is also a member of a trade union. He joined the trade union deliberately, with his eyes open; and, as one who could easily have been covered by this very matter which is raised by my noble friend, I feel that if one joins a trade union then one is bound by the rules of the trade union, because one did it deliberately. I think that if one has some other obligation, then this obligation clearly should be dealt with by means of a code of conduct, and not by means of an Act of Parliament.
The Earl of GOWRIE: My Lords, I think the substantive point has been dealt with by my noble and learned friend, so I do not wish to read out the speech that I have here. I must say—and it gives me pleasure to say this—that I am wholly in agreement with the noble Lord, Lord Wynne-Jones. Indeed, as the House will be aware, the Bill makes provision for a code of practice, which is already in the design stage and will shortly go out for consultation, to meet the very point that the noble Lord, Lord Wynne-Jones, made.
On the particular worry that the noble Lord, Lord Howie of Troon, expressed, I can say that we have a technical difficulty in proceeding as he would like, and in putting this into the Bill rather than into the code, because his amendment talks of professional institutions and professions, but does not actually define these; so, really, we would not know which bodies were covered and which were not. That, I think, would get us into the kind of difficulties and legalism which the noble Lord, Lord Houghton, in another context, warned us off, and which generally we are trying to avoid in this Bill as a whole. But at the Committee stage I gave the
944
noble Lord, Lord Howie, undertakings —and I am very happy to repeat them now—that we are seized of the very same difficulty of which he is seized and which the noble Lord, Lord Wynne-Jones, has mentioned. We think the substantive issue is covered by the previous amendment, as my noble and learned friend has said. If we can clear it up in any way in a code of practice, which we are seeking to do, I think that the noble Lord will find that that will be the best way to proceed.
Lord HOWIE of TROON: My Lords, I am not anxious to find myself in the kind of deep water about which the noble Lord, Lord Houghton, warned us. In view of the speech of the noble and learned Lord the Lord Chancellor earlier and of the assurances just given by the noble Earl, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of GOWRIE: My Lords, I beg to move that the House do now adjourn.
The LORD CHANCELLOR: My Lords, the noble Earl really means, if he will allow me, to move that further consideration on Report be now adjourned.
The Earl of GOWRIE: My Lords, I apologise. An ex-Whip should have known better. I beg to move that consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

EUROCONTROL (IMMUNITIES AND PRIVILEGES) (AMENDMENT) ORDER 1980
7.11 p.m.
Lord TREFGARNE Lord TREFGARNE rose to move, That the draft order laid before the House on 17th June be approved. The noble Lord said: My Lords, I beg to move that the Eurocontrol (Immunities and Privileges) (Amendment) Order 1980 be approved. With your Lordships' permission I will speak at the same time to the International Organisations (Immunities and Privileges) Miscellaneous Provisions Order 1980. These draft orders, both made under the International Organisations Act 1968, were laid before the House on 17th June, 1980.
The draft Eurocontrol Order is required because of a change which is to be introduced into the tax régime applied to staff members of the European Organisation for the Safety of Air Navigation—or Eurocontrol as it is generally known. The change will mean that from the date on which staff become liable for an internal tax, which will be applied for the benefit of the organisation, they will cease to pay United Kingdom tax on their salaries.
The order will have no effect on the operational working of Eurocontrol, which as your Lordships may recall, was established by convention in 1960. The original aim of the convention was that the agency it established would control both civil and military traffic in the upper air space of member states. However, by the time that the new agency started functioning in 1963, it had become evident that the original aim was incompatible with the integrated system, covering the whole air space and catering for both military and civil air traffic, which we and France were by then developing. Accordingly, the United Kingdom, France and the Republic of Ireland continued to provide their own air traffic control services in the upper air space. Despite this change, Eurocontrol has fulfilled an important role, and contributed to the development of navigational aids in all member states.
Your Lordships may know that a new agreement is being negotiated to provide the framework for a more positive cooperative venture for future safe and efficient air traffic control over Europe, in the future. In the meantime, member countries have been concerned about the practical effects of the present taxation system which permits members to tax staff salaries, but requires them to refund to the Eurocontrol budget the amount of tax which they collect.
We accepted this requirement because of the principle that the country in which an organisation is situated should not derive benefit from taxing the salaries of staff members stationed in its territory, since these salaries are, of course, provided by the funding of other member states. Although an arrangement to repay the tax which has been collected may appear to be a simple, self-cancelling, transaction, in practice it has proved to involve considerable administrative effort. It has also created financing difficulties for Euro-
946
control when delays have occurred in members making their reimbursements to the organisation. To overcome these drawbacks, members have agreed to adopt the method, commonly used by most international organisations, of applying an internal tax system to their staff, and using the proceeds for the organisation's benefit. The agreement to do this is contained in the protocol which was signed by member states in Brussels on 21st November 1978. Copies of that protocol were laid before the House in March last year.
The draft order before your Lordships is for the purpose of giving effect to that agreement. The making of the order will not, of course, result in any reduction in United Kingdom revenue receipts because, as I have said we currently repay to the organisation a sum equal to the amount of tax collected from their staff. This order, if approved, will lead to administrative savings to Her Majesty's Government and remove budget financing delays which have sometimes created difficulties for Eurocontrol. I have therefore no hesitation in commending it to your Lordships.
I turn now to the second of the draft orders, which is required to take account of changes in customs and excise law. These changes, which were introduced in the Finance (No. 2) Act 1975, made provision for a duty levied at importation to be denoted either a customs duty or an excise duty. Before the 1975 Act, which took effect on 1st January 1976, all duties charged at importation were termed duties of customs, and excise duties were charged on goods produced in the United Kingdom. Certain orders made under the 1968 International Organisations Act contain references to customs duties and excise duties in the sense in which these terms were used before the 1975 Act came into force.
The International Organisations Act itself was brought up-to-date by the Customs and Excise Management Act of 1979. It is now necessary to up-date those orders listed in the schedule which contain the now superseded, and inappropriate, terminology. The second draft order before your Lordships does no more than bring into line the provisions in the existing orders to which it refers. It does not add to their provisions in any way;

947
neither does it accord any additional privileges to the organisations or to persons connected with them. I hope therefore that your Lordships will approve this draft order, also. I beg to move the first Motion standing in my name on the Order Paper.
Moved, That the draft order laid before the House on 17th June be approved.—(Lord Trefgarne.)
Lord BRUCE of DONINGTON: My Lords, the House will be indebted to the noble Lord for having explained so clearly the purport of the two statutory instruments that we are now considering. The House will observe from the 24th Report of the Joint Committee on Statutory Instruments that these particular draft instruments were considered by the Joint Committee as not worthy of being drawn to the attention of both Houses. It therefore makes them strictly noncontroversial and we on this side of the House will wish to do everything to facilitate speedy passage. I observe with some interest the comments the noble Lord made about the Eurocontrol (Immunities and Privileges) (Amendment) Order 1980. He said that there had been a certain reorganisation of the arrangements that were originally intended for Eurocontrol.
Since he mentioned it, I must inform the noble Lord that I regard the arrangements amending the original concept of Eurocontrol as a retrograde step. It was my privilege while I was a Member of the European Parliament and the president of its Transport Committee to investigate in some detail the activities of Eurocontrol at both its centres. If there was one concept that seemed to me to bear some constructive and positive contribution to the unity of Europe, it was the concept of Eurocontrol. Indeed, by common consensus the duties it has performed in controlling the passage of aircraft over 20,000 feet have been impressive. Nobody who has visited their installations and observed their duplicated computer equipment and simulated displays for the benefit of air traffic controllers can be under any illusions as to their efficiency.
It therefore appears to be rather a pity that the Governments of the United
948
Kingdom and France were not able to swallow fully the original concept of Eurocontrol as originally formulated. One cannot speculate as to the reasons for this, but it appears that, in spite of the talk there has been about the need for a united Europe, certainly in the sphere of traffic control, the national interest, whether at West Drayton or whether in France, has certainly succeeded in minimising the original community impact that lay behind the establishment of Eurocontrol itself. These are more controversial matters on which the noble Lord touched by way of explanation and I do not want to make anything more of them.
So far as the orders themselves are concerned, there can be no doubt that the course decided upon by the Government in regard to the taxation of the officials and various others who are concerned with Eurocontrol is the most sensible course to adopt. I venture the prediction that the time is not far distant when they have to adopt the same principle in so far as the salaries of European Members of Parliament are concerned; this lies far beyond the existing order.
Regarding the International Organisations (Immunities and Privileges) Miscellaneous Provisions Order, we on this side entirely accept the various interpretations and drafting amendments that have had to be made in order to bring this up to date. One does not want to go through all of them. I have not ventured, in view of the report of the Joint Committee, to trace each amendment through to its original order. They are entirely noncontroversial. We compliment the noble Lord on his felicitous presentation, and hope that the orders will be passed by the House.
On Question, Motion agreed to.

INTERNATIONAL ORGANISATIONS (IMMUNITIES AND PRIVILEGES) MISCELLANEOUS PROVISIONS ORDER 1980
Lord TREFGARNE: My Lords, I beg to move that the draft order laid before the House on 17th June be approved.
Moved, That the draft order laid before the House on 17th June be approved. (Lord Trefgarne.)
On Question, Motion agreed to.
[The sitting was suspended from 7.23 to 8.10 p.m.]

EMPLOYMENT BILL
Report stage resumed on Clause 7.
[Amendment No. 11 not moved.]
Lord McCARTHY Lord McCARTHY moved Amendment No. 12:
Page 8, leave out from beginning of line 42 to end of line 10 on page 9.
The noble Lord said: My Lords, this is the amendment by which we wish to delete those provisions in the Bill for additional requirements in respect of new union membership agreements. What we are saying is that, given the qualifications that the Government have introduced in respect of old union membership agreements so far as the existing members are concerned and so far as personal convictions are concerned, we do not see why there should be an additional separate provision dealing with new union membership agreements.
This argument is partly based upon the central argument which we advanced earlier; that the closed shop, subject to reasonable provisions for conscientious objection, is a justifiable aim of trade union objectives and partly due to the fact that we would maintain that the kinds of qualifications and conditions which the Government are imposing in respect of new union membership agreements are in fact something which no reasonable person, looking at them objectively, could believe that any trade union could actually carry out. It is not merely the fact that the Government are insisting upon a procedural method of taking the ballot which does not give the trade unions concerned any statutory rights whatsoever in so far as the way in which this procedure is carried out, though we have sought to move amendments to that effect and they have not found favour with the Government. It is not only the fact that the Government are insisting, under the provisions of this clause, on what we regard as a quite unrealistic figure of 80 per cent.
950
which has to be voted in favour of this new form of union membership agreement—and not just 80 per cent. of those voting but of those eligible to vote—which we regard as a quite unnecessary and extreme form of qualification to make in respect of union membership agreements. But, in general terms, we would argue that this is to place the union security arrangements of working people in trade unions far beyond the kinds of qualifications and statutory limitations which in fact are placed upon other organisations, and in particular professional organisations and their arrangements to maintain membership.
This matter has been referred to by previous speakers tonight, but I do not think it has been fully developed. For example, if one looks at the classic work on the professions, Carr-Saunders and Wilson in their classic study of the professions, they say quite clearly at page 319—and this has not been objected to by anybody, so far as I know—that it is the purpose of professional associations, and not simply of trade unions, to intervene to achieve a state where some degree of monopoly of function is granted to the practitioner professional associations.
Thus, they say, no one who is not a member of one of the four Inns of Court, is allowed to plead a case before any of the higher courts while the Royal College of Veterinary Surgeons, for example, is required under the Veterinary Surgeons Act to admit to membership all those who pass their examination and thus qualify for the register. In fact, of course, the register of qualified veterinary surgeons consists of the membership of the RCVS; but that is only the position in respect of the registered profession.
In respect of the non-registered professions, similar forms of protection, partly by injunctions and partly by other statutory ways, are introduced in order to mark out and support professional organisations in their attempts to achieve what is in effect 100 per cent. membership. Carr-Saunders and Wilson say that the hallmark of qualifications ofprofessional associations is the achievement of a 100 per cent. membership. Thus, they say, it may be said that in a sense all unregistered professions are attempting to achieve 100 per cent. membership in various ways. We would argue that these ways are not subject

951
to these kinds of statutory limitations. They do not have to go through the fine needle of a vote of this kind. Therefore, we would suggest, even at this late hour, that the Government should be fair and square and agree with this amendment.
The Earl of GOWRIE: My Lords, as the noble Lord, Lord McCarthy, has very clearly put it, the effect of these amendments—I take it that he is also addressing himself to Amendment No. 15; I see that he nods his head—would be to remove the provision that the dismissal of an employee in a closed shop will be unfair, as we deem it to be unfair, if the union membership agreement takes effect after the commencement of Section 7 of the Employment Act 1980, as we trust it will become, but has not been approved in a secret ballot of those to be affected, showing at least 80 per cent. support among those entitled to vote. The burden of the argument of the noble Lord, Lord McCarthy, was that this figure of 80 per cent. is unreasonably high.
The Opposition have made no secret of their disagreement with our closed shop ballot proposals. But we have consistently, and in considerable detail, spelled out our reasons for insisting that not only should the new closed shop be subject to approval by the employees who will be covered by it, but that that approval must be given by an overwhelming majority of those employees in a secret ballot. It seems to me to be most extraordinary that noble Lords opposite are seriously asking us now to renege on this commitment. I can only again refer them back to some of the remarks made by the noble Lord, Lord Houghton of Sowerby, to the effect that membership or non-membership of a closed shop raises issues of public policy far beyond the provisions of any normal kind of organisation, and issues of whether, in fact, one may pursue one's job at all. That is why it seems to me that the onus on people seeking to make new closed shops must be an overwhelming degree of support.
We regard it as very important indeed that employees should be consulted about the introduction of any new closed shop. Any such introduction marks a substantial change in whatever existing terms and conditions of employment there may be for an employee, and it is only right that his
952
opinion should be registered. It is also right, in our view, that a closed shop may be introduced only when there is a very large majority in favour of it, and we settled on at least 80 per cent. as indicating an overwhelming majority. We got that figure not out of the blue but after consultations and it, also, is the kind of figure for membership which unions have traditionally looked for in the past before they have sought a closed shop agreement. So it seems to us to he in line with best practice in this area.
Some people—not, I think, in fairness to him, the noble Lord, Lord McCarthy, at any rate, very strongly tonight—have argued that this provision is designed to halt the spread of new closed shops. Of course, we acknowledge that 80 per cent. is a high figure, but it is deliberate because, as I said, we believe that a new closed shop should take effect only where it is definitely and positively desired by an overwhelming majority of those who are likely to be affected. The arguments for this have been clearly rehearsed not only at Committee stage but also in a slightly different context earlier this afternoon. No more needs to be said to justify our position, and we hope that these amendments will be opposed.
The LORD CHANCELLOR: My Lords, I should just like to add something, because I really think that I ought to correct the noble Lord, Lord McCarthy, on the position about the professions. What he seemed to say is a very commonly held error, but it is a complete error, if I understood him correctly. The aim of a professional association, like any other organisation, is to get as wide a membership as possible, but it is certainly not the intention of any such membership to have a closed shop.
Yes, in order to be a member of the Bar you have to pass certain examinations and to be called to the Bar, but you do not have to belong to the Bar Council which has a membership of, I guess, somewhere between 80 and 90 per cent., which is now absorbed into the Senate of the Inns of Court. To be a solicitor, you have to pass certain examinations and take certain training to take up a practising certificate. But you do not have to be a member of the Law Society, which is the professional association and which has, I suppose, a membership

953
of, again, between 80 and 90 per cent. And to be a doctor you have to get on the medical register which involves certain qualifications, but you do not have to he a member of the British Medical Association which is the professional association concerned and so on. There is every kind of difference between the qualification to practise your profession, and compulsory membership of your professional association. The one I heartily support; the other I would absolutely abhor.
8.26 p.m.
Lord McCARTHY: My Lords, it is with very great respect that I cross swords with the noble and learned Lord the Lord Chancellor on this point, but let me first deal with the points raised by the noble Earl, Lord Gowrie. He said, first, that other people have been consulted. He said that he got his 80 per cent. as the result of consultation. I should like to know whether those consultations included the Trades Union Congress, the trade unions and those who have the practice of running union membership agreements. I do not think that is the case. Nobody who knows about closed shops would have advised him to have ballots of this kind. The figure of SO per cent. is normal where unions recruit 80, 85 or even 95 per cent. of membership without the closed shop, before they go forward and demand a closed shop. That has nothing whatever to do with the figure of 80 per cent. in the context of a ballot. So I do not think there is any connection with that at all.
Secondly, the noble Earl said that this would halt the spread of the closed shop, and I am suggesting that it would halt the spread of the closed shop. He has not actually answered the question whether or not he wants to halt the spread of the closed shop. In this respect I suggest to him—and it has been said elsewhere in this House tonight—that so far as the closed shop is concerned the 1971 Industrial Relations Act was much better. The Industrial Relations Act allowed a registered union to opt for the alternative of the agency shop, which in many ways would have been a satisfactory alternative for trade unions.
I know that in the context of the 1971 Act the trade unions said that they did not want the agency shop. They did not want it, because in the context of the 1971
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Act the agency shop was connected with the whole question of registration. It was the whole issue of registration which the unions found unacceptable in 1971. Nevertheless, separated off from the issue of registration there were more acceptable ways of pursuing union membership agreements in the 1971 Act than there are in this Bill. We remain convinced that one of the aims of the Government in introducing the ballot provisions is to make the negotiation of new closed shops impossible.
So I come to what the noble and learned Lord the Lord Chancellor has said. First, with great respect, I have not talked about the British Medical Association and I have not talked about the Law Society. I know that both the British Medical Association and the Law Society do not operate 100 per cent. membership practices. Also, I have not talked about the Bar Council. I have talked about the four Inns of Court. It is impossible to plead a case before any of the higher courts unless you are a member of those institutions. And I have not just talked about the registered professions, because I accept, if this is the point, that in respect of the registered professions there are for the most part statutes which set up statutory organisations, and it is the statutory organisations which regulate the professions.
I am talking even more about the unregistered professions, because in the unregistered professions, as Carr-Saunders and Wilson say, it is the professional title, which is not necessarily descriptive of membership of the association but which becomes the monopoly of the association, which is the key to the control over entry and over membership. It is in the unregistered professions, above all, that we find practices analogous to the closed shop of trade unions, and the Government do not propose to do anything at all about that. Therefore we do not propose to withdraw this amendment.
8.29 p.m.
On Question, Whether the said amendment (No. 12) shall be agreed to?
Their Lordships divided: Contents, 40; Not-Contents, 106.

CONTENTS

Birk, B.

Janner, L.

Stewart of Alvechurch, B.

Blease, L.

Kaldor, L.

Stewart of Fulham, L.

Brockway, L.

Lee of Newton, L.

Stone, L.

Brooks of Tremorfa, L.

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

Strabolgi, L.

Chitnis, L.

Strauss, L.

Collison, L.

McCarthy, L.

Taylor of Mansfield, L.

David, B.[Teller.]

Morris of Kenwood, L.

Underhill, L.

Davies of Leek, L.

Northfield, L.

Wall, L.

Elwyn-Jones, L.

Oram, L.

Wallace of Coslany, L.

Gaitskell, B.

Peart, L.

Wedderburn of Charlton, L.

Goronwy-Roberts, L.

Phillips, B.

Wells-Pestell, L.

Hale, L.

Rhodes, L.

Whaddon, L.

Hatch of Lusby, L.

Ross of Marnock, L.

White, B.

Houghton of Sowerby, L.

Shackleton, L.

NOT-CONTENTS

Adeane, L.

Gowrie, E.

Penrhyn, L.

Ailsa, M.

Gray, L.

Rawlinson of Ewell, L.

Airey of Abingdon, B.

Gridley, L.

Reigate, L.

Auckland, L.

Grimston of Westbury, L.

Renton, L.

Avon, E.

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

Robbins, L.

Bathurst, E.

Rochdale, V.

Bellwin, L.

Hankey, L.

Rochester, L.

Berkeley, B.

Hanworth, V.

Romney, E.

Blake, L.

Hatherton, L.

Rugby, L.

Bridgeman, V.

Hives, L.

Sackville, L.

Brookes, L.

Holderness, L.

Sandys, L. [Teller.]

Brougham and Vaux, L.

Hunt of Fawley, L.

Seear, B.

Campbell of Croy, L.

Hylton-Foster, B.

Seebohm, L.

Clitheroe, L.

Ilchester, E.

Sempill, Ly.

Cockfield, L.

Kemsley, V.

Sharples, B.

Cork and Orrery, E.

Kimberley, E.

Sidmouth, V.

Cottesloe, L.

Lindsey and Abingdon, E.

Simon, V.

Craigavon, V.

Long, V.

Soames, L. (L. President.)

Cromartie, E.

Lyell, L.

Stamp, L.

de Clifford, L.

McAlpine of Moffat, L.

Strathcarron, L.

De La Warr, E.

MacAndrew, L.

Strathclyde, L.

De L'Isle, V.

McFadzean, L.

Sudeley, L.

Denham, L. [Teller.)

Mackay of Clashfern, L.

Swinfen, L.

Dormer, L.

Macleod of Borve, B.

Swinton, E.

Drumalbyn, L.

Mais, L.

Torphichen, L.

Duncan-Sandys, L.

Marley, L.

Trefgarne, L.

Dundee, E.

Merrivale, L.

Trenchard, V.

Ebbisham, L.

Middleston, L.

Trumpington, B.

Ellenborough, L.

Monson, L.

Tryon, L.

Elliot of Harwood, B.

Mottistone, L.

Vaux of Harrowden, L.

Elton, L.

Mowbray and Stourton, L.

Vickers, B.

Ferrers, E.

Murton of Lindisfarne, L.

Vivian, L.

Gainford, L.

Netherthorpe, L.

Ward of Witley, V.

Gisborough, L.

Nugent of Guildford, L.

Wigoder, L.

Gladwyn, L.

Orkney, E.

Young, B.

Godber of Willington, L.

Orr-Ewing, L.

Resolved in the negative, and amendment disagreed to accordingly.
8.38 p.m.
Lord MACKAY of CLASHFERN Lord MACKAY of CLASHFERN moved Amendment No. 13:
Page 9, line 16, at end insert—
(" (3E) In determining for the purposes of subsection (3B) and of section 58A(2) whether a person belongs to a class of employees, any restriction of the class by reference to membership (or objection to membership) of a trade union shall be disregarded.")
The noble and learned Lord said: My Lords, I beg to move this amendment.
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As your Lordships will be aware, the current statutory definition of a union membership agreement in the Act of 1956 says that for the purposes of the Act, employees are to be treated in relation to a union membership agreement as belonging to the same class if they have been identified as such by the parties to the agreement, and the Act goes on to say that they may be so identified by reference to any characteristics whatsoever.
For most purposes this definition works entirely satisfactorily, but it has recently come to our attention that in the context of our proposals on ballots where new

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closed shops may be sought, the definition may work in such a way that non-union members may be disfranchised from the ballot. This is because as currently drafted those who must be allowed to participate in the ballot are those in the relevant class, and "class" may be defined so as to exclude existing employees who are non-members. It is highly desirable that existing non-union employees should be exempted by the union membership agreement from having to belong to the union—they are in any case protected by the Bill—but it is highly undesirable that such employees should be disfranchised in the ballot. It is to avoid any possibility of this that we have tabled this amendment, which does not alter the definition of "class" in the statutory provisions presently in force. I commend the amendment to your Lordships.
Lord WEDDERBURN of CHARLTON: My Lords, this amendment from the Government cannot be allowed to pass without three comments. I follow the noble and learned Lord the Lord Advocate when lie says that, because of the definition in Section 30(5)(a) of the 1974 Act of the word "class", it would be possible to arrange between the union and the employer that the class of employees who are covered by the union membership arrangement are the union members within a certain plant and not the other existing employees. I understand his problem about that being a possible abuse of the law as it is seen by the Government, but this is an excellent illustration of the road down which the Government are being taken by the arrangements to which my noble friend Lord McCarthy was objecting in the last amendment. It means that when we get into this degree of legal regulation, of bargaining patterns and bargaining arrangements—including union membership arrangements—we have to put a stop to what might be a quite sensible situation. We will not bother to swap examples, but I can understand the noble and learned Lord's example of a possible abuse in his eyes. I am sure he could easily see that I might say there would be a situation where it might be quite sensible to say, All the union members in a shop—not George and Bill because they have been here 20 years and no one has bothered to recruit them, but all the union members and all future employees". A
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sensible management and a sensible union cannot now do that and they cannot now do it because of the words of this amendment.
It goes further: the class cannot be restricted by reference to membership. The noble and learned Lord and I know perfectly well that the first litigation on this will raise the question of whether the boundary is described by implicit reference to union membership. The world being as it is, some arrangement will be made and someone will allege that there is an implicit reference. This is to introduce into labour law what I sometimes tend to call the tax evasion mentality. We shall be down the road to the tax evasion approach to statutes and to arrangements which have to regulate bargaining practices.
The point to make on this amendment is that of course we will resist it because it is an illustration of the kind of thing to which the Government's arrangements in this Bill will lead more and more, which are quite alien to the commonsense attitudes which are common on the shop-floor between trade union and management in Britain.
Lord MOTTISTONE: Before the noble Lord sits down, is it entirely right that Bill and George (as he described them) should be excluded from voting? Why should Bill and George, because they have been with the company for 20 years and are not union members, be excluded from this voting pattern? He put it across very plausibly, as he always does—and very charmingly—as though it was a foregone conclusion, but I question whether it is a foregone conclusion. I should have thought that Bill and George would want to vote, and why should they not?
Lord WEDDERBURN of CHARLTON: My Lords, as I have not sat down, perhaps I may respond. The noble Lord is putting it to me in the terms of the noble and learned Lord the Lord Advocate. I was putting it in a different way, where George and Bill did not mind whether they voted or not, but where management and union wanted all future employees (perhaps for perfectly good industrial reasons) to be members of the union. Whether Bill and George voted in the ballot is not the real question. Of course

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if that is the question, then the noble and learned Lord has his point, but if I have a situation—and I am sure the noble Lord, Lord Mottistone, could think of such an industrial situation—where it was said, "For the future we will have everyone in the union", the most sensible way to do that is to define the UMA by reference to existing union members and all future employees. That now they cannot do and it is very odd. That is the kind of thing that the Government will be thinking about in their Green Paper. I fear what will come in the Green Paper; it will be more of this kind of thing.
Lord MACKAY of CLASHFERN: My Lords, what will be in the Green Paper is for another day. So far as this particular amendment is concerned, I really understood the noble Lord, Lord Wedderburn, ultimately to see good sense, including Bill and George in the voting, and ask your Lordships to agree to this amendment.
On Question, amendment agreed to.
8.45 p.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 14:
Page 9, line 16, at end insert—
(" (3E) Where for the purposes of this section the question falls to be determined whether it is the practice for employees to belong to a specified independent trade union or to one of a number of such trade unions, no account shall be taken of the fact that an employee is not a member of any such trade union if his dismissal would have been unfair by reason either of subsection (3B) or of paragraph (b) of subsection (3C) above.").
The noble Lord said: My Lords, this has become known in the trade on our side, as it were, as the Iolanthe amendment, because it was the amendment which I strove to move in your Lordships' Committee and the noble and learned Lord pointed out to me that the word "not" had been left out, so I was unable to move it. It now comes in a slightly different form and it addresses itself to this problem: the dismissal of a non-union member in a union membership arrangement is only fair—putting aside for the moment all questions of conscience and personal conviction and the matters we have been debating in such an excited manner this evening—if it is the practice that employees of the same class as his belong
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to one or more of the specified trade unions; that is clear law under Section 58 and, of course, there has been a line of case law in which this has caused a certain degree of difficulty. In the well-known case of the Ferrybridge Six in 1976 the tribunal which found that some 1,000 out of 39,000 employees of the Central Electricity Generating Board were not in the proper specified unions held that there was an insufficient practice. Then the words in the statute were slightly changed by the Act of 1976. But it does not seem to have made much difference, because in the case of Himpfen amp; others v Allied Records Limited in 1978 the employment appeal tribunal held that nine out of 42 workers who were not in the specified trade union was not a big enough practice and so the dismissal of non-unionists was unfair.
This amendment tries to call upon the Government to prevent their new structures from destroying the possibility of maintaining union membership arrangements altogether. That is to say, if we now take on board after cases like the Himpfen case, nine out of 42, no practice, or the Sarvent case, 1,000 out of 39,000, no practice, we now have a statutory situation where, putting aside questions of conviction and conscience, we have the existing employees who are there and cannot be dismissed (and as we have just heard we cannot even arrange for the UMA to get round that in any way). We have the new UMA which also has to have the ballot and then those who are not members of the specified unions on the day of the ballot, who keep out of the union —they are non-unionists—and it becomes fairly obvious that the ability to prove a practice in the terms in which the courts have so far demanded it, becomes almost impossible.
What this amendment attempts to do is to say, "All right; have your statutory exemptions for the existing employees or the employees who are not members on the day of the ballot, but do not judge the practice by reference to them as well as the trade unionists". The Government must know that in a large number of cases all the talk about an 80 per cent. majority, or conscience, or deeply-held personal convictions, or political convictions, or ethical objections, or Plymouth Brethren, or Roman Catholicism, or

961
Moslem or agnostic objections, are all beside the point. There just will not be the practice. There will not be sufficient people in the union to satisfy the Himpfen test.
So if the Government are not going to accept this particular way of doing it—and this is only one of a number of ways of doing it—I hope that when the noble and learned Lord replies he does at least address himself to this question. It could be that in practice this is the way in which effective 100 per cent. union membership arrangements, plus the statutory exemptions cannot be carried on. This may be the way in which a closed shop is destroyed, through lack of practice, much more significantly perhaps than all the matters we have been debating in earlier amendments this evening. I beg to move.
Lord MOTTISTONE: My Lords, does the noble Lord not think that he has postulated a very plausible case, but it is all anticipating a situation which may or may not occur in real life? It would seem to me that he is jumping ahead to assume that there are various factors built into this Bill which will not operate and which will not be successful, and the theme of the attitude of mind in industry that is developing over the months will not continue to develop in that way.
Would it not be much more appropriate to keep in mind the very situation he describes, which could be a real one but on the other hand might well not be, and use it, certainly for introduction, to advise the Government at a later stage when perhaps we might find further legislation is necessary? Every Act that is passed there are always deficiencies. We see them every day. It could well be that this is the sort of thing which needs to be kept in reserve for future legislation, rather than trying to inflict it on this Bill, based on a theoretical situation which the noble Lord sees so clearly but which I find it much harder to see as being a real case that will occur in the future.
8.51 p.m.
Lord MACKAY of CLASHFERN: My Lords, the matter which is now before your Lordships is the same point essentially as the noble Lord raised on
962
Committeee. Perhaps I should say, for the record, that he rather suggested that I had not understood the point at that time. What I did not understand was the relationship of the point he was making and the amendment he was proposing. However, that difficulty has been resolved and we now have the amendment and the point fairly clearly related.
I understand perfectly the concern which is being expressed in this amendment. It is that a number of employees, perhaps quite a large number, should in future be exempted from any requirement to join a union because they are not union members when a closed shop is introduced. As a result, it is argued, a tribunal might in future, when looking at the statutory definition of a closed shop, a union membership agreement, find that there was not in fact "an agreement or arrangement which has the effect in practice of requiring the employees for the time being of the class to which it relates to be or become a union member". So the question really is what is to be regarded as amounting to a practice in relation to the particular situation.
Lord WEDDERBURN of CHARLTON: My Lords, it is not, of course, a question of the existence of the union membership agreement and its definition, but its practice under Section 58. It comes to the same point, but it is the position under Section 58, not the definition.
Lord MACKAY of CLASHFERN: I think that has been made clear. I must say I think it is the same point, and that is why I am seeking to address it in this particular way. If the doubt the noble Lord has given expression to were to eventuate, the legal position of all union membership agreements would be uncertain and this would be both confusing and disruptive.
So far as we are concerned, I can assure the House that the Government have no intention of undermining the statutory definition of a union membership agreement by Clause 7 of the Bill. If we were persuaded there was any serious risk of that, then we should certainly wish to accept the amendment suggested or introduce something with a similar effect. The union membership agreement, as we see it, exists wherever there is a practice

963
of requiring employees "of the class to which the agreement applies" to be members of a union. The 1974 Act does not define "class and this can be any category or description of workers which the agreement uses, or the tribunal finds to exist, in relation to any requirement of union membership. Agreements normally will describe whom they cover, and this is the class. It is possible that a tribunal might sometimes be called upon to determine whom a more informal arrangement covers, but its decision will turn on the relevant factual evidence. Those whom in practice the agreement or arrangement covers will be the class. Indeed it would be strange if it were otherwise.
Recent research has shown that most closed shop agreements in fact provide exemptions. The work of LSE researchers, published last November, showed that some two-thirds of agreements exempt existing employees in post when a closed shop is introduced. If the doubt expressed in the amendment were a real one then it would already apply to most existing closed shops; these would not, if the proposers of this amendment are correct, satisfy the current statutory definition of a union membership agreement. However, it is not correct, for the reasons which I have already tried to give, and closed shops, both before and after this Bill is enacted, will continue to satisfy the statutory definition of a union membership agreement when they provide exemptions from the requirement of union membership for existing employees and other categories of worker, so long as in relation to the class as a whole the practice is to belong to the union.
The noble Lord referred to the Himpfen case and this is a special one on its own facts, in my view. The nine employees in question in that case had previously been promised by management that they need not join the particular union, and it is thus not surprising that the Employment Appeal Tribunal held that it was not the practice to require them to join. So I do not think that case really affords any light on the general situation; it was a very special case indeed. So, for these reasons, I do not believe this particular amendment is necessary, and I think it is undesirable in that it would unsettle the understanding in relation to existing union membership
964
agreements. So I would ask your Lordships not to accept it.
Lord WEDDERBURN of CHARLTON: My Lords, I must say one or two words, first, to the noble Lord, Lord Mottistone. I am usually accused of jumping ahead, but I did not want to wait, as he seemed to want to do, until the closed shop arrangements are destroyed and then wait for later legislation from this Government. The noble and learned Lord the Lord Advocate keeps telling us that we must not look ahead to the Green Paper and later legislation but we had better concentrate on this. There is a serious risk. I was interested that the noble and learned Lord went as far as he did in saying that if the risk materialised the Government would consider introducing something. I should have thought the case is now strong enough for the Government to think again before Third Reading, in this sense: that the matter is clearly not just theoretical; secondly, because if the noble and learned Lord considers the passage of Amendment No. 13, you cannot use that way out of the problem; you cannot define your union membership agreement boundaries by reference to union membership in any way at all.
The risk is plain that more and more of these situations will arise. Indeed, he referred to the research of the London School of Economics, and the interesting thing is that a number of heads have been put together around that research since it was published, asking, how long it would be before the legal decision in the Himpfen case percolated through into industrial practice and people began to ask themselves how many of these exemptions they could give without risking the practice which is necessary to maintain it.
Since it is a legal point I must join issue with the noble and learned Lord on the Himpfen case, which clearly had two ratione decidendi. One was the promise to the employees, and on page 691 the tribunal mentions lack of practice and says "on that ground, too, we differ from the tribunal". It is clearly a separate ground of the decision. It takes time for legal decisions to filter down into everyday practice. It is only now, just as that research was being considered, that the lawyers and others were considering the effect that that decision would have.

965
Would it be perhaps possible—I know it is a late stage of the Bill and I shall not get an answer now—for the Government to consider by Third Reading a different way, and that is perhaps slightly to change the wording in terms of what practice is required, to loosen it a little if there is any risk at all? That would be industrially rather more sensible than waiting for a deep sense of resentment, which will certainly appear in the trade union movement if they find that by some mischance this legislation, as it were almost by a side-wind, knocked out the validity of a large number of union membership agreements. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 15 and 16 not moved.]
Clause 18 [Acts to compel trade union membership].
9 p.m.
Lord McCARTHY Lord McCARTHY moved Amendment No. 17:
Page 9, line 36, leave out subsection (1).
The noble Lord said: My Lords, this amendment deals with the question of exclusion of rights. In effect what we are suggesting is that the Government should agree at this late stage to cancel all limitation on unfair dismissal rights for employees of less than two years' service in firms of under 20. What we are saying is that this case has not been proved and that as time goes by more and more evidence is being put forward in objective surveys, some of them initiated by the Government themselves, which indicates that the case has not been made.
The fact is that we have been presented with a whole range of evidence from the ORC surveys, the PSI surveys, the Warwick surveys and from the testimony of organisations such as the Institute of Personnel Management. As I understand it, the Government's view on this matter has changed. It was eleborated both in the other place and in Committee in this House. In particular, the noble Earl, Lord Gowrie, developed a series of arguments as to how far Governments could be expected to base legislation upon the results of surveys. Nevertheless, the noble Earl, Lord Gowrie, is not above—as most of us are—using surveys when those surveys
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appear to support what he is saying. For example, at. column 364 of the Official Report for 10th June he told my noble friend Lord Wedderburn of Charlton when this matter was discussed last time that the PSI survey evidence indicated that 17 per cent. of respondents had said that the Employment Protection Act had had a major impact upon them.
That general statement that the PSI survey has said, with various numbers in various ways, that the Employment Protection Act has had a major impact on them, has been used by Government spokesmen repeatedly in order to justify what they are doing in respect of small firms. However, at this late stage we feel we must point out that, although it is true that the PSI survey said, for example, that the EPA had a major impact on 17 per cent. of respondents, what it did not say was that that impact on respondents took a form which would justify what the Government are doing.
The overwhelming impact of the Employment Protection Act upon respondents as— was shown most clearly in the PSI follow-up survey which was done as regards 36 firms—was that it took the form of improvements in procedures, of improvements in methods of recruitment and of improvements in the way in which firms went about selecting, training, recruiting and retaining labour. Nowhere else were those improvements more clear than in the small firms.
Therefore, to say that 17 per cent. or 24 per cent. of respondents said that they were influenced by the Employment Protection Act in various ways, is not to say that the Employment Protection Act militated against taking on more people, or that in any way it particularly militated against taking on more people in small firms. The fact is, of course, that the Government and anybody else, if they are to initiate surveys of this kind, must accept the essential principle of using surveys in the formulation of policy, which is that you do not, with respect—not if you are intending to be serious—select those parts of the surveys, those bits of the tables, those scraps of evidence which may assist you in your argument: you decide on the balance of the evidence before you, on the general drift of the evidence, whether that evidence in general tends towards your position.
The stance of the Government in respect of both the PSI and ORC surveys, in respect of unfair dismissal and indeed of maternity rights, reminds one of nothing so much as the remarks of Beatrice Webb to her research assistant Margaret Cole. Margaret Cole came back with two great piles of information, one of which supported the view of the minority report on the poor law and the other which did not support the view of the minority report on the poor law. Beatrice Webb said, "Which supports us and which does not? That which does not support us throw away. We shall write the report on the basis of the evidence that supports us". That is the way in which the Government are approaching these kinds of surveys. We suggest that that is not a professional way of looking at information of this type.
If we look at the overwhelming support of the general drift of the PSI survey, the ORC survey, the Warwick survey and all the other surveys, we see that they indicate that, far from the legislation having a disadvantageous effect upon small firms, in fact it has an advantageous effect on small firms: it makes them rather more careful and rather more structured in their approach towards employees, towards taking on employees, towards training employees and in the end towards the dismissal of employees. It makes them in the end see that they have to have more systematic, structured ways of dealing with these problems.
The fact is that the Government have given in to ignorant, uninformed outcries by sections of its support. The noble Earl, Lord Gowrie, said at column 364 on the 10th June:
"We are quite happy and secure to rest upon our impression, our political judgment, our manifesto commitment: on the fact that this concern was shared by the two other principal political parties"—
in other words, I would say, on anything but the evidence, on anything but the facts. Therefore, I beg to move this amendment.
Lord LYELL: My Lords, we believe that this particular clause, in spite of the very interesting arguments that have been advanced by the noble Lord, Lord McCarthy, provides a very limited exemption. We intend to allow small employers
968
flexibility if they want to do various things and among them would be to expand their business, to meet any needs and particularly short-term needs. We believe that this clause and this measure also benefit employees because it is much better for employees to have some form of limited protection than no job at all.
But the justification for making special provisions for the small firms under this particular legislation has been very fully debated. The noble Lord, Lord McCarthy, mentioned the fairly lengthy debate that we had at an earlier stage, and indeed that debate went fairly late. There was also the further debating that took place in another place. However, the Government have said many times that the surveys commissioned by the Department of Employment do indeed show that the employment policies of significant numbers of small firms have been influenced by the Employment protection legislation.
I think that the noble Lord, Lord McCarthy—indeed all of us—would agree that survey evidence is not necessarily conclusive only on its own feet. The Government certainly have received other evidence and all kinds of evidence, especially spontaneous letters which have been sent to the Department of Employment. Indeed, we have all sorts of other very strong findings from organisations. We have examples from all kinds of employers' organisations, particularly from Scotland, that employment legislation has been a barrier to the smaller firms; and I think they are a substantial proportion of the economy of the country, in spite of some of the phrases used by the noble Lord, Lord McCarthy. I think he used the expressions "ignorance" and "prejudice". I am glad that I remembered and got it right. The noble Lord may say that, but we think such comment is a trifle unfair.
We cannot give an approximate figure of the number of positions that will be created by the reduced kind of protection that we are suggesting in this clause. What we do say is that we hope that employers, particularly the small employers, will no longer feel to the same extent as they do now, and have done for the last five or six years, that it is employment protection legislation which is the last straw in making them decide not to take on extra employees and expand their

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business. This is one of their problems which they feel particularly strongly about and which we can do something about. It is often pointed out to us—indeed, we have a fairly substantial amount of evidence—that what really worries the smaller employers is the high interest rate and the shrinkage of the home market. Issues like these may lie outside our control, but we do not think that that is any reason why we should not try to help employers where we can.
Noble Lords opposite will agree that Clause 8 provides merely a longer qualifying period for the employees employed in the smaller firms; for instance, firms employing 20 people or fewer. This clause does not change the status of any employees who may be dismissed on trade union grounds and certainly we have no intention of denying to any employees in small firms the right to join a trade union or to take an active part in it by leaving unchanged the qualifying period for the protection against dismissal on medical grounds. We have heard it said that employees in small firms need more protection because small firms' personnel policies are less sophisticated. We would admit this and we would acknowledge that personnel policy in a small firm is different from that in a large firm, but this certainly does not mean that the small firms are ready to dismiss unreasonably. Certainly we wish to encourage small firms, as well as large firms, to be good employers and to carry out good employment practices, and that is why we are going to be producing for employers a leaflet on unfair dismissal provisions.
But we do regard employment protection rights as important. While we think that the balance must be restored between the need for statutory protection for employees and the burden which it imposes on employers, we do not think it would be right, as we have pointed out many times in your Lordships' House and elsewhere, to give special treatment to small firms in any way which would create a permanent class of employee who had no protection whatever. We recognise that protection is necessary in the small firms just as it is in large firms. I should like to make it very clear that this provision will have no effect at all on employees who already are in their jobs when this Part of the Act comes into force,
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and we shall make this very clear in the relevant commencement order.
I should like to conclude by saying that all of us heartily agree with the opinions which were expressed by the noble Lord, Lord Spens, and echoed by the noble Baroness, Lady Secar, in the Second Reading debate, that in the course of this Bill and in the course of other employment protection legislation we must explain the legislation in a way which the small businessman can read and, above all, can understand and interpret. To that end, and as the Government have already announced in another place, we shall be producing for employers a guide on the unfair dismissal provisions when the amending legislation is on the statute book. For that reason we hope noble Lords will see that this amendment is unnecessary and we believe the clause should stand.
Baroness SEEAR: My Lords, the noble Lord says the Government are issuing a leaflet explaining in detail how the unfair dismissal provisions work, but it is a great pity they do not wait to see whether, when the small firms have this information, it relieves their anxiety. There is a great deal of evidence—everybody is quoting evidence tonight, and we have all got our evidence—that the objection to the unfair dismissal clause in the minds of many small employers is based on a misconception. Up and down the country we are told that we cannot dismiss anybody. Nothing will persuade people that the fact of the matter is that far more employees lose cases of unfair dismissal than win them. This is a fact that simply has not penetrated the minds of a large number of small employers. If we could get that into their heads, I believe that any need that may exist for the relief of these provisions would fall to the ground.
May we not ask the Government to accept this amendment and then to see what will be the effect of better information—which, indeed, the previous Government should have given people—on how the unfair dismissal provisions work? When that is got over, I do not believe it will be found necessary to relieve employers of any of the provisions of the Employment Protection Act.
Lord MOTTISTONE: My Lords, does the noble Baroness not think that the fact

971
that small employers have a misconception about this matter is because the legislation which led them to think that, even if it is not true, was passed by the party of the noble Lords opposite? It is as simple as that. A move in the direction of trying to help the small employer and positively doing something that he thinks will help him—it does not matter if you think it will help him or if all the statistics do not bear out the fact that it will help him—is the reason for having part of this legislation directed towards the interests of the small employer.
I shall not quote statistics to a greater extent than anyone else because we have had too many, but the fact of the matter is that the noble Baroness, Lady Seear, is right. It is what people think that matters. They think that the legislation is against them now, and when this Bill, as it stands, passes they may think that the legislation is in their favour and the particular logjam to which she referred will no longer exist.
Lord McCARTHY: My Lords, I am very disappointed at what the Government have said, but not surprised. The noble Lord is quite right; there is an ideological element in this; the work of Dr. Stanworth shows that this is the case, that the attitude of small firms is related to their ideological beliefs—I not say prejudices—about the Government that introduced this legislation. That is a fact. The noble Baroness, Lady Seear, is perfectly right in saying that the Government would do much better if they told people the facts about unfair dismissal legislation rather than pandering to the prejudices of small firms in this way. All the evidence indicates that small firms have a whole range ofprejudices, not just about unfair dismissal legislation but about the effects of taxation legislation and planning authority rules. The evidence indicates that they are absolutely obsessed by all kinds of factual inaccuracies about the world which surrounds them.
That is only one point. By moving in this way and lifting these particular narrow provisions from their back, the Government are only reinforcing their prejudices. As the noble Lord, Lord Lyell, said, the Government rely on apocryphal evidence, upon anonymous letters and upon the testimony of vested
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interests. I hope that he will place all this in the Library because we should like to see some of this evidence. With great respect, the attitude of the Government—I do not say of the noble Lord necessarily—towards the evidence which has been put forward by a whole range of surveys about unfair dismissal and maternity rights would not gain them a passmark in the paper on social methods at the noble Lord's old university. It is absolutely deplorable, and we intend to press this amendment to a Division.
Lord LYELL: My Lords, by leave, perhaps I could reply briefly to one point.
The LORD CHANCELLOR: My Lords, with the leave of the House.
Lord LYELL: My Lords, with the leave of the House—and I hope that I shall have it as greater Providence has not yet struck me down—may I say that the noble Baroness, Lady Seear, raised one particular point which I think was relevant to what the noble Lord, Lord McCarthy, had to say. It was that small employers were very worried about the legislation, and that we should have legislation which was, indeed, clear. I know, and I am sure that noble Lords all round the House will know, that it is not so much what is written into the legislation as what employers believe that is said and feel how the legislation treats them. Above all, with small firms it is the amount of time that the proprietor or the management have to spend on particular cases of this type.
The case has been made by the noble Baroness, Lady Seear, and elsewhere, I think by the noble Lord, Lord McCarthy, that the vast proportion of the cases which go to tribunals do not end up in the employee's favour. I would not necessarily believe that that is conclusive evidence. The time that is taken by management in having to go to the tribunals is one of the bugbears which we believe should be spared management. That is all I wanted to point out.
9.19 p.m.
On Question, Whether the said amendment (No. 17) shall be agreed to?
Their Lordships divided: Contents, 43; Not-Contents, 105.

CONTENTS

Birk, B.

Janner, L.

Seear, B.

Blease, L.

Kaldor, L.

Shackleton, L.

Boston of Faversham, L.

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

Simon, V.

Brockway, L.

Stewart of Alvechurch, B.

Brooks of Tremorfa, L.

McCarthy, L.

Stewart of Fulham, L.

Chitnis, L.

Morris of Kenwood, L.

Stone, L.

Collison, L.

Northfield, L.

Strabolgi, L.

David, B.

Oram, L.

Strauss, L.

Donaldson of Kingsbridge, L.

Peart, L.

Underhill, L.

Elwyn-Jones, L.

Phillips, B.

Wallace of Coslany, L.

Gladwyn, L.

Ponsonby of Shulebrede, L. [Teller.]

Wedderburn of Charlton, L.

Hale, L.

Wells-Pestell, L.

Hatch of Lusby L.

Rhodes, L.

Whaddon, L.

Houghton of Sowerby, L.

Rochester, L.

White, B.

Irving of Dartford, L.

Ross of Marnock, L.

Wigoder, L.

NOT-CONTENTS

Adeane, L.

Gisborough, L.

Onslow, E.

Ailsa, M.

Glenkinglas, L.

Orkney, E.

Airey of Abingdon, B.

Godber of Willington, L.

Orr-Ewing, L.

Atholl, D.

Gowrie, E.

Penrhyn, L.

Auckland, L.

Gray, L.

Rawlinson of Ewell, L.

Bathurst, E.

Gridley, L.

Reigate, L.

Bellwin, L.

Grimston of Westbury, L.

Renton, L.

Berkeley, B.

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

Robbins, L.

Blake, L.

Rochdale, V.

Bridgeman, V.

Hankey, L.

Romney, E.

Brookes, L.

Hanworth, V.

Rugby, L.

Brougham and Vaux, L.

Harvey of Tasburgh, L.

Sackville, L.

Buxton of Alsa, L.

Hatherton, L.

Saint Oswald, L.

Camoys, L.

Hives, L.

Sandys, L. [Teller.]

Campbell of Croy, L.

Holderness, L.

Sempill, Ly.

Clitheroe, L.

Home of the Hirsel, L.

Sharples, B.

Cockfield, L.

Hornsby-Smith, B.

Soames, L. (L. President.)

Cork and Orrery, E.

Hunt of Fawley, L.

Stamp, L.

Cottesloe, L.

Hylton-Foster, B.

Strathcarron, L.

Craigavon, V.

Ilchester, E.

Strathmore and Kinghorne, E.

Cromartie, E.

Kemsley, V.

Sudeley, L.

de Clifford, L.

Kimberley, E.

Swinfen, L.

De La Warr, E.

Lindsey and Abingdon, E.

Swinton, E.

De L'Isle, V.

Linlithgow, M.

Torphichen, L.

Denham, L. [Teller.]

Long, V.

Trefgarne, L.

Dormer, L.

Lyell, L.

Trenchard, V.

Drumalbyn, L.

McFadzean, L.

Trumpington, B.

Duncan-Sandys, L.

Mackay of Clashfern, L.

Tryon, L.

Dundee, E.

Marley, L.

Vaizey, L.

Ebbisham, L.

Merrivale, L.

Vaux of Harowden, L.

Ellenborough, L.

Middleton, L.

Vickers, B.

Elliot of Harwood, B.

Monson, L.

Vivian, L.

Elton, L.

Mottistone, L.

Ward of Witley, V.

Exeter, M.

Mowbray and Stourton, L.

Young, B.

Ferrers, E.

Murton of Lindisfarne, L.

Gainford, L.

Netherthorpe, L.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendments Nos. 18 to 22 not moved.]
Clause 10 [Contribution in respect of compensation]:
9.30 p.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 23:
Page 11, line 30, leave out ("and the tribunal") and insert ("the tribunal shall first determine whether or not the dismissal is unfair in accordance with Part V of this Act.
(2A) Where the tribunal").
The noble Lord said: My Lords, I will, with permission, speak at the same time to Amendment No. 36. We canvassed this matter in Committee, but looking through the Official Report of the debates, my noble friends and I felt that the situation was not wholly satisfactory, and the tenor of the Government's arguments both here and in another place made us bold to bring the issue back, albeit in a slightly different form. To be brief about the history of the matter, when the Government first introduced the joinder procedure in another place—the joinder of the union or the shop steward or the official who is to pay the contribution

975
for an unfair dismissal—they had a two-stage procedure in mind, as was made clear by the Minister's right honourable friends; that is, that the tribunal would first hear whether there were grounds for a joinder (in the sense that pressure had been used industrially to force the unfair dismissal) and then they would decide to join the union or the official for the contribution third party proceedings. Having carried that view up to a late stage in another place, they then went back on it and said that the employer's claim to join the union must be effective before the hearing, and that meant that everybody would come into the tribunal with all sorts of issues alive from the very beginning without distinction; the employee's claim of unfair dismissal against the employer, the employer's defence to the claim of the unfairness of the dismissal, the trade union's contention on that issue, the employer's claim of contribution against the union and the union's reply to that.
The trouble with that is that the Act makes it clear in what is now Section 63 of the 1978 Act that it is a basic principle that unfair dismissal is to be judged on what the employer did without reference to industrial pressure, and in Committee the noble and learned Lord made it clear that the. Government did not mean in any way to detract from Section 63. He also suggested (on 10th June at col. 397) that the tribunal was perfectly able to sort out all these issues, despite all the various bits of evidence coming to it on the three or four different points during the course of the hearing. When we thought about it, we thought we should ask the Government what their objection really was to having not a two stage procedure—as they themselves suggested at first, because the Government's first suggestion was for a two stage procedure to see if there was pressure—but a statutory procedure which says, "First determine the unfairness of the dismissal and then determine the issue: Was there industrial pressure and, if so, should there be a contribution?"
That does not require two hearings. It requires only the evidence and arguments to be presented in a particular way. If the noble and learned Lord will tell me that it will all be in the industrial
976
tribunal regulations, then I will reply before he says that and tell him that that is not satisfactory. This is a very new procedure and we have many objections, as we made clear in Committee, to the whole notion of the third party proceedings. But if they are to be there and if the Government really do not wish to detract from Section 63—that is, that the pressure should not be considered in determining unfairness—then it is not quite fair not to give the tribunals (not to give the trade unionists at any rate) clear confidence in the fact that the unfairness of the dismissal will be heard before the evidence is given of the pressure which is alleged to have caused it. I do not see how it would cost the Government anything at this stage to be a little more relaxed and engaging than they have been in dealing with our amendments.
Lord MACKAY of CLASHFERN: My Lords, I shall try to be engaging and, if possible, relaxed, and that of course is the procedure we think the tribunal should have—a relaxed procedure without tremendous constraints imposed unnecessarily by Parliament. Section 63 of the 1978 Act is left untouched, and accordingly the question of unfair dismissal must be determined apart from any question of pressure. But why do the tribunal need to have directions that they must first determine whether or not the dismissal was unfair?
I thought that I detected in the noble Lord's speech on the amendment a confusion between determination and the evidence. He seemed to be suggesting at one point at least that they would have to determine the question of whether the dismissal was unfair before they would hear the evidence about pressure, and that would lead to the kind of double dealing that we spoke about on Committee. I believe that the industrial tribunals are of sufficient stature to determine their own procedure in this matter, knowing that there are two distinct questions: first, the question of unfair dismissal; and, secondly, the question of pressure on any contribution that may arise from that. They are directed by Section 63 to determine the question of unfair dismissal apart altogether from any question of pressure. In our view that is all that is required of

977
them. I shall not say what the noble Lord anticipated I might say, and therefore I do not require to answer the answer that he gave—before I said it. I ask your Lordships not to agree with the amendment.
Lord WEDDERBURN of CHARLTON: My Lords, plainly we must leave this as a disagreement. I meant to say previously that some anxiety will be caused among some practitioners in the tribunals over the fact that the matter is left in this way. However, in view of the situation, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 25 not moved.]
9.36 p.m.
Earl DE LA WARR Earl DE LA WARR moved Amendment No. 24:
Page 11, line 43, at end insert—
("Indemnity in respect of union membership clauses.
76B.—(1) If in proceedings before an industrial tribunal on a complaint against an employer under section 67 the employer claims that—

(a) he and another person (in this section and in section 76C called "the contractor") were parties to a contract requiring that work done by employees of his for the purposes of the contract should be done only by employees who were members of trade unions or of a particular trade union,

(b) the complainant could not, consistently with that requirement, be employed on that work,

(c) the employer had requested the contractor to consent to the employment of the complainant on that work notwithstanding that requirement,

(d) the contractor had withheld his consent,

(e) apart from the work to which that requirement (or any similar requirement under other contracts to which the employer was a party) related the employer had no work available which was suitable for the complainant to do, and

(f) the employer would not have dismissed the complainant but for that requirement,

then, subject to subsection (2), the employer may before the hearing of the complaint require the contractor to be joined, or in Scotland sisted, as a party to the proceedings.
(2) An employer may not by virtue of this section require more than one person to be joined, or in Scotland
978
sisted, in proceedings in respect of any complaint.
(3) Where a person has been joined, or in Scotland sisted, as a party to proceedings before an industrial tribunal by virtue of subsection (1), and the tribunal—

(a) makes an award of compensation under section 68(2) or 71(2)(a) or (b), but

(b) finds that the claim of the employer (as specified in subsection (1)) is well-founded,

the tribunal shall order that person to pay to the employer an amount equal to the amount of that compensation.
Contribution in respect of indemnity under s. 76B.
76C.—(l) If in the proceedings referred to in section 76B the contractor claims that he was induced to withhold the consent referred to in subsection (1) of that section by pressure which a trade union or other person exercised on him by calling, organising, procuring or financing a strike or other industrial action, or by threatening to do so, the contractor may before the hearing of the complaint require the person who he claims exercised the pressure to be joined, or in Scotland sisted, as a party to the proceedings.
(2) Where any person has been joined, or in Scotland sisted, as a party to proceedings before an industrial tribunal by virtue of subsection (1), and the tribunal—

(a) makes an order under section 76B, but

(b) finds that the claim of the contractor (as specified in subsection (1)) is well founded,

the tribunal may make an order requiring that person to pay to the contractor a contribution in respect of the contractor's liability to the employer by virtue of the order under section 76B.
(3) The amount of any contribution ordered to be paid under this section in respect of any such liability shall be such as the tribunal considers to be just and equitable in the circumstances, and may constitute a complete indemnity.").
The noble Earl said: My Lords, I beg to move this amendment, but before speaking to it I have to ask for the indulgence of your Lordships in view of some of the phraseology that I shall use. For reasons connected with the lawyers when the amendment refers to the "contractor", I shall call him the "client", and when it refers to the "employer", I shall call him the "contractor". This may seem double dutch to your Lordships, and it did to me until the lawyers explained it;

979
but, of course, the chap who pays is in fact the contractor, and I suppose that there is somebody called a contractee. However, since this appears confusing to me as a layman, I am using ordinary lay words and I hope that I shall be able to carry the understanding of your Lordships. The legal advisers felt strongly about this matter, and who am I to take issue with the majesty of the law?
The amendment arises from the amendment of the noble Lord, Lord Orr-Ewing, at the Committee stage about union-only clauses in commercial contracts. My noble friend Lord Caldecote, whom I am sorry to say is not with us because he is in New York on his company's business, in the earlier debate concentrated on the question of where financial responsibility should lie when the result was unfair dismissal. My noble friend the Minister was sympathetic and so we are, with the help of the Government, moving the amendment in its present form.
The amendment does not solve all the problems of these very common and very unattractive type of clauses. Contractors, builders—call them what you will— dislike them intensely. Under the Bill as it now stands a contractor's position could be made worse because from now on he might have to face large claims for unfair dismissal, and of course he may be forced to accept these clauses if he wants to stay in business.
So the first part of the amendment—the proposed new Section 76B—gives the contractor the right to join the client who insists on it in any resulting claim for unfair dismissal. Then, subject to the sequence of events—which I shall not run through—which are set out in the proposed new Section 76B (1)(a) to (f), the offending client will himself be landed with the Bill for the whole of any compensation awarded against the employing contractor to unfairly dismissed employees. This should make anyone who feels like making these monstrous union-only demands on a contractor think two or three times before he makes them—and, in my submission, quite right, too!
This, then, very briefly, covers the first part of the amendment, and deals, for instance, with a Left-Wing local authority
980
who puts these clauses in just because it wants to, without any particular pressure from a union or unions. But very often the client himself, if he is, say, a big builder on a large building site, finds himself forced by direct union pressure to demand from his sub-contractors these fearsome union-only undertakings. In cases such as these, the person who has been subjected to these union pressures, which ultimately.down the line, result in dismissals, can under the proposed Section 76C join the union. The tribunal, if it then finds the dismissal to have been unfair, can require the union to pay as much of the compensation as it deems fit. So these two new sections, when taken together and added to the existing Clause 10, seek to ensure that whoever is originally responsible for this type of unfair dismissal is the party who ultimately gets "clobbered".
Of course, it goes without saying that the person who really suffers is the poor fellow who loses his job, but I hope that, by providing that the financial penalty is awarded against the offending party, these vicious practices will be squeezed out of business life. It is for that reason that I hope this amendment will be supported by noble Lords, and that it will find favour with my noble friend the Minister. I beg to move.
Lord ROCHESTER: My Lords, my noble friends and I have sympathy with this amendment. I am not sure that I altogether followed the definitions used by the noble Earl, Lord De La Warr, but I am quite prepared, with him, to put it all at the door of the lawyers. At any rate, I think I understand well enough what it is that he is aiming at, and personally found it rather easier to comprehend by reference to what the noble Viscount, Lord Caldecote, at Committee stage, I think called the client-employer, if that does not make confusion worse confounded.
At any rate, we have sympathy with what underlies this amendment as being one which, in the circumstances which the noble Earl has described, places responsibility for dismissals which are clearly, it seems to me, unfair, where that responsibility belongs; namely, with the person I shall call a client-employer, and

981
ultimately with the union or unions concerned. If I have understood that correctly, I and my noble friends are happy, on that basis, to support this amendment.
9.45 p.m.
Lord WEDDERBURN of CHARLTON: My Lords, perhaps a different voice should be allowed to intervene for a moment. Noble Lords seem to assume that situations of this sort are a priori vicious and monstrous; and, of course, their sympathies, or apparent sympathies, are with the man who has lost his job. Also they are worried about the large firm forcing a contract on the small firm that they do not like. That happens so often in society that one wonders why we have not heard their voices on that more often. The idea that there is anything new in a group of workers who have organised in order to acquire a balance of bargaining power, trying to spread the principle of unionism by various pressures through their employer, through his customers and so on, is as old as trade unionism in the modern world itself. The union label of the 19th century in certain trades, among bakers, hatters and then in the general unions, tried to use this form of pressure, such as they had of it, to extend trade unionism. There is another set of values here in the organised workforce which also ought to have its say.
But the Government have gone down the road of joinder and are listening to the siren voices of those who now invite them into the stream of double-joinder and triple-joinder, so that soon we shall have dozens of people joined in tribunals. That hits at one other point. They have gone past the point which Donovan told us not to pass; he told us not to use the industrial tribunals for cases involving industrial conflict; not to use the industrial tribunals for anything other than employee against employer. Now, under Clause 10 (and now under this double-joinder situation, even more delicately) the tribunals will have to judge what is a just and equitable contribution; and in order to judge that they must judge the merits of the strike.
The Government may wish to reflect on that when they have the Act on the statute book: that they will have to judge the merits of the employers' contribution to the strike; and they will become
982
politicised. Another sad thing about this Bill is that in the sociological sense the industrial tribunals and the Employment Appeal Tribunal are about to become politicised, to be pushed into an area where the Donovan Report said that if you are trying to do something legal, do not do it in the same courts as those that build up confidence on unfair dismissal cases. Here is an example of the natural development of Clause 10, the double joinder; and in the Green Paper no doubt we shall have others, and it will wreak havoc with the confidence that the tribunals have built up.
Lord MOTTISTONE: My Lords, will the noble Lord not agree that all that this is trying to do is to share the cost of some sort of action? It is not that anybody is being prevented from doing anything. It is that anybody who is responsible for initiating a particular framework is going to have to pay his share instead of it all being carried, possibly, by a victim company who appear in the sense of a victim because they did not initiate the action which is involved in this amendment. I should have thought that the noble Lord is rather over-gilding the situation and making more of it than would be reasonable. However, I will leave it to my noble friend on the Front Bench to deal with the problem.
The Earl of GOWRIE: My Lords, I think that my noble friend, Lord Mottistone, brought the noble Lord, Lord Wedderburn, down to earth. I think that the metaphor that I used to use in childhood is appropriate: that the noble Lord, Lord Wedderburn, was over-egging the pudding in this particular context and my noble friend brought him back to the amendment. I would say to the noble Lord, Lord Wedderburn, that, of course, there are always good reasons in anything governing collective behaviour for not doing things; but I think he must realise that the time has come for unions to re-enter the community, as it were, and for themselves to start looking critically at practices which are not simply forcing Governments into activities but which are alienating most ordinary people from the movement itself. I share with the noble Lord, Lord Wedderburn, a feeling that that would be highly undesirable. We

983
believe in trade unions; we believe in unionism. We are extremely unquiet at practices which attempt to discredit responsible unionism, and they give us no satisfaction whatsoever.
In that general context, I welcome the amendment as being a sensible and necessary provision bringing some justice into the area of contracts requiring union labour only. It is necessary in our view because it protects sub-contractors from having to meet the cost of compensation for unfair dismissal cases—that was the point clearly brought out by my noble friend Lord Mottistone—arising only because the dismissal of the non-union member happened to be forced upon the employer or contractor by a union labour clause in the contract. This amendment ensures that sub-contractors will be fully indemnified in such circumstances should they be forced to join their client. It also enables the client to produce the contract to join the union to any proceedings and the union in turn may have to indemnify him for anything up to the full amount of compensation involved.
There was considerable feeling among noble Lords at Committee that union labour only clauses needed to be countered and countered strongly. We sympathise with such views but we doubt whether some of the solutions that were proposed at the Committee stage were practicable. They vitally affect the interests of other parties who have not been consulted directly on the matter and at heart impinge on the wider issue of immunities which is, as your Lordships are aware, going to be the subject of a Green Paper later in the year. It is really the essence of our approach that we start in this Bill from a profoundly unsatisfactory situation in that the law, for historical reasons, has grown up in this country based on immunity rather than rights and obligations; but the fact that that situation is unsatisfactory or open to question does not mean to say that nothing can be done within the context of the overall immunity framework. The difficulties do not attach to the amendment we are discussing. It is commendably modest and deals with the cost issue brought out by my noble friend Lord Mottistone. As my noble friend Lord De La Warr said, it will provide a real disincentive against such practices,
984
and I therefore commend it to your Lordships.
I should like just to add that we do not intend to leave the matter at that. Particularly in view of the concern of many parties about such contract clauses, there is in our view clear scope for a voluntary initiative on this matter and we are anxious that employers should desist from and resist the placing of union labour only requirements on contractors. We have recently written to the CBI—who are themselves on record as opposing such clauses—enlisting the CBI's aid in such a voluntary initiative. The code of practice on the closed shop will give a lead by including a declaration to the effect that the practice of imposing union labour only requirements on contractors is unreasonable.
The contractors themselves might explore further how they might co-operate together to resist the spread of this practice and my right honourable friend the Secretary of State for Trade is considering whether any amendment to restrictive trade practices legislation may be required to facilitate that kind of co-operation. I should say that there has been special concern about the use of such clauses in public sector contracts. I do not know frankly how prevalent the practice of union labour only clauses is among public sector purchasers; but I can say that I know of no instance where a Government department or a health authority has used a clause of this kind, and certainly our standard forms of contract do not contain such a clause.
In any event, the Government will take care to ensure that voluntary action taken in the private sector is appropriately reflected in the public sector. Also, of course, we should expect these industries and authorities, as responsible employers, to have full regard to our forthcoming code of practice on the closed shop. The amendment is not all that will be done to counter union-labour-only clauses. Nevertheless it is a necessary and a fair first step, which protects the position of subcontractors, and I would urge the House to support it.
On Question, amendment agreed to.
[Amendment No. 26 not moved.]
Clause 11 [Notice to employer]:
9.56 p.m.
Lord McCARTHY Lord McCARTHY moved Amendment No. 27:
Page 12, line 24, leave out subsection (2).
The noble Lord said: My Lords, this amendment is to take out subsection (2) of Clause 11: that is really to leave out the second part of the Government's new set of provisions requiring in maternity cases for the exercise of maternity rights, additional processes of notification. The fact is, as the House knows, that Clause 11 restricts the present rights of return in three new ways: first, by additional application procedures; secondly, by additional confirmation procedures; and, thirdly, by additions to the procedure for notice and the period of notice of the final decision to return. We suggest that the House should agree to delete the second part of that, which deals with confirmation procedures.
The argument of the Government for the need for additional confirmation procedures has always been that in the absence of a formal confirmation procedure the employer, and especially, of course, the small employer, who is always so dear to their hearts, is put in a difficult position. He has no way of knowing whether a woman who goes out on maternity leave will in fact come back, and in the period in which she is away he has to hold open her job and, especially in the small firm, it is said that this is a difficult problem.
I think it is worth reminding the House why we have provisions of this kind at all. We have such provisions, and indeed we have all the maternity rights introduced under the Employment Protection Act, because it was thought to be an essential element in providing for a situation of non-discrimination so far as women in employment were concerned. The argument was that if women were to have a fair chance of progress and promotion in jobs, when they necessarily found they had to be absent for maternity reasons they had to have some right of return and some right of reinstatement or, quite clearly, they would be put in a disadvantageous position so far as men were con-
986
cerned. So, in a sense, this was always a part of the policy of non-discrimination.
In general terms, in that sense, it was not opposed by the party opposite. Their argument has always been a much narrower one in terms of the impact of these particular aspects of maternity rights on employers. The credibility of this argument, it seems to me, has always turned, and must always have turned, upon assumptions about the proportions of the labour force, especially, but not entirely, in small firms, who were entitled to exercise such rights, and the proportion or percentage of the labour force who actually did exercise those rights. If a significant part of the labour force of a small or medium-sized firm were entitled to exercise these rights and if they did actually exercise them, then of course it might be reasonable to say that they were unduly restrictive so far as the employer was concerned.
It is true that until comparatively recently we have had to deal with this problem in a kind of welter of apocrypha—anecdotal evidence. Thus, at columns 406 and 407 of the Official Report for 10th June the noble Earl, Lord Gowrie, said:
"The whole emphasis of these very minor changes"—
that is, the changes proposed in the Bill—
"to the existing legislation is to remove the disincentive effects on employers, particularly very small employers, of taking on new women. That must be a matter of judgment and it is hard to quantify…
"The right of employers is to provide"—
I think that Hansard meant the need of employers—
"for the sudden unexpected event within the context of their business which makes it impracticable to take the woman back on that particular day. To formalise notification in the way which appears superficially equitable to the noble Lord would, in fact, rob the employer of this flexibility".
As I understand the argument, what was being said, without supporting evidence—and perhaps there was not supporting evidence at that time—was that there was a fairly frequent need for the employer to hold open jobs, especially in the small firm, and that this was a disincentive, maybe even to the employment of women, and particularly women of maternity

987
age, in small firms. But, fortunately, we now have the facts. The report of the Policy Studies Institute on maternity rights, which was commissioned by the last Government, now enables us to avoid apocrypha.
The noble Earl, in answer to a Question which I asked him in the House the other day, admitted that he did not have this evidence at the time when the Government concocted their Bill. He said, on the one hand—and I am quoting from column 344 of Hansard for 2nd July—that such surveys are useful. He went on:
"I find considerable justification for the Government's measures in this survey if I am prepared to look through a particular lens".
I want to look through some of the lenses at the maternity rights provisions of the PSI survey, to see what kind of lens it would be. Fortunately, the noble Earl went on to say some other things about his attitude to these surveys. He said:
"You cannot place any judgment of any coherence on surveys of this kind"—
though, of course—
"They are useful…I give very little weight to surveys"—
though, of course, he finds—
"considerable justification for the Government's measures in this survey".
He went on:
"It seems to me to have very little relevance".
So in the light of what we now know of the Government's attitude to the PSI survey, what do we find? Let me just give a few of the facts from this survey. First, 40 per cent. of women in small firms, about which the Government are particularly concerned, have no rights at all because they are part-time workers. Secondly, so far as women as a whole are concerned, only 50 per cent. in all firms who have maternity situations have statutory rights, because they have not been at work long enough to qualify for their statutory rights. Thirdly, 50 per cent. of those who have statutory rights have no intention of returning. Fourthly, in small firms—and this is where we really get to the point—of, for example, 28 women, only 15 per cent. of pregnant women give notification of their intention to return. If we put all these figures together we see, as the writer of this
988
survey shows in his last chapter, that there is no substantial quantifiable problem, so far as maternity rights are concerned, even for large firms. For example, firms who employ 100 women, on average, will be troubled by four women going off to have babies each year and only 50 per cent.—namely, two women in a firm employing 100 women—will have statutory rights at all. Only one of those two women will give notice of a desire to return, and only once in three years will one woman come and demand reinstatement. This is the extent of the problem.
Coming to small firms, we find that, on this basis, firms with 25 women—partly because small firms, for the reasons I have given, will tend to employ fewer women with statutory rights—will be in the situation of somebody coming along and demanding reinstatement once every 12 years. If firms employ 10 women, they will find that somebody will come along and ask for reinstatement, in the exercise of their statutory rights, once in 30 years. This is the measure of the problem on evidence available to the Government and sponsored by the Government. In such a context, I cannot see how the Government can cover their nakedness. They must accept this amendment.
10.6 p.m.
The Earl of GOWRIE: My Lords, I am very glad—indeed, I am grateful to him—that the noble Lord, Lord McCarthy, recognised that there is a relatively narrow difference between the party opposite and ourselves and that both are equally committed to equal opportunity for women at work. I have special departmental responsibilities in this area and the one thing that tends to raise my choler in an otherwise, I hope, patient temperament is any suggestion that the Government have anything other than an enormous interest in women entering work, remaining in work and returning to work, should they leave, whether for maternity or for any other reason. We have that interest politically, we have it morally and we have it economically.
The noble Lord and I have crossed swords over this narrow difference of the PSI survey—and, indeed, of another survey which was not raised by the noble Lord,

989
Lord McCarthy, this evening—on several occasions in the past. Those of your Lordships who are gluttons for the punishment of discussion about industrial relations legislation may have spent last Sunday watching the noble Lord, Lord McCarthy, and my honourable friend the Under-Secretary in another place debating this same issue on television at 12 o'clock. I cannot remember the identical arguments on television at 12.30, or whatever it was, last Sunday, but as I remember it, the noble Lord, Lord McCarthy, produced his survey and my honourable friend produced a letter from the Scottish Development Agency. They waved these pieces of paper at each other, and enlightenment and a good time was had by all viewers, I hope.
Our contention is that it is extremely difficult to measure the disincentive effects of any activity. One can ask people who employ women, or who have employed women, what the effects of a given piece of legislation or a legislative proposal may be. But it is very different to quantify what the effects may be on very small businesses, which are in issue here, because one does not know whom they might or might not have taken on.
I am not dismissive of surveys. Indeed, I was one of those responsible for having the PSI survey published, as I think at Question Time the noble Lord, Lord McCarthy, was kind enough to recognise. But it is semantically wrong of the noble Lord to call surveys of opinion facts. They are not. They are surveys of a given sample of opinion. We weigh them but we do not give them any more weight than that. The noble Lord is peculiarly indifferent to surveys which do not fall within the bounds of his interest, like attitudes towards the closed shop and other matters, so I think that there is a certain amount of sauce for the goose and sauce for the gander in these particular survey arguments.
Having got that off my chest, and I hope I shall not need to repeat it in connection with all the other maternity amendments, I should like to come quickly to this particular amendment, the effects of which would be to remove one of the provisions in the clause enabling an employer to obtain confirmation within a reasonable period after the baby's birth that the woman intends to return to work.
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We are not talking here about any rights or non-rights of returning to work after having a baby; we are simply talking about what notice might be given to the employer. I am not one of those who has the distrust of anecdotal evidence expressed by the noble Lord, Lord McCarthy, not being a sociologist; one of the main criticisms of the present maternity legislation is that an employer cannot be sure whether an employee really intends to return to work, and he may have no contact with her from the time she leaves until she is on the point of returning. That makes a nonsense of his manpower planning and obviously it bears more hardly on a very small employer than it does on a larger employer.
The notification that the Bill proposes—the additional notification—is merely an easy-to-understand solution to this admittedly narrow problem and I cannot believe that it will be a burden of any kind to the women concerned. We have modified the original proposals so that the woman is not expected to take the initiative in sending this notification, and so that she is reminded that she will forfeit her right to return if she does not reply in time. In fact, all she has to do is to answer a letter, and it really is rather insulting to women to assume that this will be an immense burden to them.
If is it not reasonably practicable for her to reply within two weeks, she does not even have to; she must simply reply as soon as she can and only those employers who really need to know whether she still intends to return will ask for this additional notification; that is, not earlier than 49 days after the birth. But for those who do send the written request the information will be a very real help to them in their manpower planning. We have dealt with many issues of great moment in this Report stage and we shall have more issues of great moment tomorrow and maybe later today, but I really do not think that this is an issue of great moment. However, I think it has sufficient weight for a sufficient number of women and a sufficient number of employers to be a modest improvement for all concerned. It imposes no large burdens and I ask the House to resist the amendment.
Lord McCARTHY: My Lords, I am very disappointed in what the noble Lord

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has said. I agree with him that it is not a matter of great moment; it is a matter where the Government's arguments are particularly thin. It is a matter where they cannot argue, as they can justifiably argue on a large part of this Bill, that they believe that it is necessary to change the balance of power in industry and therefore they have to do something about the collective power of workers organised in trade unions. This has nothing to do with that. For the most part this is about unorganised women. That is what we are complaining about. To respond to the statement that surveys are tossed about this House and that we have attitudes to surveys that do not fit with what we want to see in surveys, I must press the noble Lord that what one says about surveys is quite technical; what kind of credence one gives to a survey is a matter of the response rate, it is a matter of whether or not there are leading questions, a matter of whether it is sent out by interested or disinterested parties and a matter of how far one thinks there is a representative structured sample. On all these four tests the surveys that we are using from the PSI and the ORC and the Warwick Survey are immeasurably superior to the 2 per cent. and 3 per cent. biased samples which come from organisations of small employers and institutions which turn out to be front office organisations for the Conservative Party.
So it is quite untrue and most unfair to say that we are using biased surveys. We are trying to use the general principle of surveys with the balance of the evidence and the drift of that evidence, and we are saying that if you take that general principle the surveys that we have, most particularly the PSI in this case, do not support the position taken up by the Government.
Finally, when he says it is insulting to say that women cannot fill this form in, may I say that we are not suggesting that women cannot fill the form in; we are suggesting it is an additional burden. We have put down a whole series of amendments trying to control the way that that burden should be distributed, suggesting, for example, that there might be a standard form. All these things have been rejected by the Government. Therefore, although this is not an important issue and by no
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means the most important issue, it is one of the most deplorable issues upon which the Government have maintained their usual obstinacy.
On Question, amendment negatived.
[Amendment No. 28 not moved.]
10.16 p.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 29:
Page 13, line 4, at end insert—
("(4) There shall be added to subsection (3) of section 64 of the 1978 Act the words "or to the dismissal of an employee which is unfair by reason of section 60 of this Act where that employee has been continuously employed for thirteen weeks."").
The noble Lord said: My Lords, it seems to be falling to me to move the more dove-ish amendments tonight—an unusual role, but one that gives me some hope that perhaps before the night ends the Government will lean sufficiently in our direction to say that we have some merits. This amendment relates to a question discussed in your Lordships' Committee, where we put forward an amendment to strike out the need for a qualifying period of service in respect of women dismissed by reason of pregnancy. I appreciate what the noble Earl has said, that this would be one of the matters in which he has a particular interest. My noble friends are not taking my words in the manner I meant, and I am sure the noble Earl did not understand them in that light.
We put forward the fact, for example, that the Equal Opportunities Commission is very disturbed about the way in which there is evidence that women are dismissed on grounds of pregnancy in a rather unfair manner. We do not have a survey to offer the noble Earl on this subject and I suspect he has not got one to offer back. But there is a series of well known situations, no doubt more known to him through the Commission than to me, and in the debate in Committee he was not disposed to deny that there was a problem. What he did say was that our suggestion to get rid of the qualifying period of service was wrong. On 10th June, at column 411 of the Official Report he said:
"Employers could be understandably anxious at the prospect of employees with no service being able to bring claims for unfair dismissal on this ground".
I take that point, that to give no service qualification period was perhaps an incorrect suggestion to meet the problem. He went on to say in the same column that the last Government found no reason to distinguish between this sort of dismissal and the generality in terms of the qualifying period, and I assure him that it never gives me great anguish to say that my own party gets things wrong in the same manner that the Government may be getting them wrong. We said in Committee that we hoped the Government would think about this matter again and take this opportunity to extend a small piece of justice towards women dismissed in this situation.
We suggested that there should perhaps be a shorter qualifying period, in the sense that pregnancy is not a similar ground for dismissal, surely, on reflection on the experience of the legislation that we now have, as the ground for misdemeanours like misconduct. If the noble Earl repeats the point that they cannot be treated in the same way as inadmissible reasons—that is, dismissal by reason of trade union activity—that is no doubt a fair point in reply to what we put forward in Committee. But is it not the case that there is sufficient evidence for the Act to be adjusted so that women who are dismissed by reason of pregnancy enter into the right to complain of the unfairness of that dismissal after a modest period of service? If the Government think we have chosen the wrong period, thirteen weeks, no doubt that could be put right on Third Reading. But surely there is a case for this Act to carry forward a small piece of law reform in industrial relations. Previously the noble Earl did not deny that there was a problem. The Equal Opportunities Commission says that there is a problem. Could the Bill perhaps be the place where a small piece of justice is offered to women who are apparently fairly frequently being dismissed on grounds that are rather unjust and in many cases do not have the 52 weeks which at present is necessary? I beg to move.
10.21 p.m.
The Earl of GOWRIE: My Lords, I too feel certainly extremely dove-ish at this point. I am a little puzzled that the noble Lord sees a problem here. He has fairly met my point in advance—that is,
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that the previous Government saw no reason to make this special distinction for pregnant women in unfair dismissal, but they may have been wrong. Indeed, they may have been wrong and we have looked at the matter with as clear and as objective eyes as we have been able.
We are all, as he said, surveyless in this area. It seems to me that my instincts are that nowadays two incomes are extremely important to many households and that many women who are pregnant, particularly younger women, are quite happy to work on until quite a late stage in their pregnancy and to return to work relatively soon after their delivery. We spoke about that when discussing the previous amendment.
Therefore, as a matter of instinct or hunch, I would be reluctant to see anything pass into statute which might be against the interests of women, in that it could conceivably make employers more reluctant to take on married women who were perhaps evidently pregnant. However, I do not lay enormous weight on that. What I would give more weight to is that the noble Lord, Lord Wedderburn, is well aware that I am a lay figure, but I understand from my notes that pregnant employees have the protection of Section 60 of the Employment Protection (Consolidation) Act 1978, and that that provides that dismissal solely on grounds of pregnancy is automatically unfair. So it would seem to me that, as regards the dismissal of a pregnant woman that came to an industrial tribunal, the onus would be on the employer to show that there were very severe reasons for his having dismissed the employee, because Section 60 of the Employment Protection (Consolidation) Act is so unambiguous. So, I think that my resistance is in no ill spirit, but I simply cannot see that what the noble Lord is suggesting is in any way needed.
Lord WEDDERBURN of CHARLTON: My Lords, I did not rehearse the whole argument that we rehearsed in Committee. One of the factors of which the noble Earl will of course be aware, and which must be in his brief but which neither of us has mentioned, is that until this year there was some expectation that the Sex Discrimination Act might cover a case of this kind. But in the

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decision of Turley v Allders Department Stores, mentioned in Committee, that view now appears to be incorrect. So no help can be afforded to the pregnant woman, without a qualifiying period, who is dismissed by reason of the Sex Discrimination Act.
It is a little difficult for me to take the matter very much further. That there is a problem seems to be generally agreed. The fact that Section 60 puts a requirement upon the employer does not alter the point about the qualifying period. I am rather disappointed that the Government could not see their way to introduce an amendment along these lines. Obviously, it is the kind of point which is not that controversial in party terms, but perhaps one could ask the Government to have a final look before they bring the Bill forward for Third Reading. In that spirit I beg leave to withdraw the amendment.
The LORD CHANCELLOR: My Lords, I think that the noble Baroness was rising when the noble Lord sought to withdraw the amendment. Perhaps it would be better if I do not put the matter to the House yet.
Baroness SEEAR: My Lords, I am grateful. I only wish to rise to support this amendment, or at least to support the suggestion that the noble Earl the Minister should look at it again. As he has said, this is not a matter of great importance, but it is one that can be of quite significant importance in individual cases. If it is really covered already in the Act then of course there is no point in covering it twice. But if there is any doubt as to whether it is covered, then surely the shorter period which is proposed in the amendment has much to recommend it. It would do little harm to have it incorporated and it would be extremely welcome in many quarters if the Government were to see their way to think about it.
The Earl of GOWRIE: My Lords, I understand that I need the leave of the House to reply; I will try to do so very quickly. I am advised that what I said about Section 60 of the Act is right. But the noble Lord, Lord Wedderburn, is quite fair in raising the Turley v Allders
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Department Stores case. The issue there was not that the lady in question was pregnant, but the qualifying period. Therefore the issue is whether one should make this special distinction on qualifying period which the last Government did not see as being necessary and which at the moment we do not see as being necessary in respect of pregnant women.
I think it would be going too far for me to say that I will look at this point between now and Third Reading. I could not offer real hope of bringing in an amendment to this effect between now and Third Reading, but I will undertake, as a Minister directly responsible here, to monitor the situation over the next six months or a year. There is no reason why we should not return with an amendment, should life prove that one is needed. Our contention is that it is unlikely that that will happen, but I will keep a very close eye on the situation, and if any of your Lordships wish to keep me up to the mark on that statement in the form of questions or examination of some kind I will do my best to give fair answer.
Lord WEDDERBURN of CHARLTON: My Lords, I feel we are doing rather well on this amendment. If the noble Earl, in the course of his consultations, could have special consultation, as I am sure he will, with the Equal Opportunities Commission on this matter, who knows, it may be that by the time the Bill has gone back to another place there could be a small drop put into it that would bounce back here very quickly and, from us, on to the statute book. But I note that the noble Earl is not giving us that assurance. I am glad he is going to look at the matter. I beg to leave withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 30 not moved.]
Clause 12 [Right to return]:
10.29 p.m.
Lord McCARTHY Lord McCARTHY moved Amendment No. 31:
Page 13, leave out lines 6 to 20.
The noble Lord said: My Lords, this brings us to Clause 12, which is the other clause dealing with maternity and particularly with the right to return. The effect of our amendment, which is to

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leave out lines 6 to 20 on page 13, is in fact to set aside the situation which the Government are proposing, where the right to return is reduced for women employed in firms with less than five employees and where the employer can argue that it is not reasonably practicable to permit them to return and that he cannot provide suitable alternative work on not unfavourable conditions. We are suggesting that those parts of the Bill should be deleted.
Once again I have to return to the PSI survey. Obviously, if the figures are correct, those with less than five employees still face the problem, once in every 60 years, of a woman who actually wants to return. That is the basis and extent of the problem. Again, if we look not simply at the PSI survey but at many other surveys which have been done and many other fieldwork investigations on women's employment in small firms, we find that, quite contrary to the views which are often expressed on the other side of the House, women in firms of very small size are paid significantly less than they are paid in firms of somewhat larger size. They find it rather more difficult to return to work after they have had babies because there is little chance in firms of that size that there will be flexi-time arrangements, creche arrangements and things of that kind.
Therefore, we are not dealing here with a group of women who are not in need of the statutory protection; they are in fact very much in need of the statutory protection and we know on the basis of the PSI survey that the extent of the imposition on the small employer is quite frankly negligible.
I think that the Government should try to appreciate, even at this late hour, what a provision of this kind in practice will mean to almost certainly an unorganised person working in a small firm. The fact is that on many occasions she will be told that it is not reasonably practical for the employer to re-engage her. What does she do when she is told something of that kind? The fact is that she can only find out whether or not that is reasonable for the employer to say by going to a tribunal. Only if she takes the case to a tribunal will she find someone who will tell her whether or not the employer's interpretation of his legal
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responsibilities is, in fact, reasonably practical. We would suggest that if the Government think about this they must come to the conclusion that this is a curiously mean-minded aspect of the Bill, and that in the great majority of cases women in situations of this kind will not challenge what is said by the employer as to whether or not it is reasonably practical.
The noble Earl is quite justifiably proud of the provisions in other parts of the Bill, which we shall reach in a moment, except that we have no amendments to move dealing with the ante-natal rights that he has inserted in the Bill. This suggests to me that his heart is in the right place. Although he says that he is dove-ish tonight—and he has not yet flown into our dovecote—perhaps he might offer us a small olive branch. He could feel a little warmer still, not simply about ante-natal provisions, but about deleting this particular part of this rather nasty clause. I beg to move.
The Earl of GOWRIE: My Lords, although it is not directly relevant to the amendment, I think it would be worth reminding the House that relative to our European Community neighbours, we treat issues of pregnancy and employment very well. We have a generous amount of leave permitted in the United Kingdom—up to 29 weeks after the birth as against an average in other Community countries of six to eight weeks of paid post-natal leave. Therefore, I think that we have nothing to be ashamed of here. As the noble Lord, Lord McCarthy, fairly said, I am indeed proud of the fact that we are adding to this Bill a new right giving women leave for ante-natal care and ante-natal tuition. I think that this is a good thing to have done.
But there is a talon concealed in the dovecote of the noble Lord, Lord McCarthy, because there is a slight implication here that we are taking away a right which has been given to women in respect of reinstatement. If we examine what the real situation is, although that is technically true, in the real world I do not think it would be regarded as in any way emotionally true. We are not trying to create a two-tier system or to renege on any women's rights. We are simply recognizing certain practical

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realities of the working place and saying that employers do not have to do what is not reasonably practical for them once they can show, either to the satisfaction of the employee, of the woman who seeks to return herself, or—if she does not accept that—to the satisfaction of the tribunal that it is not reasonably practical for the firm to take her back. This exemption relates only to the very smallest of firms and is strictly defined. It is having six employees or fewer. It is not a blanket exemption, and the onus is quite clearly on the employer to prove that he qualifies that it is not reasonably practical for him to give her her job back, otherwise all the rights of reinstatement, subject to the notification procedures which we have discussed, remain for women.
I do not think that we can reasonably go further than that. I think that we have the balance right regarding the interests of the very small employer. When I talk about his interests I am not simply and cynically, as the noble Lord, Lord McCarthy, seemed to suggest, appealing for his support or his vote. I am concerned about potential disincentive effects which, in my judgment, cannot be measured by surveys, whether conducted by the PSI or anybody else, on hiring women who are pregnant or who may become pregnant. That is why I would hope, in the interests of women as well as in the interests of the smaller employer, that this modest provision can go forward and the amendment be resisted.
Lord McCARTHY: My Lords, the noble Earl makes four points. He says first that we are better off in many respects than other countries. So in some respects we are, but in general in other countries they do not have qualifying periods so that we are not universally better off. Secondly, he says in the real world he does not feel there would be much resentment of this. If he would look in the postbag that I am sure he gets, as I do, from women's organisations, from the Equal Opportunities Commission, from all kinds of pressure groups in the women's movement, he will find that this is an aspect of the Bill which is particularly resented by them.
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He talks about the onus of proof when women get to the tribunal. Of course I accept that. The central point I was trying to make is that, for the most part, women in this context will not get to tribunals. They would have to go to a tribunal to find out about the onus of proof and to find out whether their employer has reasonably interpreted this Bill. I would suggest that the great majority of women who receive a letter saying it is not reasonably practical will feel that they have to conform to what is being said. Finally, he said it is not reasonable to go further. It is not only reasonable to go further; it is easy—he could drop this part of the clause.
The Earl of GOWRIE: My Lords, before the noble Lord sits down, and with the leave of the House, may I answer one point of fact that he made about my postbag, or about the representations which have been made to me. We did proceed throughout this Bill by means of consultation, and I am perfectly happy to admit to the noble Lord that when we suggested that this particular exemption apply to firms of 20 employees or fewer we did get substantial representations from women's organisations and indeed from individuals. Since, in sensible response to a problem which we were always trying to target on the very small employer (and maybe at 20 we drew the very small employer too widely) we changed our minds and altered it down, I for one have received nothing at all.
On Question, amendment negatived.
10.39 p.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 32:
Page 13, line 9, leave out ("employees") and insert ("workers").
The noble Lord said: This is one of two points that follow my noble friend's description of this part of the Bill about which there is a rather deep division of opinion between the Government Benches and ourselves. Approaching it, as we do, with the belief that this is a very unfair and unnecessary relaxation of the rights of women in very small firms, we naturally wish to press the Government upon two matters that were discussed in Committee but were not quite the same as these amendments. The first is this Amend-

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ment 32, which I quite appreciate in a sense goes with an amendment we did not move, Amendment 18, because it relates to a cut-off point for rights in small firms. Amendment 18 was about the cut-off point of 20 employees for unfair dismissal rights. This is the cut-off point of five workers for maternity rights to retire.
The proposal that the word "employee" should not be used rests, I think, on a number of grounds. First, we are encouraged that the Government themselves accepted at Committee stage a clause—Clause 2 of the Bill as it now is—which is not about the same matter but which applies a cut-off point to the area in which the employer must respond favourably to a trade union request for a ballot on his premises. The cut-off point there, in Clause 2(3)(b), is where the number of workers employed by the employer added to those of an associated employer does not exceed 20. The word "workers" is used and we think that is very sensible.
In Committee we had some discussion about the great difficulty today in employment law of recognising an employee as against a worker; that is, an employee who is employed under the old term "contract of service" or "contract of employment", stricto sensu, and the worker who is defined in the 1974 Act, a definition that came from the 1971 Act, working under a contract of service or with services other than for a professional client.
We suggest to the Government that there are good reasons for making the cut-off point in this Bill the same in all three respects. Therefore I raise the amendment here, where it seems to us particularly important to make the cut-off point one of "workers", for three reasons. The first is, as my noble friend has suggested, that the women whose rights are being cut down are likely to be weakly organised in unions and not to be in any way cognisant of the law. They simply will know the number of people who are around at the place of work; they certainly will not be able to distinguish, any more than the Court of Appeal can sometimes easily distinguish today in the light of recent case law, the worker from the employee. Only the lawyer can do that, and according to the Court
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of Appeal he often gets it wrong. So first of all it is a common sense reason: if you want people to know the situation you use the wider definition.
Secondly, if there are employers of women who have enterprises where the workers do not exceed five, they will be less able to evade the statutory provisions if the word "worker" is used rather than the word "employee". That is to say, if there is a very bad employer in a small enterprise, once he has passed the point of five employees in the strict sense of the meaning here he will employ his sixth or seventh person under contracts for services, and the case law which we discussed in Committee shows that there is an extraordinary number of people around in British industry who are now working as self-employed people.
That brings me to the final reason: that what is known in the construction industry as "the lump" is not by any means now confined to the construction industry. There is, in a sense, a black economy, to use the Italian term, in many areas of British industry where people are in many respects self-employed, technically speaking, and this is causing a great deal of case law in the courts. It is desirable, in statutes relating to labour law, wherever possible, to put pressure against the development of those practices.
So on the grounds of common sense, of knowing where you are—you can know where you are if you know there are five workers; you cannot know whether the sixth one is an employee, but you can know she is a worker—on the grounds that it would be some obstacle, at least, to evasion by the bad small employer, and on the grounds of policy in labour law generally, I beg to move Amendment 32: that "workers", not "employees", is the right word to use here for the cut-off point.
10.45 p.m.
Lord ROCHESTER: I oppose the amendment, my Lords. We have already demonstrated our sympathy to the Labour Front Bench in what they have had in mind in seeking not to distinguish between women simply on the grounds that some work for larger firms than others. One of the grounds in particular which the noble Lord, Lord Wedderburn of

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Charlton, has put forward in support of the amendment is that he wishes to raise above five the number specified in the clause. But I am very unhappy about the way in which he is setting about it—by seeking to substitute for the word "employee" the word "worker"—because I recall well from my industrial experience that what irritates management (I see the noble Lord, Lord Mottistone, grinning; he may have had the same experience in this connection) is being categorised as something other than workers.
Secondly, the amendment seems to me to go in the opposite direction from that in which, in terms of sound personnel policy, we should be proceeding, towards something more like what is called a single status system of employment. Either we are all workers or we are all employees, but not one or the other, and of the two terms, for the reasons I have given, I very much prefer the word "employees". Had I realised that "workers" appears elsewhere in the Bill I might have had something to say earlier, but in respect of this amendment, that is my feeling and I hope it will be resisted.
Lord MOTTISTONE: My Lords, I am pleased to speak following the noble Lord, Lord Rochester, who kindly mentioned my reaction to his statement while he was speaking. I was looking forward to the debate on this amendment, having missed No. 18, to see exactly what noble Lords opposite meant. The House may remember that in between the two, the noble and learned Lord the Lord Chancellor pointed out the importance of plain English. It would seem to me that plain English about workers is more important than what appears in some Act passed by noble Lords opposite in 1974, and it is a pity if they sought to define "worker" in some technical way which distinguishes it from "employee". I was intrigued—although I found it difficult to follow—by what the noble Lord, Lord Wedderburn of Charlton, was saying about self-employed labour, which somehow implied that self-employed labourers were not workers. What the Government could well do is first to sort out the fact that they have "worker" in Clause 2, which is obviously at loggerheads with what is elsewhere.
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As the noble Lord, Lord Rochester, said, we must be consistent. Secondly, they might seek the opportunity on Third Reading to get rid of whatever definition noble Lords opposite put in their 1974 Act, so as to have it straightforward and accept the fact that all people who work in an enterprise are workers.
Lord MACKAY of CLASHFERN: My Lords, as for the amendment—which is all I propose to deal with—I would certainly suggest that it is unlikely that an employer will change the character of the people working for him once he gets to the number which is important for this clause, and I do not think he would do it for that purpose alone; he might of course have other reasons, and the noble Lord, Lord Wedderburn, referred to those, but we are not dealing with those here. The important point from our point of view is that the clause is dealing with the burden of the employment protection legislation, and it seems highly relevant in that context to use the employee as the person who is important for the purpose of counting numbers. If one were dealing with some other form of protection, the workers might be important.
I also wish to point out that in the way that it is expressed the amendment refers to workers employed by the employer. So, in any event, employment is implied in the formula that the noble Lord is producing. I am therefore not sure that his amendment achieves anything at all, but if it does then it is an undesirable thing. I invite your Lordships not to accept the amendment.
Lord ROCHESTER: My Lords, with the leave of the House, may I ask whether the noble and learned Lord considers that there is anything in the point made by the noble Lord, Lord Mottistone, and myself; namely, that there should at least be some consistency in this matter throughout the Bill?
Lord MACKAY of CLASHFERN: My Lords, I have heard it said that consistency is the hobgoblin of little minds, but whether that would apply in this context I would not say. I think it is fair to say that Clause 2 deals with a situation somewhat different from that with which we are concerned here. Perhaps I might be allowed to leave it at that, at least at this time.
10.52 p.m.
Lord WEDDERBURN of CHARLTON: My Lords, my attempt to move the amendment briefly has proved to be a lesson to me not to do such a thing when one has a legal point to put over and one might be misunderstood. As the noble and learned Lord the Lord Advocate knows, the words "employee" on the one hand, and "worker", on the other, are found throughout the new employment laws. There is no question of a difference in status or of any stigma being attached to the one or the other. Indeed, the distinction was not introduced in the 1974 Act. If it appeared in a general way, it came in first perhaps in the 1971 Industrial Relations Act, although the distinction can be found earlier, with slightly different definitions.
The situation is simply that an employee is someone who falls under the employment protection laws, and is employed under a contract of employment in the old sense, while a worker is defined as a term of art, including the employee, but also one or two other people, such as people who work for services, rather than under contract of service, or who are employed by Government departments.
Therefore, there was no question of status or stigma being involved. The question was the one to which the noble and learned Lord addressed himself: whether, just because the employment protection laws speak in terms of the employee—and rightly so; that is understandable, because one needs the contract of employment on which to operate—the cut-off point should therefore be defined in terms of employees when they have all the other undesirable features.
It is a strictly legal issue, but it involves the policy, and I note that the Government have decided to continue with the traditional method. I suspect that before employment protection law develops much further the cut-off point will be defined by way of workers, even though the rights apply to employees; and here I accept what the noble and learned Lord says. There is not really any discrepancy in cutting off by reference to the one, even though the rights inhere in the other. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 33 and 34 not moved.]
Clause 15 [Action short of dismissal relating to trade union membership and activities]:
Lord McCARTHY Lord McCARTHY moved Amendment No. 35:
Page 16, line 43, at end insert—
("(1A) There shall be added to section 23 of the 1978 Act, the following subsection: —
(8) For the purposes of this section, an act done by an employer in respect of an employee shall not be regarded as an act compelling that employee to be or become a member of a trade union by reason only that it affords to workers who are members of an independent trade union a benefit or advantage which is not afforded to that employee").
The noble Lord said: My Lords, we regard this as a very important issue. Your Lordships will remember that we raised it at the Committee stage. It deals with the scope and meaning, as we see it, of Clause 15(1) where, your Lordships will remember, the Government proposed in effect to delete the words "which is not independent", so that the provisions of Clause 15(1) apply to both independent and non-independent unions. So it becomes actionable for an employee to have action taken against him by his employer to compel him to belong to a union—any union. We have argued that this in fact creates a very wide series of problems for a trade union and for employers outside even the area of the formal union membership agreement, which is the area to which the rest of the clause applies.
Your Lordships will, I hope, remember that at the Committee stage of the Bill we introduced an amendment which was designed to modify this situation and indeed to restore the previous position. But in that debate we were told by the noble and learned Lord the Lord Advocate that such things could be done by the tribunals, and that in any case it was difficult to say, to suggest and to assume that all kinds of things—some of which we had mentioned—which represented mere inducements to membership, would necessarily be regarded by the tribunals as constituting compulsion.
It therefore seemed incumbent upon us, if we wanted to try to have some impact upon the Government at this stage, to seek some basis for making a

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distinction between some of those pressures, inducements, incentives or encouragements, which we sought to argue at the Committee stage were the very stuff of industrial relations, to get people to join trade unions and to encourage people to remain in trade unions, and to leave them outside the ambit of the Bill while trying to go with the Government's desire to in some way protect workers who had had compulsion placed upon them, short of dismissal, to join a trade union. That is indeed what we would say our amendment is trying to do.
In some ways it is a probing amendment. If the Government wish to tell us that they do not like this particular form of words and they will go away and look for other words, we shall be very pleased to withdraw the amendment. But what we would really like them to face is the question that, unless something of this kind is done, then there is a very real possibility that tribunals would have to decide whether or not a whole range of practices represented compulsion. As we said, those practices are the very stuff of which industrial relations are made up—shop stewards ensuring, as they always do, that only trade union collectively designed and recognised procedures are used by non-unionists, so that non-unionists can use only trade union grievance procedures; the allocation of overtime by shop stewards; the allocation of rotas by shop stewards; decisions by shop stewards taken, in effect, in the absence of non-unionists but which nevertheless commit non-unionists as to what piece-work prices shall be; and negotiations among trade unions and employers as to benefits for members only.
We want to have a form of words which have a sporting chance to rule out practices of this kind, realising that such an interpretation might well mean that tribunals would rule in certain other practices, short of dismissal, as constituting compulsion; for instance, some of the examples given by my noble friend Lord Wedderburn when this issue was discussed on Committee. For example, he gave the case of the employer who suspended a non-unionist until he agreed to join a union; or the example of the union which operated a practice of refusing to promote non-unionists. Things
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of this kind, and other forms of threats of sanctions of various sorts, might reasonably, under the terms of this part of the Bill, if this amendment was accepted, be regarded as compulsion.
The answer which the noble and learned Lord the Lord Advocate gave my noble friend Lord Wedderburn at that time of night was that, although it might he possible to distinguish between these cases, he would rather that these things were left to the tribunal. He said—and I quote from col. 593 on 12th June:
"The noble Lord, Lord Wedderburn, gave a number of examples and invited me to comment on them".
Then he went on to comment.
"The cases he gave all fall to be settled by the criterion: does the action in question amount to seeking to compel the person to join the union?"
We accept that. He went on:
"Certainly so far as the first case is concerned I would think that it did not…".
If I remember it, that was the case of refusal to allow access to a trade union procedure.
"I would think very much the same of the second case"—
I think that was the suspension case—
"if the ill-feeling was generated in some way which was independent of compulsion to join the union. The breakaway case",
which was another case mentioned by my noble friend Lord Wedderburn,
"is a little more difficult. I think it would depend on a full account of the circumstances. I doubt whether the noble Lord's example gave sufficient of the circumstances to enable a confident answer to be given".
That is our very point—to enable a confident answer to be given.
We should like to see some direction given to the tribunals on the way that they might interpret this part of the Bill, and we should like to see the way in which that direction was given to make a distinction (as we say in the amendment) between acts which are done by an employer which could be said to be compelling an employee to become a member of a trade union and acts which (as we put in our definition in the last part of the amendment) afford to workers who are members of an independent trade union a benefit or advantage which is not, in effect, afforded to a non-unionist, or, as we would put it, to an employee bringing a case to a tribunal.

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In other words, if the only benefit or incentive is something given to the workers who are members of an independent trade union, some benefit or advantage, and that is the only form which the alleged compulsion takes, we would say it should not be part of the terms of Clause 15(1). 1 beg to move.
Lord MACKAY of CLASHFERN: My Lords, this matter seems to be causing undue difficulty to noble Lords opposite. As my noble and learned friend the Lord Chancellor said earlier, the test is one of plain English: whether the action in question was for the purpose of compelling the person affected to be or to become a member of a trade union. Surely that is a test which is reasonably easy to apply and, as my noble and learned friend the Lord Chancellor said on the last occasion, the judges do not have much difficulty in determining what is the purpose. Surely it is easier to leave it on that general test than to try to test it in relation to particular examples as this amendment seeks to do. The amendment suggests that it should not be such action if the action is by reason only that it affords to workers who are members of an independent trade union a benefit or advantage which is not afforded to that employee. It must depend on the circumstances, the nature of the benefit, the way in which, and the purpose particularly with which, this course of conduct is pursued. If the refusal of these benefits is part of a deliberate strategy to compel nonmembers to join by refusing them improvements in terms and conditions of employment that they would normally expect, then this would fall foul of the clause. I would therefore suggest that this amendment, instead of helping matters, only hinders matters and the simple test (which is, after all a test of previous legislation) is much better, and this amendment should not be given support.
Lord McCARTHY: My Lords, the noble Lord does not help. If he looks at the amendment, he will see that we are saying "by reason only". We are not saying there would be a general policy to force people into unions in the way he suggests. Obviously, if there was an attempt to force people into unions as part of a whole series of motives, the tribunal would say that it was compulsion.
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We say "by reason only", solely, just that—that it affords the workers who are members of an independent union benefits or advantages not afforded to the employee. The hour being so late at night and we being so far into the Bill, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 36 not moved.]
Lord DEN HAM: My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

  COAL PRODUCTION: EMPLOYEES
  COAL PRODUCTION: EMPLOYEES
  VACANCIES IN SERVICES
  VACANCIES IN SERVICES
  EEC DIRECTIVE: VAT AND EXCISE ON STORES
  EEC DIRECTIVE: VAT AND EXCISE ON STORES
  ROCKALL WATERS: EXPLORATION
  ROCKALL WATERS: EXPLORATION
  ANGOLA: VISITS TO BRITISH PRISONERS
  ANGOLA: VISITS TO BRITISH PRISONERS
  LIFE PEERS: LIST
  LIFE PEERS: LIST
  RADIOACTIVE MATERIALS: WORKERS' COMPENSATION
  RADIOACTIVE MATERIALS: WORKERS' COMPENSATION