Sitting of 24 July 1980

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

EASTBOURNE HARBOUR BILL [Lords]
Order for Third Reading read.
To be read the Third time upon Monday 28 July.

SALVATION ARMY BILL [Lords]
Read the Third time and passed, with amendments.

GREATER MANCHESTER BILL [Lords]
Orders for Second Reading read.
To be read a Second time upon Thursday 31 July.

DUNDEE PORT AUTHORITY ORDER CONFIRMATION BILL
Read the Third time and passed.
CITY OF DUNDEE DISTRICT COUNCIL ORDER CONFIRMATION
Mr. Secretary Younger presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936 relating to the City of Dundee District Council: And the same was read the First time; and ordered to be considered upon Wednesday 30 July and to be printed. [Bill 257.]
INVERCLYDE DISTRICT COUNCIL ORDER CONFIRMATION
Mr. Secretary Younger presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936 relating to Inverclyde District Council: And the same was read the First time; and ordered to be considered upon Wednesday 30 July and to be printed. [Bill 258.]
ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    North Sea Oil (Revenue)
    Mr. Dubs1. Mr. Dubs asked the Chancellor of the Exchequer what is his latest estimate of North Sea oil revenues from corporation tax, petroleum revenue tax and royalties in 1980–81.
    The Minister of State, Treasury (Mr. Peter Rees): The figures—which were published in the Treasury economic progress report for July—are £450 million, £2,560 million and £1,090 million for corporation tax, petroleum revenue tax, and royalties respectively.
    Mr. Dubs: Is the Minister aware that many experts believe that the Treasury is seriously under-estimating the likely revenue from North Sea oil over the next two or three years? That is likely to result in a lower, or possibly negative, public sector borrowing requirement. Will the Minister make clear that, if that happens, he will review the public expenditure cuts with a view to reducing them?
    Mr. Rees: The hon. Gentleman is making certain assumptions that we are not disposed to make at present. Naturally, we are concerned with the structure of petroleum revenue tax, but we feel that it is designed to secure a proper share of the profits of North Sea oil for the British people.
    Mr. Waldegrave: Will my hon. and learned Friend consider making a statement on the revenue implications of the Secretary of State for Energy's recent statement on depletion policy?
    Mr. Rees: We are aware of the implications of that statement, but we do not think that it will make a substantial difference to the figures that I gave.
    Mr. Healey: Will the Minister of State explain why the figures that are published in the brown book on the effects of North Sea oil revenue are all in 1978–79 prices and therefore understate by more than half the actual benefit that the Government are deriving from North Sea oil? Will he assure the House that the reason for that is that the Government are now throwing £ 4 billion worth of revenue

    745
    down the drain in financing unemployment that they have created?
    Mr. Rees: The Government are not throwing any money down the drain. Our costing of the draft manifesto of the Labour Party is that it would throw £20,000 billion down the drain in nationalisation.
    Mr. Healey: Will the Minister answer a question that has been asked repeatedly in the House? Why are the Government understating by more than 60 per cent. in the brown book the actual value of oil to them?
    Mr. Rees: I have given the figures for the current year. As the right hon. Gentleman will know, it was not the practice of either his Administration, nor is it of this Administration, to give forecasts for future years.

    Economic Strategy
    2. Mr. Kenneth Lewis 2. Mr. Kenneth Lewis asked the Chancellor of the Exchequer if he is satisfied that his economic measures are working according to the Government's plans.
    The Chancellor of the Exchequer (Sir Geoffrey Howe): The first priority of the Government's economic policy is to reduce the rate of inflation. There are encouraging signs that our policies are beginning to do that.
    Mr. Lewis: I understand that following the downward slide that we inherited from the previous Government it will take a little time to get up the hill if we are to see the promised land, but does not my right hon. and learned Friend accept that, if industrial and commercial confidence is to return, it must be made clear to industry that we shall soon get out of our inflationary difficulties? Industry will invest when it has hope. Hope is important as a basis for the revival of British industry.
    Sir G. Howe: I am glad to bear in mind the points made by my hon. Friend and to remind him that the downturn in inflation that we saw this month is the first such downturn for two years. I expect to see a further substantial drop in the rate of inflation next month. The fact that it is now two years since the rate began to go up is indicative of the fact that all economic policies are bound to take time to work out.
    Mr. Healey: Is it not the case that the fall in the rate of inflation this month is due entirely to world prices, a factor which is beyond the Government's control, that the fall next month will be due entirely to the fact that the Chancellor has learnt enough not to be as lunatic as he was last year in doubling the rate of value added tax, which then falls out of the index, and that the main effect of the Government's policies so far is to produce unemployment at the level of 1936 and to condemn a whole generation of youngsters to the scrapheap?
    Sir G. Howe: There is concern on both sides of the House about the need to secure a downward movement in unemployment. But, as the right hon. Gentleman told the House on many occasions, the conquest of inflation must precede the conquest of unemployment. When we came into office we inherited a rapidly growing rate of inflation, running at almost 14 per cent. Now, after two years of movement in the wrong direction, we have begun to move in the right direction. We are entitled to take credit for that.
    Viscount Cranborne: In considering the Government's economic policy, does my right hon. and learned Friend accept that there is considerable cause for concern about the very high interest costs that future Governments, as well as the present Government, will have to bear on long-term Government gilt-edged stock? Does he accept that there is now a strong case at least for index linking long-term gilts?
    Sir G. Howe: I appreciate the point made by my hon. Friend about the concern felt about the burden of interest, which is one of the reasons why it is important to reduce the total size of Government borrowing along the lines that we have in mind. The point that he makes about the indexation of gilts has been put forward in many quarters and deserves consideration, but there are many complications on the other side of the account.
    Mr. Haynes: Is the Chancellor aware of the pressure that is being put upon workers to accept smaller wage increases, and that the message seems to be coming right across the nation? Does it also include managers, directors, and all the rest of the people who totally ignore that sort of recommendation and who get

    747
    away with murder and have done so for many years?
    Sir G. Howe: The hon. Gentleman puts an emotional gloss on the realities. I am grateful to him for telling the House in such plain terms that the message is, as he put it, getting across to the nation in support of the case that there must be moderation in the acceptance of and bargaining for pay settlements at all levels. At every level and in every workplace, people, when determining their pay, must take account of the impact of that on the prospects of their own employment.

    Minimum Lending Rate
    Mr. Sever3. Mr. Sever asked the Chancellor of the Exchequer what further measures he is taking to lower the minimum lending rate.
    The Chief Secretary to the Treasury (Mr. John Biffen): The Government's public spending, taxing and borrowing policies are designed to make it possible for monetary targets to be achieved with lower nominal interest rates in due course.
    Mr. Sever: Does the Minister accept that, particularly in the inner areas—such as Ladywood—of big cities, one of the best opportunities available to the Government for stimulating employment and maximising profit is the stimulation of the small business sector? Does he further agree that the stimulus they are looking for includes an immediate reduction of the minimum lending requirement?
    Mr. Biffen: I accept that the level of interest rates has a very real bearing on the general climate of business optimism and that it is wholly desirable that the Government should have as an objective the achievement of lower interest rates, provided that they are consistent with the monetary aggregates.
    Mr. Budgen: Will my right hon. Friend please explain why the effect upon the money supply of taking off the corset should be disregarded, as is suggested in the Financial Times today?
    Mr. Biffen: I bear many burdens, but what appears in the Financial Times is not one of them.
    Mr. Richard Wainwright: In this connection, will Treasury Ministers at least consider reducing the return net of tax
    748
    to foreign lenders, as other countries have done, with a view to reducing the inflows into this country which are helping to achieve a gross overvaluation of sterling?
    Mr. Biffen: That is a highly contentious suggestion and I do not think that I can give any answer to it this afternoon.
    Mr. Healey: Is the right hon. Gentleman aware that for once we congratulate him on cutting the minimum lending rate last month, although the subsequent money supply figures showed that the money supply was running outside the Government's target? Is he aware that we shall also congratulate him if he cuts minimum lending rate again in September, in spite of the fact that the unwinding of the corset is likely—according to the Governor of the Bank of England on Monday—to add perhaps over 3 per cent. to the monetary range?
    Mr. Biffen: The congratulations of the right hon. Gentleman will always be assessed in the circumstances in which they are proffered.
    Mr. Bruce-Gardyne: Does my right hon. Friend agree that every Minister, without exception, in every spending Department could well have emblazoned on his wall the motto "Spending less means borrowing less; and borrowing less means lower interest rates for the benefit of the private sector"?
    Mr. Biffen: Yes.

    Exchange Controls
    4. Mr. Parry 4. Mr. Parry asked the Chancellor of the Exchequer what specific powers remain to him to regulate exchange control.
    Mr. Biffen: The Treasury continues to have the powers in the Exchange Control Act 1947 as amended by the Finance Acts 1968 and 1977, and also those in section 2 of the Emergency Laws (Re-enactments and Repeals) Act 1964.
    Mr. Parry: Given the mess of the Government's economic position, will the right hon. Gentleman tell us how long it would take to reintroduce the measures if it became necessary?
    Mr. Biffen: Most of the arguments are to the effect that the difficulties derive from a currency that is valued too highly. Therefore, the Government are

    749
    not usually asked to reintroduce exchange control.
    Mr. Eggar: Does my right hon. Friend believe that there is any case for inward exchange controls?
    Mr. Biffen: On present evidence, no.
    Mr. Heffer: Whatever the Government do on the question of exchange controls, will the Chief Secretary and his right hon. Friends consider the position that is developing in Ellesmere Port, where 1,500 workers in Bowaters are faced with immediate redundancy because of the imports of paper from the United States of America? Will the right hon. Gentleman look at that in addition to looking at the question of exchange controls?
    Mr. Biffen: I realise that the hon. Gentleman has made a point about which he feels very strongly, and I shall see that it is brought to the attention of my right hon. Friend the Secretary of State for Trade.

    Inflation
    5. Mr. Winnick 5. Mr. Winnick asked the Chancellor of the Exchequer when he expects a substantial reduction in inflation.
    Sir Geoffrey Howe: I expect a substantial fall in the annual rate of increase of the retail price index next month.
    Mr. Winnick: Since the Government were directly responsible for inflation reaching nearly 22 per cent., they can hardly be congratulated now on the fact that there is a tiny reduction. Is the right hon. and learned Gentleman aware that the economic policies of the Government, which are leading to a return of mass unemployment, will leave behind a legacy of hatred and bitterness towards the Tory Party of the sort that was seen in the 1930s?
    Sir G. Howe: The hon. Gentleman must understand that no Government policy is designed to lead or is leading to mass unemployment. As his right hon. Friend the Member for Leeds, East (Mr. Healey) told the House on many occasions, we have found ourselves entering each recession with a higher level of unemployment than on the previous occasion because we have attempted to spend our way out of recession and because of
    750
    recurrent bouts of inflation. It is only by applying ourselves to the conquest of inflation—the subject of the original question—that we shall be able to deal with unemployment.
    Mr. Nicholas Winterton: Does my right hon. and learned Friend agree that one of the best ways to achieve a reduction in the rate of inflation is to reduce direct taxation, which would reduce the working man's expectation of pay increases? Would that not also lead to production, which is different from productivity, and perhaps change the economic climate of Britain within 24 months?
    Sir G. Howe: My hon. Friend has listed several of the solid reasons in favour of reducing direct taxation. He must remember that, desirable as that objective is, it should not be achieved at the expense of greater borrowing, which would itself involve higher interest rates and, therefore, greater inflation. The two objectives must be balanced against each other.
    Mr. Healey: Does the right hon. and learned Gentleman accept the view that Mr. Frank Cassell of the Treasury put to the Select Committee last week—namely, that the rate of inflation could be over 26 per cent. if the Government had not permitted an increase in the value of the pound, which is now strangling British industry and producing excessive unemployment? By how much does he expect the rate of inflation to rise as a result of the fall in the value of the pound if he is successful in his other objective of reducing interest rates?
    Sir G. Howe: The right hon. Gentleman has attempted to condense a series of economic propositions into a short sentence. Our objective remains that of securing the reduction of inflation. We can resume discussion of the wider topics in next week's debate.
    Mr. Hal Miller: Does my right hon. and learned Friend understand the fear in manufacturing industry that is bearing the brunt of the Government's attack on inflation through high interest rates and that not enough has been done to control public expenditure and public borrowing? Will he comment on that?
    Sir G. Howe: I well understand the extent to which business, small and

    751
    large, is concerned about the continuation of high interest rates. That is why our objective has been so firmly concentrated on the reduction of public borrowing and public spending. I am grateful to have my hon. Friend's support for that policy.

    International Monetary Fund (Substitution Account)
    6. Mr. Hooley 6. Mr. Hooley asked the Chancellor of the Exchequor when further talks will take place in the International Monetary Fund on the creation of a substitution account.
    Sir Geoffrey Howe: Possibly at the next meeting of the interim committee to be held in Washington on 28 September.
    Mr. Hooley: Is the Chancellor aware that reform of the international monetary system was one of the main recommendations of the Brandt commission? What proposals are the Government to put forward for making more acceptable as a reserve unit the special drawing rights?
    Sir G. Howe: I appreciate that that was one of the matters contained in the Brandt commission's report. It was discussed at the summit meeting at Venice. We shall be returning to the question of the substitution account and the wider issues at the meeting of the fund in September.
    Mr. Goodlad: Does my right hon. and learned Friend accept that an alternative to the IMF substitution account in helping to recycle OPEC surpluses is the greater use of debt instruments, the repayment terms of which are related to the price of certain commodities so that the risk to the lender is related to commodities and not only currencies? Therefore, the risk to the borrowing country, which may be a less developed country with only one commodity as its product, is that much reduced.
    Sir G. Howe: That is one of the methods that could be studied to deal with the problem that my hon. Friend has in mind. It is right to acknowledge the scale of the difficulties that arise for the less developed countries as a result of the large increase in oil prices last year and the consequent redistribution of funds throughout the world.
    Mr. Horam: Has the right hon. and learned Gentleman seen the recent suggestions made about commodity bonds and oil bonds, which follow on from the question of the hon. Member for North-wich (Mr. Goodlad)? Will he ensure that these suggestions, which are valuable and imaginative, are pursued seriously at the appropriate international level?
    Sir G. Howe: I shall ensure that the proposals are studied.

    Exchange Controls
    7. Mr. Dalyell 7. Mr. Dalyell asked the Chancellor of the Exchequer if he will make a statement on his latest assessment of the effect of dismantling exchange controls.
    Mr. Biffen: Capital outflows since the dismantling of exchange controls seem to have been running at about £ 1 billion a quarter, for the greater part representing repayment of foreign currency debt by United Kingdom companies. Overseas purchases of sterling assets over the same period have more than offset these outflows.
    Mr. Dalyell: To use the Chancellor's words and to telescope a series of economic propositions into a single sentence, is it not none the less true that it would be more comfortable to make moves towards a less strong pound if there were a fallback of some sort of exchange control machinery? Given the reply to my hon. Friend the Member for Liverpool, Scotland Exchange (Mr. Parry), do we take it that the 1964 and 1977 machinery is adequate to bring back exchange controls should outside events unwelcome to the Government make that practicable and necessary?
    Mr. Biffen: I should require notice of the latter part of the hon. Gentleman's question.
    Mr. Campbell-Savours: Why?
    Mr. Biffen: It will be asked in good faith and answered in good faith. The residual law is kept in being on account of European Community obligations. I do not believe that it is to the advantage of the economy to try to proceed towards a situation in which either the inflow or outflow of capital is more restricted. I believe that we should move to a regime that seeks greater liberalisation.
    Mr. Wickenden: Does my right hon. Friend accept that those of us who bear the responsibility of trying to create employment and who are doing so take great pleasure in the fact that we have been set free from the shackles of exchange controls and enabled to create employment?
    Mr. Biffen: I take account of my hon. Friend's remark. Although this is a fairly esoteric subject, it sharply divides in the starkest philosophic terms the differences between the two sides of the House.
    Mr. Arthur Lewis: Is the Minister aware that the motor car manufacturing industry is in great difficulties? Is he also aware that at the same time almost all foreign car manufacturers are advertising their cars for sale on 5 per cent. loans, a rate that is a third of the going rate in Britain? Will he examine the terms of this financing to ascertain the extent of the manoeuvring and manipulation of exchange controls that is enabling foreign firms to sell their cars in Britain at the expense of British manufacturers and to manoeuvre interest rates so that they can advertise loans costing only 5 per cent?
    Mr. Biffen: I shall have that matter investigated. I am not immediately certain that there is any Government responsibility.

    Tax and Price Index
    8. Mr. Ioan Evans 8. Mr. Ioan Evans asked the Chancellor of the Exchequer what are the latest figures for the tax and price index.
    Mr. Peter Rees: The tax and price index rose by 17.4 per cent. over the 12 months up to June 1980.
    Mr. Evans: In view of the fact that there have been over 9,000 price increases this year, that the Government have doubled the rate of inflation, that they have introduced a new index that gives a better impression than the RPI, and that it might be higher than the RPI in August because VAT is coming out of the RPI, will the hon. and learned Gentleman consider introducing a new index—a tax, prices and unemployment index?
    Mr. Rees: I suspect that the two indexes are enough.
    Mr. Jay: When will the rate of price inflation fall to the level at which it stood when the Government took office?
    Mr. Rees: It would be a rash person who made such a prediction with utter confidence. As my right hon. and learned Friend has said, we hope that it will fall to 16½ per cent. by the autumn.

    European Community (United Kingdom Membership)
    9. Mr. Marlow 9. Mr. Marlow asked the Chancellor of the Exchequer what further discussions have taken place with European finance ministers concerning the total cost to the United Kingdom of European Economic Community membership.
    Sir Geoffrey Howe: The Finance Council last held an extended discussion of the overall economic effects of Community membership in October 1979. The subject is, moreover, highly relevant to the longer-term review provided for in the agreement of 30 May.
    Mr. Marlow: When my right hon. and learned Friend next meets the Finance Ministers in Europe, will he draw their attention to the fact that food and feed stuffs, imported last year under the common agricultural policy, at common agricultural prices, gave us a bill of some £627 million beyond and above the price that we would have to pay if we had bought the same goods on the world market? If we had bought our stuff on the world market, and not under the CAP, it would have made no difference to the world's supply and demand situation, and we could have made a saving of £627 million. This constitutes a real increase to the budget deficit. Will he bring this fact to the attention of the Finance Ministers and ensure that they take good account of that in any future financial calculations?
    Sir G. Howe: Without doubting the figures that my hon. Friend has quoted, I accept the extent to which the common agricultural policy and other aspects inflict significant non-budgetary losses on the commodities that he mentioned. We drew that to the attention of Community Finance Ministers during negotiations, which were directed in the first instance at the budgetary problem. We shall certainly draw that point to their attention during the next stage of our discussions on the structure of the budget.
    Mr. John Garrett: What is the Treasury's current estimate of the total cost of Britain's membership of the EEC?
    Sir G. Howe: It is not possible to produce a total cost. It must be remembered that there are factors on both sides of the account. For example, there has been a substantial increase in our exports to Europe and those exports have increased at a faster rate than our exports to other overseas markets. I do not wish to mislead the House or the hon. Gentleman. When we reach the next stage of the negotiations on the structure of the budget—provided for in the agreement of 30 May—all those matters should be, and will be, taken into account.
    Mr. Budgen: Will my right hon. and learned Friend explain the principles that will apply to reforming the EEC budget?
    Sir G. Howe: The main principle is to ensure that it operates fairly for all member States and provides a stable roundation for the long-term financing of the Community.
    Mr. Spearing: When the Chancellor of the Exchequer deals with" all those matters", will he include the cost of the increased unemployment that has resulted from our membership of the EEC? Will he estimate the additional cost of unemployment pay to fishermen, both now and in the future?
    Sir G. Howe: I know that the hon. Gentleman if often prepared to attribute many misfortunes to our membership of the Community. However, it would be wrong to assume that our membership has had an adverse effect on employment in Britain. Our exports to the Community have been increasing at a faster rate than our exports to other parts of the world. That should be borne in mind.
    Mr. Dorrell: In calculating the total cost-benefit balance of our membership of the EEC, will my right hon. and learned Friend bear in mind that Europe is this country's largest and fastest growing market, and that we have no interest in isolating ourselves from our most important customers?
    Sir G. Howe: I am grateful to my hon. Friend, as he has emphasised the point that I have been trying to make. I repeat that last year our exports to
    756
    the Community increased by 30 per cent., while our exports to the rest of the world increased by only 8 per cent. It is important to remember the significance of our trading links with the Community.
    Mr. Cryer: Is it not true that our imports from the EEC have been growing at a more rapid rate, and that we have a deficit of between £2·5 billion and £3 billion? Does he not accept that the Venice charade allowed us to have some of our own money back, with the EEC's permission? Does not that mean that there has been a shift away from the United Kingdom Parliament, in relation to the right to raise taxes and to decide on expenditure? Is it not true that the EEC Commission will now decide how the money is to be spent?
    Sir G. Howe: As regards the significant point that the hon. Gentleman has raised, the deficit on visible trade increased in money terms, but in real terms there has been a small net reduction in our deficit with the Community. I am not sure how the hon. Gentleman has managed to confuse what took place in Venice with what took place within the Community. There is no connection between the two.

    Tax Evasion
    10. Mr. McCrindle 10. Mr. McCrindle asked the Chancellor of the Exchequer if he is satisfied that no further action is required to combat tax evasion.
    Mr. Peter Rees: No, Sir. That would be too complacent. but the Board of Inland Revenue and the Board of Customs and Excise are constantly improving their techniques to combat tax evasion, and that is reflected in the results achieved.
    Mr. McCrindle: If my hon. and learned Friend is as concerned as I am about the substantial loss of revenue that may result from tax evasion, and if he bears in mind the fact that small business men are already subjected to random VAT tests and that suspected social security scroungers may be visited by social security inspectors, should not the Treasury appoint inspectors to carry out random tests of those suspected of avoiding income tax? That would be in the interests of the taxpayer.
    Mr. Rees: My hon. Friend will be aware that a new special office has been

    757
    opened in Sheffield, and that the special office in London has been strengthened. In-depth checks are conducted on income tax returns.
    Mr. Richard Wainwright: In view of the growing and justified sense of unfairness at the failure to collect income tax effectively—despite uneven pressure on certain taxpayers—how much longer will Treasury Ministers claim that PAYE has an advantage because it does not require an income tax return each year from millions of taxpayers?
    Mr. Rees: If the hon. Gentleman is suggesting that we should change to a system of self-assessment, he should bear in mind the considerable cost imposed on taxpayers in the United States of America.
    Mr. Michael Brown: Will my hon. and learned Friend speculate upon whether his Department is satisfied with the operation of section 32 of the Inland Revenue Regulation Act 1890? How does he ensure that evidence from informers is reliable? Is he satisfied with the operation of the Act?
    Mr. Rees: Neither I nor any other Treasury Minister is concerned with the information given by informers. As the House will know, and as I have made clear in a written answer today, the conduct of individual cases is exclusively a matter for the Inland Revenue. As my hon. Friend will know, the amounts paid to informers are very small. Whether the evidence is valid and trustworthy is exclusively a matter for the Inland Revenue to decide in the first instance.
    Mr. Ron Brown: Are not the Government covering up for scroungers at the top, and for those who back the Tory Party? Does not that typify the fact that this Government are a class Government, who are unwilling to take any action against those who take away the wealth that rightly belongs to the Exchequer? Why do not the Government do something? Is not it a fact that the Government are willing to attack working class people and those on social security benefit but that they are not willing to deal with their own kind? The country will judge the Government in due course.
    Mr. Rees: The hon. Gentleman has completely misunderstood the position. The Inland Revenue is charged with the duty of collecting tax and of initiating
    758
    proceedings whenever it thinks it is justified. No Treasury Minister is to the slightest degree concerned with such operations.

    Unemployment Costs
    11. Mr. Straw 11. Mr. Straw asked the Chancellor of the Exchequer what estimate he makes of the gross cost to the Exchequer of unemployment in the United Kingdom in (a) 1979, and (b) 1980 in terms of national insurance contributions and direct and indirect tax forgone, and social security and other benefits paid out.
    Mr. Biffen: The cost of the payment of unemployment and supplementary benefits to unemployed persons in 1979–80 was £1,400 million. It is not possible to make a meaningful estimate of the additional information sought in relation to tax and social security benefits.
    Mr. Straw: Is the Chief Secretary aware that his right hon. Friend the Minister of Agriculture, Fisheries and Food has made a meaningful estimate of those other costs? Is he not aware that he put that cost at £7,000 million, or three-quarters of the public sector borrowing requirement? Given that unemployment now costs three-quarters of the PSBR, and that the cost of maintaining people in work by means of sensible support schemes is less than the cost of throwing them out of work, is not the Chief Secretary aware that one can draw no other conclusion but that the Government are wilfully and unnecessarily forcing people out of work?
    Mr. Biffen: No text exists indicating the figure of £7,000 million. That figure has been attributed to my right hon. Friend the Minister of Agriculture by newspaper cuttings alone. It would not be appropriate for the House to proceed on the basis of newspaper cuttings. Our determination is to contest unemployment. To secure a victory over unemployment there is a prerequisite of a victory over inflation.
    Mr. Joel Barnett: Given that the Government argue that the level of unemployment is not their fault but that of pay settlements, is the Chief Secretary prepared to predict that if pay settlements in the next round are about 10 per cent. or lower unemployment will not reach 2 million and, indeed will fall next year?
    Mr. Biffen: The long and hallowed tradition in the Treasury is that unemployment forecasts are never made. That tradition was followed religiously by the right hon. Member for Leeds, East (Mr. Healey). I intend to follow that tradition.
    Mr. Healey: Am I right in assuming that the right hon. Gentleman occasionally meets the Minister of Agriculture, Fisheries and Food socially, if not in the Cabinet room? Would he care to ask the Minister to confirm the report that he gave an estimate of £7,000 million as the cost—if I might correct my hon. Friend the Member for Blackburn (Mr. Straw)—not of the current level of unemployment which is 1·9 million, but of 1½ million unemployed? Will the right hon. Gentleman have a word with the Minister and find out what he actually said and say whether he agrees with it?
    Mr. Biffen: Since I do not believe in trial by newspaper cutting I would not dream of doing that.

    Farmhouse Cider
    12. Mr. Speller 12. Mr. Speller asked the Chancellor of the Exchequer what proposals are being considered within the EEC to require farmhouse cider of a strength above 8·5 per cent. to be treated for revenue purposes in the same way as table wine.
    Mr. Peter Rees: Proposals were put forward by the Commission last year which if accepted would result in cider of a strength above 6 per cent. being subjected to the same duty as table wine. The Commission has, however, made clear that it is prepared to agree to amending this limit to 8·5 per cent. This would represent little difference in practice from the present borderline of 8·7 per cent. between the cider duty and the made-wine duty.
    Mr. Speller: Is my hon. and learned Friend aware that in Devonshire the proposal would result in scrumpy costing 75p a pint? Furthermore, is he aware that it would result in the industry being put flat on its back? Does he agree that this, like many matters related to the Community, is intended in due course to bring the tax level on wine down to that of cider rather than vice versa? May we have an assurance that we shall not see the 75p pint in our lifetime?
    Mr. Rees: It is not for me to speculate on the effects of scrumpy on my hon. Friend's constituents. I reassure him and the House that the Government and the Commission are aware of the impact of increased duties on the cider industry, which is a small industry featuring particularly in the economies of my hon. Friend's county and Hereford.

    Inflation
    13. Mr. Canavan 13. Mr. Canavan asked the Chancellor of the Exchequer what is the current rate of inflation.
    15. Mr. Flannery 15. Mr. Flannery asked the Chancellor of the Exchequer what is the current rate of inflation; and what it was in 1979 and 1978 at this time of year.
    Sir Geoffrey Howe: The retail prices index rose by 21 per cent in the 12 months up to June 1980. In the comparable periods up to June 1978 and June 1979, the index rose by 7·4 per cent and 11·4 per cent respectively.
    Mr. Canavan: Since we have one of the lowest wage economies in Western Europe, why does the Chancellor blame so-called high wages for the high rate of inflation which he has created? When he said in his television broadcast last week that we are paying ourselves too much for producing too little, was he referring to himself since he will soon be earning £30,000 a year for producing nothing but high inflation and record unemployment?
    Sir G. Howe: I wish the problems about which the hon. Gentleman is obviously anxious were capable of being solved by abuse of that kind. He must note that even from the figures that I have given the rate of inflation has been increasing for the last two years. The downturn this month is the first step in the right direction. The problem about our economy and the comparison between standards of living is that even in the last two years pay rose 10 times faster than productivity. That is the reason for the difference in our living standards and those in the rest of Western Europe.
    Mr. Flannery: Will the Chancellor of the Exchequer admit that his Government's policies more than doubled the rate of inflation that existed when the Labour Government left office? When

    761
    will he admit that the Government's policies are an utter failure and that they are so doctrinaire as to be almost unbelievable? Does he accept that there is further unemployment in the pipeline and that the situation has run away with the Government, who have no idea how to handle this dreadful situation?
    Sir G. Howe: Far be it from me to enter a competition in doctrinairism with the hon. Gentleman.
    Mr. Cryer: The Chancellor would win.
    Sir G. Howe: I remind the House that the rate of inflation when we came to office—the rate at which prices had been rising in the last six months of the Labour Government—was substantial—14 per cent.—and rising.

  PRIME MINISTER (ENGAGEMENTS)
  Q1. Mr. Robert Atkins Q1. Mr. Robert Atkins asked the Prime Minister if she will list her official engagements for 24 July.
  The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet. In addtion to my duties in this House, I shall be having further meetings with ministerial colleagues and others.
  Mr. Atkins: Will my right hon. Friend find time during her busy day to make it clear that she is determined to maintain Britain's nuclear deterrent? Will she also make it clear to those who are interested in these matters overseas that the march planned by the Campaign for Nuclear Disarmament on 26 October, even though it is supported by members of the Labour Party, dos not represent the views of the British people?
  The Prime Minister: We announced our decision to keep our independent nuclear deterrent by announcing the decision to purchase Trident. I believe that the British people are firmly behind a policy which leaves us master of our own destiny. The policy has been warmly welcomed by our allies. It makes it clear that we are resolved to defend our own freedom.
  Miss Joan Lestor: Bearing in mind the Prime Minister's advocacy that
  762
  people should be prepared to move from one area of the country to another to seek employment, will the right hon. Lady find time today to visit Slough which, until now, has been an area of fairly high employment but where unemployment has increased dramatically in the last month and where the number of job vacancies has fallen dramatically? Will she explain where the unemployed of Merseyside and other places are supposed to find jobs? Will she explain, if they move to areas such as Slough, in view of the malicious housing policy operated there, how they will find accommodation?
  The Prime Minister: I think that it is reasonable to expect that there must be some mobility and that people should be willing to move to where the jobs are available. [Hon. Members: "Where?"] One has only to look in the situations vacant columns in many newspapers to discover where the jobs are available. Fortunately, the number of job vacancies has not yet fallen as far as it did under the previous Government, although it is fairly low. The number of vacancies reported to jobcentres is only about one-third of the jobs available.
  Mr. Latham: In view of the current price war in the high streets and the reduction in private sector settlements, is not it increasingly important that there should be a lower level of public sector settlements and that industries such as the Post Office which reach high settlements should not be allowed to exceed their cash limits?
  The Prime Minister: I agree with my hon. Friend. It is crucial for us to get public sector settlements down, if only because the money is drawn out of the private sector. It is to the private sector that we must look for increasing numbers of jobs. People in the public sector who go in for large settlements must keep within their cash limits.
  Mr. James Callaghan: When the Prime Minister said in South Wales last Saturday that people without work should move to areas of industrial success, to which areas was she referring? Will she also please tell us what effect she thinks the removal of skilled workers from South Wales will have on the communities that they leave behind?
  The Prime Minister: Wales has always been accustomed to a certain amount of

  763
  mobility. After all, that was how people come to move to where the jobs were. When coalmining ceased in the Rhondda and steel ceased at East Moors or Ebbw Vale, for example the people were prepared to move to other jobs. I was a Minister in the Department of Education and Science and I know that many many teachers came from Wales. Mobility is nothing new to Wales.
  Mr. Callaghan: Does not the Prime Minister realise that the mobility of the 1930s left behind a bitterness that has not been forgotten? Does she not realise also that with the consent of both Governments a successful policy of taking work to the regions was started, which has revived the prosperity of South Wales, and that we will simply not return to her kind of policies?
  The Prime Minister: I do not believe that it is possible to guarantee everyone a job where he happens to live. I am delighted to see that the right hon. Gentleman agrees with me. There must be some mobility to enable people to move to where the jobs are. [Hon. Gentlemen: "Where?"] There are some 400,000 vacant jobs on the usual method of calculation, if people are willing to take them. There must be some mobility if young people want jobs, as there always has been. [Hon. Gentlemen: "Where?"] The right hon. Gentleman is making a terrible—
  Hon. Members: Where are the jobs?
  Mr. Speaker: Order.
  Mr. Callaghan: Will the Prime Minister now please tell us to which areas she believes the unemployed steel workers in South Wales should move?
  The Prime Minister: Some of them will move within Wales where there are jobs. [Hon. Gentlemen: "Where?"] That is why some £48 million has been allocated especially to South Wales to help with advanced factories and help other factories go there. Other factories will go there. However, they will not go anywhere if they face total rigidity in labour and embittered labour. That is the worst reputation that any politician can give to an area.
  Q2. Mr Bob Dunn Q2. Mr Bob Dunn asked the Prime Minister if she will list her official engagements for Thursday 24 July.
  The Prime Minister: I refer my hon. Friend to the reply which I have just given.
  Mr. Dunn: Will the Prime Minister find time today to consider how best to persuade some of our European Allies that their refusal to take NATO missile bases on their soil will be seen as a dangerous drift towards neutrality, a position that would undoubtedly delight pro-Soviet sympathisers in this country and elsewhere?
  The Prime Minister: I assume that my hon. Friend is referring to cruise missiles. Before Christmas NATO decided to accept cruise missiles on the soil of NATO countries. No NATO country has so far refused to accept those missiles, although two have still to make a formal decision to accept them. Most NATO countries already have nuclear weapons on their soil, which indicates their firm determination to defend the Western way of life.
  Mr. Donald Stewart: Will the Prime Minister take time today to consider the total collapse that has overtaken the Scottish fishing industry? Will she call urgent meetings with the Ministers concerned to discuss financial assistance and protection, and, in view of her laudable aim that we should be masters of our own destiny, will she, if necessary, take unilateral action, regardless of what the EEC may think?
  The Prime Minister: My right hon. Friend the Minister of Agriculture, Fisheries and Food is involved in negotiating a fisheries agreement with our European partners. I understand that he will report to the House in a statement after questions. Some of the firms concerned already have money left from the £3 million that was allocated to the fishing industry. Others are in considerable difficulty, and my right hon. Friend is considering how best to help.
  Mr. John Wells: Is my right hon. Friend aware that many of us are very sorry that she is not enjoying any official meals today? The next time that she has an official meal, will she take note that one-third of its value will come from horticultural produce? Will she further take note of the plight of the British horticultural industry? Is she aware of the sedentary interventions of the hon.

  765
  Member for Salford, East (Mr. Allaun) during her reply to a similar question, when he kept pathetically squeaking "Holland, Holland"?
  The Prime Minister: It is a matter of some relief that I have no official meals today. I know of the splendid work done by my hon. Friend in trying to help the horticultural industry. He will be the first to accept that my right hon. Friend the Minister of Agriculture, Fisheries and Food has been very active indeed, in protecting the British horticultural industry, particularly over matters like strawberry pulp and apples.
  Mr. Alton: Will the Prime Minister take time today to consider the latest unemployment figures on Merseyside, where there is a new post-war record of 107,000 people out of work, which is 14 per cent. of the population? What advice can I give to two young constituents of mine who last week, no doubt following her advice, went to the island of Guernsey seeking employment, and were thrown off the island and told that there were no job prospects for them there?
  The Prime Minister: The hon. Gentleman asks what advice one can give. We have increased the number of opportunities available under the youth opportunities programme with the object of trying to help young people who are out of work to gain work experience. I hope that those who do not have a job will take advantage of the scheme. Alternatively, I hope that they will go to one of the skillcentres to acquire a skill. Skillcentres still do not have full occupancy. One of the ironies of the unemployment situation is that there is still a shortage of skilled people in some parts of the country.
  Mr. Waldegrave: Does my right hon. Friend accept that the 334 hon. Members who signed early-day motion 17 will have welcomed the way that the British Government voted at the International Whaling Commission? Does she agree that the failure of the meeting to take action on whaling enables the British Government to take the lead by unilaterally banning the import of whale products?
  The Prime Minister: I am grateful to my hon. Friend. It is nice to be con-
  766
  gratulated now and then. I am glad that the British Government took a lead on a commercial moratorium on catching whales. We also took a lead in prohibiting the import of sperm whale products.
  Q3. Mr. Newens Q3. Mr. Newens asked the Prime Minister if she will list her official engagements for Thusrday 24 July.
  The Prime Minister: I refer the hon. Gentleman to the reply which I gave earlier.
  Mr. Newens: Does the Prime Minister recognise that her policies are not only ruining industry throughout the country, including the more prosperous South-East, and not only in horticulture, which was referred to by the hon. Member for Maidstone (Mr. Wells), but also in furniture and many other manufacturing industries? Is she aware that in the past the growth of unemployment led to an outbreak of Fascism and other extremist creeds in other parts of the world, and that if she pursues her present policies she will produce vast social unrest for this country? Does she accept that the only way forward is for her to renounce her policies and for the country to be reoriented in a proper Socialist direction?
  The Prime Minister: The short answer is "No, Sir". The hon. Gentleman forgets that during the lifetime of the previous Labour Government some 700,000 manufacturing jobs were lost, car production fell by over 30 per cent. and steel production by over 6 million tonnes a year.
  Mr. Rhodes James: Has my right hon. Friend's attention been drawn today to the fact that the Social Democratic Alliance has announced the number of constituencies that it proposes to challenge at the next general election, and that most of its members are former leading members of the Labour Party-
  The Prime Minister: That does not surprise me. I believe that there is only one party and one policy for Britain at the moment; and that is ours.
  Mr. Ron Brown: Is it not about time that the Prime Minister came clean and admitted that her Government are a Government of double standards, because, on the one hand, basic social services are being destroyed, while, on the other,

  767
  record sums are being spent on armaments, which is money spent on killing people? Is it not time that the Government faced up to reality and resigned, so that we may have an early general election?
  The Prime Minister: No, Sir.

  BUSINESS OF THE HOUSE
  Mr. James Callaghan: May I ask the Leader of the House to state the business for next week?
  The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): The business for next week will be as follows:
  Monday 28 July—Motions on the social security orders on benefits up-rating, family income supplement, child benefit uprating, pensioners' lump sum payment, married women and widows' special provisions, and Supplementary Benefit (Resources) and (Requirement) Regulations.
  Motions relating to the Supplementary Benefit (Single Payment) Regulations, the (Aggregation) Regulations, the (Deductions and Payments to Third Parties) Regulations and the (Transitional) Regulations.
  Consideration of Lords amendments to the Employment Bill.
  Proceedings on the following four Lords consolidation measures:

  Education (Scotland) Bill

  Water (Scotland) Bill

  Solicitors (Scotland) Bill

  Criminal Appeal (Northern Ireland) Bill

  Second Reading of the Highways Bill [Lords].

  Tuesday 29 July—Debate on the Opposition motion of no confidence in Her Majesty's Government.

  Motions relating to the Notification of Accidents and Dangerous Occurrences Regulations and the Industrial Tribunals (Rules of Procedure) Regulations.
  Wednesday 30 July—Supply [28th Allotted Day]: Until about 7 o'clock, debate on a Liberal motion on the indifference of Her Majesty's Government to the plight of small businesses. Afterwards, debate on an Opposition motion on the disastrous effects of Government policies on the textiles and clothing industries.
  Motion on the Education (Assisted Places) Regulations.

  769
  Remaining stages of the Law Reform (Miscellaneous Provisions) (Scotland) Bill.
  Motion on the International Monetary Fund (Increase of Subscription) Order.
  Thursday 31 July—Supply [29th Allotted Day]: The House will be asked to pass all the outstanding Votes.
  Debate on developments in the European Communities January-December 1979 (Cmnd. 7780.)
  Friday 1 August—Debate on the prison system, and on the report of the May committee (Cmnd. 7673.)
  Monday 4 August—Proceedings on the Consolidated Fund (Appropriation) Bill.
  The House will wish to know that subject to progress of business it is hoped that the House will rise for the Summer Adjournment on Friday 8 August.
  Mr. Callaghan: If there were room for another motion of no confidence next week it would be on the handling of Government business. On any count—and this ought to appeal to Conservative Back Benchers as much as to any other hon. Members—Monday is a disgraceful day. Trying to stuff everything into one day is treating Parliament with contempt. The Leader of the House should reconsider what he is doing, quite apart from the fact that the major item of business is to rob those on social security of part of the benefit that they need and are entitled to.
  In view of the business proposed for Monday, and bearing in mind that there is also a motion of no confidence on Tuesday and a Supply day on Wednesday, will the right hon. Gentleman undertake to see that no lengthy statements will be made on those days, so that the House may proceed with its business forthwith?
  Mr. St. John-Stevas: I shall endeavour to reduce the number of statements to a minimum, but the House has a right to hear statements on major matters of Government policy. I find the right hon. Gentleman's strictures on the arrangement of business for Monday quite extraordinary. He should know that these things are done by arrangement and agreement.
  Mr. Callaghan: The Leader of the House should not attempt to deceive us. He knows that the Government put forward the business and the Opposition do not have control over it. If the right hon. Gentleman is good enough to tell us what he proposes to do and sometimes to make adjustments, that is within his power and we thank him for his courtesy when he does it. However, I still say that Monday is a grossly overloaded day and the right hon. Gentleman should not have arranged the business in that way.
  Mr. St. John-Stevas: I am grateful to the right hon. Gentleman for what I take to be a withdrawal.
  Mr. Callaghan: The Leader of the House should not say that sort of thing. Is he trying to get business through or not? He knows that far too much is being put into next week. I repeat my request. If it is wished to make statements before the House rises, the right hon. Gentleman should adjust the business accordingly. He should not expect us to have long statements, which take time, because hon. Members wish to question Ministers, and the sort of business that is proposed for Monday. The right hon. Gentleman should not allow that to happen on Monday, Tuesday or Wednesday.
  Mr. St. John-Stevas: Taking into account the desire of the House to hear statements, I shall do what I can to meet the right hon. Gentleman's wishes.
  Mr. du Cann: Will my right hon. Friend confirm his undertaking that we are to have a debate on procedure, preferably before the Summer Recess? Will he be in a position to make a statement next week on the matters that we discussed on Monday?
  Mr. St. John-Stevas: I am glad to be able to tell my right hon. Friend that we shall have a debate on procedure, as promised, before we rise. The matters concerning hon. Members that were discussed and voted on by the House this week are being considered by the Government. Complex issues are involved in relation to some of those matters, particularly pensions, and I shall be making a statement next week.
  Mr. Beith: How will the first part of Monday's business be dealt with? Will it, as it could in theory, be on nine

  771
  separate motions of one and a half hours each?
  Mr. St. John-Stevas: No. That would be inconvenient for the House. The arrangements are that there will be a general debate on the motions and that the outstanding votes will be taken at 10 o'clock.
  Several Hon. Members Several Hon. Members rose—
  Mr. Speaker: Order. I remind the House that there are statements to follow. I hope that questions will be as brief as possible.
  Mr. Forman: Can my right hon. Friend assure us that once we have got all the necessary Government business on to the statute book we shall move towards the fulfilment of our election promise to go for minimum legislation?
  Mr. St. John-Stevas: It is the aim of the Government in the next Session to have less legislation. It is no part of Conservative policy to introduce legislation for its own sake. By the time the current Session is over, three-quarters of the legislation promised in the Conservative manifesto will, subject to one or two amendments, have been fulfilled.
  Mr. Heffer: As the Leader of the House has not said when the House is to come back after the recess, will he give an assurance that if the inevitable announcement of 2 million unemployed is made during the recess the House will be recalled in order to discuss that matter?
  Mr. St. John-Stevas: I hope that that eventuality will not arise. Any recess is subject to the recall of Parliament and any hon. Member is at liberty to make representations, in given circumstances, that the House should be recalled.
  Mr. John Wells: Is my hon. Friend aware that the House is becoming steadily more bored with the conduct of the Leader of the Opposition, who, during the course of the past week, misbehaved, notably during the concluding stages of Monday's debate by thumping the Dispatch Box and failing to pay attention to the Chair, who has consistently, throughout Question Time today, made an exhibition of himself, and who again, just now, showed his fundamental ignorance of the way in which the business— [Interruption].
  Mr. Speaker: Order. What I could hear of the hon. Gentleman's remarks did not appear to have much to do with the business for next week.
  Mr. Skinner: Will the Leader of the House encourage the responsible Minister to make a statement about the military takeover in Bolivia? [Hon. Members: "Where is your tie?"] Has the right hon. Gentleman seen— [Interruption.]—
  Mr. Speaker: Order. I am protecting the hon. Gentleman. The House seems to be in an excitable mood, but we should hear the question from the hon. Member for Bolsover (Mr. Skinner).
  Mr. Skinner: Conservative Members are out of control. Will the Leader of the House encourage the responsible Minister to make a statement condemning the military takeover in Bolivia? Will he take heed of early-day motion 831 and others signed by many Opposition Members? [That this House calls upon Her Majesty's Government to condemn the military takeover in Bolivia; support the valiant actions of miners and other workers in their efforts to achieve democratic government; and strongly suggests that Her Majesty's Government act in concert with the United States and West German Govermnents in denouncing the coup, withdraw all financial aid, and do not recognise this new regime.] Will he ask Ministers to follow the example of the United States, West Germany and many other Governments who have refused to recognise the new regime? Will he ensure that any financial aid that was promised will be withdrawn?
  Mr. St. John-Stevas: On behalf of the Government I can say straight away that we strongly deplore the military intervention in Bolivia, which followed peaceful and properly conducted elections. We hope that this completely unjustified interruption of the democratic process will be short-lived. Foreign Ministers of the Nine have condemned the coup. Heads of EEC missions, including our ambassador, have put on record with the military authorities their concern about the bloodshed that has already been caused. As for the aid project, the military intervention is a new factor that has to be taken into account. I hope that the hon. Gentleman will be satisfied with that forthright statement.
  Mr. McQuarrie: Will my right hon. Friend make time available within the course of next week for a full-scale debate on the fishing industry, in view of the desperate position of that industry, both onshore and offshore, as brought to light in questions today and by the general situation throughout the country?
  Mr. St. John-Stevas: I am well aware of the importance of that matter, but I am afraid that I cannot promise a full debate before the recess.
  Mr. Fitt: Will the Leader of the House ensure the presence of the Secretary of State for Northern Ireland at the censure motion debate next Tuesday to give him an opportunity to refute the sentiments expressed during the week by the right hon. Member for Down, South (Mr. Powell)? Will he also suggest to the Secretary of State that he should make a statement at the earliest opportunity on the unlawful and unjustified killing of a young boy in the streets of Belfast last night by the RUC?
  Mr. St. John-Stevas: I shall certainly draw those matters, particularly the second, to the attention of my right hon. Friend.
  Mr. Kershaw: Has my right hon. Friend seen early-day motion 807, dealing with the position of overseas students from Hong Kong?
  [That having regard to the mutually beneficial relationship between Hong Kong and this country, this House calls on Her Majesty's Government to rectify the anomaly by which students from Hong Kong and other British dependent territories are obliged to pay full fees at British universities whilst students from the European Economic Community and French dependent territories are subsidised by the British taxpayer.]
  As nothing much seems to be happening on Monday, can the debate take place on that day?
  Mr. St. John-Stevas: I have seen the motion— [Interruption.] I have seen it only recently, but I have certainly seen it. The relationship between this country and the Crown colony of Hong Kong is a special one. The Government are glad to welcome Hong Kong students to our academic institutions. I shall look again at the business for Monday to see whether my hon. Friend's motion can be added.
  Mr. Winnick: In view of the right hon. Gentleman's remarks about Bolivia, when will the House have a debate on the lifting of the arms embargo to Chile? Is the right hon. Gentleman proud to be a member of a Government that permit arms to be sold to the gang of murderers and torturers who destroyed democracy in Chile in 1973?
  Mr. St. John-Stevas: As the hon. Gentleman knows, the Government have revised the policy of the previous Government on Chile. We have decided that the total embargo imposed by the previous Government on such sales should be lifted. That is the Government's position.
  Mr. Pawsey: Is my right hon. Friend aware that many hon. Members on the Government side of the House are awaiting anxiously the statement on civil defence? Is he able to advise the House when such a statement might be made?
  Mr. St. John-Stevas: I shall certainly draw that request to the attention of my right hon. Friend.
  Mr. Greville Janner: In view of the recent collapse of the House of Lords, will there be a statement at some time on the action that the Government propose to take on the repair, maintenance and cleaning of the Palace of Westminster?
  Mr. St. John-Stevas: We are looking into the question of the safety of the House of Commons. I have noted what happened in the other place. I can assure the hon. and learned Gentleman that I have made inquiries. I understand that no hon. Members are in danger and that we can go about our business safely, but not in the other place.
  Mr. Kenneth Lewis: Following the remarks of the hon. and learned Member for Leicester, West (Mr. Janner), may I congratulate my right hon. Friend upon the massive amount of business that has so far been transacted in this place without the roof falling in, despite what happened along the corridor?
  Mr. St. John-Stevas: I am grateful to my hon. Friend for that unsolicited and undoubtedly deserved tribute.
  Mr. van Stranbenzee: In spite of next week being a busy one, will my right

  775
  hon. Friend find time for a debate on early-day motion 830?
  [That this House notes that the honourable Member for Wokingham stated in the House on 20th December 1979 ' When I had dealings with Mr. Tony Smythe, when I was proud to serve at the Northern Ireland Office and he was in the National Council for Civil Liberties, I had no doubts whatever that all his interests lay on the side of the Irish Republican Army'; also notes that this grossly defamatory accusation has been allowed to remain on the record for seven months; and calls upon the honourable Member to withdraw these words unreservedly or repeat them outside the House.]
  This would provide the House with a chance to judge the matters referred to in the motion, not by way of selective quotation but by considering the full sequence of events that culminated, my right hon. Friend may recall, in a public apology by Mr. Tony Smythe to my constituents for the ruthless way in which he defamed them at a time when they were unable to defend themselves.
  Mr. St. John-Stevas: I have seen the motion on the Order Paper. I appreciate the strong feelings that the motion has aroused, but I am afraid that I cannot find time for a debate next week.
  Mr. Speaker: Order. I propose to allow business questions to run until four o'clock. There are two statements to follow. I hope that hon. Members realise that they will decide whether their colleagues are called.
  Mr. Straw: Is the Leader of the House aware that owing to a mass defection of Conservative peers early this week the Government have been defeated five times on amendments to the Housing Bill? Do the Government intend to accept these amendments? When will the Bill come back to the House of Commons?
  Mr. St. John-Stevas: The Housing Bill will be coming back to the House with amendments before the recess. It will then be possible for the House to decide whether to accept or reject those amendments. It is true that the Government have been defeated five times in the House of Lords. That is no bad thing, necessarily. Is shows that we are a genuine bicameral legislature. The
  776
  Government have been defeated five times in the House of Lords but only four times this week in this place.
  Mr. Bruce-Gardyne: On Thursday's business, my right hon. Friend said that the House would be invited to approve the outstanding Votes, which involve additional public expenditure of about £230 million. Are we to have an opportunity to debate those Votes before being invited to vote upon them?
  Mr. St. John-Stevas: I have great sympathy with the point made by my hon. Friend and other hon. Members. It is clear that our machinery for examining Supply is totally unsatisfactroy. This matter should be discussed in detail and in depth by the Procedure Committee. I hope that it will be raised in the procedure debate and that, as a result, we can set in hand arrangements for a thorough overhaul of this highly unsatisfactory situation. That is the only way to deal with it. This is a problem of long standing. We need a carefully considered and radical solution, and I hope that will be the first step towards it.
  Mr. Christopher Price: May we have a debate next week on the decision, just over half an hour ago, by the Dorset county council, by 55 votes to 22, with 10 Tory defections, to abolish the school meals service altogether? Is that not the result of the disastrous Education (No. 2) Bill, which was put through earlier this year? Is this not a far more important matter for an immediate Government statement than Wednesday evening's business on the assisted places scheme? Why is there such a rush about the assisted places scheme when it is not to come in until late next year anyway?
  Mr. St. John-Stevas: The school meals service in Dorset is a matter for the local education authority to decide.
  Mr. Price: It is a national matter.
  Mr. St. John-Stevas: No. Under our constitution it is a matter for the local education authority to decide. It has control over its own expenditure. Whether we applaud or condemn it, it is a matter for the local education authority.
  It is extremely important that this House should have an opportunity to debate the assisted places regulations in good time, so that arrangements can be made for the autumn term.
  Viscount Cranborne: I am grateful for my right hon. Friend's reply and equally grateful for the interest taken by the hon. Member for Lewisham, West (Mr. Price) in matters appertaining to Dorset. Will my right hon. Friend find time before the recess for the House to debate the coming Russian offensive in Afghanistan and the daily atrocities being committed by the Soviet imperialists in that country?
  Mr. St. John-Stevas: I join my hon. Friend in utterly condemning the Soviet invasion of Afghanistan and the atrocities that are being committed there. I cannot promise an early debate, but should the situation in that country deteriorate further there would be an opportunity to reconsider what I have said.
  Mr. Arthur Lewis: The Leader of the House may be aware that some time ago there was the unfortunate death of a schoolteacher from the East End of London. As we know that the police did not cause his death, that his friends did not cause his death, and that we can assume that he did not hit himself on the head, may we have a Select Committee to go into all aspects of the matter? We are interested in what is happpening in Afghanistan, but surely we must be even more interested in knowing how that man met his death.
  Mr. St. John-Stevas: That matter has been raised from time to time in the House, and the hon. Gentleman recently tabled a motion about it. However, my right hon. Friend the Home Secretary has made it plain that he is satisfied with the investigations that have been carried out and that there is no need for a further inquiry.
  Mr. Budgen: In the debate on procedure will the Government bring forward immediate and specific proposals to change the ridiculous procedure by which the Supplementary Estimates go through the House on the nod?
  Mr. St. John-Stevas: In response to an earlier question I indicated that in that debate proposals will be put forward for remedying this situation. It is for the House to decide, but we cannot remedy it immediately. We must consider the matter in great detail, and every hon. Member will have a contribution to make on it I assure my hon. Friend that it
  778
  is my intention and determination to see that the wishes of the House in this matter are respected.
  Mr. Cryer: Will the Leader of the House find time before the recess for a debate on the White Paper on telephone interception, which has not been debated in the House but is frequently used as a reference? If so, we could also debate the question of Menwith Hill, Harrogate, and the interception of international telephone signals, which is apparently being carried out with the illegal connivance of the Post Office. If that is the case, surely it merits debate in the House.
  Mr. St. John-Stevas: It may merit debate, but many subjects merit debate for which I do not have time. As the hon. Gentleman knows, because he has taken a keen interest in this subject, this matter comes directly under the responsibility of my right hon. Friend the Home Secretary and it is not normal to answer questions on it in the House.
  Mr. Kinnock Mr. Kinnock rose—
  Mr. Speaker: Order. I shall call the Front Bench spokesman at the end. I want to devote the remaining few minutes to Back Benchers.
  Mr. Robert Atkins: Will my right hon. Friend bear in mind the amendment to early-day motion 796 in favour of Trident, which nearly 200 of his right hon. and hon. Friends have signed as opposed to a mere 153 Opposition Members?
  [That this House supports Her Majesty's Government's decision to replace Polaris with the Trident weapon system, believing that Great Britain's strategic nuclear deterrent has contributed substantially to peace in Europe for the last 35 years.]
  Does he agree that there is a need for an urgent debate on the decision to purchase the Trident weapon system?
  Mr. St. John-Stevas: I agree with the amendment to the motion, which I have seen, and the views expressed by my hon. Friend. The first duty of any Government is the defence of the country against external attack. The Trident system will be a major contribution to that end. It would not be unfitting in due course to have a debate on that subject, but perhaps we could have it

  779
  when the House returns rather than before the recess.
  Mr. Spearing: Is the Leader of the House aware that his right hon. Friend the Lord Privy Seal has declined to make any statement about forthcoming business at the EEC Council of Ministers' meeting in September and October on the ground that the agenda is too tentative? Will he look into this matter and ensure that we have proper parliamentary accountability from the Government in that rather ramshackle outfit?
  Mr. St. John-Stevas: I shall certainly draw that matter to the attention of my right hon. Friend the Lord Privy Seal, but he has to judge whether, in the light of all the circumstances, a statement is necessary. He has decided in this instance that it is not. However, I shall certainly draw the matter to his attention again.
  Mr. Adley: Is my right hon. Friend aware that the remarks about Dorset schools made by the hon. Member for Lewisham, West (Mr. Price) are not shared by my constituents, half of whom live in the county of Dorset? One of the few who have been in touch with me about the decisions of the county council described the situation succinctly by saying "I can feed my children, but I cannot teach them." Will my right hon. Friend ensure that this matter is left in the hands of the county council and confirm that there is no intention of the House debating and censuring individual county councils on their decisions?
  Mr. St. John-Stevas: That puts the case admirably. I entirely agree with my hon. Friend that this matter falls within the scope of local authority discretion. The local authority decides this matter. It has been given the freedom that has long been demanded under the Education Act.
  Mr. English: Perhaps unintentionally, the Leader of the House did not say when he wished the House of Commons to return after the recess. Does he agree that if the Procedure Committee is not set up in the next couple of weeks over two months will have been lost, during which that Committee could have been taking written evidence? Will the Leader of the House table the motions for the procedure debate next week so that we
  780
  all have an adequate opportunity to consider them?
  Mr. St. John-Stevas: I shall consider the hon. Gentleman's important representation. It has yet to be decided what motions, if any, are to be put down at the end of the debate. I did not say when the House would return because a final date has not yet been decided. However, I hope that it will be as late in October as possible.
  Several Hon. Members Several Hon. Members rose—
  Mr. Speaker: Order. There are only two Back-Bench Members still seeking to catch my eye and if they are quick I shall call them.
  Mr. Ioan Evans: Given the fact that there will be a motion of no confidence next Tuesday, will the Government put forward positive proposals for dealing with the problem of unemployment? Will the Leader of the House have a word with the Prime Minister, telling her that deep offence has been caused in Wales by her remark that people should go elsewhere to find jobs?
  Mr. St. John-Stevas: I well understand the feelings of the hon. Gentleman about unemployment in Wales, but I think that the remarks of the Prime Minister have been misinterpreted by the hon. Members. The Prime Minister was making a particular point about the mobility that is necessary. I clearly understand the sensitivity of Welsh Members on this matter. There will be an opportunity to raise the issue in the debate on Tuesday.
  Mr. Dubs: Will the Leader of the House find time before the recess for a debate on housing in London? Is he aware that every London Member can confirm that there is a worsening housing crisis in London, that homelessness is increasing, that waiting lists are increasing and that there is a decline in building? We need a debate on these issues.
  Mr. St. John-Stevas: There are housing problems in all parts of the country, and there have been for many years. I do not think that we can have a special debate on London on this matter but there will, no doubt, be opportunities to raise the issues when the Housing Bill returns from the other place.
  Mr. Kinnock: Recalling the question of my hon. Friend the Member for

  781
  Lewisham, West (Mr. Price), ignoring the sycophancy evident on the Government Back Benches, and acknowledging that Dorset county council is guilty of a disastrous desertion of its responsibility to children, if that question is one for local determination will the right hon. Gentleman tell me why his right hon. Friend the Secretary of State for Education and Science sent two civil servants to Dorset to try to pull Dorset county council into line?
  Mr. St. John-Stevas: I do not think that that is the purpose of whatever emissaries have gone from Elizabeth House. It is quite clear that the constitutional position is that local authorities have a responsibility for providing school meals. They have wanted that freedom for a long time. They have now obtained it, and it is up to them and not this House to determine how they use their powers.
  Mr. Jim Spicer: On a point of order, Mr. Speaker. Without wishing to be impertinent, I have sensed during business questions your impatience at the abuse of those questions by many hon. Members. That abuse has been demonstrated this afternoon in classic fashion by the hon. Member for Lewisham, West (Mr. Price) in seeking to interfere in matters that are of no concern to the House. I speak for myself—though I believe that I have the support of many of my hon.
  782
  Friends—when I say that you would have full support if you called a halt to such interference in future.
  Mr. Speaker: The hon. Gentleman is a Member for Dorset and the House always understands that if there is a reference to an hon. Member's constituency he is bound to take a very special interest in that reference.

  CONSOLIDATED FUND (APPROPRIATION) BILL
  Mr. Speaker: I have a short statement to make.
  For the debate on Monday 4 August on the Second Reading of the Consolidated Fund (Appropriation) Bill hon. Members may hand in to my office by 9 am on Thursday 31 July their names and the topic that they wish to raise. The ballot will be carried out as on the last occasion. An hon. Member may hand in only his or her own name and one topic. The debate will cover all the main Estimates originally presented for the current financial year in House of Commons Papers Nos. 469, 470 and 471 and the Supplementary and Revised Estimates presented since then in House of Commons Papers Nos. 643, 644 and 645.
  On Second Reading it will be in order to raise any topic falling within the compass of those Estimates.
  I shall put out the result of the ballot later on 31 July.

  EUROPEAN COMMUNITY (AGRICULTURE MINISTERS' MEETING)
  The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker): With permission, Mr. Speaker, I wish to make a statement about the Council of Fisheries Ministers in Luxembourg on 21 July, at which I represented the United Kingdom, together with my right hon. Friend the Secretary of State for Scotland and my hon. Friend the Minister of State.
  I should also like to report on the Council of Agriculture Ministers meeting on 22 July at which I and my hon. Friend the Minister of State represented the United Kingdom.
  The Fisheries Council had a useful discussion of the principles for determining 1980 quota allocations between member States. The Commission had prepared a schedule of quota allocations which made it clear that these were not its proposals on quotas but were simply a schedule of quota allocations with a range of calculating methods which it had been considering.
  I questioned these methods and stressed the need for a fair distribution of catches to take into account the size of the resources found within our fisheries limits and the full extent of United Kingdom losses of fishing opportunities in third country waters. I urged the Commission to put forward proposals fully reflecting these factors and it was agreed that the council would undertake detailed discussion of quota proposals to be presented by the Commission at the October meeting of the Council.
  The Council also considered a Commission communications on access arrangements, where I made clear the Government's requirement for an adequate zone of exclusive access and for preferential arrangements beyond. These demands were supported by certain other member States.
  New proposals on structural measures were tabled at the Council but not discussed in substance, and there was a general exchange of views on the revised Commission proposals for a conservation regime. The Council agreed to a detailed examination of all outstanding problems connected with the conservation proposal at its next meeting on 29 September. A
  784
  further Council was planned for October, which will allow time for preparatory discussions to be completed on quotas, access and the structural proposals.
  At the Agriculture Council there was a short discussion upon the various programmes for structural aid. It was agreed that decisions on these proposals, including those for Northern Ireland and Scotland, would be taken at the October meeting of the Council.
  Mr. Gundelach reported to the Council on his successful negotiations with New Zealand on arrangements for the future import of New Zealand lamb into the Community. There has been total agreement between the Commission and the New Zealand Government other than on the issue of whether the existing tariff of 20 per cent. should be reduced to 10 or to 8 per cent.
  The Commission emphasised that the agreement reached was a satisfactory and fair one. Only the French Government raised major reservations. They opposed any reduction in the tariff below 15 per cent. and questioned other elements in the agreement. The British Government expressed the view that a reduction of the tariff to 8 per cent. was a reasonable request on the part of the New Zealand Government and we made clear our position that we would only support an agreement that was satisfactory to the New Zealand Government.
  We were supported vigorously both by the Commission and by many other nations in our demand that agreement should be swiftly reached and that it was essential that the sheepmeat regime came in at the earliest possible date. On the recommendation of the Commission and the Presidency, the Council agreed that all the internal and external aspects of the regime should be decided at its next meeting in September in order to permit its entry into force on 1 October 1980. The Commission expressed its confidence that it would reach the necessary agreement with third country suppliers in time for the Council to finalise arrangements at the next meeting.
  On access for New Zealand butter, Mr. Gundelach reported that New Zealand was prepared, under a gentleman's agreement, to reduce sendings to the United Kingdom by 20,000 tonnes in 1980, in return for an increase in her net

  785
  selling price to 75 per cent of the intervention price. Other members of the Council were prepared to accept this agreement, even though they thought the terms were generous to New Zealand. Since it was clear that the Council would not agree to better terms, and in the knowledge that they were acceptable to New Zealand, I agreed to them in advance of the debate tomorrow.
  Following a request that I made at the last Council meeting on the difficulties of the glasshouse sector, the Commission reported that it was initiating discussions with the Dutch Government under article 93 (1) of the Treaty on the preferential rate charged for natural gas in the Netherlands. I was supported by other countries in demanding that these talks should take place speedily and the Commission assured the Council of its recognition of the urgency of the problem.
  As a result of pressure from the United Kingdom for action against cheap offers from Poland, the Council agreed to a Commission proposal to introduce surveillance arrangements for strawberry pulp and frozen strawberries, thus equipping the Council with the ability to take quick action to deal with cheap imports which threatened the interests of our soft fruit producers.
  A discussion took place on problems connected with battery hens. The Council endorsed the Commission's intention to produce a report and proposals on this subject and agreed that the report should be discussed speedily after it had been received. The Council agreed to a suggestion made by the United Kingdom that research made on alternative methods of commercial egg production should be co-ordinated throughout the Community.
  Mr. Hardy: On a point of order, Mr. Speaker. Is it not outrageous to have a statement on fisheries and an extremely long statement on agriculture lumped together? Would it not have been better, more courteous to the House and more considerate to all hon. Members if the Minister had presented two separate statements? You are placed in an intolerable position. One hon. Member will be called to raise matters about the Antipodes and the next minute another hon. Member will be talking about the North Sea. It appears to me that there
  786
  is far too much variety for us at this time.
  Mr. Speaker: This is not the first time that we have had such a statement. It is not for me either to defend or to criticise it. We must deal with the statement that has been made.
  Mr. Mason: The House is obliged to the right hon. Member for his report. What does the blocking by the French of the new sheepmeat regime mean, first to the calculations on the farm price package, and, secondly, to the farmers who expected some financial assistance, which now appears to be delayed? It appears that the French have blocked this at least until October.
  Is the Minister intent on standing by the New Zealand Government's request for a 12 per cent. cut in the tariff on their lamb exports to the United Kingdom? That is what they want. He said that they had a veto over the sheepmeat regime, so will he continue to back them?
  On the question of butter, New Zealand's exports to the Common Market, which really means exports to the United Kingdom, will be cut by 20,000 tonnes. Although they are subject to less duty or a better price, does the Minister—as distinct from the EEC Commission-feel that the New Zealanders have got a fair deal, bearing in mind that this agreement is for one year only and that the Government have agreed to it prior to the debate tomorrow on New Zealand butter quotas?
  On the question of fish, we hope that the Minister will stand by unanimous agreement of the House on access and total allowable catch demands, and especially the fishing industry's demand for at least a 45 per cent. take of white fish species.
  Finally, is the Minister not aware that the fishing industry has been having a disastrous year? The deep sea fleet is rusting at the quayside, the inshore fleets are going on strike as a protest against subsidising cheap fish imports and the industry as a whole is in dire straits. It desperately needs help until a better deal on the common fisheries policy is forthcoming. What will the Minister do about that?
  Mr. Walker: The regulation on sheep-meat always included a clause that stated that it should come into effect at the same time as the agreement with third countries. The New Zealand negotiations have only just taken place, the Australian negotiations are taking place this week, and there are one or two other minor negotiations to come. The date of 1 October was not objected to by the French Government, therefore I believe that it is likely that the sheepmeat regime will come into being on that date.
  Prior to that, and in the interim, I have previously announced a lift in the guarantee price for the United Kingdom of 11 per cent. over last year's prices, which means that the guarantee over the last season, for which the Labour Government were responsible, is 22 per cent higher.
  On the question of support for the New Zealand Government of 8 per cent., we were alone in supporting that figure. I gather from a telegram that I received this morning that the New Zealand Prime Minister said at a press conference yesterday that 10 per cent. would be acceptable to the New Zealand Government. He was grateful to the British Government for arguing for the 8 per cent. position.
  On the question of butter, once again we were in close contact with the New Zealand Government, and the figure for the quota for the remaining part of the year is based on their sales to date this year, which have been lower than originally anticipated. Therefore, the improvement that the New Zealanders will now obtain by the lowering of the levy against them will enable them to have better sales than expected in the latter part of the year. As I made clear in my statement, New Zealand Government officials were present in Luxembourg and we were in close consultation with them throughout. It was their wish that we should agree to this arrangement.
  I come now to the question of fishing. One of the pleasing features of this meeting was that for the first time our views about access were not in a minority of eight to one. We had substantial support from a number of other countries. Of course, we adhere to the view that we have always held on that question. In terms of quotas we are in close touch with the industry and we made clear the
  788
  degree to which we wanted different proposals on quotas put forward at the next meeting. I hope that substantial improvement will take place.
  The right hon. Gentleman mentioned the condition of the fishing industry. The industry came to us for aid earlier in the year, and we gave the aid that was then requested. The Opposition supported that. At the end of June and the beginning of this month the industry came to us again, saying that the position had deteriorated still further. It agreed to present new figures to us, the last of which I received at the end of last week. The fishing industry knows that we are now urgently discussing those figures and I hope that it will judge our desire to help it in a difficult period on what we have already done this year.
  Mr. Donald Stewart: Is the Minister aware that the postponing of further discussions on fisheries until 29 September makes his previous commitment to an agreement on 1 January all the more dangerous? Will he give us an assurance that if by that time no satisfactory agreement has been made his commitment will go by the board, not the interests of our fishermen?
  Mr. Walker: I shall not allow the interests of our fishermen to go by the board. Like the right hon. Member, I consider fishing to be one of the most basic and vital industries in this country. The tone and the atmosphere of the meeting that we have just held was constructive. We discussed for the first time the major elements of access and quotas. The agreement that we should have a major meeting in October to deal with proposals from the Commission is an encouraging trend, not a discouraging one.
  Mrs. Kellett-Bowman: If my right hon. Friend is wrong in his belief that the sheepmeat regime will come into operation on 1 October, will he take immediate steps to adjust the United Kingdom guarantee price to the level promised under the common regime? Many sheep prices are so low that despite the good lamb drop it has been very difficult for sheep farmers to make an adequate living this year.
  Mr. Walker: I cannot guarantee that. I hope and believe that the regime will

  789
  come into being on 1 October, the Council having unanimously agreed to that date and France being alone in its opposition to the New Zealand agreement. I repeat that I did not know whether there would be a sheepmeat regime earlier in the year, so I announced a substantial lift in the guarantee prices. These are 11 per cent. above last year, which in turn were 10 per cent. above the year before. There has been much better lambing this year than the previous year, and by giving an 11 per cent. increase in the guarantee price we have shown our determination to support the British sheepmeat industry.
  Mr. J. Enoch Powell: Did the Minister notice the persistent reference in reports from Brussels on proceedings of the Fisheries Council to "a package deal "on the budget arrangements? In view of the Prime Minister's firm repudiation of any such linkage, will the right hon. Gentleman make it clear that those budget arrangements will come into force punctually, irrespective of whatever arrangement is made on fisheries, or whether an arrangement is made at all?
  Mr. Walker: Yes. As one who was present at the Brussels meeting, I can confirm that there was no mention of any linkage with the budget deal by any country. The Government treat it as a separate subject.
  Mr. Wall: I congratulate my right hon. Friend on once again standing up for the rights of British fishermen. Is he aware that because of the further delay in the settlement of the common fisheries policy the industry cannot survive without further and immediate Government help? Will he make a statement as soon as possible before the recess?
  Mr. Walker: I can only repeat that when the industry came to us for help for the period March to September we agreed to provide help along the lines of the terms that it suggested. I appreciate that events since then have been different from those which the industry anticipated. We asked the industry for more details. It collaborated with us and gave us more facts and details. We are giving the matter urgent consideration, and I shall make a statement at the earliest opportunity.
  Mr. Stephen Ross: Because the fishing talks are to continue, I echo the requests put forward by hon. Members that immediate financial aid should be given to the industry. I congratulate the Minister on standing firm over New Zealand exports of lamb to Europe.
  I deal next with horticulture. I think that the Minister will agree that his statement will disappoint the glasshouse growers in my constituency, who cannot continue operating much longer. It is monstrous to suggest that we must return to the Dutch for further discussions. What is the time scale? Is the Minister aware that speed is of the essence? Redundancies are already taking place because, having looked at future plantings, growers are giving up the ghost.
  Mr. Walker: I recognise the anxiety in the industry, which I share. As to the advantage held by the Dutch in the cost of energy supplies, the Commission has, in fairness, taken the only action that it can, which is to use an article in the Treaty to demand detailed information and the right of access to information so that it can ascertain the details of the problem. The Commission has guaranteed that it will do that urgently. My Danish, German and Belgian colleagues join me in saying that their glasshouse industries were suffering heavily because of unfair competition. I hope that the Commission will act quickly.
  Mr. Colin Shepherd: Further to my right hon. Friend's response to my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman), may I ask whether he is aware that his confidence that the French will not renege on their agreement will not be shared by British sheepmeat producers? What contingency plans has he in mind should the French so renege?
  Mr. Walker: I am not prepared to say that we are considering contingency planning for a regime to which the whole Community agreed in May. Every member country and the Commission, with the exception of a query from France, agreed at the last meeting. The Council agreed that the regime would come into effect on 1 October. I am sure that my hon. Friend will understand that if I said that we were considering a contingency programme it would indicate

  791
  that we thought it reasonable for a Government to take an action that would affect sheep producers throughout the Community—certainly Holland, Germany and elsewhere—while that Government continued to pursue illegal actions.
  Mr. James Johnson: Will the Minister confirm that during the negotiations Britain was offered about 31 per cent. in demersal stocks and 38 per cent. in pelagic stocks? Even if the French behave like gentlemen, which is dubious, does the right hon. Gentleman think that he will receive better offers in his October negotiations? The British fishing industry is almost on its last legs. It asked him for £35 million for the next six months to continue operating. Will he light like a tiger shark inside the Cabinet to obtain that money? He has all-party support for that aim, as well as all-party support against people on the Continent.
  Mr. Walker: I expect, and will argue for, better quotas. The hon. Gentleman has considerable knowledge of fishing. He knows that broad figures covering the totality of the stock give a false impression, because certain stocks are more vulnerable than others. Certain stocks of fish have greater priority for the British fishing industry. We are close to the industry on the question of priorities for improvement of our quotas, and we shall work on that basis. I repeat that the Government responded generously to the first request this year for aid. The second request for aid has only recently been put forward in its completed form, and we are examining it urgently.
  Mr. Speaker: I appeal to the House for short questions and answers because there is another statement to follow and I wish to call as many hon. Members as I can.
  Mr. Peter Mills: Will my right hon. Friend take note that there will be real anger and loss of confidence in the sheep world because of the latest trick by the French Government to delay the exports of our produce to France? Will he bear in mind that the autumn sales will be affected? With great respect to him and to the other Council Ministers, something must be done before 1 October. Why cannot they return to the conference table and take action before that date to save the industry?
  Mr. Walker: The date has always depended upon the dates on which negotiations with third countries are completed, which is in the hands of the Commission. Although we can cope with the administrative problems of an earlier date, other countries cannot. If the regime is introduced on 1 October, it will affect prices advantageously both before and after that date. Because of the uncertainty whether the regime would be completed, would be introduced at all, or would even be negotiated at all, I have announced substantial increases in the guarantee prices which are 22 per cent. above their level two years ago.
  Mr. Robert Hughes: Will the Minister admit that there was no progress towards reaching an agreement at the last Fisheries Council meeting? Is he aware that the fishing industry—especially the small ports, which have borne the long-drawn-out negotiations with Considerable dignity and considerable trust in both Governments—is at its wit's end? The action taking place in the North-East of Scotland and elsewhere this week is a measure of the despair and hysteria in the industry. The only way in which the right hon. Gentleman can give some confidence to the industry is to announce next week—not later, because the industry cannot wait—that there will be immediate short-term aid for the industry.
  Mr. Walker: I disagree with the hon. Gentleman's first point. Important progress was made at the meeting. I do not wish to make a party point, but until a year ago the position was that eight countries had agreed to a fishing policy that was unsatisfactory for Britain. It was important to shift them away from that agreement and to look more objectively at our position. The Council meeting showed that that had been achieved. I hope that the October meeting, which will be crucial, will make important progress for the fishing industry.
  The Scottish fishermen recently sailed back into port, and I understand their disappointment over the prices of fish this week. I am pleased that the Scottish Fishermen's Federation has advised the fleet to return to sea. Because of the way in which we considered the industry's first application for aid, it knows that we will genuinely consider its current problems.
  Sir Walter Clegg: Is my right hon. Friend aware that in Fleetwood two more medium trawlers have tied up, which makes the best part of our medium trawler fleet tied up and out of action? Unless help is forthcoming quickly there will be no fleet by the time my right hon. Friend reaches the negotiations.
  Mr. Walker: I understand the problem and also the effect that price of fish in Britain, combined with increased costs, have had on the fishing industry during the year. My hon. Friend knows that we met the fishermen from Fleetwood, as we met fishermen from other ports. The package that we announced in March was designed to meet their application for aid from March to September. I know that the position has deteriorated since then, and I assure my hon. Friend that we are giving urgent attention to the facts and figures that have been given to us.
  Mr. Jay: Is the Minister aware that the Norwegian fishing industry is benefiting greatly from a 200-mile exclusive fishing zone?
  Mr. Walker: I am not the spokesman for the Norwegian fishing industry. I have not studied how well or how badly it is doing.
  Mr. Sproat: Was the question of cheap foreign imports of fish discussed at the meeting? Will my right hon. Friend continue to make it clear to our EEC partners that however much the fish quota percentages may be juggled, whether globally or by species, there is no way in which we can accept less than 40 per cent., when we put in more than 60 per cent.?
  Mr. Walker: My hon. Friend used the word "juggle" with regard to the percentage of quotas. In fact, to have a 40 per cent. quota which consisted of a whole range of fish which were used primarily for making fertilisers and so on would not be particularly attractive. The important thing—which is what we are doing with the industry—is to discuss not an overall percentage aim but, rather, stock by stock, what is required for the industry. We shall obviously endeavour to obtain the best quotas possible. As to imports, I think that my hon. Friend knows that as a result of the representations of the United Kingdom Government the tariff against third country imports
  794
  into the Community have been increased to the maximum allowed by the GATT.
  Mr. Austin Mitchell: Will the right hon. Gentleman accept the industry's case for £70 million worth of aid a year and for a limitation on imports, which it requires if it is to survive in order to inherit the settlement? Secondly, as part of that settlement, will he bear in mind the need for an increase in mesh sizes, harmonisation of aids and subsidies throughout the Common Market and a limitation on, and registration of, foreign effort in British preferential waters if we are to have any control at all, because the quotas are a particularly useless form of policing effort in those waters?
  Mr. Walker: Whatever regime is introduced, it is important that a proper system of control should be in force throughout the Community. As to the application for £35 million worth of aid for a half year, I can only state what I have constantly repeated to the House—that we are examining the detail of that application. Until we have done so, and until we have decided how we shall help, I cannot make an announcement. As to the harmonisation of aid, we are at present giving a total of £24 million to the fishing industry which is a higher volume of aid than in some other Community countries. If we added a further £70 million on top of that, which the hon. Gentleman is advocating, harmonisation would do considerable damage to the British fishing position.
  Miss Fookes: Will my right hon. Friend take on board my warm welcome for his references to the welfare of battery hens? Can he give any details of the research that will be undertaken into alternative and more humane methods of egg production?
  Mr. Walker: We have decided to increase the research programme that we are carrying out at one of the Ministry's husbandry farms. The German Government are just completing a research programme. One of the results of the Council meeting was the agreement that the Commission should co-ordinate research throughout the Community to see what progress could be made.
  Mr. Hugh D. Brown: I recognise that progress has been made on sheep, but, as a market man himself, if the right hon.

  795
  Gentleman were buying lambs in the first sales in Scotland in two weeks' time, would he be prepared to offer reasonably high prices?
  Mr. Walker: Yes.
  Mr. Pollock: Does my right hon. Friend accept that during the current crisis in the industry, and pending settlement of a common fisheries policy, it is vital for the industry, Parliament and the Government to present a united front in order to be an effective negotiating force in Europe? To indicate the Government's good faith to the industry, will my right hon. Friend heed the urgings from both sides of the House for an early response to the request for aid?
  Mr. Walker: Yes.
  Mr. Dalyell: This is more than just a question of ethyl alcohol. It concerns the dire plight of the Scottish glasshouse industry, where growers, such as Peter Easton, have made complaints for the first time in their lives. Are not the Dutch Government at the Hague the most efficient Government in the world? Is it not preposterous that they cannot let their colleagues know exactly what is going on in relation to preferential natural gas prices? Of course they know. Are they not openly flouting Common Market rules—the very people who lecture us all on how to keep the rules?
  Mr. Walker: They argue that they are not selling subsidised fuel, but that they are merely providing fuel at a commercial rate to their glasshouse industry. They are using the advantage of having cheap energy for that purpose. So far as I know, there is no form of subsidy on that gas. They are just not charging the equivalent oil price. I think that it is true to say that there is no direct subsidy, but, unlike all the other countries in the Community, they are not charging the oil equivalent price for their energy. It is the demand that they bring it up to the oil equivalent price that is the important factor. The Commission has used its powers under the Treaty to obtain the information. I recognise that unlss urgent action is taken, real harm will be done to our glasshouse industry in Scotland and elsewhere.
  Several Hon. Members Several Hon. Members rose—
  Mr. Speaker: Order. I appeal to the House. I shall not be able to call other hon. Members if questions and answers are too long. I was hoping to call all those hon. Members who have risen, because I know that most of them have a constituency interest, and I always try to call them in those circumstances.
  Mr. Peter Fraser: I recognise the success that my right hon. Friend has announced in his stattement relating to the import of strawberry pulp from non-EEC countries, but does he recognise that a similar crisis is looming in relation to raspberries and the import of pulp from the same countries? Will he initiate the same sort of action within the EEC as he did with regard to strawberries?
  Mr. Walker: Yes.
  Mr. Spearing: Will the arrangement for New Zealand butter solve the problems which the right hon. Gentleman outlined in a written answer to me? As we are debating New Zealand butter tomorrow, why did the Minister not agree ad referendum?
  Mr. Walker: I think that the hon. Gentleman will share my view that what we did earlier this week was in the interests of the New Zealand Government. As quite a lot of hostility was expressed to the generosity of the terms, and as I had available to me terms which the New Zealand Government representative considered that I should accept, I think that, on reflection, the hon. Gentleman will agree that it would have been wrong had I left the position uncertain until a later time when other countries could come back and object. I did what I did in the interests of the New Zealand Government. This year's settlement is one which the New Zealand Government consider favourable to their position. However, the point raised in my written reply is of much greater importance with regard to the allocation of New Zealand butter in 1981 and onwards.
  Mr. Myles: In view of what my hon. Friend the Member for Moray and Nairn (Mr. Pollock) said about Ministers and the industry working together, will my right hon. Friend advise the industry that it should pay attention to its elected leaders and pay no attention to din-raisers, such as Jim Sillars, who are trying to stir up trouble in the industry?
  Mr. Walker: I know that the leaders of the Scottish fishing industry have been extremely diligent in advocating what they consider to be necessary for the Scottish fishermen. In their many talks with the Government, both in Brussels and in London, no group of men could have done more to put the case for the industry. Having heard their fierce and tough representations, I believe that they are generally trying to represent the industry. I very much hope that the industry will take their advice to go back to sea this weekend, because the action that will otherwise be taken will be of no help to them or their case, which is not a case against the Government but one in respect of which the Government share their feelings.
  Mr. John Home Robertson: Will the right hon. Gentleman undertake to monitor prices at store sheep sales during September? If evidence emerges that hill farmers are not getting their fair share of the returns from the coming European sheepmeat regime, will he be prepared to make national funds available to assist them during the winter?
  Mr. Walker: As the hon. Gentleman knows, we review the hill farm subsidies on the basis of what has happened during the past year. As to the comparison with last year, I think that the hon. Gentleman knows that during the main period of sales the guarantee operated throughout last year. If that is the case this year, the guarantee will be 11 per cent. higher.
  Mr. John MacKay: Does my right hon. Friend realise that if he comes to Oban as a buyer, I and my hill farmers reckon that he will be the only confident buyer there? We do not place very much store on the French promise of a settlement on 1 October. Will my right hon. Friend seriously consider the request by some of my hon. Friends for an interim United Kingdom arrangement to tide us over until that agreement? If that agreement occurs on 1 October, the interim agreement will operate for a very short time, but it will at least give confidence.
  Mr. Walker: Prior to this situation we decided to lift the guarantee by 11 per cent. against last year, which in turn had been raised by 10 per cent. above the year before. The guaranteed price is 22 per cent. above what it was two
  798
  years ago. That was prior to any possible addition of benefit that the sheepmeat regime would give. In this period we have had one of the record lambing seasons of all time. There are plenty of lambs about. The increased guarantee will, I hope, help the industry considerably.
  Mr. Maclennan: Does the Minister realise that the action taken this week by the Scottish fishermen was a distress signal and a warning that he cannot rely on the patience of the industry indefinitely? When will he make an announcement about the aid for which the Government have been asked? Will it be before the House rises for the Summer Recess?
  Mr. Walker: In terms of the patience of the industry, I can only say that when it came to us originally the industry duly recorded that we acted speedily and effectively. We are acting speedily on its application, the figures of which we received only at the end of last week.
  Viscount Cranborne: Will my right hon. Friend give an assurance that he will continue to protect the interests of the inshore fishing industry, which employs many people in my constituency, and that, in particular, he will protect the position of the sea fisheries districts?
  Mr. Walker: To the inshore fishermen, the most important point is the exclusive zone. I was much encouraged by the much more generous attitude towards that than there had ever been before. Certainly we shall do that.
  Mr. Hardy: Is it not clear that the determined and increasing national support for various agricultural and horticultural activities means that over the next three or four years we shall produce a smaller share of the food that we need from our own resources? Can we expect a more vigorous response from the British Government? When will the Council of Ministers seriously consider the developing cereal surplus, which has important implications?
  Mr. Walker: As to food production, we have had two record cereal crops. Our sugar beet quota is at a high level. Our sheep production is likely to be stimulated. I hope that in the coming years we shall produce more food from

  799
  our own resources. The cereal surplus is variable in relation to world demand. I should prefer to have a surplus of cereals, which could be used and disposed of, to a surplus of many other products, such as dairy products, which we have at present.
  Mr. Body: What advice can my right hon. Friend give to glasshouse growers in my constituency and elsewhere who have already made their employees redundant, and who will be out of business before October?
  Mr. Walker: I hope that the Commission will act quickly now that it has taken powers under the Treaty
  Mr. Wm. Ross: Was there any discussion on structural aids for Scotland and Northern Ireland? Can the Minister indicate what structure he is aiming at for the pig and poultry industries in Northern Ireland? Will he indicate the size that he wishes those industries to be in future? Did he seek clearance for any national aids on the ground that this is a depressed area?
  Mr. Walker: The hon. Gentleman will understand that to answer those questions will result in a long statement of detail. If I may, I shall write to the hon. Gentleman giving him the detail of what has happened so far and the various alternatives that are available to us.
  Mr. Nicholas Baker: Will my right hon. Friend deploy his usual energy to per-
  800
  suade the EEC Commission to do what it said it should do and restore the balance in the Community egg production industry, as the United Kingdom egg production industry is in a state of decline?
  Mr. Walker: Yes, I recognise the problem. It is one that is shared by a number of European countries at present. The problem is being examined by the Commision in relation to third-country imports.
  Mr. Strang: Does the Minister under-sand that the fishing industry is on the verge of collapse? Is he aware that the desperate decision by the fishermen of North-East Scotland collectively to cease fishing is escalating to other ports, and that the hardship of such action will extend wel beyond the men who go to sea? Does he recognise that unless the Government announce further temporary aid of at least £35 million before the recess, the industry will not survive on a sufficient scale to take advantage of any deal that he negotiates in Brussels?
  Mr. Walker: It is extraordinary that the hon. Gentleman should talk about the extension of the action of the fishermen of North-East Scotland when only yesterday their leaders urged them to go back to sea. Therefore, I hope that the hon. Gentleman will support the leaders of that industry in the advice that they gave to it. The last time that there was an application for aid we considered it objectively and acted quickly. Certainly we are considering this application just as objectively.

  NEW HEBRIDES
  The Minister of State, Foreign and Commonwealth Office (Mr. Peter Blaker): With your permision, Mr. Speaker, I shall make a statement about the New Hebrides.
  As the House is aware, it has always been the objective of Britain and France to ensure that the New Hebrides condominium should acieve independence in peace and unity.
  When I met my French colleague in Paris on Saturday 19 July, we agreed that independence should take place as planned on 30 July. We also recognised with regret that our efforts to achieve a negotiated solution to the problems that have resulted from the activities of Mr. Jimmy Stevens and his associates on the island of Santo had not so far been successful.
  We therefore agreed that while our two personal representatives should return to the New Hebrides to continue their efforts to establish a real dialogue between the Government and the various opposition groups we could not allow the secessionists to continue blatantly to flout the authority of the legitimate Government on the island of Santo.
  As a consequence of this decision, during the course of this morning, local time, British and French troops, acting together, carried out an operation to restore the authority of the legitimate Government on the island of Santo, thus putting an end to the eight-week rebellion. The operation appears so far to have been a complete success. There have been no casualties, and no shots were fired. I should like to congratulate the British and French troops on the efficiency with which this successful operation has been carried out.
  The way is now open for the central Government's representative to return to Santo and for the blockade to be lifted. A fresh attempt will now be made to reopen a dialogue to try to resolve outstanding difficulties before independence on 30 July. In this way we and the French Government have sought to fulfil our obligation to bring the New Hebrides to independence in peace and unity.
  Mrs. Dunwoody: The House will be impressed by the efficiency and speed
  802
  with which this operation was carried out. However, the Minister seems not to have kept us quite as well informed as some other parts of the Establishment. For example, is it true that the French commissioner went in ahead of the troops and cleared the way? If so, where is Mr. Jimmy Stevens? How many of the secessionists are likely to be charged, and are at present in custody? How long are British troops to remain on the island? Above all, how much aid will be available to the New Hebrides Government after the country becomes independent? It is all very well for the member States which have so far held responsibility to say "We shall hand over to you in peace and unity" but it is no use if they are not prepared to put up a positive aid programme, backed not just by one member of the condominium but by both, and by a sufficient amount of money and a sufficient guarantee of territorial integrity to allow the independent Government to continue.
  Mr. Blaker: I really must say that I find the carping tone of the hon. Lady absolutely astonishing. It is entirely in line with the hectoring manner that she has adopted all the way through this episode. She should have gone along the corridor and talked to her right hon. and noble Friend Lord Goronwy-Roberts, who speaks for her party in the other place, who knows the New Hebrides, in contrast to the hon. Lady, and who has consistently supported the Government.
  It is true that the French resident commissioner was sent to Santo 12 hours or so in advance of the arrival of the troops to inform the French settlers there of what was intended, so as to reduce the number of casualties. That was a successful operation. It was the right thing to do.
  I do not know where Mr. Stevens is. There are conflicting reports. According to my information, his whereabouts are not known, although I have seen it reported in the newspapers that he was at the airport. I very much hope that Mr. Stevens will now be prepared to co-operate in negotiations with the New Hebrides Government. I do not think that this is a matter for levity. There has been a successful operation. The problems of the New Hebrides are serious for the people of the New Hebrides, even

  803
  if the Opposition do not regard them in that way.
  I understand that it is not intended to charge the rebels but to negotiate with them so as to reach an agreed solution to the outstanding problems. In my opinion, that would be very much in the interests of the people of the New Hebrides.
  We do not intend that our troops should stay for long. If the New Hebrides Government should wish them to stay after independence day, next Wednesday, we shall be prepared to consider that request.
  We have made an offer of aid to Father Lini's Government. I shall not give the House the details at the moment because the matter is still under discussion, but, given our resources, I regard the offer as generous.
  Mrs. Dunwoody: The Minister has not answered the question. We have heard a lot about his ego; we have not heard much information. I asked him specifically what was the French Government's attitude towards aid. Is it their intention to agree to an aid package? If so, why is that not clear?
  We all congratulate the French Government, who seem to have handled their end of the arrangements very well.
  Mr. Blaker: I am struck by the fact that the hon. Lady should now congratulate the French. That is rather a change from the attitude that she displayed on previous occasions. It is not for me to answer for the French Government concerning their aid offer, but I understand that they intend to make an offer and have already had preliminary discussions with the New Hebrides Government.
  Several Hon. Members Several Hon. Members rose—
  Mr. Speaker: Order. I propose to call those hon. Members who rose immediately after the statement.
  Mr. Paul Dean: In contrast to the sour attitude of the hon. Member for Crewe (Mrs. Dunwoody), may I ask my hon. Friend to accept congratulations on the quiet and patient manner in which he has conducted very difficult negotiations, in the highest traditions of British diplomacy? Will he also convey the congratulations of the whole House—
  804
  with the exception of the hon. Lady—to our diplomats on the ground, to the Armed Forces, and to all others who have been involved in a very difficult period?
  Is my hon. Friend able to give any further indication to the House about the topics that remain for negotiation and the prospects of reaching agreement on them before independence?
  Mr. Blaker: I am grateful to my hon. Friend. It has been a difficult diplomatic negotiation, because five different parties have been involved. I shall transmit his congratulations to the diplomatic people and to the troops who have been concerned.
  I take some encouragement from the fact that in spite of the defence cuts made by the previous Labour Government our troops are still able to conduct an efficient military operation 12,000 miles from home.
  There are still three or four topics remaining for negotiation. The main one is the devolution of power to the regional assemblies. Father Lini has made a generous offer on that subject. We now wait to see whether Mr. Stevens is willing to respond in the same spirit.
  Mr. Ogden: Will the hon. Gentleman please try to find out where Mr. Jimmy Stevens is? There is usually enough trouble when his whereabouts are known. He is not a character who can be easily missed.
  We should like to be able to congratulate the hon. Gentleman on the success that he undoubtedly had in getting Anglo-French co-operation moving again. Does he agree that the critical attention that he has had from this House and from other Commonwealth Governments helped rather than hindered him in his negotiations with the French? Is he aware that there is some doubt about the price that the new Government of the New Hebrides may have been persuaded—or may yet be persuaded—to pay for Anglo-French co-operation?
  Mr. Blaker: We shall hope to learn soon where Mr. Stevens is. It is very much up to him to come forward, and we hope that he will be prepared to negotiate.
  I do not think that the criticisms made in the House have been helpful. The tone adopted by the hon. Member for Crewe

  805
  (Mrs. Dunwoody) has fallen below the level that we would have expected in a matter concerning Britain's national interests.
  As to the price—as the hon. Member for Liverpool, West Derby (Mr. Ogden) described it—that the New Hebrides Government are being asked to pay, I emphasise that they are not being asked to change the constitution. Both the French and British Governments have made it clear that they uphold the duly elected Government and constitution. No change is intended in the constitution. Father Lini has put forward some suggestions that I regard as generous, and I hope that Mr. Stevens will now respond.
  Sir Anthony Meyer: Is my hon. Friend aware that this very successful outcome is due in no way to the captious and irresponsible attitude of the Opposition, in particular of the hon. Member for Crewe (Mrs. Dunwoody), but to his own persistence and quiet determination, and that he is to be congratulated on having removed this irritant to Anglo-French relations?
  Will my hon. Friend give an assurance—in view of the evident wish of the Opposition to continue to foment trouble—that the declared intention of the New Hebrides Government to join the Commonwealth will not prevent them from having a special relationship with France, should they so wish?
  Mr. Blaker: I am grateful to my hon. Friend for his remarks. I am sure that it was right to seek the maximum Anglo-French co-operation, if only in the interests of the people of the New Hebrides, many of whom speak French and many of whom are descended from French people. There is always the question of future co-operation between France and Britain in the granting of aid, and that is important.
  The Parliament of the New Hebrides has already passed a resolution indicating the wish of the New Hebrides to join the Commonwealth, and I have no doubt that Commonwealth countries will be very glad to receive the New Hebrides immediately after independence. The New Hebrides is in the unusual position of being able to join the French-speaking Association, and I expect it also to apply to join that body.
  Mr. Roper: Will the hon. Gentleman make sure that the House is given further information on the developing position in the next few days? While Jimmy Stevens is still roaming, the trouble has not yet necessarily ended.
  Will the hon. Gentleman also take to the people, the Parliament and the Government of the New Hebrides the good wishes of, I believe, all parts of the House on their independence next week? Will he also pass on those congratulations to the Royal Marines and the Royal Air Force on the part that they have played in ensuring that that independence is as successful as it will be?
  Finally, will the hon. Gentleman put informal pressure on his French colleague to make sure that the very important offer of French educational aid is sorted out before independence next week?
  Mr. Blaker: I have no doubt that the French Government will be prepared to come forward soon with the aid offer that the hon. Gentleman has rightly described as generous.
  I shall transmit to my right hon. Friend the Secretary of State the hon. Gentleman's request that the House be given further information. I shall be leaving on Saturday for the independence celebrations.
  I do not think that we should get too excited about the whereabouts of Mr Stevens. Independence will be going ahead on Wednesday regardless of what Mr. Stevens does, and that is a reassurance for the people of the New Hebrides.
  I shall gladly pass on the hon. Gentleman's congratulations to the armed forces.
  Mr. Christopher Price: Is the hon. Gentleman aware that some of us believe that he and the other members of the Government concerned deserve credit for creating one of the very few genuine Anglo-French actions in the New Hebrides to have taken place over the years, and in succeeding, so far, reasonably well without shots being fired?
  Is the hon. Gentleman further aware that four or five days is a very short period in which to enter into discussions and get agreement on the issues which created the present position? Does he believe that co-existence is possible between the present Administration in the

  807
  New Hebrides and Jimmy Stevens? Finally, will he comment on discussions with the Papua New Guinea Government concerning an arrangement under which PNG troops might be brought in to stabilise a situation?
  Mr. Blaker: I am glad that the hon. Gentleman welcomes this example of Anglo-French co-operation in the New Hebrides. As I said before, a condominium is not the easiest system to run. I am sorry that a representative of the Liberal Party is not in the Chamber, as it was the Liberal Party in 1914 that set up the present arrangements. If it were starting again, it might think of proceeding in some other way.
  I agree that it is not long between now and independence. However, in my view it is possible for an agreement to be reached if the will is present on the part of Jimmy Stevens. The issues remaining to be settled have been fully discussed and they are well known to the parties. If the will is there, an agreement can be reached in not five days but two.
  I have read reports on the willingness of Papua New Guinea to provide assistance to the Government of the New Hebrides after independence. It is up to that Government after independence to decide what help they wish to call on, if any, from their neighbours. We hope that it will be possible to resolve the problem before that time and that such assistance will not be necessary.
  Mr. Dalyell: Will the Minister accept that our ribaldry of 10 minutes ago was not because we do not regard the situation in the New Hebrides as serious? Some of us have tabled private notice questions and done heaven knows what else on this subject. Is it really suggested that Jimmy Stevens might be in the airport? The airport is not exactly Heathrow. It would not be difficult to find him if he were there.
  Some of us think it a matter of importance that soon after Wednesday the troops should be brought home. They might become entangled in the New Hebrides and their stay might be many months or even years if they do not come out quickly and cleanly. Once troops remain in such a place it becomes increasingly difficult to get them out.
  Mr. Blaker: I recognise that the hon. Gentleman has consistently been con-
  808
  cerned about the possible use of troops. When we last discussed the matter he was concerned that their use in landing on Santo might lead to casualties. Fortunately, that turned out to be an unnecessary fear. I understand what the hon. Gentleman is saying about the possibility of our troops remaining for a long time if they remain after independence at the request of the New Hebrides Government. That is not our intention. However, we are prepared, if requested, to keep the troops there for a short time in the interests of a settlement and in the interests of helping the New Hebrides Government.

  MR. TONY SMYTHE
  Mr. Ennals: On a point of order, Mr. Speaker. I am sorry to raise a point of order after we have had the Business Statement and two other statements. Speaking in the House on 20 December 1979, the hon. Member for Wokingham (Mr. van Straubenzee) said:
  "When I had dealings with Mr. Tony Smythe, when I was proud to serve at the Northern Ireland Office and he was in the National Council for Civil Liberties, I had no doubt whatever that all his interests lay on the side of the Irish Republican Army."— [Official Report, 20 December 1979; Vol. 976, c. 1055-56.]
  That statement was grossly defamatory at the time that it was made. In spite of exchanges in the House, this statement, so damaging to the personal reputation of Mr. Smythe, has never been withdrawn by the hon. Gentleman, nor has he responded to repeated challenges to repeat the statement outside the House.
  I am raising this point of order on behalf of Mr. Smythe, who is unable to defend himself because the allegations were made under the protection of parliamentary privilege. Mr. Smythe's Member of Parliament, the hon. Member for Hornsey (Mr. Rossi), is the Minister of State, Northern Ireland Office. The hon. Gentleman specifically and in writing has authorised me to raise this issue on be-half of his constituent.
  It is not my intention to raise any of the other accusations made against Mr. Smythe and the organisation of which he is the director. I am concerned only to obtain justice and to protect the rights and clear the reputation of a man who has made a considerable contribution to

  809
  human rights and liberties in Britain. I am not seeking to challenge the principle of the privilege of hon. Members.
  Statements impugning the honour and integrity of an individual that have been proved by the evidence to be patently untrue are an infringement of hon. Members' vital privilege. I would no more than you, Mr. Speaker, in your ruling of 23 June, seek to take away the privilege of hon. Members. You rightly ruled, Mr. Speaker:
  "Every hon. Member must take full… responsibility for any statement that he makes in this House."— [Official Report, 23 June 1980; Vol. 987, c. 28.]
  As every right hon. and hon. Member argued on 23 June, the privileges that we hold will be brought into disrepute if damaging and defamatory allegations are made against individuals that are disproved by those in a position to know and are subsequently not withdrawn openly and publicly in the House. None of us needs to be reminded of a recent example in which one of our colleagues acted in precisely that way to clear the name of an individual against whom he had made an allegation.
  My purpose in raising this point of order is to ask whether the hon. Member for Wokingham, who knew, as you did, Mr. Speaker, that I proposed to raise this point of order, has sought from you an opportunity to make a personal statement of withdrawal to end this long drawn-out and unsavoury issue which has done and is doing damage to not only the individual abused but to the integrity of the House and the privileges that we claim for ourselves.
  Mr. Speaker: I listened with care to the right hon. Member for Norwich, North (Mr. Ennals), as I did recently when a similar application was made to me. I have received no request from anyone to make a statement, but the House will know that the hon. Member for Wokingham (Mr. van Straubenzee) asked this afternoon during business questions that the matter be debated next week. I have received no statement.

  FISHING INDUSTRY
  Mr. Maclennan: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
  "The continuing deep depression of quay prices for fish, the hardship created for the industry by the Government's failure to respond to its predicament and the urgent need for substantial financial assistance if the industry is to survive."
  This afternoon we had a statement that has covered some of the matters that should be the subject of urgent debate in the House. It is in the light of the statement that I think it right to put submissions to you, Mr. Speaker, for your consideration. In the normal course of events, I should have chosen to give you greater notice of my intention to raise this issue under Standing Order No. 9. As the issue arose from the statement, you will appreciate, Mr. Speaker, that it was not possible for me to give you prior notice of my intention.
  That the matter is specific I have doubt that you will agree, Mr. Speaker, in the light of the exchanges that have taken place. The industry's predicament has been drawn sharply to the attention of everyone by the action of many members of the Scottish fishing fleet in not sailing this week. That it is of major importance was stressed by almost every hon. Member who spoke on the statement this afternoon. The only real issue is whether it should have the urgent consideration of the House under Standing Order No. 9 procedures.
  This is precisely the sort of issue where that procedure is appropriate. During the statement on the business for next week and on the business for the remainder of the Session, the Leader of the House indicated in a clear answer that there would be no time for a further debate on the fishing industry before Parliament rises for the Summer Recess. Equally, he indicated that the House would probably not reconvene much before the end of October. As there will be a long lapse of time, and as the industry's predicament requires urgent attention, it would seem appropriate to consider such matters at greater length than was possible this afternoon, even in the

  811
  lengthy exchange of questions and answers.
  In observation of your strictures, Mr. Speaker, that questions and answers should be brief, it was impossible to do more than headline the industry's predicament during that exchange. It was also impossible to draw attention to the problems of particular sections of the industry. For example, there was no mention in the Minister's speech of the problems of the shellfish industry. I cannot now deploy the arguments that would be deployed in the course of a full debate. However, it is clear that the Minister did not give an undertaking, and he specifically refused to say whether he would offer any financial assistance to the industry. He took refuge by pointing to the fact that £3 million of aid had been given to the industry in the spring. However, the industry understood that that money was an interim offer of assistance. It understood that the Government would come forward with substantial assistance in July.
  The president of the Scottish Fishermen's Federation, Mr. Gilbert Buchan, has made clear that he expected Government action in July, and not mere consideration of the issue. That being so, the Minister owes the House a full statement, indicating the Government's response, before the House rises. Hon. Members should be entitled to deploy the case on behalf of a suffering and important section of our industry.
  Mr. Speaker: The hon. Member for Caithness and Sutherland (Mr. Maclennan) asks leave to move the Adjournment of the House under Stand-
  812
  ing Order No. 9, for the purpose of discussing a specific and important matter that arises from a statement that was made this afternoon, and that he believes should have urgent consideration, namely,
  "The continuing deep depression of quay prices for fish, the hardship created for the industry by the Government's failure to respond to its predicament and the urgent need for substantial financial assistance if the industry is to survive."
  I listened with great care to the exchanges this afternoon, and especially to the arguments that the hon. Gentleman advanced. I bore in mind that we are approaching the end of the time available for debate. As the House knows, under Standing Order No. 9 I am directed to take account of the several factors set out in the Order but to give no reason for my decision.
  I listened with anxious care to what the hon. Gentleman said, but I must rule that the hon. Gentleman's submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

  STATUTORY INSTRUMENTS, &c.
  Mr. Speaker: By leave of the House, I propose to put together the two motions on the Order Paper.
  Ordered,
  That the Anti-Competitive Practices (Exclusions) Order 1980 (S.I., 1980, No. 979) be referred to a Standing Committee on Statutory Instruments, &c.
  That the Local Authorities (Relaxation of Controls) (Scotland) Order 1980 be referred to a Standing Committee on Statutory Instruments, &c.— [Mr. MacGregor.]

  COAL INDUSTRY BILL
  As amended (in the Standing Committee), considered.
  Mr. Speaker: No amendments have been selected for consideration.
  Order for Third Reading read.
  5.14 pm
  The Secretary of State for Energy (Mr. David Howell): I beg to move, That the Bill be now read the Third time.
  Mr. Speaker: I have selected the amendment in the name of the Leader of the Opposition.
  Mr. Howell: I do not wish to detain the House by repeating in detail the points that were covered on Second Reading. It might be more helpful if I concentrate on those issues that have received particular attention since then and have given rise to concern, and in some cases, misunderstandings.
  The House will be aware—this was raised in Committee—that an economic summit was held in Venice towards the end of June. I had the privilege of attending that meeting. Among other things, it was concerned with energy, and energy strategies for the OECD countries. At the end of the meeting a declaration was issued which rightly attracted a great deal of attention. Those who are concerned about the coal industry, which includes most of those in this House and most members of the Committee, were particularly worried about what the summit had to say about coal. The United States of America, Canada, Japan, France, the Federal Republic of Germany, Italy and Britain attended the summit, and in a communique they committed themselves together to a doubling of coal production and use during the next 10 years. The important word is "together", and that means adding up all the countries at the summit. Obviously, the circumstances of each country differ enormously.
  As hon. Members will know, the United States of America has vast reserves of coal, much of which is easily accessible by opencast methods. It is one of the world's largest coal producers, yet it does not use coal to anything like the
  814
  extent that we do. Less than half of its electricity is generated from coal. It is clearly reasonable to think that the great bulk of the increase in coal production that the seven countries seek will be found in the United States of America. On the other hand, Italy and Japan—also represented at Venice—have no great reserves of coal. With the exception of their steel industries, they make little use of coal. They have indicated that their aim will be to use more coal for power generation and general steam raising. However, that coal will need to be imported.
  Of the seven countries, this nation is in a unique position, because we already use coal for a higher proportion of our energy needs than any of the other Venice countries. The development of the United Kingdom coal industry is proceeding in accordance with the ideas that were first put forward in 1973 by the National Coal Board. At that time a Conservative Government were in office, and those ideas were embodied in "Plan for Coal". That plan was drawn up in the expectation that oil would become scarcer and more expensive from that point on. Although that expectation seemed about to be belied in the middle and late 1970s, it has been borne out by events.
  Proposals for developing the industry were formally endorsed in 1974 by the previous Labour Government. At that time, and subsequently, the Conservative Party affirmed its support for that concept. There have been delays in the progress of some of the projects specified in the original proposals. Those delays had a variety of causes, but they were not the result—as far as I know—of any Government's actions. We expect that the original "Plan for Coal" will be more or less completed by later in the 1980s. There has been continuity all the way through under successive Governments. Our strategy for coal is drawn up on the basis of that continuity.
  From that strategy stems the various financial provisions in the Bill. First, it increases the borrowing limits, which should be sufficient to sustain National Coal Board investment at the high rates projected in the March White Paper—that is, about £800 million a year at today's prices for about three years. Secondly, it provides for uprating grants of over £500 million on a tapering basis

  815
  over the four years of the strategy period, until 1982–83. Thirdly, it makes a continuing provision after 1982–83 for social grants to help with the enormous burdens of the past and to ease the transition from what was a declining industry struggling with worn out, uneconomic capacity and feeling that world events were turning against it, to a modern industry operating with high efficiency, much improved working conditions and with colossal potential for expansion. That is the turnround that we all want to see. Nobody interested in the coal industry disagrees on that common ground.
  In considering the implications for the United Kingdom coal industry, it is right to bear in mind the progress that has been made so far. Britain uses coal to a much greater extent than any of the other Venice powers. Over 70 per cent. of our public supply electricity is generated by coal. The next highest figures are 55 per cent. for West Germany and just under 50 per cent. for the United States. The other four countries are way behind those levels.
  In terms of overall energy supplies, the latest comparable figures are that the United Kingdom draws 33 per cent. of its primary energy supplies from coal, compared with 27 per cent. for West Germany, 19 per cent. for the United States and only 14 per cent. for Japan. Clearly, there is less immediate scope for further developing coal production and use in the United Kingdom than there is in the other countries. That is because, thanks to the foresight of successive Governments—and neither side can claim the credit nor take the blame—and the enterprise of both sides of this enormous industry, we have come a long way. We start further down the track than any of the other Venice powers.
  I say that not in a spirit of complacency. There is no room for complacency in any area of energy policy in the next 10 dangerous years. However, for us the Venice affirmation was nothing new. It was an affirmation by the seven countries represented that coal must be developed. Both sides of the House and all parts of the industry made that affirmation six or seven years ago.
  The new prospects for coal, nationally and internationally, are now fully understood. They will help to dispel the cloud
  816
  of fear that still hangs over some people who work in and speak tor the industry. Some people fear that the new investment is a temporary phase and that we shall go back to the bad days of the 1960s. They fear that we shall return to years such as 1967–68 when 62 pits closed and the work force dropped by 45,000. It is no wonder that such times are mentioned when I have the privilege of talking to members of the National Union of Mine-workers.
  Mr. T. H. H. Skeet: I am following my right hon. Friend's argument with keen interest. We are providing additional capacity in the United Kingdom. Is my right hon. Friend also promising to provide additional markets? Where will the coal be sold? What relevance is the conference in Italy because we are discussing the world coal trade?
  Mr. Howell: Coal produced at an economic and competitive price will find its markets. As the price of oil in real terms continues, perhaps not smoothly, to rise as it is influenced by political interference or decisions to cut production in the oil producing countries, the competitive position of coal will improve and the markets will open up.
  Pit closures will continue. They are inevitable in an extractive industry. No one can shut his eyes to the fact that closures will take place. However, they will be balanced by new capacity and new jobs. The "Plan for Coal" is based on a gradual replacement of old capacity by new.
  Mr. George Grant: Will the right hon. Gentleman give way?
  Mr. Howell: I am sure that the hon. Gentleman has a speech to make. I am sure also that he will make some valid points, because he knows the subject.
  The message of Venice, which has come up in debates since the Second Reading, is clear and worth emphasising. It is that coal is here to stay. The industry will expand, and we shall move on from the defeatist days. In our view, that expansion is best achieved if the industry has soundly based finances. Our aim is to achieve that.
  Mr. Grant: The Secretary of State talks of the need to dispel fears about pit closures. He also mentioned

  817
  competition. Does he accept that the fears are real? Will he examine the stocks of undistributed coal? There are 3 million tonnes more this year than last year. He must understand that the fears are genuine, especially since he has introduced financial restrictions in the Bill.
  Mr. Howell: I shall come to the financial pattern in a moment. Whether it imposes a straitjacket is something that I shall discuss later. The stocks were low last year and they are higher this year. No one can be blind to the recessionary forces operating in the West generally. They create a challenge for all industries, including our great extractive industries. I do not deny what the hon. Gentleman says, but the challenge is being experienced by all British industries.
  I turn to the blocking, or amending, motion tabled by the Opposition. It suggests that the financial limits in the Bill and the money resolution are too restrictive. That is not the situation. On taking office we found that the coal industry's finances were in a disquieting state. For two or three years the industry's reliance on Government grants has been growing. In the short term we have little choice but to continue the grants. For the financial year 1979–80 grants total £ 250 million, of which £ 190 million are operational grants which effectively make up losses incurred on various aspects of the board's commercial operations. The total is more than double the provision made by the previous Administration in the January 1979 public expenditure White Paper. If there is a restriction now, there was certainly a restriction then.
  In the longer term, remedial action was necessary. We started from the premise, which we maintain strongly, that it is not for the Government to run the pits. The operation of the British coal industry is a matter for the National Coal Board, in co-operation with the NUM. It is for the Government to establish the framework for operations and to let the NCB management manage. The need was to discuss and agree with the NCB the financial framework, and to set an agreed limit for grants and external finance in the years ahead. We began to do that in the summer, and continued into the autumn of 1979.
  818
  The conclusion that we reached was that a return to breakeven by the NCB—after interest and after social grants, which go on beyond the strategy and for which we recognise a continuing need—was possible by the financial year 1983-84. Accordingly, we have agreeed with the board limits for operating grant in the years ahead. These are in 1979 money, so that every figure that I mention has already been enlarged by the processes of inflation. I am speaking in constant money. For 1980-81, the figure is £ 135 million. In 1980–81 money that will be a considerably higher figure. For 1981–82 the figure is £ 109 million, and for 1982-83 it is £ 28 million. All those figures are at 1979 survey prices, which are basically the prices of two years ago, and not even the end of 1979. The figures will be revalued to outturn prices in accordance with inflation. When hon. Gentlemen talk about restriction strait-jackets, they should note that. Comments made on Second Reading and, I believe, in Committee seem to indicate that there is confusion. It was believed that they were hard and fast, constant figures that would not be adjusted to money values.
  Mr. Albert Roberts: The right hon. Gentleman mentioned agreement with the NCB. Was that arrived at under duress?
  Mr. Howell: The NCB accepts the strategy and recognises that it is a tough challenge. It considers that the challenge should be faced and the strategy pursued.
  I repeat that the grants can be adjusted for inflation. In 1980–81 we expect to pay out over £ 170 million in operating grant, by comparison with the uninflated figure of £ 135 million. The total paid in operating grants over the four years from 1979–80 to 1982–83 is likely to exceed £ 500 million.
  As I have made clear, the Bill also provides for the social grants to go on and for there to be increases in some areas of social grant to meet the difficult trans-sitional problems. Those grants are an essential part of the modernisation process, and we do not consider it possible to phase them out in the foreseeable future, and nor is it our intention to do so. I made that clear on Second Reading, as did my hon. Friend in great

  819
  detail in Committee, but it is worth putting firmly on the record. I hope that that reassurance will meet the worries of those who see that side of things also ending. Those grants will not end.
  The Bill provides also for an increase in the board's borrowing powers, amounting to no less than £1,600 million. It also provides for loans to be made to the board with interest deferred, which is a useful feature and will allow the NCB more flexibility in financing projects with long lead times. That option was not adopted by our predecessors, who saw no need for it. We believe that it will be a valuable and useful weapon for the National Coal Board.
  The main provisions of the Bill in terms of limits on grants were settled with the board in November. In the past seven months the events that have unfolded have not been precisely as predicted. No one can ever see the precise shape of events. Some of the unexpected events are not helpful to the board; for example, the economic downturn in the United Kingdom and world-wide, which must depress the market for coal and has made imports available at low prices. Also, the rationalisation of the steel operation has and will undoubtedly reduce that need for coal.
  Other aspects will help the board. For example, the further increase in the price of oil. which will make more favourable the coal-oil price ratio and make coal more competitive, and the Venice summit declaration, which I talked about at the beginning, will increase the possibility for coal exports into world trade if it can be produced at a competitive price.
  Our strategy for coal is carefully thought out. It is a robust one. I reject the mistaken concept of a straitjacket.
  Mr. John Evans: The Secretary of State mentions competitive prices for the export market. Does he accept that some of our competitors are unfairly subsidised? Does he consider that fair competition?
  Mr. Howell: That does not apply to those that are expanding into world markets and entering into the huge world coal contracts for the future. The Australians, Canadians and Americans are not subsidised. The steam coal industry in this country has nothing to fear
  820
  if it continues with its present trend of productivity and performance. As the hon. Gentleman knows, it is competitive. However, in the world coal trade, which will be entered to a perhaps more limited extent than some people realise, because there will be such an international demand for world coal and so many contracts tying up supplies, subsidised coal will not make the lead.
  I repeat that I do not accept the view of a straitjacket. On the contrary, not to have a strategy and to chop and change all the time, would create uncertainty and difficulty for the NCB which is the last thing that the industry needs or wants. Our purpose is not to confine the industry or to hold it down. It is absurd to approach the prospects of such a great energy industry in that frame of mind. Our object should be to build it up, restore it to financial strength and viability, put it on a firm basis for expansion and open up new and exciting possibilities for coal.
  In saying that I emphasise again that it is not the Government who can will the industry to succeed. Only the industry can do that. The Government can create the conditions for its success, which we believe we are doing. The industry will succeed, and we have the confidence in its management and men, which sometimes those who comment perfectly sincerely on the industry do not reflect. I ask the House to reject the Opposition motion and to give the Bill a Third Reading.
  5.36 pm
  Dr. David Owen (Plymouth, Devon-port): I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  "this House declines to give a Third Reading to a Bill which does not provide adequate borrowing powers to enable the National Coal Board to carry on its operations in a satisfactory manner, and proposes to extinguish operating grants by the end of the financial year of the Board in 1983 as defined in the Bill."
  I urge my right hon. and hon. Friends to vote for the reasoned amendment but not against Third Reading. Parts of the Bill will bring relief in the coal industry. It also provides much needed financial support. For those outside the House who do not understand the conventions, I should explain that by voting for a

  821
  reasoned amendment we are focusing our criticism on the central core of the Bill which we find objectionable. The late Iain Macleod once argued in this House that he was not voting against the Third Reading of a Bill because he would not wish to vote against even a one-legged Father Christmas. I ask myself whether there are any elements of a Father Christmas in this Bill. I see not a shade of a Father Christmas but rather an Ebenezer Scrooge.
  It was interesting that the Secretary of State was not able to pray in aid one single reputable body that believes that the financial targets are fulfillable. He said that he had great confidence in the men and managers in the coal mining industry. There is no group of people for whom I have greater respect. We have a great deal of coal mining expertise on these Labour Benches.
  Where are the people who believe that this industry can reasonably be asked to live within those financial limits? First, the board does not believe that it can. As the chairman of the National Coal Board made clear when he addressed the NCB conference in Eastbourne:
  "the Board were concerned about some other financial aspect of the Bill—particularly the timetable for phasing out operating grants. This view had also been expressed by MPs on both sides of the House of Commons when the Bill was being debated. At the last Tripartite meeting with the Government, the Board and the unions expressed the hope that there would be more flexibility in these financial arrangements."
  The NUM is on record as saying that it does not believe that it is possible for the industry to meet its targets. The union president Joe Gormley has made that abundantly clear. The National Association of Colliery Overmen, Deputies and Shotfirers has made clear that it does not believe that the industry can live within its financial straitjacket. The managers' association, a non-political body which represents the views of management throughout the industry, has also made clear that it does not believe that the targets are feasible.
  Can the Secretary of State pray in aid any of the independent commentators who comment on the energy industry, usually with a great deal of information? I have not been able to find anyone, even on a Conservative newspaper, who is prepared
  822
  to endorse the financial targets that the Secretary of State has set for the industry.
  It appears that only the Secretary of State and the Under-Secretary, together, presumably, with some officials in the Department, believe that it will be possible for the industry to achieve its targets. It might have been possible if the situation had remained the same as it was in August 1979 when the strategy was first negotiated with the NCB, but throughout the Committee stage we searched in vain for the degree of flexibility in the interpretation of the financial targets that we were promised on Second Reading.
  We regret that the Secretary of State did not feel able to come to the Committee to discuss these issues. The Under-Secretary appeared to be living in a rigid straitjacket. With the sole exception of the decision to take investment in liquefaction outside the financial limits of the Bill, there was no evidence of flexibility or financial leeway.
  The Under-Secretary attaches a great deal of importance to the deferred interest arrangements in the Bill. I admit that if they were flexibly applied they could give the NCB some freedom, but the Under-Secretary was unable to give us any details of how the arrangements are to be applied. We were unable to quantify the extent to which the industry may be able to benefit from deferred interest payments.
  We had hoped that the Secretary of State would carefully consider the arguments made in Committee, go back to the Chancellor of the Exchequer and come to the House on Third Reading to announce a great deal more flexibility for the industry. There has been no such give in the Government's position. I conclude that the position has not materially changed from the time when the Bill was presented. Indeed, in one significant sense—the Phurnacite plant—the situation has materially worsened, with severe consequences.
  The Secretary of State referred to the Venice summit. At least he was there, though not as a participant, and we must attach some importance to his interpretations. However, his interpretation of the word "together" in the communique is one of the most interesting explanations that I have come across. It appears that "together" means "We are all together, except the United Kingdom".

  823
  The Government went to Venice after the publication of the Coal Industry Bill and with an existing strategy for coal. They were a joint signatory to an international committee to double coal output by 1990, but, from the moment the ink was dry, the Prime Minister was denying that she had made any commitment. There has been no evidence that any new decision was taken at Venice. I have attended two summits, but if that is the way that everyone who attends summits nowadays is to interpret commitments, it is no wonder that the net outcome has not been as satisfactory as many believe it could have been.
  The Secretary of State said that he found a disquieting situation in the industry and a growing reluctance in relation to grants. But he knows that it was implicit in "Plan for Coal" that there would be heavy Government investment to expand an industry that had been declining. The central objective of "Plan for Coal" was a commitment to coal output targets and a commitment to finance them.
  The Secretary of State's policy of financial constraints, with no commitment to coal output targets, is not only against the national interest and the arguments for self-sufficiency in this country but is diametrically opposed to EEC energy policy, to which the right hon. Gentleman has been a co-signatory at Energy Council meetings.
  In this area, as in so many others, it is time that the Government looked at what is being done by our major industrial competitors in the EEC. I have the latest figures for direct aids to production—coal subsithes—in the EEC. For 1979, the Belgian Government paid about £ 34 per tonne, the Federal Republic of Germany paid about £ 15 per tonne and France paid £18 per tonne. In the nearest comparable year, 1978–79, the United Kingdom paid only £1 per tonne and in 1979–80 we shall have paid £1.60 per tonne. There is a massive difference in the degree of Government support for the coal industry in this country compared with that in Belgium, West Germany and France, and the gap is widening. There was a further increase in financial support by EEC countries in 1979 compared with the previous year. They see the reason for expanding coal output and
  824
  they are prepared to help their coal industries. Only our Government seem to have doctrinal arguments against such assistance.
  Another aspect that needs to be stressed is that our production costs are substantially lower than those elsewhere in Western Europe. Of course, that is one reason why other European Governments are prepared to provide direct subsidies. The United Kingdom's coal production costs are about one-half of those of Belgium, nearly one-third of those in France and nearly one-quarter of the costs in West Germany. That is a remarkable achievement of our coal industry and instead of knocking it on the head, which everyone believes is being done by the Bill, the Government have a duty to provide greater financial support. In no area is that more important than in imports.
  Sir Derek Ezra told the Eastbourne conference that:
  "The Board's view was that imports should complement, not replace UK coal. They firmly believed that any excessive imports due to short-term market fluctuation could do long-term harm to the coal industry and its customers alike."
  The Government have an obligation to assist the board in overcoming the short-term fluctuations that it faces. It would be gravely damaging to "Plan for Coal" if we allowed the short term to impede the medium to longer-term expansion of the industry.
  Major changes have taken place since August 1979. There was no answer in Committee to the fact that the NCB expects the higher level of national insurance contributions to cost it about £12 million per annum, and the further increase in oil prices, which will increase opencast costs, will put an extra burden on the NCB of about £15 million per annum.
  In addition, there will be a substantial loss of sales revenue on coking coal sold to other markets in order to undertake necessary commitments to alleviate the situation in South Wales. The August 1979 strategy review showed a broad balance over the four years 1980–81 to 1983–84. The NCB was being pushed to live within a difficult financial target, but I think that it believed that it could do so. It now does not believe that it can live within the target. This is made clear in its public statements.

  825
  I am worried most by the stocking situation. For each 1 million tonnes of imbalance between supply and demand, leading to stocking or sales at low prices, the National Coal Board might expect its revenue results to be worsened by £10 million at 1980 money values. In cash terms, the adverse effect for each one million tonnes stocked could be £40 million. There is a serious situation, with considerable coal stocking. This is further aggravated by the financial situation in which the Central Electricity Generating Board finds itself.
  The CEGB faces a dramatic drop in demand. The figures were revealed to the Select Committee of the House yesterday by the chairman of the CEGB, who showed that there had been a substantial fall in demand over the first quarter of last year. I believe that the figure is 2.6 per cent. If this continues, we face, in the short term, an extremely serious situation. I believe that situation has already been reached. The National Coal Board naturally wants to sell all the coal that it can do the Central Electricity Generating Board and move its stocks from Coal Board land to that of the CEGB. The CEGB, because of the financial restrictions placed on it, is reluctant to accept this coal because it comes on to its books. It finds difficulty in taking the coal for which it is contracted.
  There is now genuine anxiety about whether the CEGB, facing falling demand and tight cash limits, will be able to meet its commitment to 75 million tonnes from the National Coal Board. I hope that the Under-Secretary will give some indication of his attitude on the matter. Are the financial restrictions and cash limits being applied to the CEGB to be relaxed? It is as important in this debate to argue for a relaxation in CEGB cash limits as it is for those of the NCB.
  Mr. Edward Rowlands: And for the British Steel Corporation.
  Dr. Owen: As my hon. Friend says, there is also the serious problem of BSC. If demand from Llanwern was to be seriously affected, this would have serious consequences in South Wales. Although this debate is specially related to coal, my case can be argued across the whole of nationalised industry. There is an
  826
  overwhelming demand, in the interests of the coal industry, for an early relaxation, before the Summer Recess, of the financial limits set for the Coal Board, for the British Steel Corporation and for the CEGB.
  There is no room for the CEGB to increase its price of electricity. In its comments on the increase, due to take place on 1 August 1980, the Southwestern Electricity Consultative Council said:
  "These increases amount to an average of 10-7 per cent. on present quarterly tariffs and their size has shocked members of the Council. It is recalled that prices rose by 17 per cent. as recently as 1 April this year and at that time, although statements by the Government have pointed to a further rise in the Autumn, there had been grounds for hoping that this would not exceed 5 per cent. By the time the August increases are implemented, electricity tariffs will have been swollen by about 50 per cent. in 14 months. Electricity prices cannot be insulated from the national level of inflation and this heavy burden for consumers reflects remorselessly its insidious and damaging effects."
  There is no room for further increases in electricity prices. We are facing a serious situation. The more that prices in the energy industries are increased, the more demand will be cut. This is affecting the whole industry. It affects not only the Coal Board and the CEGB. It also affects jobs. An investment cutback that affects the Coal Board will also affect the CEGB. It is forgotten what major purchasing bodies these industries are. In 1978–79, for example, the NCB purchased £1,033 million worth of equipment. Contracts for services including shaft sinking and plant hire amounted to £226 million, steel, ranging from colliery arches to haulage ropes, amounted to £161 million, coalface powered supports and machinery amounted to £318 million, other equipment and electrical goods amounted to £164 million and stores and general goods amounted to £164 million.
  The NCB is a vast investor. If its investment is cut back, the effects will infiltrate every aspect of our industrial life. The effect is already seen within the CEGB which has had to clamp down on many investment orders. A serious situation confronts the power plant industry. I do not believe that it is possible to continue with the present restrictions on CEGB investment if there is to be a power plant industry in the next two or three years.
  Mr. Dennis Skinner: They are all interlocked.
  Dr. Owen: As my hon. Friend says, all these issues are interlocked. Many people outside the House, hearing about cash limits on nationalised industries or cutbacks on public expenditure, believe that what is involved is a reduction in bureaucracy or administration. They have not grasped—I do not think any of us have—that industrial jobs are put at risk. The interlocking nature of the problem is not easily understood. Day by day, it means factory closures, lay-offs and short-time working. Until the Government understand that they have the power to make some impact on the appalling unemployment situation, we shall continue to suffer spiralling unemployment. Sensible use of the National Coal Board's investment policy can help protect jobs and prove an investment in the future. These are real jobs. These are not the artificial jobs that the Secretary of State for Industry often attacked in his heady days of Opposition. They are real jobs. They are the sort of jobs that this country has to maintain if it is to be in a position to expand its industrial base when the slump eventually eases.
  I turn to another area that causes me great concern. I asked the Under-Secretary to make it clear before the debate or during the debate what would happen to the national smokeless fuels plant at Aberaman. I accept that he answered a written question on this on 21 July. The impact of that decision is appalling. We asked for an investment of £36 million of which about £5.5 million might be met by regional development grants. The Government have turned it down flat. This is a serious situation, with repercussive effects throughout South Wales, if the decision is carried out. Will the Under-Secretary say what is likely to be the attitude of the Alkali Inspectorate towards the plant? At risk, I understand, are five pits and at least 1,000 jobs in Aberaman. How can this be justified when the coal consumers are extremely anxious about the consequences? A letter from the Chamber of Coal Traders, referring to the Coal Industry Bill, says:
  "It is our view that a high degree of self-sufficiency should form the basis of any national energy policy but the Government's
  828
  proposals in the Coal Industry Bill will force consumers of naturally smokeless and manufactured smokeless fuels to rely more heavily on imported fuels because home produced supplies are not available. And the British consumer will suffer since foreign fuels are substantially more expensive. Such a policy does not seem to us to make economic sense and will give rise to severe social consequences if numerous pits close in the South Wales coalfield".
  It is no use asking people to switch to coal and to open up their chimneys and to have—I believe rightly—pollution legislation which ensures that people have to use smokeless fuel, only to find suddenly that there is no indigenous production and that supplies have to be purchased from overseas. Is it only the Federal Republic of Germany and other European countries who will invest? Are we not going to invest in our future? We know what will happen. The German coal industry which, as I have already demonstrated, receives greater assistance than the coal industry in the United Kingdom, will be given a Heaven-sent opportunity to take advantage of the decision over the Phurnacite plant by increasing substantially its exports of manufactured smokeless fuels to the United Kingdom, which are already increasing. Sophia Jacoba a major German company, is stepping up its production of a suitable alternative, marketed as Extracite. Large tonnages of this fuel will be sold on the market in the United Kingdom. This in turn could well affect the development of works and plant for the home production of manufactured smokeless fuels as substitutes for anthracite.
  One of the meanest and narrowest decisions is not to go ahead with the Phurnacite plant. It will have serious consequences on the longer-term planning of manpower within the South Wales coal-field. It is crucial for South Wales to be able to plan the introduction of new pits or the rundown of existing pits over a period. The policy on imported coking coal, if the Redcar decision is to go ahead, will also have extremely serious consequences in the North-East.
  I do not want to give any comfort to those who, perhaps unrealistically, fear pit closures. I know about the anxiety that the threat of redundancies and closures produces in many industries and I do not want to exaggerate it. I believe that Sir Derek Ezra is determined that the pit closure programme should follow

  829
  the due procedure and that the tripartite agreement will be kept. But, even if he keeps to the agreement, if the financial constraints under which he has to operate are so tight, those areas where there has not been an exhaustion of coal, where the seams are still able to produce coal of a quantity and quality that we need will face the possibility of closure because of the high cost.
  Mr. Rowlands: I apologise for interrupting my right hon. Friend who is making the most cogent of presentations of the problems. Is he aware that not only have we lost a market for 1 million tonnes as a result of the Margam decision to import coking coal, but that we have firm reports that the British Steel Corporation has marketing men in the United States trying to sign up contracts to replace the Llanwern market? Some of our worst worries about pit closures—we do not want to be scaremongers because we live in these communities—could come true as a result of this nonsense. Will he challenge the Government on that point?
  Dr. Owen: I agree with my hon. Friend. It is important that the Under-Secretary should say that the agreement on coking coal, which was painfully constructed for this year, will carry on into 1981 and 1982. I hope that as a result of the negotiations he will be able to make that announcement. There would be strong resentment if, as in previous years, the British Steel Corporation were to cobble up an agreement without the fullest consultations with the National Coal Board, leaving the NCB to face a sudden dramatic fall in the demand for coking coal.
  What should the Government do? The relaxation of the financial constraints under which these industries operate is the first essential. But more can and should be done. I have already drawn the attention of the Under-Secretary to the need seriously to consider switching modern oil-fired stations to coal. The figures that I have gleaned show that the fuel bill for a modern coal-fired station, such as Drax, using about 5 million tonnes per annum, is about £170 million at present day prices. That compares with a bill of over £260 million for a modern oil-fired station, such as Pembroke, using the same
  830
  amount of fuel in coal equivalent terms. Perhaps the Under-Secretary will comment on those figures. I gave them in Committee and he did not comment on them at that time. If the figures are correct, the argument for switching earlier than might have been anticipated from oil to coal is considerable.
  Mr. Skeet: Is the right hon. Gentleman aware that the capital cost of converting from oil to coal is tantamount to starting afresh and building a new plant?
  Dr. Owen: The hon. Gentleman grossly exaggerates. Switching would not be taking place to the extent that it has taken place in European countries over the past few years if that were so. We are all trying to switch out of oil. I accept that it has a capital cost, but it is nowhere near as great as the hon. Gentleman implied. If the fuel cost savings are anything like I have suggested—a saving of £90 million a year—the capital cost is containable.
  The Government should be doing other things. They should be bringing forward the modernisation and replanning of existing power stations and, where they are oil-fired, switching them to coal. These small power stations throughout the country would have an important effect. First, such a course would provide a market for coal at a time when the market is extremely weak. Secondly, it would provide work for the power plant industry by giving it, not a large work load as for the very large power stations, but a useful infilling work load which it needs. It would provide jobs around the country and would be an investment in the longer term. It would also allow the Government to conserve energy by linking these stations more imaginatively than hitherto to combine heat and power.
  Nothing has been more disappointing than the parsimony shown by the Government in their reaction to the Marshall report. That report was carefully documented. It came to a firm conclusion and asked for finance. All that the Government have done has been to ask for yet further studies. The financial contribution and support necessary for local authorities to go ahead in some pilot areas have not been forthcoming. We have yet more strategic surveys and more questions are being asked.

  831
  Our indictment of the Government is serious. It is not that the intention behind the Bill is as malign as might appear. I believe that it was put forward in the genuine belief that it would allow the coal industry a steady future and reasonable expansion. But there has been a dramatic change in the country's economic circumstances for which the Government must take a high degree of responsibility. When I hear the Prime Minister talk about her highest priority being inflation, I cannot help but ask "Why did you increase value added tax? Why did you add in so many different ways to the inflationary spiral facing the country so that within a year we have had double the rate of inflation?"
  All these consequeces are felt by these major industries. They are battling in a difficult situation, with falling demand, high interest rates and high prices. They are facing a squeeze on their investment which will add to the already dramatically high unemployment.
  I have tried not to be totally negative but to put forward some concrete suggestions for financial investment. I realise this will mean breaking the limits that the Government have set themselves. I believe that it can be contained. I can think of few more worthwhile investments. It would create jobs, allow industry to modernise and be the right response to the present situation. It will have to come. Everyone in the House believes that day is coming. Whether the U-turn is a gentle curve or more like a V-turn will be up to the Government. But there is no doubt that they cannot continue with their present policies. Already there are signs that the Government are beginning to switch. We have seen the obvious relaxation that is coming in the BSC's financial limits.
  I urge the Secretary of State to reconsider his position on the coal industry. He has a heavy responsibility. We thought that the coal industry's investment programme had been largely taken out of politics. There has been an agreement on the need to invest. The Under-Secretary makes eloquent speeches about his commitment to the coal industry. We want action—a positive decision. It cannot wait until the autumn. We hear rumours that the Government are thinking of relaxing the financial limits on the nationalised industries some time in the autumn. It
  832
  would be an act of folly and would be socially unacceptable to wait any longer. If this decision is to be taken—it is long overdue—it ought to be taken in the next few days.
  I urge my right hon. and hon. Friends to vote for the reasoned amendment. If, as I expect, the Government get the Bill through, it will have to go to another place. There is still time for the Government to rethink their strategy, which is fundamentally flawed and is capable of producing great damage to the coal industry, to the confidence of those who work in it and add further to the savage twist of unemployment facing every part of this country, but none more so than the areas where there is a high mining contact—a big mining industry. I refer particularly to the North-east and South Wales. Those areas are crying out for a little sensitivity and a little understanding of the situation facing them.
  6.10 pm
  Mr. John H. Osbom: I do not support the line taken by the spokesman for the Opposition. I hope that my right hon. Friend will retain the financial controls and disciplines that he outlined in his speech.
  British coal has a future. Coal is a long-term economic source of energy and has a vital role to play. Though I support my right hon. Friend, I suggest that he engages in further assiduous discussions with our friends in the EEC. My right hon. Friend rightly pointed out that in this country coal accounts for 33 per cent. of our energy consumption. The figures are lower in Germany, France and elsewhere. Coal is important to Britain.
  The right hon. Member for Plymouth, Devonport (Dr. Owen) spoke of payment for stock. I have been in the tool, steel and other industries, and I can say that that is a normal commercial problem that faces any supplier or user of a bulk commodity. One would imagine, after listening to the right hon. Gentleman, that this is a new problem because it is affecting the coal and electricity industries. In view of the right hon. Gentleman's comments, I regret the millstone that is tied around the neck of any Conservative Minister with the nationalised BSC and nationalised utilities such as the CEGB and State-owned coal. We discussed those issues two days ago.

  833
  Our debates in Committee coincided with the national conference of the National Union of Mineworkers, and Members sponsored by that union of course forecast and followed up many of the speeches made at that conference.
  Government policy is positive and takes over where the previous Government left off. On Second Reading optimism about the future emerged. Though there is a world shortage of oil and gas, coal enjoys a seller's market throughout the world. Our coal exports, however, are infinitesimally small compared with our total output. British coal should be in a seller's market. I hope, judging by EEC predictions, that our industry will eventually enter the seller's market, because if it does not the EEC will go short of energy.
  Anyone living in the villages of South Yorkshire and the bordering areas of Derbyshire and Nottinghamshire—I speak of the newer villages round Selby—could hope for a secure future by producing a commodity needed by other people. It is too early to speak of the Vale of Belvoir.
  The Second Reading debate contained references to modern mining techniques and methods of keeping down production costs while increasing productivity. There have been two interesting meetings in the House of Commons lately. The parliamentary and scientific group recently discussed robots. That meeting was addressed by the director-general of PERA, Professor Hegginbotham, who was supported by Sir Henry Chilver, from Cranfield, chairman of the committee that produced the worthwhile ACARD report on this subject.
  A few weeks ago Professor Thring, one-time head of the fuel department at Sheffield university, and of QMC, spoke in Westminster. He concentrated on the need to introduce labour-saving devices in order to increase quality and productivity and at the same time reduce costs. If those suggestions were accepted I believe that the miners would benefit in the same way as other people in other industries and countries have benefited. The Yorkshire coal industry need not be a Cinderella industry, though one might imagine that that was the case when listening to Mr. Arthur Scargill and
  834
  others. It is an industry with a future, and Opposition Front Bench spokesmen are wrong to denigrate it and engender gloom as they did in Committee.
  On Second Reading I spoke of my visit to the United States. I met many people who envisaged a great future for coal though admittedly in opencast rather than deepcast mining, in the United States. I met American industrialists who not only run utilities but are engaged in the extraction of gas and oil. They are taking advantage of solid fossil fuels. The attitude of Opposition Members was in contrast to that.
  I hope that the Select Committee on Energy will create optimism by better informing hon. Members who are interested in coal and energy. This defeatism is wrong at a time when there is an opportunity for the British coal industry. Perhaps our outlook is too old-fashioned, and perhaps leadership within the industry is not as dynamic as it might be. My right hon. Friend has increased the industry's borrowing powers by £1,200 million, to £4,200 million. That continues the momentum begun in 1976, with £600 million a year building up to £800 million a year going into the coal industry.
  The hon. Member for Midlothian (Mr. Eadie) and others talked of pit closures in the North-West, the North-East and Wales. In any mining programme, whether of coal or other minerals, if the product is of low density, or if costs are too high, there is a general acceptance that sooner or later high-cost, futile operations must be abandoned. It is a tragedy that the British coal industry should consider itself to be an exception.
  At the NUM conference Sir Derek Ezra was challenged about the closure of 50 pits. Sir Derek denied such closures, but Mr. Arthur Scargill is reported to have said that Sir Derek's denial was a lie.
  Perhaps it was regrettable that in Committee we concentrated upon closures rather than opportunities. However, I accept that there is fear of closures in the constituencies of some Opposition Members. How can we deal with that challenge? We know from our debates that the Community is expecting a target of 170 million to 200 million tons a year from this country, much of which should

  835
  go into EEC exports. On 21 July, in answer to a question from the hon. Member for Rother Valley (Mr. Hardy), my right hon. Friend said that that target depended on coal being sold at competitive prices. That is the rub and it worries me.
  An interesting Community document—C174; Volume 23—was produced on 14 July 1980. It contains figures that cause me to think, particularly when I recall the erudite speeches made in Committee. The document contains a list of prices up to 1 April 1980. The South Yorkshire price for long-flame, No. 2 nuts coal of 30 to 50 mm is 88·85 US dollars compared with 95·22 in Lorraine, 96·24 in Belgium and 106·38 in the Ruhr.
  If we dealt with smaller nuts, similar figures would be produced. The South Yorkshire figure is 80·95 US dollars per ton as compared with 106·38 dollars in the Ruhr. In table 20 of the report the equivalent prices for imported coal vary, but I calculated it to be about $38 a tonne. Imported coal, therefore, is cheaper.
  The right hon. Member for Devonport quoted subsidies in Belgium, Germany and France. I have a different set of figures, but I do not dispute the right hon. Gentleman's figures, because they are probably more up to date than mine. We must remember that the biggest coal producer is Britain, with 120 million tons a year. Germany produces 93 million tons and the countries getting the biggest subsithes—France and Belgium—produce 18 million tons and 6 million tons a year respectively. This must be put in perspective. The big subsidies are in Belgium and France, which produce small tonnages. This matter should be examined by a Select Committee. Certainly there is a subsidy in Germany as well, and we should relate our position to that.
  In this country we are concerned about the impact of imported coal, whether it comes from the United States, Australia or South Africa. In the United States there are opencast opportunities and transport challenges. I hope to go with the Commonwealth Parliamentary Association delegation to Australia, a country that I visited more than 25 years ago, when I saw much of its mining potential—not only iron ore but coal.
  I do not want to touch on the statement on agriculture that was made this
  836
  afternoon. With the common agricultural policy there is bound to be a problem for New Zealand, and certainly for Australia. The CAP imposes a levy on imported foods to Britain, when we must import more food than any other EEC country. I dare not raise the question of a common energy policy—as I did on Second Reading—but I suggest that such a policy would benefit this country. The CAP may be against Britain's interests but a CEP could be in our interests. I accept that this makes no appeal to the national executive committee of the Labour Party or to the National Union of Mineworkers. I accept also that my right hon. and hon. Friends are a little timid.
  Mr. Skeet: As very few people in the United Kingdom support the CAP, how many people in Europe could be expected to support the CEP?
  Mr. Osborn: My hon. Friend is right. Eight out of nine at present would be against it, and in future it would probably be 11 out of 12. This is the difficult ground that those who represent our interests in the Community must negotiate.
  What are the alternatives? British coal will never be competitive with imported coal. No Community coal will ever be competitive. There is a suggestion that by the turn of the century about one-sixth of the coal in the Community will be imported. The right hon. Member for Devonport talked about operational and deficit grants. I believe that the total grants to the NCB could be about 4¼ per cent. of turnover. That is about £200 million next year. My right hon. Friend said that in total it would be £500 million to date.
  The Community, and particularly Germany, claims that our industry is subsidised and supported, and that it does not run at a profit. It would be useful for the British and German leaders to compare notes and for our respective Governments to do the same in order to try to work together.
  I believe that imported oil, natural gas and coal to a certain extent must be regarded as an insecure source of supply to this country. The coal industry could mean a great deal to this country. We have talked about agreed prices in steel, the Paris Treaty, and the ECSC. Should

  837
  not our leaders get together and talk about agreed domestic and industrial coal prices? They should relate imported coal prices to domestic coal prices, for example. That is why at Question Time I suggested to my right hon. Friend that he should discuss with Community coal producers an agreed stable price level and try to work out a mechanism by which, if other countries inject subsidies into their industry, subsidies in Britain should be comparable.
  My right hon. Friend said that it was not for the Government to run the pits. I agree with that. He spoke about the 1983-84 limits. I share his belief that it would be healthy for the coal industry to be able to stand on its own feet. My right hon. Friend said that it was the task of the NCB to run the industry. The NCB must be given every support by a Conservative Government—I do not draw back from that at all—but the conditions are that our coal must become competitive in price and that we look for higher productivity.
  I have already talked about mechanisation and automation. If in the future I have to choose between subsidies, such as those given in France, Belgium and Germany, or some sort of levy on imported coal, I would prefer the latter. I support the Bill and reject the amendment.
  6.20 pm
  Mr. Allen McKay: I begin by taking up the challenge of the hon. Member for Sheffield, Hallam (Mr. Osborn) about Labour Members denigrating the industry and the miners. That is the most disgraceful statement that I have ever heard in a debate like this. The hon. Members here have spent a lifetime in the industry and in the trade unions, and they are now sponsored members.
  Mr. John H. Osborn: I understand the hon. Member's feelings, but I wish that Labour Members could inject some optimism into people in the industry—those in management and those down in the pits. I very much hope the hon. Member will try to do so in his contribution this afternoon.
  Mr. McKay: The fact is that throughout the history of the coal industry we have learnt to mistrust the words of Conservatives. Those fears are not
  838
  allayed by the present unemployment situation and by what has happened to the steel industry and to small industry.
  I declare an interest, although it is not a financial one. I am biased in favour of the industry that I love, because it has given me work, it has educated me and it has given me every opportunity for promotion and advancement. I shall never be able to repay my debt to the coal industry. My feelings are slightly blemished, because on 1 May my father died of pneumoconiosis after suffering for 20 years.
  In the Bill there are elements that we applaud. I applaud the element that finances people who find themselves in the situation in which my mother found herself. For 20 years she had the guts and the courage to nurse my father.
  Throughout its life the industry has always had its ups and downs. It was exploited to the full by the old coal owners, who salvaged coal—or savaged coal, I might say—from the easy, workable seams and areas, and left behind a legacy for us. Not all owners were like that, but a good many of them were. By and large, their motive was profit and that motive was to result in the exploitation of the coal industry and the mine workers themselves. I believe that during that period the country lived off the backs of the mine workers. Because of that exploitation and insufficient investment, the industry began to decline.
  I have been privileged to work for the coal industry for more than 30 years, originally as an electrical engineer and later as an industrial relations officer. During my time as an engineer I was branch president of the National Union of Mineworkers. During this period I saw the industry move out of private ownership. It was a proud day when I saw the NCB flag flying from the top of the winding gear. At last I felt that I had a stake in the industry to which I belonged.
  I have watched the industry heave itself out of being a typical village industry, at the same time retaining its proud village commitment and its traditions to its work force. In fact, it achieved world-wide recognition for the skill of its miners, the expertise of its engineers and the ability of its management, who came from the shop floor. Those ideas welded together the mineworking force. The ability and

  839
  the co-operation of the trade unions led to the rise of the industry from the condition in which it was left by private ownership. It moved from conventional mining methods of production to the use of the most sophisticated electronic, electrical and mechanical methods—methods that are not only recognised but are required throughout the world. Through its exports of expertise and mining machinery the industry earns for Britain about £200 million a year.
  In the 1960s ghastly mistakes were made as the Government bowed to the oil lobby. During that period 400 pits were lost, divisional structures were dismantled and areas were merged. In 1947 there were 958 pits, with an average manpower of 704,000, but in 1979 the figure had been reduced to 223 pits, with an average manpower of 235,000. During that time the miners held back from industrial conflict and watched the industry being dismantled. They accepted miserable increases in wages, because the then chairman of the National Coal Board told them that it was for the betterment of the industry. He said "Be calm, be patient, accept what is given, and the rewards will come later". Those rewards came. We watched other industries race away in the wages league—but still the collieries closed. We accepted the low wages and the conditions to try to save the industry—but still the collieries closed. They were closed not because the reserves were exhausted but purely and simply for economic reasons.
  The word "economic" became the most hated word in the mining vocabulary. In those days one could call a colliery anything that one wanted, but it survived. It survived until it was called uneconomic, and that sounded its death knell. A few people protested about the closures and warned that the oil would not last and that it would not always be cheap, but to no avail. The Bill brings with it that same warning. In his Second Reading speech the Minister spoke of a dynamic and vibrant industry. It is such an industry. It is poised to provide Britain with its energy requirements for many years. But at this moment, when it is poised to take off, the Bill is poised to shoot it down. The industry is being put into a financial straitjacket.
  The Bill confirms that the Government are interested in the future of the coal
  840
  industry not as a supplier of the nation's energy needs but only as a profitable concern. The industry cannot meet the Government's requirements in the three years that it has been given. Therefore, it is faced with certain directions in which it can move. It could increase its prices, but that would be inflationary and would lead to further imports of cheap, subsidised coal. An alternative would be the closure of uneconomic pits.
  As my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) said, the other EEC countries are more understanding of their coal industries. Belgium provides a subsidy of £24 per tonne, with production costs of £56 a tonne. France provides a subsidy of £14 a tonne, with production costs of £42 per tonne. Germany provides a subsidy of £ 12 a tonne, with production costs of £ 40 a tonne. Britain provides a subsidy of £1 a tonne. I am sure that the mining industries of other countries are equally poised and vibrant. They are poised to export to Britain the coal that we shall fail to produce.
  It is easy to close a colliery—it can be closed within a few months—but to open a colliery takes about 14 years. The Minister said that pit closure was the responsibility of the NCB. If he pushes the board into that responsibility, and if it is forced to close mines purely and simply for financial reasons, there will be no replacement capacity. What do the Government expect of the NCB if the financial restrictions are not met within three years? Do they expect uneconomic pits to be closed? If so, from where will the replacement capacity come?
  I shall quote from the NCB's comments on the report of the House of Lords Select Comittee on coal.
  "We recognise of course that the industry has a major role in determining its own long-term objectives, and that indeed is the policy we have adopted in putting forward Plan 2000, the main elements of which were summarised in Coal for the Future. However, energy in general—and coal in particular—has very long investment lead times. It will only be possible for the coal industry to succeed in meeting its forward objectives against a background of consitent ongoing Government (and EEC) support in terms of general energy policy, specific coal policy measures and investment funding."
  It continued:
  "The industry needs to be able to generate some 4 million tons a year of new and replacement capacity in the latter part

  841
  of the century. After allowing for the closure of old capacity, such a rate of new development would enable the industry to show continuing net expansion and progressive improvement in productivity and competitiveness. If the country is to have the long-term benefits of an expanded and efficient coal industry, it will be essential to maintain the continuity of the investment programme."
  That indicates that the board was worried about the financial restrictions placed upon it for the next three years. It continued:
  "It remains the Board's view that it will be highly desirable, on grounds of national energy policy, to provide for a significant increase in the use of coal from the mid-1980s".
  The NCB and the miners have always accepted a challenge. No doubt they will accept the challenge that is being thrown down now.
  We are worried that only people from the coal industry recognise that the challenge will be too much. That does not take away anything from the industry. People from the industry know what has happened in the past, and what will happen in the future.
  The Financial Times on 17 June said:
  "Until the new mines, and the 87 existing collieries which are being expensively but slowly mechanised and refurbished, begin to make a substantial contribution to coal output, management will have only two options in striving to meet the Government's breakeven target, it will either have to accelerate the closure of uneconomic pits or to raise prices.
  The Government has pointedly refused to give any indication of whether it expects the NCB to bring forward its programme of pit closures."
  A report from a colliery stated:
  "The impression has been given that the Germans, Belgians, people like this, have a dynamic force of miners compared with our own turning out this tremendous coal. And they're not, they're not different at all. But they have governments who can see the commonsense policy of applying a subsidy to carry an energy industry through a time of recession so that they are not dependent ever on other nations."
  If those nations can do it, why cannot we do it?
  While we accept the challenge thrown down by the Government, while we accept what the Government have said about the financial conditions, and while we know what those financial restraints will mean to the coal industry, we will not
  842
  accept the closure of uneconomic collieries. We will not accept that the Government's financial restraints will put the NCB in that position. We will not accept the enforced redundancies and unemployment that will be created by the Government's measure. We will not accept seeing the industry ground down, as we watched the steel industry ground down, because of the Government's policies. If that has to be, so be it. But we shall stand shoulder to shoulder and fight for the industry and the country that we love.
  6.30 pm
  Mr. T. H. H. Skeet: The hon. Member for Penistone (Mr. McKay) made a moving and interesting speech. However, I should like to refer to the speech of the right hon. Member for Plymouth, Devonport (Dr. Owen), who made two major points. The first was that the industry was not serviced with adequate borrowing powers. Perhaps the right hon. Gentleman will reflect on the fact that under the Coal Industry Act 1965 borrowing went up from £1,800 million to £2,600 million—an addition of £800 million. Under the Bill it goes up by £1.6 billion. Surely the NCB's borrowing requirements, as provided under the Bill, are ample.
  Mr. John Evans: The hon. Gentleman is not comparing like with like.
  Mr. Skeet: I am comparing like with like. I am expressing it in money terms, but even in real terms the increase is considerable.
  The other substantial point made by the right hon. Gentleman was that under the new regime the NCB could not live within its prescribed limits. He went on to indicate—I have heard it from him, and many other people, before—that subsidies to European industries, such as those in Germany, France and Belgium, are very much higher than those in the United Kingdom. It is unique that the right hon. Gentleman should use that argument. Between 1975–76 and 1978–79—at the time of a Labour Government—operational grants in the United Kingdom were nil in the first year, roughly £11 million in the next year, £24 million in the following year and £ 117.7 million in the final year. Operational grants have not tended to fall. They have gone up significantly, and in recent years they

  843
  have tended to escalate. Surely the Government are right to ask the NCB to be viable.
  I turn to the social grants, which are being continued. In 1974–75 they amounted to £119 million in round figures. In the ensuing year they amounted to £72·4 million. The year after that they were £43·4 million, and they were £51 million the following year. The trend has been on the social side, where the grants have remained relatively consistent, and it is perfectly right that they should continue. It is, therefore, extraordinary to discover that the right hon. Gentleman is advocating that the operational grants should be continued, because during the period of the previous Government he did not give substantial operational grants to the industry.
  The social grants are to be continued as heretofore. We in Parliament must look after the general situation with regard to public expenditure. It is extraordinary that this industry is providing little money of its own. In fact, if one looks at its accounts one finds that very little is being provided by the NCB. It must all come from exterior borrowings. The figures that I cited in Committee reveal that between April 1973 and March 1979 only about 4 per cent. of the total was provided from internal sources, with all the rest coming from outside. Does anyone argue that we should not act as custodians of the public and indicate that certain safeguards should be prescribed? That is what we have done here.
  The three largest borrowers are the British Steel Corporation, British Rail and the NCB. NCB expenditure in 1979–80 was £604 million, including Government grants of £172 million. In 1980–81 it is £834 million, including Government grants of £253 million. The point is that the NCB is not being deprived. The miners are not being denigrated. They are being assisted by almost £1 billion a year. It is building up towards that figure. The Minister and my right hon. Friend are determined that the miners will remain the kings of industrial workers. They are receiving more than £100 a week for doing a job which many hon. Members are not prepared to do themselves.
  I am saying that the NCB should periodically come back to the House so that
  844
  hon. Members may vet or monitor its expenditure as it moves ahead through its 10-year "Plan for Coal" to see whether the money is well spent.
  Mr. John Evans: No Labour Member would object in the slightest to the NCB or any other nationalised industry coming to the House so that we could discuss its spending programmes. I am interested in the hon. Gentleman's arguments about the finance that is made available to the NCB by the Exchequer. He seems to be rather querulous about that. He is a well-known supporter of the nuclear lobby, and he seems to swallow with equanimity the fact that we are talking about a £20 billion-plus programme for the nuclear power industry over the next decade. However, it seems to me that his arguments in that regard do not square with his arguments in this case.
  Mr, Skeet: I am afraid that the hon. Gentleman is wrong. I believe that a balance of fuels must be available to the CEGB and the South of Scotland Electricity Board. At the present time, 70 per cent. of the CEGB's output is supplied by coal, and about 13 per cent. of total electricity comes from nuclear power. The nuclear side must be built up. In my judgment, coal will not be available in sufficient quantities when it is required. We must also bear in mind that the number of fatalities in nuclear power stations is negligible, whereas the number connected with the mining industry is quite substantial, even now.
  Mrs. Elaine Kellett-Bowman: Does my hon. Friend agree that coal is far too valuable a substance to use in this way? It must be used as a feedstock. It is far too valuable to burn just to produce electricity.
  Mr. Skeet: Something that I shall say in a few moments will indicate that I can see only with difficulty the market for coal. As I am an enthusiast for the coal industry, I am prepared to ensure that it has a reasonable market in future. However, before leaving the subject of borrowing, I should point out that the £2,600 million is likely to be exceeded in 1981–82. The Bill provides enough money to cover the board's borrowing right up to 1985, and I would have thought that that was ample.
  This is a unique occasion to monitor the performance of the "Plan for Coal"

  845
  that was brought forward in 1974. We have now reached 1980, and we have learnt a significant fact. In percentage terms, coal's price advantage over oil in 1974—that is, after world oil prices went up—was 51 per cent. By early 1979 that had declined to 14 per cent. As a result of recent oil price rises, that advantage will have increased again, but one cannot help notice the narrowing of that advantage. As I have indicated, it has a habit of deteriorating as coal pursues the price of oil. Although a State monopoly, there is unequivocal evidence that the NCB is controlled by the market, whether or not it recognises that point.
  Mr. Peter Hardy Mr. Peter Hardy (Rother Valley) rose—
  Mr. Skeet: I have given way quite considerably, and I should like to advance my argument a little further.
  Under the "Plan for Coal", initial expenditure in 1974 or thereabouts was £1,400 million. The amount spent to the end of March 1980 was £1,900 million, at 1979ߝ80 prices. If one works on exactly the same price basis, total expenditure for the planned period will be £5·7 billion, and we have virtually gone halfway through the period. What have we got for it?
  I turn to annual production of coal. I shall be absolutely fair and take a period of three years. In 1973 production was 132 million tonnes. In 1974, because of disruption, it was 110 million tonnes, and in 1975 it was 128 million tonnes. It was high. Today we have production of roughly 122·4 million tons. Therefore, production has come down—[Hon. Members: "There are fewer pits".]—probably in recognition of market conditions.
  Output per man shift is another significant point. In May 1974 it was 2·26 tonnes. In April 1980 it was 2·27 tonnes. Therefore, there has not been an enormous change. The last significant advance forward was at the time of Lord Robens, when output went up substantially through mechanisation. We look forward to the time when it can rise again, but it may take some time to reach that point.
  It is interesting to note the differences between 1940 and 1980. I refer to the
  846
  average cash earnings. In the heady days of October 1974 average earnings were £50 per week. In October 1979 the rate went up to £112. The average mining costs per tonne were £11·79. In 1978–79 the cost went up to £24·10. The average price of coal to large industrial consumers was £ 9.6 a tonne. It went up to £ 27 a tonne in 1979. It trebled in price.
  What we have learnt so far is this: production has gone down, the amount of investment has gone up, and earnings have escalated considerably. Has the nation derived benefit from this large investment in the industry?
  Mr. Allen McKay: Will the hon. Gentleman take into consideration the provisional results for 1979–80? Deep-mined output is up by 3·8 million tonnes to 109 million tonnes. That is the first increase on a previous year since 1963. Productivity of all mine workers is up by 1·5 per cent., and in the last three months it is 4 per cent. higher, making an overall output per man shift of 2·7 tonnes. There has been record breaking productivity at the coalface, with a breakthrough of more than 9 tonnes per man shift since last November. The attendance at work has improved and accidents have decreased. That is no mean achievement in the mining industry.
  Mr. Skeet: That does not persuade me, as the hon. Gentleman knows. He says that there must be no closure of uneconomic pits. He knows perfectly well that in South Wales only four mines out of 38 had an OMS of over 2·3 tonnes. This is the right solution. I am in favour of phasing out pits only if new ones can be phased in. Taking the Western region, Silverdale has an output of 4·4 tonnes per man shift. In the South Midlands, at Ragworth output is 4·8 tonnes per man shift. At Daw Mill it is 4·8 tonnes and in North Nottinghamshire, at Thoresby, the output is 4·7 tonnes.
  That is the way to make a profitable National Ooal Board. That is the way to earn high wages. However, if the productivity of the remainder in Wales—that is, excluding the four mines that are relatively profitable—is too low, one understands that the good pits are being ruined in profitability by the bad ones. The bad pits are not sufficiently profitable.

  847
  Government supporters are backing a profitable mining industry. I am delighted that we are going ahead with Selby. We must wait for the occasion, but we may be going ahead with Belvoir, in which case productivity per man shift would improve further. I give this indication for a period which has been carefully monitored. Productivity is not as good as it should be because the returns from the good pits are being reduced as a result of the returns of the bad pits. I mean bad only in relation to their return on OMS.
  The coal-oil price ratio in pence per therm in 1974 was 0·61. The provisional figure in 1980 is 0·81. That may have changed. Therefore, I do not take any great point on that.
  The inland consumption is interesting. The consumption at power stations has gone up significantly, from 67 million tonnes to 88·8 million tonnes. That is a gain of 22 million tonnes. Therefore, a special market has been provided for the major quantity of coal that is becoming available. However, coke oven consumption has gone down; and the industrial market and domestic market consumption have gone down too.
  How is it possible to have these figures with these vast injections of public funds into the industry? Taking the totality of the sources of funds that have gone into the NCB between April 1973 and March 1979, the finance that came from the internal resources of the National Coal Board was no more than 4 per cent. The rest came from borrowing from the European banks, the European Investment Bank and Government grants. The industry is providing only 4 per cent., yet the right hon. Gentleman has the audacity to say that the Government are not being fair to the miners. Are they being fair to themselves or the taxpayer, who must provide it? Money does not come like manna from Heaven.
  The right hon. Gentleman mentioned that he wanted fixed targets. The target set out in the "Plan for Coal" was about 135 million tonnes by 1985. We all hoped that that would be achieved consistent with the market. The figure for the year 2000 is about 170 million tonnes. The Minister gave these figures in a written answer on 22 July, at column 139. By 1990 the figure will be 127 million tonnes rising to 138 million tonnes. By the year
  848
  2,000 it will be 137 million to 155 million tonnes. Therefore, the official figures have declined. These figures have been taken from the 1979 energy projections, a Department of Energy paper. According to the Government's expenditure plans for 1980–81 to 1983—Cmnd. 7841—we see that the target output of 135 million tonnes, which was expected in 1985, will not be reached until probably the end of the 1980s.
  We are not doing too well on this basis. Therefore, I am giving encouragement to the miners. They are doing better. The Government are reciprocating by providing the necessary cash for development and improvement. That is not coming from the industry. However, much more improvement is required.
  I move on to a sector which is of vital importance. I am concerned about the decline in the market. I mentioned that electricity generation is substantial. It is the largest part of coal consumption. The worrying factors on the horizon, such as the fall in electricity demand and the nuclear power programme, must be accommodated. Coal imports are cheap and total 4 million tonnes per annum. Some of these imports are on long-term contracts. There is extensive pollution from power stations. Miners know that in certain areas subsidence is serious.
  We see that there is a possibility that the coking coal market will be cut back substantially because of changes in technology, such as direct reduction processes which do not use coking coal, and also the SKF plasma smelt, which is probably a process for the future. The 1979 energy projections for the domestic market indicate that it is likely to fall away to about 3 or 4 per cent. by the year 2000. These figures come from a Government publication. Although it indicates that the figure may not go quite as low as that, nevertheless the downwards trend continues.
  We may expect expansion on the industrial front, with fluidised bed combustion. I raise two points. What will industry do with the limestone slurry that is formed, and how is it proposed to reduce the capital price of the fluidised bed combuster, which is much more expensive than the conventional plant used at present? Should we not be giving much more thought to dispersions of oil and coal? This might be a useful way ahead.

  849
  We have discussed the international summit on coal, which was held recently in Italy. There will not be a great deal of joy for the United Kingdom unless other countries can take on board the earnest recommendation that prices must be competitive. Our prices are well ahead of those in Poland, Australia, South Africa and the United States. This is a worrying aspect. Therefore, the international market for coal may well expand However, it is unlikely that we shall participate in it. It might be possible for us to extend into Europe, but will our European partners buy expensive coal? They will do so only as part of a package, and if they do they will not be told by the miners that they will have to pay the highest prices.
  I am concerned about coal burn for power stations—the biggest market for coal. In 1979 that worked out to almost 89 million tonnes.
  The Minister said in a written answer on 24 April 1980 that in 1990, the figure is likely to be between 80 and 94 million tonnes. In the year 2000 the figure may be between 65 and 78 million tonnes. Those figures largely confirm the energy projections of 1979. So, the difficulty that we face is that there will be a vast expansion of the coal industry. Long lead times are involved, and the plants must be ready for expansion. The medium and short-term projections for the coal industry are not satisfactory. The National Coal Board has probably got its timing wrong, and when it expects to come into the market the sales will not be there. The Government of the day will then have to make cuts. That will be regrettable, and I hope that it will not happen.
  With regard to power stations—this is part of the evidence that was given by Professor Manners in the Vale of Belvoir inquiry in March
  "Above all else, the figures reveal with persuasive clarity that, in order to estimate with good reason a demand for power station coal in excess of 70 million to 75 million tonnes between 1985 and 1990, it is necessary to assume (a) a rate of economic growth of at, or above 2·5 per cent. per annum throughout the decade, and (b) a coal: oil price ratio wider than 0·7 in 1985 and 1990. In the light of British economic performance in recent years and decades, and of coal: oil price relativities since 1973, both appear to be very optimistic assumptions."
  850
  In his evidence, Professor Manners further said:
  "Turning to the coal: oil price ratio, my judgment is that it is unlikely to widen to anything like the differentials proposed by the Department of Energy for the period to the year 2000".
  It would pay the coal industry to listen to and take the advice of Professor Manners. I am prepared to listen to and take the advice of eminent people who advocate the contrary view. But another view is that matters are not satisfactory, and the public, many of whom will have an opportunity to read the comments of certain hon. Members, will ask whether the money is being well spent or whether the Government are putting too much into the industry at this time. We are not being parsimonious, but are we not being a little over-generous?
  7.4 pm
  Mr. Michael Welsh: I shall be as brief as possible, because I know that many hon. Members, particularly Labour Members, wish to speak.
  I shall speak in favour of the amendment, and along the same lines as my hon. Friend the Member for Penistone (Mr. McKay), who has been involved with the coal industry all his life and has seen many of its ups and downs. We hope that this is not one of the down periods. Having read the Bill, and having served on the Committee, I think that there will be another downturn for the coal mining industry unless we act now. I still believe that the Government can act differently even at this eleventh hour.
  I support the amendment, although parts of the Bill are favourable to the coal industry, and are acceptable. That is why we shall vote for the amendment but not against the Bill. Other parts of the Bill spell murder to the mining industry. That is a sincere statement. The Bill does not provide adequate borrowing powers, and it withdraws operating powers by 1983—the wrong time. It would have been far more satisfactory if the industry had been given another three or four years.
  The fact that the Bill does not provide adequate borrowing powers is not because of the outlook of Ministers; it is because of a direct instruction by the Treasury with regard to the public sector borrowing requirement. The Bill does not

  851
  basically deal with coal mining; it deals with public expenditure cuts.
  Why could not the industry break even at the end of the period envisaged by "Plan for Coal"? Why should the industry change the method of costing before the end of that period? The morale of the miners is important in the production of coal. They will accept the challenge and produce more coal if they believe that they have friends in places such as the House of Commons. They will make an effort. But if we change from historic costing to current costing we shall not receive operational grants unless there is a loss. Even this year the coal industry could be £190 million in the red. The Government would then give an operational grant, and the profit would be seen to be £90 million. If that is so, why do we not stick to historic costing, give the grants above the line, and show, correctly, a profit of £90 million?
  The Bill will help only those who are anti-coal. The hon. Member for Bedford (Mr. Skeet) said that he is pro-coal. I am sure that he supports the miners, even if he does so in a strange way.
  Mr. Skeet: I have nothing against the miners. I support them. But let them not be deceived by adulation, false information or false optimism, which may come their way in inappropriate markets.
  Mr. Welsh: Miners will accept the challenge and they will not ask for anything more than they deserve. They deserve to work and they deserve the support of the Government of the day. The borrowing power is needed because successive Governments have insisted on investment so that coal can be produced. The biggest problem besides grants is the difference in costing. There is no reason why the method should be changed to current' costing. If we accept "Plan for Coal", why change horses in midstream? Why change the method of costing?
  The miners, the National Coal Board and the industry as a whole all accept the challenge. We believe that if we continue to get help as we are at present we shall break even by 1986, but if we do not get the support in 1983 that we are now getting, what is to happen to the industry? I ask the Minister to answer that question. What will happen if the
  852
  industry is shown to be £100 million in the red and there are no grants? In those circumstances, obviously there will be very great embarrassment.
  The Minister could then say one of three things. First, he could say that the industry is £100 million in the red, that there are no more grants, and that uneconomic pits are to be closed. Secondly, he could say that the industry must sell off some of its assets—as is happening in most other nationalised industries. Thirdly, he could say that the earnings of the miners must be reduced.
  A fourth possibility would be for the Government to make further grants, but they are determined not to do that, so the Minister would have to adopt one of the three courses that I have mentioned. I warn the Government that the National Union of Mineworkers would not tolerate any of those three courses being followed. They would fight against them with all the power at their disposal.
  When the lads come to the NCB, say, in 1983 for wage increases, if the NCB says that there is no money—"It in't in t'tin"—there will be trouble. It will make the winter of 1974 look like a parson's tea party. That is not a threat and it is not a promise; it is a certainty.
  We need until 1986 the help that we are getting at present because of the borrowing that has been necessary to get the industry, shortly, into a profitable position. But if, as a result of following any of the three courses that I have mentioned, the NCB—due to circumstances beyond its control—is still approximately £100 million in the red in 1983, we hope that the Government will reconsider the question of grants.
  I ask the Minister to make the position plain to the miners. If it is the intention, in a very gentle way, to kill the mining industry, I hope that he will tell us that that is the intention. Then the miners will know where they stand. When they know where they stand they can make the necessary decision—and it may hurt a lot of people. But I hope that the Minister will give the assurance that if we are still in the red in 1983 there will be some flexibility.
  It was a great disappointment to hear that the NCB will be unable to borrow money from the EEC as in the past. The industry used to get from the European Coal and Steel Community about

  853
  $500 million equivalent a year. It is now to be reduced to $150 million. The Treasury has already written to the NCB to say that this avenue for borrowing money is to be practically closed. The NCB, therefore, is having to work in a different way from any other industry. If the NCB is to be prevented from borrowing money from the European Coal and Steel Community, there is no doubt that the industry will be put into a strait-jacket. We know that it is connected with the public sector borrowing requirement.
  It is interesting to recall that the NUM, along with the NCB, was involved with the European Coal and Steel Community years ago. Joe Gormley chaired various committees, and still does. We have been closely involved with the Community and have been able to borrow money from it at very reasonable rates. Now, unfortunately, that door its being closed.
  The regional grants are also being stopped. Labour and Conservative Governments have not applied for many regional grants in the past, but they are now to cease altogether. If the Bill is passed as it stands at present, no Secretary of State will have the opportunity to get those grants. It is a mean, nasty and brutish attitude to take, because the grants were intended to enable people in the industry to live a better life. It would seem that the intention is that once again they are to be condemned to live in rough areas, while the people represented by Conservative Members are able to live in the beautiful rural areas. That is what makes this such a horrid Bill.
  A political party that forces the NCB, in one way or another, to close its mines,—especially as there will be unsatisfied needs that production could supply—does not deserve to survive. The NUM and the Opposition will do all they can to amend the Bill when we have a new Labour Government in the very near future.
  7.18 pm
  Mr. Peter Hardy: I shall endeavour to make a short speech, but I feel that it is necessary to express a degree of despair about Government policy—not merely about their energy policy but about their complete disregard for the national need.
  854
  Earlier today we had a statement on agriculture, and the Bill shows the same sort of disregard of national requirements. I was called by Mr. Speaker, and I suggested that in Britain we were supine in our response to national need, whereas our Community partners vigorously pursued their own national interest. In the same way, they now vigorously pursue their national interest in terms of support for mining.
  I deeply regret that the hon. Member for Bedford (Mr. Skeet) would not give way to me during his speech. I always listen to him with interest, and always become more and more convinced that there is a good case for presenting our speeches for publication, so that other hon. Members do not have to listen to them. However, I listened to the hon. Gentleman. One thing that he said will be of considerable interest to the mining areas.
  The Secretary of State and the Under-Secretary of State have been reassuring the mining communities of Britain that the Bill will not prove to be a dreadful thing for them. Now the hon. Member for Bedford seems to have confirmed the. fears of those communities. He said that he felt that the miners might be led into false optimism. There is, indeed, a real divergence of view between the Government Front Bench and the hon. Gentleman. I hope that any divergence of view concerning the interpretation of the NCB's finances will be clarified by the Minister, because the hon. Gentleman's description of the NCB's contribution to its capital investment was something of a travesty. It would be appropriate for the Minister—
  Mr. Skeet Mr. Skeet rose—
  Mr. Hardy: No. I am not giving way to the hon. Gentleman. He did not give way to me. I hope that the Minister will put that matter in proper perspective. It was wrong of the hon. Gentleman to present such a travesty of an interpretation. Of course, we all know what the Conservative Party has done to the coal mining industry.
  The position is desperate. The Conservative Government have been in power for slightly over one year, yet the damage has already been enormous. They have placed high priority on the cutting of public expenditure at almost any cost.

  855
  Money is being poured out on unemployment benefit, with all the social consequences which that brings. The social consequences of high unemployment in areas such as Wales, Scotland, the North-East and South Yorkshire are such that it is important that the industry should be given higher priority.
  Fears about the industry are not restricted to the National Union of Mine-workers. They are felt by everyone connected with the industry—whether members of the NUM, its local leaders, members of the National Association of Colliery Overmen, Deputies and Shotfirers, to which my father belonged for many years, or the British Association of Colliery Management.
  My hon. Friend the Member for Penistone (Mr. McKay) reminded me of the day when my father took me—I was a schoolboy—to Manvers Main colliery to see the vesting day. In those days one heard a certain amount of cynicism. I was only a boy, but I could sense a little of it. The managers of Manvers Main colliery were the managers after nationalisation. The flag changed, but the faces did not.
  Over the past 33 years management has arisen from career opportunities. The service and support that colliery managers gave to the Conservative Party 40 or 50 years ago is no longer applicable. The members of the British Association of Colliery Managers do not pay the political levy. They are part of the trade union movement, but they are not part of the Labour Party. The association has made it clear from its professional understanding of the mining industry that it is critical not of the whole of the Bill—we are not critical of the whole of it—but of the straitjacket provisions.
  I gather that the Secretary of State does not like the use of the word "strait-jacket". However, if the Government pursue lunatic policies they cannot object if we use such words.
  Mr. Skeet: Get the facts right.
  Mr. Hardy: I did not suggest that the hon. Gentleman should wear a strait-jacket. I said that the Government were pursuing lunatic policies. Usually the hon. Gentleman supports them eagerly.
  856
  The British Association of Colliery Management argues that the industry is geared to change and innovation. Productivity is on a dynamic growth course. The position is far better than some Conservative Members believe. Morale is high and absenteeism is at its lowest level for 20 years. The momentum gathered from "Plan for Coal" must not be threatened.
  The British Association of Colliery Management is not a Labour Party organisation, but it believes that certain parts of the Bill seriously undermine the growth of the coal industry. I hope that the Minister will take steps to change the present inflexible approach. The Government would show some sense if the Minister were to meet the industry on a tripartite basis in the same way as the previous Labour Government, if he spelt out to it the difficulties faced by the nation, which would not be ignored by the industry, and asked it voluntarily to respond, as it has done in the past. My hon. Friend the Member for Midlothian (Mr. Eadie) took part in all the meetings and knows that the recognition of reality is not a difficult task for the mining industry.
  If a hard and firm target is set, which the National Coal Board is obliged to meet, the board will have to be prepared to meet it and there will have to be contingency plans. There will have to be a dedication of resources and energy to meet the target. There will have to be cautious, careful and excessively prudent arrangements for drawing in the horns of investment. I hope that the Minister will give an assurance to the NCB that the present inflexibility will not be allowed to deter research into the use of coal and the development of coal technology.
  Britain is one of the world leaders in mining technology and engineering. The Government's present inflexibility must not be allowed to deter investment in projects such as Selby. The Minister knows that there is drama and glamour in oil rigs in the North Sea. He also knows that Selby is better than two of the best North Sea oil platforms and that it will remain so for at least twice as long as the best and most durable of our oilfields. It must be right for us to urge the Minister not to impose such regulations and rules on NCB finances, which

  857
  will threaten Britain's ability to cash in on the bonanza of coal, which will be 10 or 20-fold greater than the most optimistic estimate of our offshore oil resources. The assurance of flexibility is important. It would be better for the Government to reduce some of their rigidity and to give the industry the capital and the opportunity to maintain the dynamic growth that it is experiencing.
  I do not want to be critical of the Under-Secretary of State. I have heard the hon. Gentleman pay a graceful tribute to the industry. I recognise that he has made enormous efforts to understand it. It would be better if some of his hon. Friends who do not understand the industry and who have had little contact with it were to follow his example. The hon. Gentleman's exposure to the industry should have equipped him to understand the nature, mood and mentality of those who work and live in the coalfields of Britain, to understand the miners and to appreciate that he can lead but cannot drive. It is the effort to drive that is causing a great deal of anxiety.
  I have noticed the Government's inflexibility towards the coal industry. I do not see any inflexibility towards nuclear power. I have never attacked research and development into nuclear power. Britain must remain in high technology. We must ensure that future generations never face desolation. However, if the coal industry is to be placed in a strait-jacket, as is proposed in the Bill, it will be entirely wrong for us to leave no limitation and to be relaxed in our approach to the possibility of huge sums being devoted to investment especially in American nuclear technology.
  If the Minister wishes to develop and generate a massive anti-nuclear campaign, the Government are going along the right road. By telling the coal industry that it must break even by 1983, in the present muddle of nuclear policy and nuclear decision-taking, and while they play about without limit or restraint along the American road, the Government are risking the grave embarrassment of Britain and the society within it.
  I do not want to speak for too long—
  Mr. Skeet: Hear, hear.
  Mr. Hardy: I am delighted that the hon. Gentleman has been listening to my
  858
  speech. If he had not been, he would not have been annoyed.
  Mr. Skeet: I am courteous.
  Mr. Hardy: I have not taken anywhere near as long as the hon. Gentleman. I do not wish to take too long, because many of my hon. Friends wish to take part in the debate. They will be speaking as representatives of every part of the country and of every coalfield. There will be a unanimity of view. We wish to see the industry survive. It is in Britain's interests that it should do so.
  I have referred to the Under-Secretary of State's service to the industry. He has visited it and publicly paid tributes to it. Will he maintain his close contact with it? Will he ensure that he is at least able to understand the need for swift arrangements when it is necessary for them to be made? Will he continue to be aware of deteriorating events, entirely outside the industry's control, which will increase the intolerability of the pressure that the Bill places upon the industry? If the world recession worsens, and if the appalling industrial wasting continues, will the Minister ensure that the National Coal Board will not be irreparably damaged? If that were to happen, our children and their children would suffer.
  Reference has already been made to a one-legged Santa Clause. Few Labour Members believe in Father Christmas. However, we believe that the Prime Minister should be placed on top of a Christmas tree, so long as it was possible to remove the right, hon. Lady before the 12 days were over.
  Mr. Skeet: Cheap. Withdraw. The age of chivalry is not yet dead.
  Mr. Hardy: There are those who buy disposable Christmas trees. I also believe in disposable fairies. Will the Minister ensure that he maintains his contacts with the industry and that he meets the industry's representatives frequently, to ensure that a swift improvement in arrangements can be made if the recession gives rise to further difficulties? Will the Government ensure that the effort required from the National Coal Board in order to meet the timetable does not prevent investment at the 220-odd collieries that have substantial reserves? Will the Minister ensure that he does not prevent investment in the development of

  859
  new collieries, which must be working by the 1990s?
  Does the Minister accept that a carefully thought-out strategy will involve contingency plans to respond to any movement in the subsidies given by European countries? Does he accept that such a strategy will involve contingency plans in the event of the price of oil falling by a marked amount in real terms? There is anxiety that as the recession bites the price of oil will fall and cause temporary but serious consequences for world energy pricing. That could be disadvantageous to Britain.
  Will the Minister keep a close eye on recruitment? Many coalfields, including my own, face appalling problems. Recently, I spoke in the Chamber about unemployment. I am president of the youth organisations in South Yorkshire. I am deeply distressed about our level of unemployment. The National Coal Board is the only significant employer in my constituency that is providing constant opportunities. I should hate it to be plunged into any temporary difficulty that would make it impossible for it to maintain that contribution. Without it, heaven knows what would happen! In South Wales, such a position may already have been reached.
  Will the Minister explain to the Secretary of State that we do not think that he fully understands the length of lead times in mining development. He seems to imagine that the NCB can break even in two years' time. The Minister understands that lead times are enormous. That is unavoidable. Some of my hon. Friends went to the ceremony at Selby, when the first sods were removed. It was a great occasion, because for a decade or more we had argued that such development was essential. However, it will be 1984 or 1985 before full production is achieved. It will have been worth the investment. The Under-Secretary realises this. I am not convinced that the Secretary of State understands it.
  I have asked the Minister to answer several questions. The most important question that has been asked was that which was asked by another hon. Member in relation to the travesty of media interpretation. Several of my hon. Friends were miners. They are perhaps too modest to say that the national media's main interest is in the comments and actions
  860
  of one or two miners' leaders. Such men are able, colourful and perhaps controversial.
  Mr. Welsh: Moderates.
  Mr. Hardy: I do not wish to enter into a controversy with my hon. Friend. The hon. Member for Bedford probably takes an interest in the comments only of the colourful and controversial leaders. Recently, little attention has been given to reality. Despite the potential onslaught on coal, and despite the history of the past.10 or 40 years, the industry has been a national success. Our coal is not quarried; it is deep-mined. It is the most successfully deep-mined coal in Western Europe. Production by volume and by method is a success story. Last year, 4 million more tonnes were mined than in the year before.
  The coal industry is a family industry. No outside entrepreneur, city slicker or wide boy from the South-East has taken charge of the industry. The achievements have been the achievements of a family. Those who lead the industry were developed and trained in it. From time to time cynical words may have been spoken. Sometimes, there may have been abrasive comments and actions. However, although cynical words may have been expressed in the industry, Britain's position is not disdained. Conservative Members may not have appreciated certain forms of the industry's determination. However the national need has been served.
  Conservative Members always draw attention to miners' pay. The hon. Member for Bradford spoke about earnings of £100 a week. I would not go down a pit for £100; nor would the hon. Gentleman. Miners should be rewarded. This nation could have the greatest reward, and we shall be rewarded if our energy needs are met. That will be an important reward. However, our energy needs will not be met unless they are met by our principal present and future energy resource, namely, coal. Coal and the coal mining industry are too essential to be put in jeopardy by short-term calculations that seek to meet silly public expenditure targets.
  7.37 pm
  Mr. Edward Rowlands: It is a pity that a Bill that deals

  861
  with borrowing powers and the industry's increasing financial requirements should lead to a Division. We must explain why we intend to divide the House and why we oppose aspects of the Bill.
  This Bill is part of something else. It is part and parcel of a myopic financial view of the industry, and of its development. The industry is not being developed and expanded in the way that it could, and should be. It will suffer from artificial, cramping, financial limits imposed not in the interest of the industry's development, but for other reasons.
  Our second reason for dividing the House is that many parts of the coal industry can already see the effects of the Government's policy. They can see the consequences of the Government's attitude. That attitude is not only reflected in this Bill, but in the Government's stand-off policy towards the industry and its problems. They hold that attitude at the very moment when the industry needs the maximum degree of support, sympathy, and effort and the co-operation of the NCB, the National Union of Mineworkers and the Government.
  It has been suggested that we should strike notes of optimism and that we should preach the gospel of the industry's future. I share that view passionately. The Government's actions and indications have destroyed the optimism.
  We have never talked down our industry or our coalfields. However, now we must talk about the profound issues which face the industry. I shall concentrate on the South Wales coalfield. Its situation reflects the way in which Government policy will work through and affect the industry. Our fear is that the South Wales coalfield will bear the brunt of the Government's Scrooge-like approach to the industry. Anger is beginning to come from the coalfield. People are asking what they can do because they cannot depend on the Government. They go to see the Secretary of State and are greeted with a "No". They do not even get a sympathetic "No". A strategy was being evolved. The Government, the NCB and the NUM started to think through the problems. They published their thoughts in a document from the tripartite group of the South-West coalfield sub-committee. It did not come to
  862
  final conclusions but described the problems and paved the way for thinking through to a solution.
  The last four or five years have told a remarkable story. About £140 million of capital has been invested in pits, some like the one in my constituency which is nearly 100 years old. That investment has made it easier to get the coal out and to market it. As a result, productivity is rising. The cost of producing coal in South Wales is heavy because South Wales has an old and traditional coalfield. Seams are sunk as much as 600 feet down and a mile or two away from the base of a pithead. The last four or five years has been a period of modernisation and investment. With that has come change. The idea that miners are Luddites and opposed to change is nonsense.
  The Secretary of State told us about the cruel period of the 1950s and 1960s. Even in the 1970s a dozen pits in the South Wales coalfield were closed by agreement. It was proved to the NUM that the coal reserves were unobtainable or could not be reached in meaningful quantities at reasonable cost. The plan resulting from the tripartite talks was that as the problems of an old coalfield developed and the costs grew, a new coalfield would be developed. The plan was that two major new investments should be made to give the coalfield a future. The first element of the plan was that the enormous Margam coalfield, on the fringe of the constituency represented by my hon. Friend the Member for Ogmore (Mr. Powell), should be developed. That coalfield has 100 million tonnes of coal. It is a marvellous coalfield. Clustered around it is a group of traditional pits which still extract coal. The idea was that in the next seven or eight years—
  Mr. Skeet: Will the hon. Gentleman give way?
  Mr. Rowlands: So many of my hon. Friends wish to speak that I shall not give way. I should like to deploy my argument. I listened patiently to the hon. Gentleman's half-hour speech.
  By following the plan we could have tackled, gradually and sensibly, the problems caused by exhausted seams and geological difficulties in some of our older collieries. We could have transferred, socially, economically and industrially,

  863
  the experience of the individual miners and mining communities from the old coalfield to the new.
  The second part of the strategy involved the development of the new Phurnacite plant at Aberaman. That would have given a long-term future to the pits that serve it. It would also have established continuity in the nation's need for smokeless fuel. From that plant comes the whole of Britain's smokeless fuel production. If it closes down we shall have to import £50 million worth of smokeless fuel.
  That was the plan. We could have gradually and sensitively made the change. We could have ensured that we did not lose our skills and experience. We could have ensured that pits were not closed unnecessarily. We could have brought in new investment to coincide with the decline and closure of the oldest pits. That plan is now in grave danger. We need continuity of development, time and investment. The Government will give us none of that if they continue their policies, which are capable of destroying hope in the South Wales coalfield. The spectre of redundancies looms large.
  Reference has been made to recruitment. For the first time South Wales has stopped recruiting young apprentices. That is how we shall lose our young miners and the tradition of mining communities. Many communities are faced with the prospect of valleys littered with derelict pits and pitheads, and the slag heaps that go with them. Why? Alongside the Government's policy have come bolts out of the blue which have damaged the prospects of our coalfield. The first was the action by the British Steel Corporation. Its decisions on capacity had a profound effect. More tragic was its decision to buy coal from America. It bought 1 million tonnes and thereby removed from the South Wales coalfield that amount of the market overnight.
  I have heard firm stories that a BSC market man is in the United States considering buying more coal. That is a disaster for the South Wales coalfield. The Government say that it is nothing to do with them. We begged the Under-Secretary of State to take action on the Aberaman plant and the import of coking coal. We begged and pleaded with him. We did not have tea. We had sympathy but no action. The National Coal Board,
  864
  at great expense, sorted out a short-term deal with the BSC to save one half of its market with the BSC.
  The Government argue that the BSC is entitled to buy coal at any price. They say that if it can purchase fast, cheap American coal, good luck to it. They say that the market is free and that they must not interfere. I wonder why that principle was not applied elsewhere in South Wales? A month or two ago the potato producers in South Wales were faced with the prospect of being flooded with cheap potatoes from other countries. That was an obvious advantage to the British consumer. Like a flash the Government intervened and said "We must limit the quotas and cut imports because they damage the long-term prospects of the potato producers". Why is it that the Government can act in such a situation, at the expense of British consumers, but not intervene to save the Welsh coalfield from the BSC decision to import coal from America?
  In political and economic terms there is no difference between the two. However, there is not a single pit in Pembrokeshire, Croydon, Guildford or Finchley. There is not a single Conservative Member here with a coalfield in his constituency. There is, therefore, no political interest or clout. I do not wish to be cynical, but we cannot compete with American coal even if we close a dozen Welsh pits tomorrow, halve miners' pay, destroy the power of the NUM or emasculate the NCB. In West Virginia coal is scraped off the surface. It is shipped out in bulk. There is no way in which even the most efficient British coalfield can compete with such production.
  We shall never be able to compete, but we should not therefore conclude that we have to become dependent on that coal. The British Steel Corporation is in grave danger of depending wholly on foreign imports. In theory, North Sea oil could not compete with southern European or Kuwait oil, as our production costs are much greater. However, I repeat that we must not depend on foreign imports for our energy sources. That is one lesson that the oil sheikhs should have taught us.
  The strategy and plan of sensitive development in the South Wales coalfield will be destroyed by those imports. If

  865
  the Government continue to pursue a policy of short-term, myopic financial control over the coalfield, the consequences will be strange. The Minister is unlikely to broadcast this fact. The highest cost pits are the anthracite pits of West Wales. If the NCB is driven to make stupid, artificial, short-term financial decisions, the pits of Carnhedryn and Abernant, and the only anthracite coalfield in the country, will shortly have to be closed. That is no reflection on the miners or the board, but it is extremely difficult to get that coal. The cost is a heavy burden on the board's finances. It could be driven to the absurdity of having to close one of the most important and valuable coalfields in the United Kingdom. That illustrates the nonsense of the Government's myopic view.
  It is sad that the Government spend much of their time portraying nationalised industries as beggars, crawling on their knees—industries which have to be rapped on the knuckles for suggesting that there should be higher financial limits. Every other European country is willing to give its coal industry increasing subsidies to maintain and develop coalfields. European countries allowed the industry to run down very badly, but at least they have learnt their lesson. The West Germans are determined not to forget it. The problem is that they cannot find miners, because the mining communities have disappeared. We are in grave danger of the same thing happening in South Wales.
  While languidly draped over the Dispatch Box the Secretary of State had the gall to refer to the large number of pit closures in the period between 1966 and 1968. I was in the House at that time. As has been movingly described, the miners had then come to the conclusion that there was no future in the industry and that oil was king. They were convinced that they could not hope for better wages and that they had to accept rationalisation. The result was the closure of many pits in South Wales. We now realise that many of those pits should not have been closed, but we have learnt our lesson. In 1974–75 we produced the tripartite strategy and a plan for coal, involving investment development. The worst, oldest and geologically faulty pits were closed, but at the same time there was
  866
  development and expansion. The Government have put those plans in jeopardy. They are myopic, but even worse, they do not want to learn the lessons of the 1950s and 1960s.
  7.57 pm
  Mr. Lawrence Cunliffe: I regret that the hon. Member for Bedford (Mr. Skeet) is not in the Chamber. He attempted a statistical slug-out over increases in productivity reflecting unit costs. In Committee he consistently distorted beyond recognition the facts, figures and image of our mining industry. It is claimed that Labour Members are too pessimistic about the future of our mining industry, but the Government are seeking to tie the hands of the NCB and the mining industry in the name of monetarism. I should relish the opportunity to deal with many of the incorrect points made by the hon. Gentleman, but I shall deal with only two.
  The hon. Gentleman spoke of falling demand for British coal consumption. The recession that has occurred through the Government's actions has affected demand for coal. The Government continually tell us that industry must stand on its own feet, but demand has decreased and investment has been cut back. Every day there are factory closures, especially in the North-East and the North-West. National and local investors, and those from abroad, lack confidence in the Government's attempt to stimulate the economy, as they promised in their manifesto, in order to increase our standard of living.
  It is a myth to claim that the British workman is responsible for the problems and that he is lazy and indifferent to his task. That is certainly not true in the mining industry, as has been proved by a magnificent year of profits, increased productivity, decreased absenteeism and increased exports. There is a tremendous spin-off from the mining industry to the rest of British industry.
  We constantly use the slogan "Buy British", and it is the proud achievement of the National Coal Board that 98 per cent. of all the goods and materials that it uses are British made. We must learn that investment in one industry has major consequences in helping others to become more viable and efficient.

  867
  The Secretary of State referred to the Venice summit. He stressed the reaffirmation by Britain of the energy requirements to be met by the year 2000. We challenged the Government at the second sitting of the Committee and claimed that the Bill should be reappraised in the light of the summit meeting. We said that the Government should step back from the financial obstinacy that they were sustaining by being inflexible over the phasing out of operating grants.
  The House must realise that we cannot turn back the clock, as the Government are attempting to do with the NCB's balance sheets. They intend to mark back the books, so that a break-even result can show a loss of £190 million. That is political chicanery, trickery and deception.
  I am sure that the Government and the Prime Minister have failed abysmally to understand the magnitude of the problem of world energy requirements. They show a degree of indifference when they have to put their money where their mouths are. It was pointless for them to pay lip-service to a commitment to double coal production when they were imposing on the British mining industry the financial impediments contained in the Bill.
  If the Government want to restore the confidence of men and managers in the industry they should pump greater investment and aid into the industry instead of merely talking about the possibility of reappraising the situation in the autumn. With all the drive and determination in the world, the NCB could not break even by the dates laid down in the Bill.
  It has been said that we should make ourselves more competitive by increasing production and reducing unit costs, but many of our pits are uneconomic because of natural geological conditions and not because of any lack of effort by miners. It is ridiculous for the hon. Member for Bedford to compare unit costs and production norms in areas like the rich coalfields of Nottingham, with their 6ft. and 7ft. seams, with my part of the country, where we have small collieries with only 18in. seams, and where the men still have to crawl on their bellies and the pits have no mechanisation. Even so, they meet their production targets and,
  868
  since the new productivity deal, the men earn reasonable wages.
  Those men come from mining stock and mining communities. The great danger, as my hon. Friend the Member for Merthy Tydfil (Mr. Rowlands) pointed out, is that if we are not careful there will be no mining stock left to go down the pits when we experience a resurgence of demand for coal. It is all very well to say that we need mobility of labour, but some miners in my part of the country have already moved four or five times from region to region. They have said "Enough is enough. We are not risking the education of our children and moving home again. We will go on the dole before we move." Passions and emotions of that sort are being generated in the region. Those men cannot be moved like industrial nomads whenever it suits some economic objective. It is an inhuman process at the best of times.
  We acclaim the increase in the amount allocated to the pneumoconiosis compensation scheme, as do the miners. However, compensation cannot make up for the death of a miner whose family have seen the scourge of the disease and its effect on the body. Some of us believe that we should abolish the pneumoconiosis panels. The evidence of general practitioners, pathologists, and consultants who have kown and examined men for many years is rejected by the panels. One cannot convince the widow of a miner who was receiving a 60 or 70 per cent.—sometimes even a 100 per cent.—disability payment that a post mortem decision that her husband had chronic bronchitis is correct No rhetoric, persuasion or compassion can convince her that her husband did not suffer from the terrible disease of pneumoconosis.
  I have had responsibility for rehabilitating many sufferers at NCB engineering services workshops. It is a thankless task to have to watch them deteriorate. It is a progressive disease that eats the lungs away, and even if we doubled the amount of compensation it would not ease the feelings of the widows and families who have seen their men suffer. I make a plea that at some time in the future we should consider a more human approach to some of the problems involved in this area.
  British miners view the present situation with some anger and suspicion. The Under-Secretary satisfied the Opposition

  869
  with his reasonable approach to some matters in Committee, but it was obvious that he did not have much leeway and was in a straitjacket. Unless confidence is restored to the mining industry, backed by hard financial investment, better conditions and better remuneration, we shall never reach the commitment that we have made to double production by the year 2000 within the EEC terms and the Venice summit.
  8.10 pm
  Dr. Roger Thomas: It is a great privilege to follow the oration by my hon. Friend the Member for Leigh (Mr. Cunliffe) who, with his expertise, made some telling contributions in Committee. His case tonight, proposed with conviction, was irresistible.
  In the wake of the double blow of the recession of 1973 and the oil prices of 1974, the Government and the country turned back to coal after the unhappy record of the 1960s. Even though British mines could provide adequate supplies for our own basic needs, both the Central Electricity Generating Board and, in particular, the British Steel Corporation, have been allowed to import coal. Even during the early years of "Plan for Coal" which saw a major turnaround in investment in our indigenous industry, oil-fired power stations actually increased their proportion and contribution for pre-1973–74 decisions to be carried out. There was, about that time, a hesitancy in the Government's commitment to coal. I gather daily the impression that this hesitancy is fast returning. There is daily evidence coming to light to support this view.
  The greater the output and commitment to coal, the less will be the demand upon our far from limitless supplies of oil and natural gas. It is natural and rational to insist that future power stations could be run on coal—and on indigenous coal at that. Plans to convert oil-fired power stations to coal should be expedited. This would mean that the depletion rate of offshore oil and gas could be handled far more effectively. The great boon to our economy would not be frittered away too hastily. This can be achieved only by a commitment to coal that is above the figure envisaged by the Government over the coming decade.
  870
  The Government have also deliberately loosened their grip and control over North Sea oil instead of extending their interests into allied oil processing industries, the result being a far more curtailed advantage for the British people. It is now clear that the Government are determined to streamline the coal industry so that it all falls within the category of well-designed, well-equipped, highly mechanised, high-productivity mining capacity. If that is the case, further contraction is bound to occur.
  The Prime Minister, in her famous speech at Swansea last week, more or less told the Welsh workers—the Welsh miners were not excluded—that, if they wish to play a vital part in the industry, they will have to be prepared to be mobile. That mobility would not be confined to moving from pit to pit within South Wales but would mean being prepared to move to the geologically lucrative mines that extract coal east of the Pennines. This amounts, unfortunately, to a further piece of evidence that the Government do not really care for Wales. Neither do they appear to care very much more for the other long standing, less prosperous regions that contain the more perilous parts of the peripheral coalfields of the United Kingdom.
  The slump of 1973 followed by the oil crisis of 1974 marked a turning point for our energy policy as much as for our economic policy in general. Nuclear power is said to be cheaper than power from coal-fired stations, but the CEGB is not fully forthcoming with the essential statistics on relative costs. Further comparison is difficult when the former is technically a continuous process and the latter are used for the variable part of the required load. A statement such as that from the chairman of the CEGB to the effect that up to the end of March 1978 the electricity consumer will have saved, through present nuclear capacity, up to £ 100 million, compared with the costs of alternative coal-fired stations, is hardly calculated to help the coal mining industry to assist this country to use its reserves of fossilised fuels to the full.
  Yet, in a parliamentary reply on 23 April, the Department of Energy stated:
  "Current research should enable disposal routes to be developed before the end of the century."— [Official Report, 23 April 1980; Vol. 984, c. 173].

  871
  The operative word is "should". There is no element of certainty in the Minister's reply. It has to be taken on trust that the safe management and disposal of nuclear waste to which both the Government and the nuclear industry are giving their highest priority will provide that degree of total safety that our people deserve and demand.
  In 1979–80, the domestic market apparently became the coal industry's second largest after many years of decline. Sales of domestic solid fuel appliances are certainly increasing as oil becomes prohibitively expensive. We have an advisory service second to none. Yet there is a mounting fear that coal supplies for these families, who have now been convinced that their homes should be heated by coal, will come from outside the British Isles. This is a distressing and despicable situation if it is allowed to develop.
  In the anthracite areas of the South Wales coalfield, where geological unpredictabilities are gathering momentum, supplying new domestic and, to a lesser extent, industrial consumers will result either in importation or resorting to opencast methods of coal extraction, a method that is wholly unacceptable unless more concessions are forthcoming both in regard to the relative disturbances between blasting and occupied dwellings, the desecration of the countryside to resemble parts of distant planets, and we have the long overdue improvement of transportation, with more reliance upon rail and far less upon inadequate roads, both in quality and upkeep.
  For the domestic consumer, energy is now a very costly item. The recent price increases have hit the low-paid and the pensioners very badly. Their fuel bills form over 12 per cent. of their living costs compared with a third of that percentage for those with higher incomes.
  I remind the Under-Secretary, whose placatory tones and conciliatory nature we witnessed during the Committee stage, of his final contribution to that Committee stage, in which he said:
  "I see no reason why I should not initiate a form of tripartite debate immediately"— [Official Report, Standing Committee B, 15 July 1980; c. 327.]
  This is something that we wish the Secretary of State to carry out.
  8.19 pm
  Mr. Ray Powell: Having listened to my hon. Friends I can safely say that although over past weeks we continually win the arguments we lose the votes. On the crucial issue of coal and energy and this Bill, the Conservatives have been able to field two supporting speakers whereas the Labour Benches could continue all night.
  Sir Anthony Meyer rose—
  Mr. Powell: I have no wish to give way. Let me start first. The hon. Gentleman will have an opportunity to address the House. He may interject later. I am sure that he will have a lot more to interject before I have concluded.
  I am the son of a miner. My hon. Friend the Member for Leigh (Mr. Cunliffe) referred to pneumoconiosis, which is covered in the Bill. An extra £7 million will be allocated in payment for pneumoconiosis sufferers in the mining industry. My father died from pneumoconiosis 25 years ago, but he was not compensated. My mother was one of the widows referred to by my hon. Friend who was searching for compensation. We are not going back to what happened 25 years ago, but we shall not progress favourably with the Government's proposals. Does the hon. Gentleman wish to intervene now?
  Sir A. Meyer: I was merely going to say that, although I had to be absent for part of the debate, I expected that we would witness a truly united onslaught of all Members representing Welsh Labour mining constituencies. From what I have been able to make out, there have not been more than four Welsh Members present. That is hardly the overwhelming onslaught that we expected.
  Mr. Powell: I am surprised that the hon. Gentleman should interject in that fashion. I have been here since the start of the debate. I went to the toilet, so I might have missed the hon. Gentleman then. He may have been in his place then. But he has not been here throughout the debate. Therefore, how can he know how many Welsh Members have been in the Chamber? Most of the Welsh Members representing mining areas have been in the Chamber tonight. They declared their intention of allowing most of the sponsored NUM Members to speak

  873
  first and then for others with mining interests, such as mine in Ogmore, to speak in the later part of the debate. I cannot see why the hon. Gentleman was so eager to speak. Five Labour Members still wish to speak.
  Mr. Skinner: They have been boozing all day.
  Mr. Powell: I listened to the speech by the hon. Member for Bedford (Mr. Skeet), but I could not follow his argument. He reminded me of a colliery manager in the Rhondda, who used to hold his thumb in his waistcoat pocket and speak with an accent similar to the hon. Gentleman's, but he had never been down the mine.
  Mrs. Kellett-Bowman: My hon. Friend has.
  Mr. Powell: I wonder whether he ever worked in a 2ft. 6in. seam. It would not appear from his accent that he had ever worked in a colliery.
  The Minister stated that the Government could give the necessary assistance to sustain a viable local industry. The National Coal Board cannot live within these cash limits. The NUM said that it could not live within this financial strait-jacket. We know of the difficulties that the NCB and the NUM would have if the board had to live within this financial straitjacket.
  We should be planning a fuel policy that will not only meet the requirements of today but will match the needs of tomorrow. It was easy for hon. Gentlemen to intervene when the Minister referred to the closures and rundown in the mid-1960s. Many Labour Members objected strongly. However, it is still reasonable for Opposition Members to refer to the coal industry that the Conservative Government inherited 14 months ago.
  The United Kingdom coal industry is the largest in Western Europe and one of the most technologically advanced in the world. Annually, only 1 million tonnes of coal are produced by private enterprise, compared with 120 million tonnes by the NCB. Last year the industry saved Britain £5 billion in foreign exchange at current oil prices. It met 40 per cent. of Britain's energy needs. The right approach by the previous Labour
  874
  Government enabled productivity to rise by 8 per cent., which was matched by increased sales in 1978–79. Coal generated three-quarters of the nation's electricity. We have estimated reserves of 45,000 million tonnes—sufficient to last 300 years at current rates of extraction.
  I have set out the success of the coal industry to the date when this Government took office. That was the state of the industry 14 months ago. I refer now to the worry, fear, and anxiety already created in the 14 months of this Tory Administration. My right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) referred to the reduction of demand as a result of recession. He asked for more power to be created by coal, not oil. That would be a major step forward, which would help to solve the problem in the coal industry. That was an excellent suggestion, which the Government should consider.
  The demanning of Port Talbot alone will throw 8,000 steel workers out of work. The demand for coking coal will obviously fall. Four collieries in my constituency producing coking coal employ 4,000 workers, who will be in fear of losing their jobs. Those collieries are St. John's, the Wyndham and Western, Ogmore Valley and Falddu, in the Garus Valley. They are desperately attempting to break even or to make a profit. The closure of the collieries will mean the death of the valleys. We have seen this happen before in Wales. In the Rhondda, where I was born, there were 38 collieries in 1955. Now there is only one, and that is due to be closed.
  The Welsh miners, particularly the South Wales miners, will fight and win, if not for themselves for their children and their children's children. They fear being out of work. What jobs can be offered to the miners in Wales?
  Mr. D. N. Campbell-Savours: They can move.
  Mr. Powell: I am coming to the point about moving. They have moved from Wales in the past. Slough was considered to be a Welsh town. People went from the Welsh valleys to Slough.
  About 11,000 workers could be made redundant in and around Ogmore. We listened to the Prime Minister today saying that the Welsh unemployed should move elsewhere within Wales. My hon.

  875
  Friend the Member for Carmarthen (Dr. Thomas) referred to her speech on Saturday.
  I was at the rally on Saturday. The Prime Minister must have seen the people only through the windows of her party's pavilion in Swansea, because her supporters ushered her in through the back door and out again by the back door. Yet when she did see the people through the windows she said that she was glad that they were not on her side.
  Sir Anthony Meyer Sir Anthony Meyer rose—
  Mr. Powell: I do not intend to give way again. I know that the hon. Member for Flint, West (Sir A. Meyer) was at that conference. The Prime Minister said that she was glad that those people were not on her side. But 14 months ago she conned them into being on her side. She conned some of those trade unionists who were marching in Swansea on Saturday. She did not even bother to visit the industries and the factories that are going bust in Wales, though she was invited to do so by my hon. Friend the Member for Swansea, East (Mr. Anderson) and my right hon. Friend the Member for Swansea, West (Mr. Williams).
  The Prime Minister did not accept the challenge. She was in and out of Swansea without so much as a farewell. She simply left the message that if the unemployed wanted work in Wales they must go and find it. My advice to my constituents—and I have 16,000 to spare—is that they should move to Finchley, because if we wish to move the right hon. Lady by the democratic process we should get rid of her there.
  Sir A. Meyer: I am quite sure that the hon. Gentleman does not wish to be unfair. I know how fair-minded he is. However, the Prime Minister's comments about not wishing to have those people on her side were not directed to those taking part in the official Labour Party demonstration. She was addressing a group of extremely unruly members of the Socialist Workers Party. It was they who completely wrecked the Labour Party demonstration. I am quite certain that the hon. Gentleman would no more wish to have them on his side than would my right hon. Friend the Prime Minister.
  Mr. Powell: I took it that the Prime Minister was addressing a Tory conference. I am given to understand that it was made up mostly of out-of-work civil servants. Whether she was addressing her remarks to them I do not know, but I understood that she was referring to the demonstration and the 10,000 trade unionists who were marching.
  My right hon. Friend the Leader of the Opposition asked the Prime Minister today where the workers should move to within Wales. It was apparent that the Prime Minister did not wish the workers to move out of Wales. She wished them to move within Wales. The cry of Opposition Members was "Where in Wales will unemployed workers find jobs?"
  Mr. Skinner: How about Shotton?
  Mr. Powell: My hon. Friend the Member for Bolsover (Mr. Skinner) refers to Shotton. I was about to refer to the percentage of unemployment in my area. Fourteen months ago Ogmore was a growth area. The unemployment figure was 3.8 per cent. There was the prospect of a new Ford engine works at Bridgend. That factory was intended to employ about 2,300 people and it was to receive a subsidy of £180 million. What has happened to that project within 14 months?
  The factory will now require only 1,500 workers, and 500 of them will be redundant workers from Ford factories at Swansea and elsewhere. That means that we shall have only 1,000 new jobs in Bridgend despite the £180 million subsidy. Ogmore now has an 8·5 per cent. rate of unemployment. That means 4,500 people out of work according to last week's figure, and that total excludes 500 students. Therefore, the real total is 5,000.
  The most disappointing fact is that 5,000 people are looking for jobs and the number of registered vacancies in the Port Talbot travel-to-work area is 50. There are 50 jobs, with 5,000 people seeking them.
  Perhaps Ministers will tell us where the unemployed in my constituency will find jobs in Wales. They cannot go anywhere else. If they go to Shotton they will find that the unemployment figure there is 30 per cent. Unemployment figures are high all over Wales, with the exception of Carmarthen, which has about 3 per

  877
  cent. We asked today, where are these people to find jobs, not only in Wales but outside? The same situation exists practically all over the country.
  My hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) covered most of the points that I wished to raise about the development at Margam. This is something that the Minister should reconsider. It is important to us in Ogmore. Port Talbot and the Neath valleys. If that mine is opened and investment is put in it could accommodate a number of colliers who are in areas that are oversubscribed. I share my hon. Friend's opinion about young people who cannot get jobs in collieries in Wales. There is not one vacancy for young people in the coalfields of South Wales at present.
  8.37 pm
  Mr. John Evans: I am sure that the whole House will recognise that this has been a truly remarkable debate, particularly because of the speeches that we have heard from this side of the Chamber from men who have spent their entire lives in the coal mining industry. They revealed their tremendous knowledge of that industry. We have had only two contributions from the Conservative Benches—an interesting contribution from the hon. Member for Sheffield, Hallam (Mr. Osborn) and a remarkable speech from the hon. Member for Bedford (Mr. Skeet), to whom I shall refer later. We also had a typically evil intervention from the hon. Member for Flint, West (Sir A. Meyer), who enjoys an odious reputation as a result of his interventions. It added nothing to the debate, but that is the sort of thing that we now expect from him.
  I have a considerable constituency and personal interest in this debate. I have two collieries in my constituency, Parkside and Golborne, where 10 miners lost their lives in a dreadful pit accident last year. It is worth while putting on record that there is an additional price to be paid for coal by the miners—often with their lives. When some people discuss the mining industry, they overlook that fact.
  I shall be brief because I know that my hon. Friend the Member for Bolsover (Mr. Skinner) wants to participate in the debate, but I feel that it is important to rebut the statement that the Secretary of
  878
  State made in opening the debate when he denied that the Bill was deliberately tightly drawn. The Under-Secretary is well aware of the serious difficulties that we had in Committee in attempting to put down amendments because of the tightness of the money resolution. It was drawn over-tightly to prevent the far-reaching debate that is necessary on the future of the coal mining industry. In a debate about an industry as fundamental as coal mining we need to know the targets that the Government want to set for coal production, not only for the short-term, but for the medium and long terms.
  It is right to pay tribute both to the Under-Secretary and to the Chairman of the Committee for the way in which they responded to our speeches which, if I am honest, were sometimes not entirely in order. The Government accepted one minor amendment to clause 1 (1)—to delete the words "on one occasion only". That referred to the authority of the Secretary of State, with the approval of the Treasury, to increase the borrowing requirement by statutory instrument from £3,400 million to £4,200 million. That sums up the differences between the two parties and the inflexible approach adopted by the Government to the borrowing requirements of the NCB.
  All the leaders in the Western world recognise that coal has a great future. The Under-Secretary will recall that we spent some time in Committee, both before and after the Prime Minister reported to the House on the Venice communique, discussing that matter. The communique recognised that the output of coal in the Western world should be doubled by 1990, from 600 million tonnes to 1,200 million tonnes. Because Britain has technically recoverable reserves of coal of 45 billion tonnes, we assumed that the Prime Minister would rush back to Britain to pronounce from the Front Bench on the wonderful future for the coal mining industry, its enormous reserves of coal, and the attitude of the world leaders. Italy and Japan do not produce coal. Therefore, to meet the agreed target for cutting oil consumption those countries will have greatly to expand their coal imports.
  Hon. Members will recall that the Prime Minister adopted a cold and negative attitude to the questions that were

  879
  put to her about the Venice communique. She made it clear that the British coal industry would not play any part in the doubling of the Western world's coal output. To refresh my memory I read her answers. She gave a remarkable reply to my hon. Friend the Member for Rother Valley (Mr. Hardy), who referred to productivity in the coal industry. She said:
  "I am very well aware of the substantial improvements in productivity in the coal industry, and I welcome them. With respect, such improvements have so far not been reflected in a lessening of the increase in price."— [Official Report, 24 June 1980; Vol. 987, c. 245.]
  That remarkable answer constrasts vividly with the Government's attitude, and especially with the attitude of the Department of Energy, to gas prices. Gas is another element of the energy industry. Despite the enormous profits that that industry has made over the past few years the Government have decreed that the price of gas should be increased, and that it should be increased further by another 10 per cent. in October. We asked how the market forces applied to the gas industry. We were told that a different set of market forces applied and that the price of gas should be increased in line with the price of oil.
  It seems to be a "no win" situation when one element of the energy sector finds that its prices will be increased despite the enormous profits that it is making, whereas another and even more important element—the coal industry—finds that it is castigated because it has not lessened the increase in the price of coal.
  I suspect that if the sums of the past few years were done correctly we would find that in real terms, taking inflation into account, coal prices have probably lessened somewhat. However, it is interesting to note that the right hon. Lady constantly carps about competitive prices and the need for the British coal industry to be competitive. No Labour Member quarrels with the necessity for the industry to be competitive. Indeed, no Labour Member would complain about any segment of British industry being competitive. But we must ask "Competitive with what?" That is where we always run into difficulties.
  My right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) referred
  880
  to subsidies in EEC countries. He indicated that the subsidy was £34 per tonne in Belgium, £18 per tonne in France, £15 per tonne in West Germany and £1 per tonne in the United Kingdom. How on earth is British industry supposed to compete on equal terms with industries that receive subsidies of that order?
  The hon. Member for Bedford, who unfortunately, has not resumed his place, referred to competition from South Africa. Do I need to remind the House that the South African coal mining industry is virtually serviced by slave labour? Is any hon. Member seriously suggesting that competition from South African mines should be considered fair competition? The same applies to competition from Eastern European countries. Every hon. Member, whatever his political views or beliefs, knows that competition from Eastern European countries simply cannot be measured in terms of fairness, because we do not know the base from which they start. We must always ask that question when we refer to fair competition.
  The Prime Minister, the Secretaries of State for Energy and for Industry, and all of that ilk, constantly put British industry—certainly the coal mining industry—into a Catch-22 situation. They constantly say that if it wants to compete in world markets it must be competitive. But at the same time, particularly in relation to coal, they allow subsidised imports to come in which undermine the rejuvenation of industry. How on earth can one win in those circumstances?
  The British coal mining industry has a right to compete on an equal basis. One would have expected Conservative Members who constantly proclaim their patriotism, to agree with that view although at times they do not seem to extend that patriotism to British workers. Unfortunately—this applies not only to the coal mining industry but to almost every other industry—we cannot achieve that equal basis from which to compete. Until such time as the Government come clean, I suspect that there will always be the cry for the necessity to have import controls in order to protect the British industrial base.
  We also know that the cash limits that have been imposed on the industry are far too rigid and operate over far too short

  881
  a time scale. We all know that this industry requires massive capital expenditure. One cannot open a new colliery or start a new coalfield without masses of capital expenditure. The mining industry is publicly owned, and therefore its finance must come from the public purse. We shall reap the benefits in the years to come.
  I do not think that any Tony Member, no matter how Right wing he may be, would dare suggest that the price of oil will fall in the future. We all know that the price of oil will continue to escalate. In his ridiculous comparison between coal and oil the hon. Member for Bedford suggested that the price ratio between oil and coal was narrowing, even though it is 14 per cent. in favour of coal at present. Yet we all know that after the next OPEC meeting the price ratio will again widen substantially.
  We recognise that the increases in the borrowing limits are welcome, yet we know that they are unnecessary. The Opposition, the coal mining industry and the NUM recognise the sugar-coated pill that is offered to them. Part of the price that must be paid for the increased borrowing limits is colliery closures. The Government know that they will run into substantial difficulties when they attempt to embark upon that programme. We said repeatedly in Committee that no one in the industry or the Opposition would ever object to a mine being closed because its reserves had been exhausted. No miner wants to work down below and send up dirt and dust. We are talking about collieries which may now be uneconomic in narrow financial terms but which, in the foreseeable future, will be economic because of the ever-rising price of oil. Mistakes were made in the late 1950s and 1960s when mines were closed, yet if we could now open them at a reasonable cost they would be economic. They would produce coal economically. In the past they were classed as uneconomic in comparison with the price of oil.
  There is a necessity for a healthy and expanding industry which, if given half a chance, will take its place by exporting coal throughout the world. The majority of the mining industry is in the development and assisted areas. Even Government supporters know that the northern
  882
  half of Britain is in a state of near collapse because of Government policies, yet here we have an industry which, given a chance, could expand. The mining industry, when it was expanding, was an enormous purchaser of materials on a vast scale. If that expansion were repeated today it would give a stimulus to other industries in the area. That is part of the policy which we seek to persuade the Government to adopt.
  Like the hon. Member for Bedford, I am a supporter of the British nuclear industry. Hardly surprisingly, I have a personal interest and belief in the industry. In addition, 6,500 of my constituents work at the Atomic Energy Authority establishment at Risley. There is a great disparity between the Government's attitude to capital expenditure in the mining industry, where we are talking about the expenditure of £4·2 billion over the next few years, and their attitude to the expansion programme for the nuclear industry—with which I agree—where we are talking in terms of a £20 billion-plus expansion.
  In those circumstances it hardly seems surprising that members of the mining fraternity tend towards the view that the nuclear industry is being allowed to grow at the expense of the mining industry. In view of the arguments of the hon. Member for Bedford, it appears that miners' fears are justified, especially when we consider Government policy on defence expenditure. We have already expended £920 million on the Sting Ray torpedo, yet we do not have a torpedo. We shall spend £5 billion on Trident. We are increasing the defence budget in almost every area to kill people, yet here we are discussing an industry that will create wealth and happiness for millions of people.
  One of the other elements in the argument about energy supplies is the plight of the Third world. I do not have time to go into that. However, if we are ever to alleviate the sufferings of the people of the Third world, energy must play a large part in improving their lot. Surely, in that area alone, the expansion of the British coal industry is in their interests.
  Despite the protestations of good faith by the Government, and especially the Secretary of State, they have managed to convey the feeling to the country that the

  883
  Bill is to be interpreted as cutting back on coal production and spearheading pit closures. The Secretary of State will have a difficult job during the next few months in trying to get it across to the mining industry that that is not the intention of the Bill. That is why I and my hon. Friends will vote for the amendment tonight.
  8.55 pm
  Mr. Dennis Skinner: I realise that the House wants to progress quickly, and I shall not delay it too long.
  One of the things that needs to be said at the outset of my speech is that any Bill that reduces the ability of workers within the public sector must be set against the background of strategy which the Tory Government purport to follow—that of shifting the balance of power away from working class people and their organisations, principally the trade unions, to the bosses. That is putting the matter simply and bluntly, but it is the sort of philosophy that was pointed to by the Secretary of State for Industry before the Tory Government were elected. He made it clear that his main aim would be to shift that balance of power. His main argument was that during the course of the previous Labour Government, and other Governments before that—even the Government of whom the Secretary of State was a member when he messed up the National Health Service—the ratchet had moved too far the other way, and had to be pushed back. The Bill must be looked at against that background. It cannot be looked at in isolation by a "wet" such as the junior Minister, who may be described as a pleasant fellow who tries his best.
  The Tory strategy on the Coal Industry Bill is no different from their strategy on all the other attempts—some successful—to decimate the public sector by cutting public expenditure, allowing prices to rip, allowing interest rates to rocket to the highest level ever, and reducing wages. We now hear the continuing cry of the Prime Minister and her Cabinet colleagues about the need to cut back on wages in order to squeeze inflation out of the economy. That is why this Bill has been described as an attack on the mining industry. However the Under-Secretary of State may reply to some of the questions, the plain fact is that the Government are trying to reduce the power of
  884
  miners and the mining industry by appealing to miners, and saying "We are not attacking you as we are attacking the rest." The only reason why they are not attacking the miners as they are attacking the public sector workers—local government, railway and civil aviation workers—is simply that on previous occasions the miners have been strong enough to take up the cudgels and knock this Tory Government flat on their back.
  Mr. John Evans: Let us knock them down again.
  Mrs. Kellett-Bowman: Which Tory Government?
  Mr. Skinner: The previous Tory Government. They are all the same.
  In 1974, when the miners put the Tory Government out of office, we were on a three-day week. Now we have another Tory Government, and there is hardly any difference.
  Mr. Evans: No one is working.
  Mr. Skinner: It has become official Tory policy to throw people on to a three-day, two-day, one-day, and even a no-day week. The Government have even put forward a Bill to remove the earnings-related supplement. The miners will be affected more than some other workers in that respect. There are also attacks upon the miners' voluntary retirement scheme, by withdrawing the first 312 days of unemployment benefit. These are other attacks that are coming from the Tories. That is why I take this opportunity to attack the Tories once again.
  Some people have the impression that a few of us on the Left wing of the Labour Party do not spend much time attacking the Tories. [Hon. Members: "Where are they?"] I cannot account for them, but I know what I am in business to do. [Hon. Members: "They have just walked in."] Yes, they have come to hear me.
  The Tories were also elected to attack the principle of free collective bargaining. There is no doubt at all that a few blue collar workers were stupid enough to believe the Tories' propaganda in many constituencies, particularly in the South of England. They were carried away with some of the fanciful ideas put forward by the Tories. A few people

  885
  thought that perhaps they would find Utopia under the new axis of Thatcher and Murdoch. [Interruption.] Why do I mention Murdoch? Tory Members know who I mean—
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. We must confine ourselves to the Coal Industry Bill.
  Mr. Skinner: What I am attempting to suggest, Mr. Deputy Speaker, at the beginning of my contribution, is that we cannot look at the Bill in isolation from the rest of what the Tories are doing. It is an attack upon the working class. The Tories want to shift the balance of power away from the working class to their own class. That is why we have this Bill today.
  But, quite apart from that, the Bill is barmy. The Government are hell-bent on trying to reduce the bargaining power of workers in the pits and hell-bent on changing and shifting the economy to their own way of thinking. Even set against that background, the economics of the Bill are crazy. We are dealing with the coal industry. It is no different from others around the globe, apart from a few exceptions such as those in America where open-cast mining takes place to a greater extent than here, so that the productivity is bound to be much higher. Not as many miners, as a percentage of the total, have to go down the pits.
  We are looking at an industry that is extractive in nature. A pit is not like a factory which can be producing marsh-mallows one week and typewriters the next. Almost without exception, once pits have been closed, they are closed for ever.
  Some of my hon. Friends from Wales have spoken tonight. I met them at the Welsh miners' rally a few weeks ago. When I looked at them and at the miners they represent in the Welsh valleys, I was taken back to the 1930s and to the occasions when Governments of all kinds were saying "Shut the pits, shift the miners, let them go to Coventry." Coventry then was the new Utopia. Cars were being built there and cars were the "in" thing. There was lots of manufacture and lots of engineering. People said "Miners are skilled and able to do a lot of hard work. Let them go to Coventry." They also went to Corby. Those
  886
  who went there were mainly from Scotland. There were all these new little havens for people on the move. The Tories are trying to do it again now.
  Mr. Rowlands: We shall not go again.
  Mr. Skinner: They were industrial gipsies. Where are the jobs now? Where are the towns that the Prime Minister talks about to which the miners will have to go if they are thrown out of work again in the Welsh valleys?
  Mr. Rowlands: We shall not be moved again.
  Mr. Skinner: Are they to go to Shot-ton, with 30 per cent. unemployed? Are they to go to the towns that have been producing cars? Are they to go to the towns that used to produce textiles but now produce hardly any textiles? Are they to go to towns in the Midlands which have known prosperity, relatively speaking, and which for decades have never known unemployment of the kind that we are witnessing now? Would they go to any of those towns? There are no jobs there. There is too much competition in any event. There is nowhere for these people to move to throughout the length and breadth of Great Britain.
  The Bill has been introduced to reduce the ability of Britain to produce much-needed energy. We cannot turn off taps in the coal industry as in the North Sea and say "Let us run it down for a while. Let us leave it for five years. Let us slow it down." That cannot be done with the pits. Once they are shut, they are gone.
  If the Minister is as right as he has been described by some—I do not know about these things—he should examine what he is doing. The coal industry has to be supported. Apart from the coal industry there is only one other major industry that has not been tackled by Governments by reductions and stop-go policies. I refer to the food industry. It has been argued for generations that we need food and more besides. It is considered spendid if we can produce more food to enable us to improve the balance of payments. All Governments, including the present one, say "Yes. We shall have intervention in the food industry. We shall intervene in every region, pump in money, take out money and put more in." It is exactly the same with the mines.

  887
  The mining industry must be considered against the background that I have presented. We must ensure that we have sufficient coal, not merely while we have a Tory Government, but for the next five years and for generations to follow. We do not have so much oil or gas in the North Sea that we can afford to shut down pits.
  We hear so much nowadays about wind power, solar power and the liquefaction of coal. These are all splendid schemes, but we do not have them in operation. The chance of having them in abundance is negligible unless there is a massive breakthrough in technology. We must remember where we have enery in abundance compared with the energy resources of many of our major competitors.
  We have the largest coal industry in Europe. Recently the Prime Minister went to Venice to meet all those wonderful people from Europe. That cost the taxpayer about £17,000 for the two weekends. The Government were not worried about spending money then. They were not talking about cutting expenditure during the Venice trips. The first trip cost £8,000 and the second £9,000. That was the cost of swanning along on the gondolas.
  The right hon. Lady returned with a piece of paper. It was rather like another Tory Prime Minister who returned with a piece of paper in his hand. On this occasion it read "Double coal production". The miners were not exactly cheering. However, down in the pits in Bolsover and many other areas, especially in Wales, they must have said "That must be sensible. The Common Market has been a crazy set-up for us all. It has resulted in more imports. There have been £6 million worth of extra imports this year as opposed to an extra £2½ million during the last year of the previous Labour Government. However, here is a chance. Someone is saying something that is sensible. If they want to double coal production, that means that they will keep all the pits in Wales."
  The Prime Minister put the tin hat on all that within days. She said "It did not really mean the United Kingdom. It meant doubling coal production generally but not here." After that she went to Wales and made her infamous speech. She insulted the Welsh people on their
  888
  own territory. She was saying, in effect, "Go on, pack your bags and go." The message was rather like that of Prime Ministers in the 1920s and the 1930s. I have news for Tory Prime Ministers. The youth of today are not as docile as their forefathers. The people in the 1920s and 1930s had never known other than intermittent periods of long unemployment. They had never been able to experience a system in which it was possible for everybody to have a job. However, for two decades after the Second World War it became apparent to generations that such a system was feasible. That was so until the late 1960s.
  Mr. Tim Eggar: Until the Labour Government.
  Mr. Skinner: There were never more than half a million unemployed. However, there are nearly 2 million people out of work now. The Minister should consider the Bill together with some of the speeches, detailed remarks and questions that my hon. Friends have put forward. The Minister said that he would be flexible in terms of deficit financing. I remember those words. Perhaps the Prime Minister has told him that he cannot use them again. I remembered those words, because they were very important. I said to myself "Christ Almighty, there's a gleam coming through this one."
  The Minister should bear in mind that the coal industry can produce over 100 million tonnes, and has the capacity to double that figure. It would demand a tremendous effort and would take about 10 years to do. However, given the new coalfields in Selby, the Vale of Belvoir, and so on, it can be done. We must retain the pits in Wales and Scotland. We must ensure that we have sufficient markets in terms of electricity, the sale of domestic coal and industrial usage. If there were interdependence and interlocking between the coal industry, the steel industry and those that use coal and if we prevented the Government from throwing more people on the scrap heap, we should not only save the coal industry but in addition we should do something sensible for the nation. Many jobs could be saved, and the resulting spin-off would be beneficial to all.
  9.11 pm
  Mr. Alex Eadie: It has been said that there is one certainty about

  889
  the debate, and that is that we shall win the argument about the Bill. Any hon. Member with experience of our proceedings will accept that that is the logical conclusion. It has also been said that, although we will win the argument and the debate, we shall lose the vote. As we reach the end of this important Third Reading, it is important to set out the progress that has been made. What concessions or hope have the Government given us? After a day's debate on Second Reading, seven Committee sittings, and a day on Third Reading, the Opposition must consider that.
  The catalogue of the Government's promises and assurances is very thin, but they should be listed so that the Minister can confirm them. Only two important promises have been made. Perhaps the Minister recollects that in Committee he replied to a debate on clause 1. On 1 July he gave a specific undertaking. He said that Government financial aid to the research and development pilot projects for the extraction of oil from coal would involve capital sums in addition to the ceilings in the Bill. That is one assurance that the Government gave but which we did not know about before the Committee stage.
  Health is of great importance to the miner. The Under-Secretary responded to hon. Members who complained about the diagnosis for compensation, under industrial injury benefit schemes, for diseases such as pneumoconiosis, bronchitis, emphysema and other diseases associated with work underground. My hon. Friend the Member for Carmarthen (Dr. Thomas) made an interesting contribution. He is a doctor who is acquainted with mining diseases, and he was of assistance to the Committee.
  The Minister said:
  "If my right hon. Friend the Secretary of State agrees I see no reason why I should not initiate a form of tripartite debate immediately where the Government, the board and the mining unions can meet to establish whether, in this whole area of health, we should be examining other potential initiatives. That is a perfectly legitimate and reasonable intention arising from this debate. I do not, however, believe that it is for us to investigate the prospect of doing it in a proper form, such as tripartite discussions."
  He went on:
  "I give a firm undertaking that I shall seek to ask the NUM and the NCB to form, with
  890
  the Government, a tripartite body further to examine the whole area."— [Official Report, Standing Committee B, 15 July 1980; col. 327–8.]
  I have spent some time on that matter because contributions have been made mainly by my hon. Friends from Wales. Diseases associated with work underground are prevalent in Wales. We are entitled to ask the Under-Secretary of State whether he has the agreement of the Secretary of State to proceed with the initiative that he suggested in Committee.
  Reference has been made to the Phurnacite plant in Wales. That matter was raised in Committee by my hon. Friend the Member for Carmarthen. The Minister was non-committal and cagey, and many of us were very unhappy with his reply.
  The House should understand why we attach great importance to the Phurnacite plant and the new Ancid process. Closure of the plant would directly affect 950 jobs and a further 4,500 mineworkers would be involved. That equals five pits.
  The Minister said that he would bring the matter to the House as quickly as possible. The result is a written answer to my hon. Friend the Member for Aberdare (Mr. Evans) on 21 July 1980. The Minister rejects the idea of new capital investment for the new process, and is therefore, at a stroke, endangering 950 jobs and affecting 4,500 others. The Minister shakes his head. That gives us hope.
  The written answer concludes:
  "After the most careful consideration, the Government have decided against giving special assistance, bearing in mind that there are other ways of securing the continued process of phurnacite."— [Official Report, 21 July 1980; Vol. 989, c. 35.]
  What are those other ways? Will the Minister argue that I am exaggerating and that those jobs are not in jeopardy? If so, he should tell us what the employment prospects are.
  When the Bill was first debated we were able to use in support of our argument documents from the mining unions and the sections of the press knowledgeable on energy matters. We could prove that no responsible body accepted the entire Bill. The provisions for revamping the balance sheet and extinguishing grants in three or four years were universally criticised. We could not then quote the views of management to support our case.

  891
  The Secretary of State said that he had great confidence in the management of the industry. The question that we want to ask is: does he ever listen to what those in mining management say to him? Is he aware of what the British Association of Colliery Management said about the Bill? There was no collaboration between us and BACOM, but its criticisms of the Bill are identical to those that we have made throughout the passage of the legislation.
  By way of introduction, BACOM says:
  "The financial objectives in the Bill are… too stringent, and cannot be achieved in the given timescale without seriously undermining the healthy growth of the coal industry".
  The Government presented calculations and told us about negotiations that had been carried out with the NCB in November. They had the audacity to present those to the House as being relevant in July 1980. We know how inflation has raged during that time. The Government believe that those are credible figures to present to the House and the nation. The financial objectives in the Bill are described by BACOM as outdated. It goes on:
  "the economic situation has considerably worsened since the strategy was discussed and agreed with the NCB. To meet the Government's targets, the NCB would have to (a) raise the price of coal. But our price is already at the top end of the market."
  It describes the impossible situation facing the nation and those in the coal industry. On increased efficiency it says:
  "By raising productivity and replacing old capital stock with modern equipment, the industry is already making better use of its resources."
  It makes most trenchant criticisms of the Bill and concludes on the question of strategic value and deficit grant:
  "By asking the Coal Industry to break even so soon, the Government is putting no monetary value whatsoever on the strategic necessity of greater indigenous production. If security of supply within the UK, within the EEC and within the Western world is as important as the Government and Western leaders maintain, they should be willing to back their commitment with cash."
  It says that deficit grant is inappropriate and provocative. Some of my hon. Friends have suggested that the Bill is provocative to those in the mining industry.
  The industry was starved of capital. That was one of the main planks of our argument on earlier stages of the Bill. We tried to point out to the Government
  892
  that their time scale was all wrong. The industry was starved of capital investment for more than two decades. We cannot expect that new reserves will start to come into production overnight.
  The Secretary of State said that the Government expected "Plan for Coal" to pay off in the late 1980s. He is not suggesting in the Bill that the late 1980s is the time to discuss the whole question of trying to extinguish grants. To some extent the right hon. Gentleman fell flat on his face. He confessed to the House that it would be the late 1980s before "Plan for Coal" came to fruition. We ask him to believe in his words and take back this nonsense of trying to extinguish the capital operating grants in a period of three years.
  I said on Second Reading that the Bill reeked of party dogma. As the Bill has proceeded through the House, it is a fair and objective comment to say that it has started to leak like a sieve. Every authoritative opinion has criticised the Bill's structure in the same terms as the Opposition have criticised it. The Bill has not had a good press. All unions in the industry, without exception, have expressed fears and misgivings as the Bill has proceeded through the House. Their protests have become increasingly loud. Management has been equally stringent in its criticism. It would be foolhardy of the Government to ignore this criticism.
  It is a new experience to find management deciding to document its objections. In my 30 years in the industry I never encountered a management that documented its objections in such a trenchant manner. The Minister should examine the documentation. If he has already done so, we are entitled to hear his comments.
  It is depressing to be confronted on Third Reading with the general philosophy and approach that "Whitehall knows best", together with the Tory Party doctrine. It is irresponsible for any Government to ignore the views of men and management who have the responsibility to produce what H G Wells called "bottled sunshine".
  It is established that coal is a fuel not only for the twentieth century but for the twenty-first century. The nation should grasp that fact. The Government should take the lead. It is tragic that the Government should ask the House to support a Bill that could trigger off a

  893
  programme of pit closures and also reduce—a damnable effect—coal production in this country.
  The new pits and the coal reserves will not be in production in the time envisaged in clauses 3 and 4. My hon. Friend the Member for Bolsover (Mr. Skinner) summed up the situation when he said that one can rarely reopen a pit when it has closed. Pits are not like factories. In the words of Rodgers and Hammerstein, "You can't pick up a petal that falls from a flower".
  We think that our amendment offers the Government an opportunity to draw back from the crass folly involved in the clauses that we have highlighted during the passage of the Bill. Because we believe that it is in the best interests of the nation and of those who work in our great coal industry, we hope that some Government supporters who want to assist this nation will join us in our protest in the Division Lobby tonight.
  9.35 pm
  The Under-Secretary of State for Energy (Mr. John Moore): We have had an energetic, if not lengthy, Third Reading debate. It might be appropriate first to thank all those who have participated in both Second and Third Readings and in the arduous work of the Committee.
  I automatically assumed that all who spoke in the debate had the future of the coal industry at heart and had no interest in domestic or national politics. But we had the benefit of the advice of and a pyrotechnic display by the hon. Member for Bolsover (Mr. Skinner).
  I am somewhat surprised and a little depressed, having a genuine interest in the coal industry, to see how few hon. Members have read not only the Bill but the detailed debates in Committee. The astonishing statements by Opposition Members makes me wonder what they thought when they saw the Bill and whether they were able to communicate to the mining industry the nature of its fundamental features.
  The first and most classic feature of the Bill is the capital commitment. The right hon. Member for Plymouth, Devonport (Dr. Owen), at the beginning of the debate, acted as though the Government were carrying out another example of, he
  894
  said, a squeeze on a nationalised industry. A squeeze? The capital commitment in the Bill is exactly the capital commitment in the previous Labour Govern-Government's 1979 White Paper at 1979 survey prices turned into today's money. It is exactly the capital commitment of "Plan for Coal" about which we have talked so much. The modest amount that is going in capital investment this year and for the next three years is £800 million. That is a substantial amount of money rightly going into a great industry. Let us recognise what it does. It confirms the previous Labour Government's attitude towards major long-term investment in the industry and it includes the investment outlined in "Plan for Coal" and this Government's commitment to it. Therefore, I have great difficulty in finding out what the Opposition want. They obviously want a great deal more money than is entailed by their own plans when in government.
  Secondly, the Bill has a grant structure which is generous in its recognition of the past. But it is also tough in its sensible desire to move this great industry to genuine profitability.
  The third important feature of the Bill—I shall come back to the remarks made in Committee by the hon. Member for Carmarthen (Dr. Thomas) to which others have referred—is that it is compassionate. It is compassionate in its improvement of social grants, redundancies and transfers in areas where there have not been genuine improvements since 1973. Rightly, it is compassionate towards widows of those who suffered from the dread scourge pneumoconiosis. These are some of the basic features of the Bill which I was astonished not to hear acknowledged and recognised in the debate.
  My hon. Friend the Member for Bedford (Mr. Skeet) was a little unkind in part in his suggestion that there had not been a radical improvement in the coal industry's output since vesting day. I think that we should recognise the fundamental change that has taken place in the nature of the coal industry since vesting day. The significant fact is that in 1947 output per man year in tonnes per man was 266 compared with 469 in 1979–80. That is a major achievement in the coal industry and I believe that all of us who are interested in the industry would wish that to be put on record.

  895
  My hon. Friend the Member for Bedford asked a couple of detailed questions. He asked what we would do with the limestone slurry that would be formed. We were discussing the important developments in fluidised bed combustion, and we know that there is a great future for our coal industry in that area. I am told that the limestone slurry is associated with the need to remove sulphur from coal. Our coals have a modest sulphur content, and therefore, under existing clean air regulations in the United Kingdom there is no need to use this process.
  In that context my hon. Friend asked how we would get capital costs down. Costs would fall as more systems are built, and fluidised bed systems are expected to be more suitable for relatively small industrial systems than for large power stations. I chaired a meeting of the tripartite research and development committee yesterday, and we looked at the potential not only in Comoil but in fluidised bed combustion techniques.
  The hon. Member for Rother Valley (Mr. Hardy), who takes a detailed interest in the industry, asked some specific questions. I can confirm that if I am permitted to I shall maintain as close a contact with the industry as I have been able to maintain so far. Obviously, I shall keep a close watch on the key figures relating to employment in the industry.
  The hon. Member for Newton (Mr. Evan) referred, legitimately, to the tightness of the money resolution. I, too, felt his dismay, and the dismay of hon. Members on both sides of the House, at some of the limits on our ability to discuss these matters in Committee and the difficulty of tabling amendments. I draw the attention of the hon. Gentleman to the fact that the money resolution is not more tightly drawn than the money resolutions to previous coal Bills. I refer specifically to 1977. I am not able to make decisions in that area, but we are only all fours with past experience.
  The hon. Member for Penistone (Mr. McKay) drew our attention to his sad experiences with pneumoconiosis, and the hon. Members for Leigh (Mr. Cun-liffe), and for Ogmore (Mr. Powell) and in particular the hon. Member for Midlothian (Mr. Eadie), spoke specifically
  896
  about the problems of that disease. Let me remind the House that we have been able—it was pure justice, and I said so in Committee—to make a modest improvement in the Bill. That modest improvement relating to pre-1970 widows has been welcomed on all sides. That is what is being done here.
  In Committee I said that I took the points made by the hon. Member for Carmarthen, who made a great and outstanding speech. I said that I would go forward and have discussions, and I have done so, with the approval of my right hon. Friend the Secretary of State. I am in consultation with the DHSS. This is an area where, if we intend to establish the right kind of tripartite forum, we must do it properly. I have taken the point, and I am pursuing it. I shall report to the House in due course. This is an area in which none of us would expect anything but the most generous treatment that the House can possibly mete out.
  Other substantive and legitimate points were raised, and I do not seek to duck them. Again and again we returned on Second Reading, in Committee and in this debate to the subject of closures. The right hon. Member for Devonport and the hon. Members for Penistone, for Merthyr Tydfil (Mr. Rowlands) and for Newton again raised the issue. May I make the principal point clear? It is vital that the Government should reiterate it repeatedly, and I shall try to deal with the point raised by the hon. Member for Merthyr Tydfil.
  The Bill is not a programme for closures in the industry. Let me illustrate that fact in two clear ways, especially for those who were not involved with our work in Committee. Some people outside the House argue when they examine the capital investment in the industry, that money is going into great new super pits and that other areas without such prospects are not in receipt of similar investment.
  I give the following illustrations to support my view. First, the capital investment programme for the industry assumes £272 million a year in 1979 survey prices. That means that roughly half of all the continuing capital investment will go into existing production. That is the crucial feature of the discussion. Secondly, and most importantly—it can

  897
  be seen in the detailed figures—the Bill specifically assumes a pattern of closures similar to those of the recent past. On Second Reading I drew attention to the fact that the Opposition, while in government, committed massive capital investment to the coal industry under "Plan for Coal". At the same time, they recognised that there would be closures and openings—but not the problems of the 1960s or the late 1950s.
  It is important to get this on the record. The 50 pits that closed in that period were part and parcel of a long-term investment programme. Let me give the figures for two crucial clauses in the Bill which were not discussed this evening. They illustrate how, in practice, the closure pattern is expected under this legislation to be similar to that of the past year under "Plan for Coal".
  Clause 6 tackles the social grants relating to pit closures. The new limit in clause 6 is £170 million, up from £60 million. Too much fear has been spread on this subject, and this data should help remove that fear. First, where does this increase come from? It relates mainly to the longer period covered—the period of seven years as against three. Of the £170 million increase, £140 million comes from that. Then there are new classes of relevant expenditure based on the assumption that the closure pattern will be the same as for the past year. That accounts for £15 million. The remaining £15 million relates to inflation assumptions.
  Mr. Eadie: I know that the Under-Secretary does not wish to mislead the House, but there is no argument between the Government and the Opposition about the proposed capital investment and the question of the new reserves in "Plan for Coal" beginning to pay off. There is general agreement that the industry needs investment. Is the hon. Member not misleading the House in saying that the pattern is the same? The pattern is not the same. In clauses 3 and 4 he proposes to extinguish the operating grants, and if this is carried out it will mean pit closures.
  Mr. Moore: When the hon. Member was in office he looked at the removal of operating grants. These grants were never seen by his Government as a per-
  898
  manent feature of the coal scene. It is our positive attitude towards the coal industry that assumes that that industry, in the new world in which it will exist, will be able to break out of the trap of grant relationships with the Government. That is not just in clause 6. It is in clause 7 as well on the payment to redundant workers, where exactly the same assumptions are applied.
  Mr. Rowlands: I accept that the Under-Secretary is answering a major point, but I should like clarification. Will he give an assurance to hon. Members representing South Wales constituencies that the sort of average pit-closure programme of the last four or five years and the assumptions in the Bill will be the same? Our basic point is that the assumptions have changed dramatically, particularly in South Wales. We are talking not about being able to handle a small number of pit closures over a six or seven-year period, but about a much larger number of closures over a shorter period. This is extremely important, because no one wants to—
  Mr. Speaker: Order. I was hoping that the hon. Member would come to a conclusion. This is a very long intervention.
  Mr. Moore: What I am trying to say is that the Government are not in the business of trying to decide on the detailed management of the coal industry. That is not our job. The Government have said two things: first, that this is not a closure programme for the industry; secondly, that we must put in a set of assumptions on redundancy, social grants and payments relating to closures. These are assumptions of what the industry feels will fit into Government strategy. That should remove the fear of total closures from the minds of hon. Members.
  The right hon. Member for Devonport and the hon. Members for Merthyr Tydfil and Midlothian raised the question of Phurnacite. Many hon. Members expressed concern about that issue. I was asked a question on Monday by the constituency Member concerned, and I feel that it is a matter of courtesy to answer him. It is simply not true to make the assumption that the Government's refusal to advance non-commercial investment—investment that the board would not seek to invest in that plant—will mean that the plant will be doomed. If we are

  899
  talking about job implications, I draw the attention of Opposition Members to the fact that the proposed permanently noncommercial Ancit process assumes a massive reduction in the numbers employed at that plant. The two batteries referred to during the debate would employ 70 men, while more than 300 are currently employed on the batteries.
  The assumption that the plant will close is wrong. The NCB is in urgent discussion with National Smokeless Fuels, the Alkali Inspectorate local authorities and the trade unions to determine how best to continue production while minimising the environmental problem. I was asked about my attitude towards the in-specorate, it is an independent body and must operate independently within its statutory powers.
  We are, rightly, talking about a coalfield in South Wales that has received more than £150 million in investment during the past five years. We are not talking about a disaster for the Phurnacite plant, but about potential, continued production—a matter which is now in the hands of the board.
  Many hon. Members raised the problem of imports, including the right hon. Member for Devonport, and the hon. Members for Merthyr Tydfil, Carmarthen, and Newton. I want to put that subject into perspective. The import position in 1979 was 4·38 million tonnes. We also exported coal. Therefore, for 1979 as a whole, the coal industry was 97·62 per cent. self-sufficient. As I said on Second Reading, the coal industry has nothing to fear from imports. The Government do not see any future for Britain as a trading nation if we impose artificial barriers to trade, especially for coal. We do not consider imports to be a long-term threat. We believe that the great bulk of our needs will be supplied from the domestic market. If we are competitive, there will be opportunities in overseas markets. The crucial provision is that the industry must be competitive.
  I recognise the special problems of coking coal during a major world steel recession, and in a world where Britain has difficulties in adjusting to that major client of the coal industry. The answer is not to restrict imports but to help the coal industry to adjust in the transitional period. We have already done that with a coking coal grant. In specific
  900
  answer to a question from the right hon. Member for Devonport, may I say that the British Steel Corporation and the NCB are currently discussing next year's position. When they have completed their discussions, we expect them to come to the Government. We assume that, in the overall pattern of grants, there will be a further coking coal grant. I cannot be more clear. That is the legitimate way to help the coal industry in its difficult transitional problems.
  Mr. Skinner Mr. Skinner rose—
  Mr. Moore: I should like to give way, but I have very little time.
  Another key and crucial point made by hon. Members throughout the debate, was in relation to foreign support. The right hon. Member for Devonport, the hon. Members for Penistone, Merthyr Tydfil and Newton, and my hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) all raised that point. They talked about the relative treatment of overseas coal industries compared with our own. We have discussed this question at considerable length.
  Mr. Skinner Mr. Skinner rose—
  Mr. Moore: We discussed this at considerable length on Second Reading. Countries expecting to participate in the major growth in world coal are not countries which are seeking to subsidise their coal industries. The United States, Australia and Canada are examples. The subsidies exist in countries which are not seeking to compete with our coal industry. For those who are interested in the details—
  Mr. Skinner: On a point of order, Mr. Speaker. A few moments ago the Minister gave some figures with regard to imports which related to 1979. During the debate my hon. Friends were simply asking for the import figures—
  Mr. Speaker: Order. The hon. Gentleman cannot pursue his argument with the Minister on a point of order.
  Mr. Skinner: The Minister misled the House.
  Mr. Moore: Perhaps I can help the hon. Member for Bolsover. Clearly because of the major radical difficulties experienced by the coal industry in 1978–79, and the urgent need for an added coal

  901
  burn in this country, it is expected that the 1980 figures will be greater because the CEGB instituted long-term contracts. No one has denied that.
  I turn to the subsidy pattern. It seems to me that we must distinguish between our belief in a future, growing coal industry, where its coal markets are in competition with other fuels—such as substitute natural gas and the liquefaction market and in the area of industrial usage—and those parts of the coal industry which are static or declining. In the belief that our coal industry will expand, we must have an industry which is competitive in those areas.
  Whatever the deliberations in this House, the coal industry is much more than the legislation we have been discussing. The coal industry represents a key resource in the ground, as well as the skills and abilities of the men who mine it. In the belief that they desire an industry that is capable of fulfilling the challenge of the future, the Bill establishes the framework to give the industry the investment to encourage it to profitability and to treat with compassion the burdens of the past. It is in that belief that I commend the Bill to the House.
  Question put, That the amendment be made.
  The House divided: Ayes 236, Noes 279.

  See Division 429 in col. 913
  Question accordingly negatived.
  Main Question put forthwith, pursuant to Standing Order No. 39 (Amendment on second or third reading), and agreed to.
  Bill accordingly read the Third time and passed.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the Magistrates' Courts Bill [Lords] may be proceeded with, though opposed, until any hour.— [Mr. Cope.]

  NATIONAL COAL BOARD (BORROWING POWERS)
  10.11 pm
  The Under-Secretary of State for Energy (Mr. John Moore): I beg to move,
  That the draft Coal Industry (Borrowing Powers) Order 1980, which was laid before this House on 17 July, be approved.
  I shall briefly explain the reasons why the Government have laid the draft order. It is laid under existing legislation to raise the limit on the National Coal Board's borrowing powers from £2,200 million to £2,600 million. Perhaps I should explain why we are doing this when the Coal Industry Bill is before Parliament.
  The NCB borrowings stood at £2,120 million on 21 July and the board expects to pass its existing limit of £2,200 million on 31 July. While the Government still seek to secure Royal Assent to the Bill before the Summer Recess, it would be quite wrong to risk leaving the NCB unable to carry on its affairs.
  10.12 pm
  Mr. Alex Eadie: The Opposition understand fairly well what prompts the Minister to move the order on behalf of the Government. We could in normal circumstances have had a debate, according to the rules laid down by the House, but the whole House will agree that we have welcomed the fact that we have had a very long and very substantial Third Reading debate on the Coal Industry Bill.
  The view of the Opposition, therefore, is that, since the order that the Minister has moved is necessary, we wish to give it an unopposed passage through the House.
  Question put and agreed to.

  MAGISTRATES' COURTS BILL [LORDS]
  Order for Second Reading read.
  10.14 pm
  The Solicitor-General (Sir Ian Percival): I beg to move, That the Bill be now read a Second time.
  I shall be very happy to explain to the House any of the provisions of the Bill if any hon. Member should so desire. Meanwhile, I shall content myself by paying a warm and sincere tribute to the Joint Committee for the time and expertise that it has given to the Bill. Yet again, we have very good reason to be grateful to the Committee, and indeed we are.
  Mr. Jeffrey Thomas: I congratulate the Solicitor-General on his brevity. I associate myself and the Opposition with his remarks, and in particular with those relating to the work of the Joint Committee. We owe it a great debt of gratitude and thank it very much indeed.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.— [Mr. Cope.]
  Bill immediately considered in Committee; reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed, without amendment.

  WISLEY AIRFIELD
  Motion made, and Question proposed, That this House do now adjourn.— [Mr. Cope.]
  10.16 pm
  Mr. Keith Wickenden: It is usual at the commencement of an Adjournment debate for the Member who initiates the debate to express his pleasure and gratitude at being able to do so. I must say that it gives me no pleasure to have to raise this matter. It
  904
  is one that reflects gravely on a Government Department, and perhaps even higher. Nevertheless, I am extremely grateful to Mr. Speaker for giving me the opportunity of raising it today.
  Wisley airfield is in Surrey and in my constituency. The facts are simple, straightforward and easy to understand. I wish that I could say the same for the behaviour of the Department of the Environment, which has been conducting affairs. The airfield came about during the war when a large area of agricultural land was requisitioned from the family of the present Earl of Lytton for defence purposes.
  At the time of the requisition, local authorities, even in wartime, were seriously concerned about the land's future use because of its proximity to two villages in the constituency—namely, Ripley and Ockham. They had meetings with Ministers, as a result of which they received a categoric assurance that the airfield would be used only for so long as hostilities continued. Needless to say, that pledge was not honoured. Nevertheless, the local authorities understood the reasons given to them after the war for continuing airfield use.
  It was explained to them that the airfield would continue to be required for defence purposes. Subsequently, when it was taken over by Vickers Armstrong, later part of the British Aircraft Corporation and later still part of British Aerospace, it was understood that the public interest required the use of the airfield for testing purposes, as it had a particularly long runway. It was said that its use should continue to enable export sales to be made. Those were the arguments used and they were good ones.
  Although the local authorities, especially Surrey county council, had considerable reservations, they nevertheless agreed to the airfield's continuing use. Furthermore, they did so on the clear understanding—asked for, given and expressed on numerous occasions—that if and when the airfield was returned to non-flying use the hangars and runways would be removed. In other words, the airfield had been built on agricultural land and would be given back for that use. Apart from anything else, Wisley is in the green belt.
  In due course, the property ceased to be used for flying purposes. Immediately,

  905
  there was pressure to have those expressions of intent—I put them no higher than that—honoured by the Property Services Agency, which is controlled by the Department of the Environment. A multitude of Government Departments have been involved over the years, but to all intents and purposes the Property Services Agency and the Department of the Environment are the bodies involved.
  The situation has not always been as clear as that. In 1976, the Department appeared to change its mind about whether the airfield would be returned to agricultural use after the runways had been taken up. A series of meetings and a great deal of correspondence took place between the local authorities and the Department. As a result, the Department returned to its original decision—namely, that the property would only be returned under what had become the Crichel Down procedure, with the runways taken up.
  I shall not weary the House by going into the many promises, undertakings—although not legal undertakings—assurances and expressions of intent that were given. However, I must refer to a few of the assurances that followed that 1976 hiccup. In early 1977, Surrey county council decided to reconsider the matter and sought an assurance that the airfield would not be returned, under the Crichel Down procedure, without the runways having been taken up and the buildings having been pulled down. It received those assurances from the Department. Minutes of meetings and letters from the Department record that.
  The former Under-Secretary of State, the hon. Member for Manchester, Gorton (Mr. Marks), wrote to my predecessor on 14 June 1977. He pointed out that it had taken longer than expected to consider taking up the runways and hardstandings. He said:
  "It will not, however, be possible to remove the reinforced concrete hardstandings without an undue burden of cost to Government funds and so they will remain in situ."
  That contradicted much of what had been said before. The local authorities challenged the fact that it would cost money to take the runways up. To the surprise of the Department, they managed to obtain an estimate from an extremely well-known civil engineer, to the effect
  906
  that it would pay to take the runways up because of the hard core in them. As a result, the opposition of the Property Services Agency seemed to disappear.
  On 15 November 1977, the agency went back to its original position, and a letter addressed to the clerk and chief executive of Surrey county council stated:
  "We do not propose to effect any sale of Wisley Airfield until removal of the buildings and runways has been completed. It is intended that sales of the buildings and the runway will be arranged consecutively during 1978 and it is unlikely that completion of the removal will be effected much before the end of 1978."
  On 17 August 1978, the Property Services Agency wrote again to the clerk of Surrey county council. It stated:
  "The delay caused by the abortive tender action is of course regrettable but as Mr. D. M. Brown said in his letter of 15 November 1977, we do not propose to effect any sale of Wisley Airfield until removal of the buildings and runways has been completed."
  In a letter dated 11 December 1978, the Property Services Agency referred to the contract for the removal of the hangars. It stated:
  "We propose following the completion of that contract immediately with a further one for the removal of the runway."
  The letter then explained why the two had to take place together. It explained that it was necessary to get vehicles across the hardstanding of the runway in order to demolish the hangars.
  In a letter to the county planning officer on 27 February 1979, the Property Services Agency stated:
  "Like you I also am disappointed that as yet we have not been successful in completing the contract for the sale and removal of the buildings at Wisley but I am a little at a loss to understand your reference to lack of positive action. I would have thought that the action over the past 2 years has all been of a positive nature which unfortunately has not yet been brought to a statisfactory conclusion."
  I suspect that the gentleman who wrote that letter is unable to differentiate between inactivity and action.
  The letter went on:
  "I am also a little surprised that you return to the view that providing there is no cost to public funds we should discount any possible gain to public funds I am sure it will be understood that we cannot accept that premise."
  The letter continued with technicalities.

  907
  On 6 March 1979, a letter from the county planning officer to the Property Services Agency stated:
  "I assume that since the building should now be removed by the end of July"—
  that was two and a half years after we first began to talk about it—
  "it will be now possible for you to proceed to invite tenders for the removal of the runway, which can then take place immediately following the demolition of the hangars and buildings."
  The PSA replied:
  "You will recall that in our letter of even reference dated 11 December 1978 we said that it was proposed to follow the completion of the contract for the removal of the buildings with a further one for the removal of the runway. This is still the Property Services Agency intention."
  On 6 March 1979 the hon. Member for Gorton said in a letter to my predecessor, Sir George Sinclair:
  "It is PSA's intention, following the removal of the hangars and buildings, to invite tenders for the sale and removal of the runway."
  This is now at ministerial level.
  On 23 May 1979, the PSA repeated to the clerk and solicitor of the Guildford borough council:
  "I have really little to add to that which has already been said to the effect that unless we receive instructions to the contrary"—
  that is where an element of doubt began to creep in—
  "our intention is still to follow the completion of the contract to remove the buildings with a contract to remove the runway."
  On 13 July 1979, out of the blue, a letter to the clerk and chief executive of the Surrey county council said:
  "As you know we have for some time been endeavouring to restore Wisley Airfield, as far as is practicable to agricultural use, and to this end we have arranged the demolition of the buildings which should be completed shortly."
  That has happened. The letter continued:
  "It has however now been decided that disposal of Government interest in the airfield should be effected as soon as possible and to this end the airfield is to be offered to the former owner the Earl of Lytton under the Crichel Down Code. This means of course that the airfield will be offered to the Earl of Lytton with the runway and associated hardstandings in situ. I am sending copies of this letter to the County Planning Officer."
  One would think that when a Government agency decides to break the pledges which it has given over many years, it might at least have the courtesy to discuss the matter with the local authorities
  908
  involved. It says little for the standards of ethics in our Civil Service if that is the measure of its behaviour.
  This caused a great deal of concern to my constituents and local representatives. I proceeded to make inquiries. The reason given for the change of heart was that a company, not the owner of the land or the person to become the owner of the land, had applied for planning permission to use the airfield for general aviation purposes—that is, for light aircraft. Not having received a favourable response from the local authority, the company appealed to the Department of the Environment against a deemed refusal.
  On behalf of the Department, it was said that the runways could not now be taken up because that would prejudice the quasi-judicial position of the Secretary of State, who would eventually have to determine the appeal. There might be some small measure of truth in that, although it equally could be argued that the extent to which the Government Department was going out of its way to break its pledges without consultation indicated that it was not adopting a neutral position, although that was not what I felt at the time.
  As my hon. Friend the Minister knows, I conducted a long and, at times, rather angry correspondence with him, and we differed considerably. Nevertheless, we tried to find one or two alternatives. The problem could have been overcome quite simply if the property was not to be sold back under the Crichel Down procedure until after the planning appeal had been determined. At that stage, if the appeal had been successful, the Government could have sold the property with the value of the runway, which is very considerable as a runway, to the Earl of Lytton, and we should have had no argument in the constituency, because the proper planning procedures would have been followed. If, however, the appeal failed, it would not have been unreasonable to expect that the Government should at that stage honour their promises.
  That proposal was turned down, apparently because of the need to raise money to reduce the public sector borrowing requirement. Some of us feel that, important as it is to reduce the public sector borrowing requirement, it is also important to behave within a reasonable code of ethics.

  909
  I then put forward another proposal that, if we could not expect the property not to be sold and if we could not expect the runway not to be taken up, it could be sold with a covenant that would be triggered only in the event that the planning appeal failed. The covenant would be that the then owner should take up the runways. That, too, was rejected, again on the ground that it would prejudice the quasi-judicial position of the Secretary of State. That appears to be the excuse that is trotted out every time that the civil servants are unable to think of a sensible reason for declining the suggestion.
  Matters then got a great deal worse. In the meantime, the Surrey country council discovered that it had not a promise but a legally binding undertaking from the Department of the Environment to its predecessor to replace the rights of way over the airfield which had been eradicated during the war. That was legally binding, so the council had been advised. Indeed, it is admitted as such by the Department, since it has agreed to take them up and has in writing agreed to restore them to their former condition, which means that they would not be covered with tarmac.
  It was therefore something of a shock to the county council to hear rumours that the Government might not be going to honour that legally binding undertaking. It therefore wrote to the Property Services Agency at the end of May 1980, putting it on notice that it would be putting a caution on the land to require the PSA to conduct itself in accordance with the legal undertaking and also requiring other things. On 27 June 1980, a little more than four weeks later, it received a reply from the Property Services Agency which is indicative of the most disgraceful sharp practice that I have ever come across. The second paragraph states:
  "I am unable to confirm that the land will be offered to the county council, because the PSA has effected a sale of the airfield to Lord Lytton, i.e. there is in existence a contract of sale for the whole and all the land being sold, with the exception that the sites of the original rights of way have been transferred."
  In a written question, I asked my hon. Friend when the transfer took place. The answer was on 20 June, three weeks after notice of legal caution had been received
  910
  from the Surrey county council. It was contracted and completed on the same day. I have never known that happen even in the commercial field, where things happen fast, let alone with the Government legal services. I repeat that that letter, in a shabby story, is the most disgraceful example of sharp practice that I have come across.
  I shall read parts of a letter from a constituent who is asking me to refer the matter to the Ombudsman. Before we fee] that we are dealing with a Home Counties crank, let me say that Mr. John Cooper, who wrote the letter, is a managing director of a leading merchant bank in the City of London, and he perhaps knows the meaning of the phrase "My word is my bond". He is not a crank but a reasonably intelligent and articulate man. He uses phrases such as:
  "I was very shocked to read in the Surrey Advertiser of the behaviour of the Property Services Agency. Assuming that the reports are correct, I am writing as a resident with land immediately adjacent to ask you to object … As a loyal and enthusiastic supporter of you as our Member of Parliament and also as chairman of the Conservative Association of Ockham, Ripley and Wisley, the villages most adjacent. I am finding it very difficult to prevent the whole Wisley airfield saga from thoroughly souring support for the Government in the locality."
  That is an area where we probably got 80 per cent. of the vote at the general election.
  I could spend a great deal of time on this matter, but I shall conclude by saying that it is a sad and shocking story. It is one of broken promises, sharp practice and had faith. Throughout my speech I have deliberately addressed my criticisms to the Government Departments involved, as Departments I have to say, with all the humility that I can, that if my hon. Friend the Under-Secretary is to avoid having the same charges levelled at him he must renounce the sort of behaviour that has taken place.
  10.41 pm
  The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg): My hon. Friend the Member for Dorking (Mr. Wickenden) has rightly raised this matter in the interests of his constituents. Let me say at once that I endorse every action that my Department has taken. I do not accept that there has been sharp practice or that anything unethical has been done.

  911
  I have been at great pains to examine for myself every piece of paper issued on this matter since the day I took office. My hon. Friend will understand that I have no right to see documents from before May last year. In my judgment, as one who has had some experience in the commercial world, nothing unethical has been done by my Department since I have had responsibility for it.
  In the limited time avalable to me I should like to deal with one or two of the points that my hon. Friend raised. He said that the PSA had broken a legal, or at least a moral, undertaking by deciding not to remove the runway before selling the airfield. No undertaking to remove the runway was given by the PSA. It was the agency's intention to remove the runway before the sale if that were economically possible, but an appeal was lodged against a deemed refusal of planning permission to use the airfield for flying purposes. Because the decision on such an appeal is the responsibility of my right hon. Friend the Secretary of State, it would have been prejudicial to his position in hearing the appeal if we had gone ahead with the removal of the runway.
  My hon. Friend said that in his opinion the undertaking that had been given to restore several rights of way over the airfield was not being fulfilled. I acknowledge unreservedly that an undertaking was given to restore the rights of way to a condition
  "similar to that when they were closed." That is being done, but it cannot be agreed that public money should be used, as the local authority suggests, to replace a pre-war lane with a 36-ft wide roadway with an 18ft carriageway apparently leading to an overgrown track, or to remove 1 kilometre of runway more than 50 metres wide in order to provide a soil surface footpath one metre wide. No reasonable person could accept that that would restore the situation to what it was before the war.
  My hon. Friend has fairly put the case for his constituents. He acknowledged that the Government's intention since May of last year—and I am sure that he endorses it—has been to reduce the public sector borrowing requirement. For that reason, surplus Government-owned land must be disposed of as swiftly as possible.
  912
  To have to await the outcome of a planning impasse—and there was and is nothing to prevent further planning applications followed by further planning appeals—could mean that the disposal of Wisley airfield, already delayed for several years, would be delayed indefinitely.
  As the local planning authorities consider that the land should be used only for agriculture, and because its disposal could not reasonably be further delayed, I took the decision that it should be offered back to the former owner's successors under the Crichel Down code. Therefore, I instructed my officials to proceed with the sale to the successors, with the runway remaining, at market value as assessed by the district valuer, and a sale has now been completed.
  My hon. Friend referred to the proposed registration of a caution against the registered title of the land by the Surrey county council. He felt that it was a somewhat unfair procedure that the PSA should have completed the sale prior to the lodging of that caution. Again, that decision was taken by me, and my officials were instructed to expedite the sale so as to avoid the Government's intentions being frustrated by an act by a local authority—these are the important words—which had no legal justification. I stand firmly by that decision.
  I do not in any way believe that my hon. Friend was wrong or unfair to raise this issue, but some of the things that have been reported in the local press and some of the actions and purported actions by the local authorities have not been totally accurate.
  If my hon. Friend still feels that the interests of his constituents would be best served by referring this matter to the Parliamentary Commissioner that is his right. I shall not feel in the least unhappy, because I think that he has a duty, if I have not convinced him, to take the matter as far as he feels that he should.
  Having looked at this matter on numerous occasions—true, only since May of last year—on the papers that I have seen from the day that I had responsibility for the Property Services Agency, I find nothing with which I would quarrel.
  I hope my hon. Friend will feel that the explanation that I have given, the answers that I have tried to give to the

  913
  points-that he made and the full correspondence that he has had from me, even if he does not accept it all as being an answer to what he wants, show that I have not tried to conceal anything.
  The one thing that I will not allow is for blame, if there be any, to fall upon the civil servants. Whatever blame there may be—and I do not believe that there

  COAL INDUSTRY BILL

  Division No. 429]

  AYES

  [9.58 pm

  Adams, Allen

  Eastham, Ken

  Lewis, Arthur (Newham North West)

  Allaun, Frank

  Edwards, Robert (Wolv SE)

  Lewis, Ron (Carlisle)

  Alton, David

  Ellis, Raymond (NE Derbyshire)

  Litherland, Robert

  Anderson, Donald

  Ellis, Tom (Wrexham)

  Lofthouse, Geoffrey

  Archer, Rt Hon Peter

  English, Michael

  Lyon, Alexander (York)

  Armstrong, Rt Hon Ernest

  Ennals, Rt Hon David

  Lyons, Edward (Bradford West)

  Ashley, Rt Hon Jack

  Evans, loan (Aberdare)

  McDonald, Dr Oonagh

  Ashton, Joe

  Evans, John (Newton)

  McElhone, Frank

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

  Ewing, Harry

  McKay, Alien (Penistone)

  Bagier, Gordon A. T.

  Faulds, Andrew

  McKelvey, William

  Barnett, Guy (Greenwich)

  Field, Frank

  MacKenzie, Rt Hon Gregor

  Barnett, Rt Hon Joel (Heywood)

  Fitch, Alan

  Maclennan, Robert

  Beith, A. J.

  Flannery, Martin

  McNally, Thomas

  Benn, Rt Hon Anthony Wedgwood

  Fletcher, Ted (Darlington)

  McWilliam, John

  Bennett, Andrew (Stockport N)

  Foot, Rt Hon Michael

  Magee, Bryan

  Booth, Rt Hon Albert

  Forrester, John

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

  Boothroyd, Miss Betty

  Foster, Derek

  Marshall, Dr Edmund (Goole)

  Bottomley, Rt Hon Arthur (M'brough)

  Fraser, John (Lambeth, Norwood)

  Marshall, Jim (Leicester South)

  Bray, Dr Jeremy

  Freeson, Rt Hon Reginald

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

  Brown, Hugh D. (Provan)

  Garrett, John (Norwich S)

  Mason, Rt Hon Roy

  Brown, Robert C. (Newcastle W)

  Garrett, W. E. (Wallsend)

  Maynard, Miss Joan

  Brown, Ronald W. (Hackney S)

  George, Bruce

  Meacher, Michael

  Brown, Ron (Edinburgh, Leith)

  Gilbert, Rt Hon Dr John

  Mellish, Rt Hon Robert

  Buchan, Norman

  Ginsburg, David

  Mikardo, Ian

  Callaghan, Rt Hon J. (Cardiff SE)

  Golding, John

  Millan, Rt. Hon Bruce

  Callaghan, Jim (Middleton & P)

  Graham, Ted

  Miller, Dr M. S. (East Kilbride)

  Campbell-Savours, Dale

  Grant, George (Morpeth)

  Mitchell, Austin (Grimsby)

  Canavan, Dennis

  Grant, John (Islington C)

  Mitchell, R. C. (Soton, Itchen)

  Cant, R. B.

  Hamilton, James (Bothwell)

  Morris, Rt Hon Alfred (Wythenshawe)

  Carter-Jones, Lewis

  Hamilton, W. W. (Central Fife)

  Morris, Rt Hon Charles (Open3haw)

  Cartwright, John

  Hardy, Peter

  Morris, Rt Hon John (Aberavon)

  Clark, Dr David (South Shields)

  Harrison, Rt Hon Walter

  Morton, George

  Cocks, Rt Hon Michael (Bristol S)

  Hattersley, Rt Hon Roy

  Moyle, Rt Hon Roland

  Cohen, Stanley

  Haynes, Frank

  Newens, Stanley

  Coleman, Donald

  Healey, Rt Hon Denis

  Oakes, Rt Hon Gordon

  Concannon, Rt Hon J. D.

  Heffer, Eric S.

  Ogden, Eric

  Cox, Tom (Wandsworth, Tooting)

  Hogg, Norman (E Dunbartonshire)

  O'Halloran, Michael

  Craigen, J. M. (Glasgow, Maryhill)

  Holland, Stuart (L'beth, Vauxhall)

  O'Neill, Martin

  Crowther, J. S.

  Home Robertson, John

  Orme, Rt Hon Stanley

  Cryer, Bob

  Homewood, William

  Owen, Rt Hon Dr David

  Cunliffe, Lawrence

  Hooley, Frank

  Palmer, Arthur

  Cunningham, George (Islington S)

  Horam, John

  Park, George

  Cunningham, Dr John (Whitehaven)

  Huckfield, Les

  Parker, John

  Daiyell, Tam

  Hudson Davies, Ednyfed (Caerphilly)

  Parry, Robert

  Davidson, Arthur

  Hughes, Mark (Durham)

  Pavitt, Laurie

  Davies, Rt Hon Denzil (Llanelli)

  Hughes, Robert (Aberdeen North)

  Powell, Raymond (Ogmore)

  Davies, Ifor (Gower)

  Hughes, Roy (Newport)

  Prescott, John

  Davis, Clinton (Hackney Central)

  Janner, Hon Greville

  Price, Christopher (Lewisham West)

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

  Jay, Rt Hon Douglas

  Race, Reg

  Deakins, Eric

  John, Brynmor

  Radice, Giles

  Dean, Joseph (Leeds West)

  Johnson, James (Hull West)

  Rees, Rt Hon Merlyn (Leeds South)

  Dempsey, James

  Johnson, Walter (Derby South)

  Richardson, Jo

  Dewar, Donald

  Jones, Barry (East Flint)

  Roberts, Albert (Normanton)

  Dixon, Donald

  Jones, Dan (Burnley)

  Roberts, Alan (Bootle)

  Dormand, Jack

  Kaufman, Rt Hon Gerald

  Roberts, Ernest (Hackney North)

  Douglas, Dick

  Kerr, Russell

  Roberts, Gwilym (Cannock)

  Douglas-Mann, Bruce

  Kilfedder, James A.

  Robertson, George

  Dubs, Alfred

  Kilroy-Sifk, Robert

  Robinson, Geoffrey (Coventry NW)

  Duffy, A. E. P.

  Kinnock, Nell

  Rodgers, Rt Hon William

  Dunn, James A. (Liverpool, Kirkdale)

  Lambie, David

  Rooker, J. W.

  Dunnett, Jack

  Lamborn, Harry

  Roper, John

  Dunwoody, Mrs Gwyneth

  Leighton, Ronald

  Ross, Ernest (Dundee West)

  Eadie, Alex

  Lestor, Miss Joan (Eton & Slough)

  Ross, Stephen (Isle of Wight)

  is any—falls squarely on my shoulders and I am prepared to accept it. I hope that on reflection my hon. Friend will feel that there has been no unethical behaviour and that the Property Services Agency has acted in a totally ethical way in the interests of the taxpayer.
  Question put and agreed to.
  Adjourned accordingly at seventeen minutes to Eleven o'clock.

  Rowlands, Ted

  Straw, Jack

  Welsh, Michael

  Ryman, John

  Summerskill, Hon Dr Shirley

  White, Frank R. (Bury & Radcliffe)

  Sandelson, Neville

  Taylor, Mrs Ann (Bolton West)

  White, James (Glasgow, Pollok)

  Sever, John

  Thomas, Dafydd (Merioneth)

  Whitlock, William

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

  Thomas, Jeffrey (Abertillery)

  Willey, Rt Hon Frederick

  Sllkln, Rt Hon John (Deptford)

  Thomas, Mike (Newcastle East)

  Williams, Rt Hon Alan (Swansea W)

  Silkin, Rt Hon S. C. (Dulwich)

  Thomas, Dr Roger (Carmarthen)

  Winnick, David

  Silverman, Julius

  Thorne, Stan (Preston South)

  Woodall, Alec

  Skinner, Dennis

  Tilley, John

  Woolmer, Kenneth

  Smith, Rt Hon J. (North Lanarkshire)

  Torney, Tom

  Wrigglesworth, Ian

  Snape, Peter

  Urwin, Rt Hon Tom

  Wright, Sheila

  Soley, Clive

  Varley, Rt Hon Eric G.

  Young, David (Bolton East)

  Spearing, Nigel

  Wainwright, Edwin (Dearne Valley)

  Stallard, A. W.

  Walker, Rt Hon Harold (Doncaster)

  TELLERS FOR THE AYES

  Stoddart, David

  Watkins, David

  Mr. James Tinn and

  Stott, Roger

  Weetch, Ken

  Mr. Hugh McCartney.

  Strang, Gavin

  Wellbeloved, James

  NOES

  Adley, Robert

  Dykes, Hugh

  Kershaw, Anthony

  Alexander, Richard

  Eden, Rt Hon Sir John

  King, Rt Hon Tom

  Ancram, Michael

  Edwards, Rt Hon N. (Pembroke)

  Knight, Mrs Jill

  Arnold, Tom

  Eggar, Timothy

  Knox, David

  Atkins, Robert (Preston North)

  Elliott, Sir William

  Lament, Norman

  Atkinson, David (B'mouth, East)

  Emery, Peter

  Lang, Ian

  Baker, Nicholas (North Dorset)

  Eyre, Reginald

  Langford-Holt, Sir John

  Banks, Robert

  Falrbairn, Nicholas

  Latham, Michael

  Beaumont-Dark, Anthony

  Fairgrieve, Russell

  Lawrence, Ivan

  Bell, Sir Ronald

  Faith, Mrs Sheila

  Lawson, Nigel

  Bendall, Vivian

  Farr, John

  Lee, John

  Benyon, Thomas (Abingdon)

  Fenner, Mrs Peggy

  Le Marchant, Spencer

  Benyon, W. (Buckingham)

  Finsberg, Geoffrey

  Lennox-Boyd, Hon Mark

  Best, Keith

  Fisher, Sir Nigel

  Lester, Jim (Beeston)

  Bevan, David Gilroy

  Fletcher, Alexander (Edinburgh N)

  Lewis, Kenneth (Rutland)

  Bitten, Rt Hon John

  Fletcher-Cooke, Charles

  Lloyd, Ian (Havant & Waterloo)

  Biggs-Davison, John

  Fookes, Miss Janet

  Lloyd, Peter (Fareham)

  Blackburn, John

  Forman, Nigel

  Loveridge, John

  Blaker, Peter

  Fowler, Rt Hon Norman

  Luce, Richard

  Body, Richard

  Fox, Marcus

  Lyell, Nicholas

  Bonsor, Sir Nicholas

  Fraser, Rt Hon H. (Stafford & St)

  McCrindle, Robert

  Boscawen, Hon Robert

  Fraser, Peter (South Angus)

  Macfarlane, Nell

  Bottomley, Peter (Woolwich West)

  Fry, Peter

  MacKay, John (Argyll)

  Bowden, Andrew

  Gardiner, George (Reigate)

  McNair-Wilson, Patrick (New Forest)

  Boyson, Dr Rhodes

  Gardner, Edward (South Fylde)

  Madel, David

  Braine, Sir Bernard

  Garel-Jones, Tristan

  Major, John

  Bright, Graham

  Glyn, Dr Alan

  Marland, Paul

  Brinton, Tim

  Goodhew, Victor

  Marlow, Tony

  Brittan, Leon

  Goodlad, Alastair

  Marshall, Michael (Arundel)

  Brocklebank-Fowler, Christopher

  Gow, Ian

  Marten, Neil (Banbury)

  Brooke, Hon Peter

  Grant, Anthony (Harrow C)

  Mates, Michael

  Brown, Michael (Brigg & Sc'thorpe)

  Gray, Hamish

  Mather, Carol

  Browne, John (Winchester)

  Greenway, Harry

  Maude, Rt Hon Angus

  Bruce-Gardyne, John

  Grieve, Percy

  Mawby, Ray

  Bryan, Sir Paul

  Griffiths, Eldon (Bury St Edmunds)

  Mawhinney, Dr Brian

  Buck, Antony

  Griffiths, Peter (Portsmouth N)

  Mayhew, Patrick

  Budgen, Nick

  Grist, Ian

  Mellor, David

  Bulmer, Esmond

  Grylls, Michael

  Meyer, Sir Anthony

  Burden, F. A.

  Gummer, John Selwyn

  Miller, Hal (Bromsgrove & Redditch)

  Butcher, John

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

  Mills, lain (Meriden)

  Butler, Hon Adam

  Hamilton, Michael (Salisbury)

  Mills, Peter (West Devon)

  Cadbury, Jocelyn

  Hampson, Dr Keith

  Miscampbell, Norman

  Carlisle, John (Luton West)

  Hannam, John

  Mitchell, David (Basingstoke)

  Carlisle, Kenneth (Lincoin)

  Haselhurst, Alan

  Moate, Roger

  Carlisle, Rt Hon Mark (Runcorn)

  Hastings, Stephen

  Monro, Hector

  Chalker, Mrs. Lynda

  Havers, Rt Hon Sir Michael

  Montgomery, Fergus

  Chapman, Sydney

  Hawksley, Warren

  Moore, John

  Clark, Hon Alan (Plymouth, Sutton)

  Hayhoe, Barney

  Morgan, Geralnt

  Clark, Sir William (Croydon South)

  Henderson, Barry

  Morris, Michael (Northampton, Sth)

  Clarke, Kenneth (Rushcliffe)

  Hicks, Robert

  Morrison, Hon Charles (Devizes)

  Clegg, Sir Walter

  Higgins, Rt Hon Terence L.

  Morrison, Hon Peter (City of Chester)

  Cockeram, Eric

  Hill, James

  Mudd, David

  Colvin, Michael

  Hogg, Hon Douglas (Grantham)

  Murphy, Christopher

  Cope, John

  Holland, Philip (Carlton)

  Myles, David

  Corrie, John

  Hooson, Tom

  Neale, Gerrard

  Costain, A. P.

  Howell, Rt Hon David (Guildford)

  Needham, Richard

  Cranborne, Viscount

  Howell, Ralph (North Norfolk)

  Nelson, Anthony

  Critchley, Julian

  Hunt, David (Wirral)

  Neubert, Michael

  Crouch, David

  Hurd, Hon Douglas

  Newton, Tony

  Dean, Paul (North Somerset)

  Jenkin, Rt Hon Patrick

  Normanton, Tom

  Dickens, Geoffrey

  Jessel, Toby

  Onslow, Cranley

  Dorrell, Stephen

  Johnson Smith, Geoffrey

  Osborn, John

  du Cann, Rt Hon Edward

  Jopling, Rt Hon Michael

  Page, Rt Hon Sir Graham (Crosby)

  Dunn, Robert (Dartford)

  Kaberry, Sir Donald

  Page, Richard (SW Hertfordshire)

  Durant, Tony

  Kellett-Bowman, Mrs Elaine

  Parkinson, Cecil

  Parris, Matthew

  Skeet, T. H. H.

  van Straubenzee, W. R.

  Patten, Christopher (Bath)

  Smith, Dudley (War. and Leam'ton)

  Vaughan, Dr Gerard

  Patten, John (Oxford)

  Speed, Keith

  Viggers, Peter

  Pattie, Geoffrey

  Speller, Tony

  Waddington, David

  Pawsey, James

  Spence, John

  Wakeham, John

  Percival, Sir Ian

  Spicer, Jim (West Dorset)

  Waldegrave, Hon William

  Pollock, Alexander

  Spicer, Michael (S Worcestershire)

  Walker, Bill (Perth & E Perthshire)

  Prentice, Rt Hon Reg

  Sproat, Iain

  Walker-Smith, Rt Hon Sir Derek

  Proctor, K. Harvey

  Squire, Robin

  Wall, Patrick

  Raison, Timothy

  Stainton, Keith

  Walters, Dennis

  Rathbone, Tim

  Stanbrook, Ivor

  Ward, John

  Rees-Davies, W. R.

  Stevens, Martin

  Warren, Kenneth

  Renton, Tim

  Stewart, Ian (Hitchin)

  Watson, John

  Rhodes James, Robert

  Stewart, John (East Renfrewshire)

  Wells, John (Maidstone)

  Rhys Williams, Sir Brandon

  Stokes, John

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

  Ridsdale, Julian

  Strading Thomas, J.

  Wheeler, John

  Roberts, Michael (Cardiff NW)

  Tapsell, Peter

  Whitelaw, Rt Hon William

  Roberts, Wyn (Conway)

  Taylor, Robert (Croydon NW)

  Whitney, Raymond

  Rossi, Hugh

  Taylor, Teddy (Southend East)

  Wickenden, Keith

  Rost, Peter

  Tebbit, Norman

  Wiggin, Jerry

  Royle, Sir Anthony

  Temple-Morris, Peter

  Wilkinson, John

  Sainsbury, Hon Timothy

  Thatcher, Rt Hon Mrs Margaret

  Williams, Delwyn (Montgomery)

  St. John-Stevas, Rt Hon Norman

  Thomas, Rt Hon Peter (Hendon S)

  Wolfson, Mark

  Shaw, Michael (Scarborough)

  Thompson, Donald

  Young, Sir George (Acton)

  Shelton, William (Streatham)

  Thome, Neil (Ilford South)

  Younger, Rt Hon George

  Shepherd, Colin (Hereford)

  Thornton, Malcolm

  Shepherd, Richard (Aldrldge-Br'hills)

  Townend, John (Bridlington)

  TELLERS FOR THE NOES:

  Shersby, Michael

  Townsend, Cyril D. (Bexleyheath)

  Mr. John MacGregor and

  Silvester, Fred

  Trippier, David

  Lord James Douglas-Hamilton

  Sims, Roger

EMPLOYMENT
  British Youth Council
  British Youth Council
  Employment Agencies
  Employment Agencies
  Skillcentres
  Skillcentres
  T & J Harrisons, Liverpool
  T & J Harrisons, Liverpool
  Specialist Temporary Employment Agencies
  Specialist Temporary Employment Agencies
  Youthways Training Scheme
  Youthways Training Scheme
  Training Opportunities Programme
  Training Opportunities Programme
  Temporary Short-Time Working Compensation Scheme
  Temporary Short-Time Working Compensation Scheme
  Job Saving and Creation
  Job Saving and Creation
  Young Persons
  Young Persons
  Maryport
  Maryport
  Ministers (Overseas Travel)
  Ministers (Overseas Travel)
  Crown Trent Limited, Stoke-on-Trent
  Crown Trent Limited, Stoke-on-Trent
  North Sea Oil and Gas (Accidents)
  North Sea Oil and Gas (Accidents)
CIVIL SERVICE
  Civil Servants (Maladministration and Neglect)
  Civil Servants (Maladministration and Neglect)
  Parliamentary Commissioner for Administration
  Parliamentary Commissioner for Administration
  Civil Servants (Secondment)
  Civil Servants (Secondment)
  Public Appointments
  Public Appointments
  Her Majesty's Stationery Office
  Her Majesty's Stationery Office
TRADE
  Moscow Airport
  Moscow Airport
  Yachts (French Territorial Waters)
  Yachts (French Territorial Waters)
  Shipping Casualties (Intervention Powers)
  Shipping Casualties (Intervention Powers)
  Bankruptcy
  Bankruptcy
  Washing Machines
  Washing Machines
  Japan
  Japan
  Textiles and Carpets
  Textiles and Carpets
  Ministers (Overseas Travel)
  Ministers (Overseas Travel)
HOUSE OF COMMONS
  Leather Blotting Paper Holders
  Leather Blotting Paper Holders
INDUSTRY
  European Community (Steel Production)
  European Community (Steel Production)
  Homos
  Homos
  National Enterprise Board
  National Enterprise Board
EUROPEAN COMMUNITY
  Immigrant percentages
  Immigrant percentages
EDUCATION AND SCIENCE
  Pupil-Teacher Ratios (Derbyshire)
  Pupil-Teacher Ratios (Derbyshire)
  Teachers (Scholarship Scheme)
  Teachers (Scholarship Scheme)
  Babraham Institute of Animal Physiology
  Babraham Institute of Animal Physiology
  Class Sizes
  Class Sizes
  Education Costs
  Education Costs
  Burnham Committee
  Burnham Committee
  Assisted Places Scheme
  Assisted Places Scheme
  Teachers
  Teachers
  Select Committees (Departmental Information)
  Select Committees (Departmental Information)
OVERSEAS DEVELOPMENT
  Somalia
  Somalia
  PUBLIC EXPENDITURE
  PUBLIC EXPENDITURE
  PRIME MINISTER (ENGAGEMENTS)
  PRIME MINISTER (ENGAGEMENTS)
  PAYMASTER GENERAL
  PAYMASTER GENERAL
  WOLVERHAMPTON
  WOLVERHAMPTON
  PUBLIC SECTOR PAY INCREASES
  PUBLIC SECTOR PAY INCREASES
  WEAPONS GRADE NUCLEAR MATERIALS
  WEAPONS GRADE NUCLEAR MATERIALS
JAPAN
  JAPAN
  JAPAN
EUROPEAN COMMUNITY (UNITED KINGDOM MEMBERSHIP)
  EUROPEAN COMMUNITY (UNITED KINGDOM MEMBERSHIP)
  EUROPEAN COMMUNITY (UNITED KINGDOM MEMBERSHIP)
Prisoners
  Prisoners
  Prisoners
Boundary Commission (Hampshire Constituencies)
  Boundary Commission (Hampshire Constituencies)
  Boundary Commission (Hampshire Constituencies)
MOBILITY OF LABOUR
  MOBILITY OF LABOUR
  MOBILITY OF LABOUR
HOME DEPARTMENT
  Electoral Registration Forms
  Electoral Registration Forms
  Communications (Interception)
  Communications (Interception)
  Wales (Electoral Arrangements)
  Wales (Electoral Arrangements)
  Prisoners (Livestock)
  Prisoners (Livestock)
  Immigration
  Immigration
  Paul Lehair
  Paul Lehair
  Charity Commissioners
  Charity Commissioners
  Filipino Women
  Filipino Women
NATIONAL FINANCE
  Tax Yields
  Tax Yields
  Value Added Tax
  Value Added Tax
  European Community Budget (United Kingdom Contribution)
  European Community Budget (United Kingdom Contribution)
  Bank Lending
  Bank Lending
  Central Government Borrowing Requirement
  Central Government Borrowing Requirement
  Public Sector Pay Increases
  Public Sector Pay Increases
  Interest Rates
  Interest Rates
  Investment
  Investment
  Inflation
  Inflation
  Minimum Lending Rate
  Minimum Lending Rate
  Public Sector Borrowing Requirement
  Public Sector Borrowing Requirement
  Taxes and Prices Index
  Taxes and Prices Index
  Industrial Production
  Industrial Production
  Unemployment Costs
  Unemployment Costs
  Public Expenditure
  Public Expenditure
  European Monetary System
  European Monetary System
  Industrial Co-operatives
  Industrial Co-operatives
  Petrol Tax
  Petrol Tax
  Sheffield Adult and Juvenile Collecting Society
  Sheffield Adult and Juvenile Collecting Society
  Coinage
  Coinage
  Industrial Regeneration (West Midlands)
  Industrial Regeneration (West Midlands)
FOREIGN AND COMMONWEALTH AFFAIRS
  Nigeria (Technical Education)
  Nigeria (Technical Education)
  Zambia (Torture)
  Zambia (Torture)
  Turkey
  Turkey
  Brandt Commission Memorandum
  Brandt Commission Memorandum
SCOTLAND
  Health Education Unit
  Health Education Unit
  Local Authority (Staff)
  Local Authority (Staff)
  Strathclyde Structure Plan
  Strathclyde Structure Plan
  Rate Income
  Rate Income
  Cash Limits
  Cash Limits
  Fish Life (European Community Directive)
  Fish Life (European Community Directive)
  Housing (Capital Expenditure Allocations)
  Housing (Capital Expenditure Allocations)
WALES
  Redundancies
  Redundancies
AGRICULTURE, FISHERIES AND FOOD
  Herbicide 2,4,5-T
  Herbicide 2,4,5-T
  Seed Potatoes (Certification)
  Seed Potatoes (Certification)
  Farm Capital Grants
  Farm Capital Grants
  Sea Fisheries Committees
  Sea Fisheries Committees
  Food Surpluses
  Food Surpluses
HOUSE OF COMMONS
  Night Staffing Costs
  Night Staffing Costs
DEFENCE
  Trident Missiles
  Trident Missiles
  Royal Navy Helicopter (Cigarette Advertisement)
  Royal Navy Helicopter (Cigarette Advertisement)
  Her Majesty's Dockyards
  Her Majesty's Dockyards
  'Research and Development Establishments
  'Research and Development Establishments
NORTHERN IRELAND
  Electricity Generation
  Electricity Generation
  Community Hall, Wallace Place, Newtownards
  Community Hall, Wallace Place, Newtownards
  Pig Industry
  Pig Industry
  Egg Industry
  Egg Industry
  Capital Stock (Pig and Egg Producers)
  Capital Stock (Pig and Egg Producers)
  Gas Pipeline
  Gas Pipeline
  Gaelic Athletic Association
  Gaelic Athletic Association
SOCIAL SERVICES
  Social Service Establishments (Charges)
  Social Service Establishments (Charges)
  Mentally Handicapped Persons (North-West Region)
  Mentally Handicapped Persons (North-West Region)
  St. George's Hospital, London
  St. George's Hospital, London
  Elderly and Disabled Persons
  Elderly and Disabled Persons
  Voluntary Organisations
  Voluntary Organisations
  School Leavers
  School Leavers
  Volunteer Centre
  Volunteer Centre
  Gingerbread
  Gingerbread
  Mobility Allowance
  Mobility Allowance
  Departmental Correspondence
  Departmental Correspondence
  Interferon
  Interferon
  Housewives (Invalidity Pension)
  Housewives (Invalidity Pension)
  Social Security (Abuse)
  Social Security (Abuse)
ENVIRONMENT
  Tower Blocks (Newham)
  Tower Blocks (Newham)
  Manpower Statistics
  Manpower Statistics
  Hostel Deficit Grants
  Hostel Deficit Grants
  Somerset House
  Somerset House
  Assistance to Industry
  Assistance to Industry
  Inner Cities
  Inner Cities
  Mobile Homes
  Mobile Homes
  Ancient Monuments
  Ancient Monuments
  Industrial Disputes (Volunteers)
  Industrial Disputes (Volunteers)
  Queen Mother (Birthday Celebrations)
  Queen Mother (Birthday Celebrations)
  House Building
  House Building
  Asbestos
  Asbestos
  Rates
  Rates
  Housing Investment Programme
  Housing Investment Programme
  Doyle, Dane, Bernbach (Contract)
  Doyle, Dane, Bernbach (Contract)
  Homeless Persons
  Homeless Persons
  Control of Pollution Act
  Control of Pollution Act
  Information Services
  Information Services
  Freshwater Fish (European Community Directive)
  Freshwater Fish (European Community Directive)
FOREIGN and COMMONWEALTH AFFAIRS
  Viewdata
  Viewdata
NATIONAL FINANCE
  Value Added Tax
  Value Added Tax
  Tax Thresholds
  Tax Thresholds
  Personal Taxation
  Personal Taxation
  Family Income Supplement
  Family Income Supplement
  Inland Revenue (Informants)
  Inland Revenue (Informants)
  Retirement Benefit (Taxation)
  Retirement Benefit (Taxation)
  £1 Coin
  £1 Coin
  Family Income
  Family Income
  Fraud Investigators
  Fraud Investigators
  Public Sector Pay Settlements
  Public Sector Pay Settlements
  Switzerland (Minimum Lending Rate)
  Switzerland (Minimum Lending Rate)
  "Pay-As-You Earn"
  "Pay-As-You Earn"
TRANSPORT
  Motor Coaches
  Motor Coaches
  M66 (Denton-Middleton)
  M66 (Denton-Middleton)
  British Railways (Track Maintenance)
  British Railways (Track Maintenance)
  Roads (Expenditure)
  Roads (Expenditure)
  Small Firms
  Small Firms
  Vehicle Licensing (Argyll)
  Vehicle Licensing (Argyll)
  Transport Supplementary Grant
  Transport Supplementary Grant
  Road Accident Victims
  Road Accident Victims
  Ministers (Overseas Travel)
  Ministers (Overseas Travel)
  Public Expenditure (Roads)
  Public Expenditure (Roads)
  Motorway Maintenance
  Motorway Maintenance

Preamble
(Sitting in the Royal Gallery)
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Exeter):
The LORD CHANCELLOR The LORD CHANCELLOR On the Woolsack.
The Duke of Montrose The Duke of Montrose—Took the Oath.

BROADCASTS TO AFGHANISTAN: LANGUAGES
Lord BETHELL: 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 plans they have to facilitate audible BBC broadcasting in the Russian and Persian languages to Afghanistan.
Lord TREFGARNE: My Lords, the only broadcasts specifically directed to Afghanistan by the BBC are those in the Farsi language, which is understood by about half of the population. The BBC Russian services are aimed at the Soviet Union but some of them are heard also in parts of Afghanistan. The BBC's capital expenditure programme to improve audibility is already under way, and includes improvement of the audibility of the Russian services.
Lord BETHELL: My Lords, I am grateful to my noble friend for that reply. I wonder, though, how aware he is of the very slender resources available to the BBC in broadcasting to Afghanistan in terms of staff and, more importantly, in terms of equipment and particularly transmitter equipment? Does he not agree that at a time of great crisis in the world, and in particular in that part of the world, it is not appropriate to implement cuts in the BBC service in that area in particular; and will he undertake to take a particular look at the broadcasting services to Afghanistan and see whether broadcasting
506
to the Soviet troops can be brought in as a short-term measure, perhaps through the medium of the Masirah link?
Lord TREFGARNE: My Lords, some of the broadcasts to Afghanistan are already made through the Masirah link to which my noble friend refers. Indeed, to judge by recent Soviet media attacks on the BBC's External Services, the Farsi broadcasts are clearly audible in Afghanistan and are proving highly effective.
Lord GLADWYN: My Lords, may we take it that these BBC broadcasts in the Persian language are monitored and that translations of them are available in the Foreign Office if anyone cares to consult them?
Lord TREFGARNE: My Lords, I cannot say for sure that we receive a transcript of every word that is transmitted over the BBC's External Services, but we certainly know the general drift of what is being said.
Lord MORRIS: My Lords, would my noble friend consider that the broadcasts to Turkey are of strategic importance, particularly bearing in mind that they are made for only two hours per week, as opposed to two and a half hours a week to Greece?
Lord TREFGARNE: My Lords, the broadcasts to Turkey are of course important, but they do not fall under the Question on the Order Paper.

ADULT LITERACY AND EDUCATION: GRANT
3.4 p.m.
Baroness DAVID: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of their decision to support the development of adult literacy and basic education by making £500,000 available to the Adult Literacy and Basic Skills Unit, they are monitoring the spending of that money in the regions.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE, (Baroness Young): My Lords, my department is represented on the unit's management committee, which is responsible both for the allocation of funds to projects and for ensuring that the unit's staff keep adequate check on how the money is spent.
Baroness DAVID: My Lords, while thanking the noble Baroness the Minister for that reply, may I ask whether she is aware that the East Midlands Advisory Council has decided it will not administer the funds allocated to it? Is the noble Baroness further aware that the LEAs supporting the regional advisory council are giving far fewer funds and literacy adult projects and adult education altogether are suffering very much in that region?
Baroness YOUNG: Yes, my Lords, the decision by the East Midlands Regional Council reflects the decision taken by the constituent local authorities to reduce greatly their support for the council, but this will affect only the training programme for tutors of the Adult Literacy and Basic Skills Unit and not the other activities. While we do not welcome the decision by the local authorities in the East Midlands, we accept that it is a matter which they are entitled to determine in the light of their own priorities and of the resources available to them.
Lord DAVIES of LEEK: My Lords, can the noble Baroness tell us how these sums are allocated? Secondly, what are the tests of literacy? Will the noble Baroness agree that illiteracy is not necessarily stupidity? There are many people in history who have been completely illiterate. Most of those who signed the Act of Union between Wales and England and between Scotland and England were illiterate but very wise people.
Baroness YOUNG: My Lords, the answer to the noble Lord's first question is that the spread of the funds of the Adult Literacy and Basic Skills Unit will depend on the proposals that come forward or can be developed by the unit itself. A major part of the unit's funds are to be used for support of special development projects, and that includes
508
the training of tutors for teaching literacy and basic skills. Although I would accept the general principle that not all illiterates are stupid, I think the noble Lord would agree that in a democracy it is a good thing to make sure that our population should be both literate and numerate.
Baroness STEDMAN: My Lords, the noble Baroness said in an earlier reply to my noble friend that cuts were being made in the training of instructors. Surely most of the people doing this work are volunteers, and therefore the cost of actual training must be very little on the instructors' part? Could the noble Baroness not put pressure on the East Midlands Advisory Council to use the money and use it for the purpose for which it was intended?
Baroness YOUNG: I must apologise to the noble Baroness because I could not fully hear all her question. The question of how the funds will be used and their spread will be a matter, of course, for the Adult Literacy Unit to determine itself. But we do believe that local authorities should be responsible for local provision in their areas and in other areas of adult education. We very much recognise that the work on literacy and numeracy is relatively expensive in terms of resources, but we hope very much that local authorities will bear in mind the priority which the Government attach to work with the disadvantaged. In the course of the normal discussions with the local authorities about expenditure on education, we will explore with them their ability to maintain and even increase in provision of this kind.
Baroness DAVID: My Lords, coming back to an earlier answer by the Minister, do I understand that the department is going to sit back quite happily, having allocated half a million pounds to this project, and will do nothing about these regions? You will put no pressure on them at all to have the projects carried forward? It seems to me it is not much use giving the money unless it is to be spent.
Baroness YOUNG: My Lords, I hope that I have indicated in my earlier answers to the other questions which have been asked the importance the Government

509
attach to this work. If indeed there is some viable alternative to a regional advisory council's participation in this work, I am quite certain that this is a matter which the Adult Literacy Unit service will be looking at themselves; and, even if they have not decided to do so already, I am quite certain their attention will be drawn to the questions and answers this afternoon, because quite obviously the point which the noble Baroness has raised is an important one.
Viscount ECCLES: My Lords, in view of the debate that we are going to have later this afternoon, could the noble Baroness tell me whether any time on the fourth channel is going to be used, either for this adult literacy programme or for any other educational programme?
Baroness YOUNG: My Lords, I hope my noble friend will agree with me that his question is rather wide of the Question which is down on the Order Paper. But if he would like to put down a Question on that subject, I will do my best to answer it.

EYE TESTS AND SPECTACLE DISPENSING
3.10 p.m.
Lord RUGBY: 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 the combined function of testing eyesight and dispensing spectacles within one business establishment is open to abuse.
Lord CULLEN of ASHBOURNE: My Lords, the majority of sight-tests and dispensings of spectacles are carried out under National Health Service provisions, and we have no evidence to suggest that the combination of these functions within one business establishment is open to abuse. But if the noble Lord has any evidence of this, perhaps he would kindly let me know.
Lord RUGBY: My Lords, I should like to thank the noble Lord for that reply. I believe there is widespread
510
dismay at the fact that people hear only the voice of the General Optical Council. Would he ensure that the voice of the public is properly heard when the Office of Fair Trading conducts its investigations, which I believe it is about to do?
Lord CULLEN of ASHBOURNE: Yes, my Lords. I think that the noble Lord is going back, by a different route, to a point which we debated on 30th January, when he was concerned about the cost of spectacles. But, in fact, as I said at the time, the position is that we have referred this to the Office of Fair Trading. We hoped to have a reply by 30th April. I understand that it will not now come for another two months.
Lord SEGAL: My Lords, can the noble Lord say what fee is received by the eyesight testing optician? Also, would he not agree that this examination is sometimes totally unnecessary in cases where the patient has already received the prescription through having his eyes tested by a fully qualified ophthalmic surgeon, whose qualifications are very much higher than those of registered opticians?
Lord CULLEN of ASHBOURNE: My Lords, the noble Lord is much more knowledgeable on this subject than I am, and I am sure that what he says is right.
Lord SEGAL: But, my Lords, would the noble Lord not agree that this is an example where the present procedure is subject to abuse, and that it is totally unnecessary to have two eyesight examinations done, when one is quite sufficient?
Lord CULLEN of ASHBOURNE: My Lords, as I said, the whole matter is in front of the Office of Fair Trading. I doubt whether we can take this matter any further until they report.
Lord CROOK: My Lords, is it not a fact that, if there is any abuse at all, it arises from the incorporation by a great chain of departmental stores into their establishments' commercial material of offices where eyes can be tested?
Lord CULLEN of ASHBOURNE: Yes, my Lords. I am sure that is true.
Lord BRUCE of DONINGTON: My Lords, would not the noble Lord agree that one of the greatest areas of abuse is the supply of frames? Would the noble Lord agree, on reflection, that it was possibly not a good thing in this connection to abolish the Price Commission?
Lord CULLEN of ASHBOURNE: My Lords, the noble Lord is taking us back to the debate which we had in January, when we went into the whole question of the expense of frames in great detail. This is a matter which the Office of Fair Trading is examining.
Lord LEATHERLAND: My Lords, does the noble Lord agree that the burden of this service might be reduced if, in cases where a person has perfect sight in one eye and defective sight in the other, it would be much cheaper to issue him with a monocle than with an ordinary pair of spectacles?
Lord CULLEN of ASHBOURNE: My Lords, that is a brilliant idea.

THE NAMIBIA NEGOTIATIONS: SWAPO PARTICIPATION
3.15 p.m.
Lord BARNBY: 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, as a member of the Committee of Five of the United Nations with regard to South-West Africa, they regard SWAPO as meriting the status for negotiation as truly representing a section of the South-West Africa community, since it is now clear that SWAPO is financed, armed and directed by Russia and its surrogates.
Lord TREFGARNE: My Lords, SWAPO has long been recognised as a party to the United Nations settlement plan for Namibia. There are a number of political parties competing for support in Namibia. The question of how much support each enjoys is for the Namibian electorate to decide.
Lord BARNBY: My Lords, may I ask the Minister whether any credibility can
512
be given to this morning's reports in the press—particularly in the Daily Telegraph—which show that SWAPO is in complete disarray? While the internal section may represent some part of the community of South-West Africa, the external section, which is supported by the United Nations and Russia, is necessarily in conflict with the Republic of South Africa. Does it not put the United Kingdom in a difficult position, through its membership of the Committee of Five, in that it appears to put the United Kingdom in confrontation with the Republic of South Africa on this subject?
Lord TREFGARNE: I think not, my Lords. As a member of the Five, to whom my noble friend referred, we are seeking to secure a negotiated settlement of the Namibian question. That means that it would be very wrong not to have regard to the views expressed by SWAPO, particularly bearing in mind that they are, of course, one of the parties taking part in the most unhappy military actions that are going on in that country.
Lord GORONWY-ROBERTS: My Lords, quite apart from the acceptability of SWAPO to the United Nations for the purpose of negotiating the independence of South-West Africa, would it not be wise to follow the same procedures as proved so signally successful in Zimbabwe; namely, to introduce into the negotiations all organisations which substantially represent any sector of opinion within the country concerned? While SWAPO is, as the Minister has reminded us, by no means the only organisation, nevertheless, it is one of the major organisations that speak for the people in Namibia and therefore ought to be included in any meaningful and successful negotiations.
Lord TREFGARNE: My Lords, I think that the noble Lord is quite right, to the extent that it is important to involve SWAPO in the discussions which I hope will lead to a peaceful settlement in Namibia. But, at the same time, I should like to hesitate before drawing too many parallels between the situation in Namibia and the situation in Zimbabwe.
Lord SHINWELL: My Lords, leaving aside the views that many of us may hold about the policy adopted by the South African Government, are we to under-

513
stand that our representative at the United Nations never protests against the Soviet Union financing and directing the operations of these so-called irregular forces in this area? Are we to understand that the Soviet Union can do as it likes in Czechoslovakia, Afghanistan, Angola and all the rest of them? What does our representative at the United Nations do—sit on his bottom and say nothing?
Lord TREFGARNE: My Lords, as I said earlier, we are seeking to achieve a negotiated settlement of the situation in Namibia. We certainly hope that the war, to which I referred earlier, will soon be brought to an end, and we think the best way to do that is by consultation and negotiation.
Lord SHINWELL: My Lords, is the noble Lord aware that one of the reasons why I asked the question was that I discovered to my astonishment yesterday that, if the press reports are accurate, our esteemed—and I emphasise the term "esteemed"—Foreign Secretary has now undertaken a U-turn and has decided that, instead of speaking in terms of confrontation with the Soviet Union, he is speaking about the desirability of conciliation and détente? What does all this mean?
Lord TREFGARNE: My Lords, that is an interesting thought, but it rather departs from the Question on the Order Paper.
Baroness GAITSKELL: My Lords, is it not understandable? Here is a country which wants its independence. Should we not, and should not the noble Lord, Lord Barnby, who is a wonderful example of British manhood and who appreciates British freedom, understand that these people would like to get aid and to become independent from any country? They have got aid from Russia. When we do not come up with aid, is it not understandable that they should get it from Russia? We should not forget that in the last war Russia was our ally and might well be our ally in the next war.
Lord TREFGARNE: My Lords, that is an interesting thought, but again it is away from the Question on the Order Paper.

BUSINESS OF THE HOUSE: PARLIAMENT CHAMBER
3.20 p.m.
The LORD PRESIDENT of the COUNCIL (Lord Soames): My Lords, in my Statement last Tuesday about the state of the ceiling of the Parliament Chamber, I said that the Property Services Agency hoped to have any defects made good in time to have the Parliament Chamber back in use for next Monday's sitting. The ceiling has since been inspected by a number of experts, including timber specialists from the Building Research Establishment. I regret to have to inform your Lordships that their interim report is to the effect that the problem is more extensive than first appeared, in that much of the ornamental woodwork in the ceiling is in a weakened condition. It has, apparently, become very dried out and brittle. The PSA have therefore had to conclude that, subject to further study, a major works programme to make good and restore the ceiling may well be necessary before it can be considered as safe and sound. This work could clearly take some time and must, of course, first be carefully planned.
The PSA, understandably, now advise that the Parliament Chamber cannot, in these circumstances, be brought back into use in the near future; and that the House should continue to sit in the Royal Gallery until the Recess. I think that the House will agree that we must, in the interests of safety, accept this expert advice. The PSA are of course now working hard to complete their investigations and to make proposals—with a view, hopefully, to getting the Chamber back in use by the time the House reassembles after the Summer Recess. I believe, however, that the House would want this whole matter to be very carefully considered, in the first instance, by your Lordships' Administration Committee. Arrangements are therefore being made for the committee to receive and consider a report by the PSA at a meeting which will take place next Wednesday.
Lord PEART: My Lords, may I thank the noble Lord for his Statement. I think that he is right. 'We must accept the advice of the Property Services Agency. They have to do the job and

515
we must rely upon their expert advice. I think, as do many other noble Lords, that once one thing has fallen down two or three more may do so, which would be disastrous. So we must accept this advice.
I am sure noble Lords will agree, certainly in principle, that what we ought to do is to try to improve the acoustics in the Royal Gallery. I know that our press colleagues are having great difficulty, and I hope that the noble Lord will look into this problem. Some members of the press have made representations about the acoustics. Hansard may well be in the same position. If the acoustics could be improved, I think that the House would be able to proceed efficiently.
Lord BYERS: My Lords, I should like to support what the noble Lord, Lord Peart, has just said. Despite the efforts of the staff, the conditions under which we are now operating are not conducive to efficiency for more than a few days. I wonder whether the noble Lord could initiate the improvement of conditions until we are in recess by having more loudspeakers and more microphones, and also by raising the Benches, if that is possible, so that we may operate in more normal conditions. May I also ask the noble Lord—I say this quite seriously because in this Chamber we are subjected to new strains—when this ceiling was last inspected?
Lord SOAMES: My Lords, I think that it is agreed by everybody that the main problem is the acoustics, but it will not be possible, because it would be so costly, to put into this Chamber on a temporary basis the sophisticated microphone arrangements that there are in our own Chamber. Everything that can be done will be done to improve the existing microphone system. More work will be done over the weekend. However, it is bound to be of a temporary nature.
I would again stress to your Lordships that the difficulties can be minimised by your Lordships taking the trouble to speak clearly. We have been spoiled by the acoustics in the Chamber. We can speak there as quickly or as slowly as we want and everything is well heard. Particular pains will have to be taken while we are in this temporary accommodation
516
to get near to a microphone and to speak as slowly as is thought to be convenient. Some of this does depend upon ourselves and how we handle it. Having said that, your Lordships can be assured that everything possible will be done to improve the acoustics.
As to the ceilings here, I am told that they have not yet been inspected. Doubtless this will happen after we have moved out! But perhaps there will be no more Government defeats while we are here.
Lord DERWENT: My Lords, may I ask my noble Leader whether or not this is the most excellent excuse for starting the Recess earlier?
Several noble Lords: Hear, hear!

THE NEW HEBRIDES: INDEPENDENCE
3.27 p.m.
The SECRETARY of STATE for FOREIGN and COMMONWEALTH AFFAIRS (Lord Carrington): My Lords, with your Lordships' permission, I should like to make a Statement about the New Hebrides.
As your Lordships are aware, it has always been the objective of Britain and France to ensure that the New Hebrides condominium should achieve independence in peace and unity, with its territorial integrity intact.
When my honourable friend the Minister of State met his French colleague, M. Dijoud, in Paris on Saturday, 19th July, they agreed that independence should take place as planned on 30th July. They also recognised with some regret that their efforts to achieve a negotiated solution to the problems which have resulted from the activities of Mr. Jimmy Stevens and his associates on the island of Santo, had not so far been successful. They therefore agreed that while their two personal representatives should return to the New Hebrides to continue their efforts to establish a real dialogue between the Government and the various opposition groups, they could not allow the secessionists to continue blatantly to flout the authority of the legitimate Government on the island of Santo.

517
As a consequence of this decision, during the course of this morning (local time) British and French troops, acting together, carried out an operation to restore the authority of the legitimate Government on the island of Santo, thus putting an end to the eight-week rebellion. The operation appears so far to have been a complete success. There have been no casualties and no shots were fired. I should like to congratulate the British and French troops for the efficiency with which this successful operation has been carried out.
The way is now open for the Central Government's representative to return to Santo and for the blockade to be lifted. A fresh attempt will now be made to reopen a dialogue to try to resolve the outstanding difficulties before independence on 30th July. In this way we and the French Government have sought to fulfil our obligation to bring the New Hebrides to independence in peace and unity.
3.30 p.m.
Lord GORONWY-ROBERTS: My Lords, the House is grateful to the noble Lord the Foreign and Commonwealth Secretary for making that Statement, and I am sure it welcomes the fact that the authority of the democratically elected Government of the New Hebrides has been effectively restored over the whole of its territory. It is particularly gratifying that this has happened through the resumed co-operation of the condominial parties, the United Kingdom and France, and that the operation, which was essentially a police operation, was carried out without casualties, and indeed without firing a shot. I would say myself that it was a peace-keeping and peacemaking operation well within one of the foremost aims of the United Nations Organisation.
A noble Lord: Speak up!
Lord GORONWY-ROBERTS: My Lords, I am doing my best. We also think it is absolutely right to proceed with Independence Day on 30th July. The New Hebrides Government will, however, continue to need support from both condominial Governments for some time even after independence. I doubt whether we have heard the last of Mr.
518
Jimmy Stevens and his associates; and Father Lini and his democratically elected Government, both now and after independence, if he is re-elected then, will need the support of both countries in continuing to assert effectively the authority of his Government over the whole of the territory handed over to him. At the same time, we welcome the fact that every effort will be made between now and 30th July to compose the differences between various elements in the islands. But I hope that we and France will continue to make it clear that the authority of the constitutional Government must prevail.
There are elements there who will refuse to come to agreement, but so long as the effort is made and it is perfectly clear to them that at the end of the day constitutional authority rests with the elected Government of the New Hebrides, that in itself is an entire policy that we on this side of the House will join the Government in promoting with our French allies. This is in the interests not only of the people of the New Hebrides, an island state always prone to the possibility of fragmentation, but also of the wider field in the Pacific and in other parts of the world where there are similar island states always threatened by internal dissidence which might fragment their internal stability and also give opportunity to external elements not concerned with the wellbeing of the countries themselves but with their own international advantage. We thank the Foreign Secretary for his Statement and we welcome very much its contents.
3.33 p.m.
Lord GLADWYN: My Lords, we, too, should like to thank the Foreign Secretary for making that Statement—
Several noble Lords: Speak up!
Lord GLADWYN: My Lords, can your Lordships hear now? Is that better? We should like to thank the Foreign Secretary for making this Statement. Clearly it is very satisfactory that the two Governments have now been successful in putting down this really rather absurd rebellion on the island of Santo. Can we take it that there will now be no question of the island of Santo becoming a tax haven for certain American financial

519
interests, and is it clear that there will be no more question of a special régime for this island when independence is declared in a few days' time?
Lord CARRINGTON: My Lords, I think that all of us are glad that this episode is now over and that the New Hebrides will move to independence on 30th July. What happens after independence will of course depend upon the wishes of the Prime Minister of the newly independent country, but I think the noble Lord opposite can rest assured that both the French Government and we ourselves will do what we can to help. I confirm what the noble Lord, Lord Gladwyn, has said. The rebellion is at an end and Santo is part of the country of the New Hebrides.

LIMITATION BILL [H.L.]
The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I propose to move that the Order of Re-commitment be discharged. I beg to move.
Moved, That the Order of Re-commitment be discharged.—(The Lord Chancellor.)
On Question, Motion agreed to.

BREASCLETE HARBOUR ORDER CONFIRMATION BILL
Read 3a, and passed.
BRITISH RAILWAYS ORDER CONFIRMATION BILL
Read 3a, and passed.
GREATER LONDON COUNCIL (MONEY) (NO. 2) BILL
Read 3a, and passed.
LONDON TRANSPORT BILL
Read 3a, with the amendments, and passed, and returned to the Commons.

LEGAL ADVICE AND ASSISTANCE (PROSPECTIVE COST) REGULATIONS 1980
The LORD CHANCELLOR The LORD CHANCELLOR rose to move, That the regulations laid before the House on 3rd July be approved.
The noble and learned Lord said: My Lords, I rise to move the Motion standing in my name. There is, in fact, a corresponding Motion relating to the position in Scotland, and it may be convenient to discuss that Motion relating to Scotland at the same time, since it is really the same subject. But this Motion standing in my name relates to England and Wales only. These proposed regulations increase from £25 to £40 the cost of advice and assistance which a solicitor may provide under what is commonly known as the green form scheme without first obtaining the approval of the area committee of the Law Society. With the approval of the appropriate legal aid committee a solicitor may provide advice and assistance beyond the limit provided by the scheme. The limit, therefore, is not a bar to the amount of advice and assistance which a solicitor may provide, but simply an administrative check which enables the Law Society to control the expenditure under the scheme.
At its present level of £25 the limit has not been changed since the scheme came into being in 1973. At that time the limit was at a level below which it was believed that most solicitors would be able to provide most eligible clients with subsidised legal advice and assistance. With rising costs it is becoming increasingly difficult to provide such advice and assistance without exceeding the old limit. The result is that there is an increasing number of applications to exceed the limit and this process places a continuously heavier burden on those who have to deal with these applications. The increase to £40 should in most cases enable solicitors once more to provide advice and assistance without the expense and without the delay which an application for permission to exceed inevitably involves. It will also reduce the resulting administrative problems. I beg to move.
Moved, That the regulations laid before the House on 3rd July be approved.—(The Lord Chancellor.)
3.42 p.m.
Lord ELWYN-JONES: My Lords, I am very happy to associate this side of the House with the approval of these regulations. It is partly as a result of inflation that the change needs to be made. The green form scheme whereby advice and assistance can be rendered without the preliminary formalities of certification by certifying committees has proved to be of very great value indeed and much advantage has been taken of it. It may well be that my noble friend Lord Mishcon will have some observations to make as to the problems that the solicitors' profession have to meet in dealing with this matter.
Can the noble and learned Lord the Lord Chancellor say whether any use was made of the new arrangements that were introduced last year to enable, in certain cases, the green form scheme actually to cover appearance and representation in court in emergency conditions? I believe that was contemplated, and I wondered whether it has operated in practice. But as to the regulations themselves, they are welcomed and necessary.
Lord WIGODER: My Lords, I wish also to say from these Benches how much we welcome these new regulations. The green form scheme has proved invaluable in providing legal advice to those who otherwise might not be able to afford it; and also I think, on a narrow financial basis, it has paid for itself in so far as it has enabled much litigation which otherwise might have taken place to be avoided, because sensible advice has been given in time. From these Benches, therefore, I welcome this new proposal.
The LORD CHANCELLOR: My Lords, I am extremely grateful, both to the noble and learned Lord, Lord Elwyn-Jones, and also to the noble Lord, Lord Wigoder, for their support of the regulations which I have just moved. I am very glad of the confirmation which both noble Lords have given to my view that the green form scheme is one of the most valuable additions to the legal aid service that has been made since its inception.
I cannot give the noble and learned Lord details of the use made of the arrange-
522
ments of last year, but I will ask my department to write a letter, which I will sign, telling him of the facts and, if he wants any further publicity for it, we can arrange for a Question and Answer in the House. I am very grateful indeed to both noble Lords. It is a useful scheme and although I did not invent it, I was the midwife which brought it to birth in 1973.
Lord MISHCON: My Lords, I rise only to add a few words to those which have already been said, since your Lordships would be rather impatient if I merely repeated in somewhat less eloquent language what has already been said. On behalf of the profession of which I am a humble but proud member may I say that these regulations are certainly very welcome.
As the noble and learned Lord the Lord Chancellor has said, this is a figure of £25 on this very valuable part of legal aid which was fixed in 1973. Indeed, it was suggested as the appropriate figure 10 years ago, and your Lordships may feel that my profession very properly has been acting without too much forcefulness in putting up with this limit of £25 for so long. That does not mean that efforts have not been made to increase it, for a very simple reason. The administrative costs of having to apply in regard to this valuable scheme, both at the solicitors' end and at the Law Society end, have really been quite prodigious when one thinks of the amounts involved. Indeed, some 25,000 applications were made for an increase only last year.
The purpose of my mentioning this matter to your Lordships—in the hope that the noble and learned Lord who sits on the Woolsack, with his usual readiness to help in legal aid, will take note of what I am saying—is that it is hoped that the rise in inflation over a period of time (much though we all hope that it will not be considerable) will be taken into account with regard even to the small increase which has now been given, and that for the sheer economy of the saving in administrative costs there could possibly be at least an annual review of the amount that we are now dealing with.
The Lord CHANCELLOR: My Lords, by leave of the House I should like to thank the noble Lord, Lord Mischon, for what he has said. I think that lawyers of both

523
branches of the profession are not perhaps always as popular as we ought to be. It ought to be recognised that this scheme is largely run by the profession and this part of it by the solicitors' profession, to whom the nation owes a duty of gratitude in the matter. I will certainly take on board the suggestion made by the noble Lord, Lord Mishcon, about annual reviews. I am not in a position to give him an answer now.
On Question, Motion agreed to.

LEGAL ADVICE AND ASSISTANCE (SCOTLAND) (PROSPECTIVE COST) REGULATIONS 1980
3.49 p.m.
The LORD CHANCELLOR The LORD CHANCELLOR rose to move, That the regulations laid before the House on 8th July be approved.
The noble and learned Lord said: My Lords, this is the same thing as regards Scotland. Technical reasons involve a separate set of regulations and I think I may move them formally. I beg to move.
Moved, That the Legal Advice and Assistance (Scotland) (Prospective Cost) Regulations 1980 be approved.—(The Lord Chancellor.)
On Question, Motion agreed to.

BROADCASTING BILL
3.50 p.m.
The PARLIAMENTARY UNDERSECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, when the Committee on the Future of Broadcasting under the chairmanship of the noble Lord, Lord Annan, published its report in March 1977, the noble Lord and members of his committee may have reflected upon the length of time which is very often needed for recommendations to turn into action. If your Lordships look at the instructions which are to be found on a packet of asparagus seed you will find the words, "First dig a trench five years ago", and many a Government committee has waited a good deal longer than that for something to happen. To be fair, the three years since the Annan
524
Report, if I may so term the noble Lord's report, have not been wasted. There has been a great deal of discussion, the publication of the previous Government's White Paper, and now this Bill which comes before your Lordships for Second Reading today.
The Bill does not follow all the recommendations of Lord Annan's committee. In particular, we have not sought to establish additional broadcasting authorities besides the BBC and the IBA. But we have been much influenced by the committee's analysis of the way in which broadcasting operates in this country, and we have taken to heart the committee's proposition as to the four requisites of good broadcasting—flexibility, diversity, editorial independence and accountability.
The first thing that the Bill does, in Clause 1, follows a recommendation of the Annan Committee; namely, to extend the life of the IBA for a period of 15 years. Taken together with the grant, next year, of a new charter for the BBC for a similar period, this will provide for the continuation of the main structure of British broadcasting as we know it today. In planning for the future, I think it is important to bear in mind that broadcasting in the United Kingdom began with the BBC. The obligations upon and the standards of broadcasters, indeed the whole example of public service broadcasting, originated with the BBC. In seeking to point the way in which television could be developed in the future, the Annan Committee proposed the establishment of an Open Broadcasting Authority which would be responsible for a new fourth television channel. The Government are convinced that they must provide for a structure which gives a new television service sound finance and organisation, and we cannot see how an Open Broadcasting Authority could achieve financial viability. It has seemed to us that an OBA would need a substantial Government grant and need it indefinitely, but we believe that editorial independence and accountability, two criteria put forward by the Annan Committee, in the traditions of British broadcasting, would be well served if the new fourth channel came under the supervision of the IBA.
The general requirements as to the quality of the service and need for due impartiality which are laid down in the

525
main Independent Broadcasting Authority Act 1973 will bind the IBA with respect to the fourth channel, but in addition Clauses 3 and 4 are drafted in order to achieve a new and distinctive kind of television service. The Annan Committee in one of its memorable phrases said that the aim of a new broadcasting authority should be to encourage productions which say something new in new ways. Well, the objectives for the new television channel have very much the same aim in view and I think those objectives are worth repeating in detail. They are that the fourth channel should cater for tastes and interests not adequately provided for on the existing ITV service; that it should contain a suitable proportion of educational programmes; that it should encourage innovation and experiment, and should include a substantial proportion of programmes from independent producers. In addition, the IBA is required to ensure a proper balance of programmes within the existing ITV service, within the new service, and across both services.
These provisions will enable the IBA to be responsible for a new television channel, which will, however, be independent of the existing ITV channel. The Bill therefore requires the IBA to establish a subsidiary to carry out the tasks of acquiring programmes and putting them together to form the new programme service. But the subsidiary is not to be dominated by the ITV programme contractors and remains under IBA supervision and therefore subject to the obligations of the IBA.
The new channel will be funded from the sale of advertising time during the programmes to be shown on it. The general provisions governing advertising on the fourth channel will be the same as those for the existing ITV service. The Bill gives the right to sell this advertising time to the contractors for ITV, who, after all, will be financing the start of the new channel. We do not believe that competitive advertising would be in the interests of this new television channel. Inevitably, competitive advertising would mean competitive programming, and out of the window would fly all the good intentions, which have wide support, for a distinctive and original kind of service.
However, may I immediately say that I am sure that it is absolutely vital that the
526
advertisers should be able to consult with the broadcasters in order to ensure good practice in these advertising matters. In order to achieve that objective the IBA has already established an advertising liaison committee under the chairmanship of the noble Lord, Lord Thomson of Monifieth, involving the Incorporated Society of British Advertisers and the Institute of Practitioners in Advertising, together with the contractors.
It is worth noticing, before leaving this part of what I am saying, that the new channel's budget will not be determined by the ITV contractors. The IBA is going to determine the amount of money needed, in consultation with the subsidiary, and it will then require subscriptions to be paid by the ITV companies in addition to the rental which they pay in respect of the existing ITV service. Initially, while advertising revenue is building up on the fourth channel, there will be a fall in the amount of levy which the companies pay. But it is our firm intention that the fourth channel shall be financially self-supporting as soon as possible and in due course financially profitable.
We hope that the new service will start in the autumn of 1982, but there is much to be done. The IBA are getting ahead with the engineering of the transmitters, and they have also, as your Lordships will be aware, recently announced the appointment as consultants of those whom they intend, subject to the enactment of this Bill, to form the board of the fourth channel subsidiary. The IBA have been at great pains to stress that their planning is provisional and dependent upon the enactment of the Bill, hence the appointment as "consultants". But I hope your Lordships, when we come to that part of the Bill in Committee, will look favourably upon it and will wish well to those who undoubtedly are going to have a difficult but a very worthwhile task in this particular respect.
I shall turn for a moment to something quite different in the Bill. I am aware that the Government's proposals for Welsh language television programmes have been the subject of criticism from Welsh speakers. I accept that they have every right to be concerned that their programmes should be shown at a convenient time during the day or the evening. We have therefore made provision for

527
that. Clause 20 of the Bill requires that the two broadcasting authorities should consult about scheduling. The aim of this requirement is to avoid clashes in the scheduling of Welsh language programmes and to ensure that a proper proportion of those programmes are shown at peak times. In addition, Clause 20 requires the Secretary of State to appoint a person as an adviser on the scheduling of Welsh language programmes. The appointment will in practice be made by my right honourable friend the Home Secretary, but after consultation with the Secretary of State for Wales. This adviser will be able to advise the BBC and the IBA on any matters which either of them refers to him arising out of their consultations.
Although in that respect Clause 20 goes a long way to ensure that Welsh language programmes are shown at convenient times, after more consideration the Government have decided on a further step. My right honourable friend the Secretary of State for Wales last week announced in another place our intention to provide in the Bill for a Welsh language television committee. The committee, which will be appointed by the Home Secretary after consultation with the Secretary of State for Wales, will have an independent chairman and at the moment it is certainly our intention that it should be the same person as the scheduling adviser. The BBC's national governor for Wales and the IBA's national member for Wales will be ex officio members of this committee. The remaining members will come from among those nominated by the broadcasting authorities. This will ensure the closest possible working relationship between the BBC and the IBA.
The committee will review the extent to which the television programmes in Welsh serve the interests of Wales, and it will report annually to the Home Secretary who will be required to lay the report before both Houses of Parliament. The report will, of course, also be sent to both the BBC and the IBA. I intend to bring forward an amendment at the Committee stage to achieve that, and I hope that when we come to that stage of the Bill your Lordships will look favourably upon that particular move.
528
Part III of the Bill—that is Clauses 8 to 15—establishes the Broadcasting Complaints Commission. Such a body was recommended by the Annan Committee. Our predecessors accepted that recommendation and there appears to be general agreement on the desirability of establishing a body of that kind.
The remit that we propose for the commission is essentially that recommended by the Annan Committee. It will deal with complaints of unjust or unfair treatment in sound or television programmes actually broadcast, and with complaints of unwarranted infringement of privacy in such programmes or in their preparation. We do not propose to extend that remit to include general complaints about the taste, content or standard of a programme or programmes: we agree with Lord Annan's Committee that this sort of complaint is different in kind from one by an individual (or an organisation) who feels that he has been unfairly treated. Complaints about programmes will continue to go to the broadcasting authorities.
The commission will, as we envisage it, be a small body. We do not think that it will need more than the minimum three members required by the Bill and its staff need not be large. But we believe that it will further instil public confidence in our television services.
There is one further point that I should like to make and it concerns a new development of significance for which the Bill provides, which is to be found in Part IV in Clauses 16 and 17. I am referring to the introduction of a levy on the profits of independent local radio companies on the same lines as that which is already payable by the independent television companies. The justification for such a levy is that the companies derive their profits from the statutory monopoly which they have been accorded and that the Exchequer is entitled to a share of those profits in such circumstances. No levy was, of course, imposed on the independent local radio system at its inception, because the future of the system was uncertain. But I think that your Lordships will know—certainly I think that many of us know from local radio in our own areas —that independent local radio now occupies an important place in broadcasting.

529
Of the first batch of 19 stations, a number are making satisfactory profits. They are the ones that will become liable for levy. However, local radio is still developing and, in particular, independent local radio stations are liable to pay, as well as the basic rental to cover the IBA's transmission and administration costs, a so-called "secondary" rental which goes towards the expansion and improvement of the ILR system. The existence of the two rentals is recognised—if your Lordships care to look at Schedule 2, paragraph 1— in the lower rate at which the Bill sets the levy for independent local radio.
I think that in this country we are very lucky in our broadcasting system. The Government are determined that this fortunate position should continue. But we should equally not become complacent and fail to recognise the potential of new developments to enrich what we already have. This Bill seeks to provide for new developments by building on the sound structure which already exists. I beg to move.
Moved, That the Bill be read 2a.—(Lord Belstead.)
4.8 p.m.
Lord DONALDSON of KINGSBRIDGE: My Lords, many of your Lordships will already have learnt that you cannot believe everything you read in print. If you look at the speaker's list your Lordships will see that the noble Lord, Lord Ponsonby of Shulbrede, should be speaking now and that I should be speaking at the end of the debate. That is due to a mistake which may even have been made by my own Whips—I do not know. However, it is a mistake which I refuse to accept and so does my noble friend Lord Ponsonby. Therefore, we have gone back to where we started.
This Bill is not one which divides the parties with great bitterness. Both sides are anxious to build a fourth channel which will be different, often but not always serious, which will cater for some minority tastes, and which will in particular enable programmes of real merit to be shown at times which would not be possible for them on ITV-I, which has to cater for popular entertainment as well. Above all, it should be a channel which does not have to chase the ratings and
530
which can explore and use talent outside the range of the regular programme contractors; there is a great deal of it in Britain today, thanks to the energetic policies of the Arts Council under previous and, if I may say so, more generous Governments.
The board of the fourth channel is being committed to encourage independent producers and that could enlarge the diversity and range of television publishing a very great deal. It should present new opportunities to those engaged in the performing arts, in writing and in the film world. We favoured the Annan version of an Open Broadcasting Authority. Indeed may I in passing say what a very distinguished report the noble Lord gave us. It has been a pleasure to have the time to re-read it again much more carefully than I read it the first time.
I think that the noble Lord who opened is correct in saying that in many of the main essentials of the Bill the Annan Report has been followed, or at least the Bill could not have existed without the background of the Annan Report. Certainly, the Open Broadcasting Authority would have cost the taxpayer more to run, at any rate to begin with, than a subsidiary under the IBA, which is the Government's version in this Bill. It is important to build in the proper safeguards, and then this version may indeed do as much and be as good as the Open Broadcasting Authority envisaged in the Annan Report.
There is a difference of opinion between the parties of a general kind, not universal in either case, but none the less real. A good many people on my side are by nature suspicious of broadcasting funded by advertising and would much prefer the public service approach laid down long ago by Lord Reith, to the inevitably more commercial approach of ITV; and there are a good many people on the other side who passionately believe in free competition, in competitive advertising, in the right to make as much money as one can through pleasing the public, and who reject and regard as over-pious the public service approach.
But most of us on both sides of the House approve the dual system of a public service BBC and commercially-motivated ITV. I welcome the Home Secretary's endorsement, which he made in his speech

531
on 3rd July, of the principle that the BBC should continue to be funded through the revenue from the television licence fee, and his emphasis that there should be no question that any BBC broadcasting should be in any way, or even partially, dependent on revenue from advertising. This is the view that I think by far the greater part of my party hold extremely strongly, and we are very pleased that it has been confirmed.
As the noble Lord, Lord Belstead, said, the BBC was there first and has set standards which ITV could not ignore. The IBA has controlled the programme contractors firmly and, on the whole, successfully; has set its face against competitive advertising which, in its opinion and, on the whole, in ours, leads to the slippery slope; and has allowed the contractors to make a great deal of money without too much debasing the product.
However, there is more than a suspicion that, because of their buoyant revenues, some ITV companies indulge in what can only be called conspicuous expenditure. This not only reduces the amount of the levy that is paid, but also makes matters even more financially difficult for the BBC.
Before discussing the details of the plans in the Bill before us, I should like to say a few words about something which is not in the Bill at all; that is, the BBC. As I have said, the success of the IBA in directing and controlling the existing channel is due to a great extent to the extremely high standards set by the BBC. In the early days of independent TV, prospects were uncertain and the whole enterprise was, from a capital point of view, somewhat risky. But the gamble has paid off handsomely and a great deal of money is being made.
At the same time, the BBC has been forbidden to charge the price for its licence fees which would enable it to maintain its standards on a level with the last few years, which means, as we have seen, cuts in all directions. I am not concerned here with the cuts themselves, though many of us are very unhappy about some of them. But the BBC is being pushed down by the Government at the very moment when ITV profits are booming.
532
In addition, the creation of a fourth channel must find its audience from the existing three channels, two of which belong to the BBC. The noble Lord, Lord Hill, speaking from his unique position as ex-chairman of both institutions, in a most impressive speech in this House on 11th June, made an unanswerable case, in my opinion, for allowing the BBC to charge more for its licence fee. His facts and figures are in Hansard for all to see, but the fundamental statistics which he quoted are worth restating, though no doubt there are other statistics which would prove something quite different. In 1978–79 the BBC produced 21½ hours of programmes each week for £208 million; the ITV produced 14½ hours of programmes each week during the same period for £233 million. Thus, the BBC produced 50 per cent. more for nearly 10 per cent. less; and ITV's income is considerably higher—I believe something like 20 to 25 per cent. higher. Here I would refer to the speech of the director-general of the BBC to the broadcasting press on 8th July, which stated the case clearly and well and proposed various solutions, which I beg the Government to study carefully.
I am not maintaining that a public service like the BBC must be allowed to spend pound for pound what the commercial contractors spend, but the two things must be kept in a fairly stable relationship, especially when the authority considers what is and what is not relevant expenditure for levy purposes; otherwise the BBC obviously will—it is already beginning—go on losing its best people in all its functions, technical as well as artistic, to ITV. Money does not necessarily make good programmes, but the lack of money can certainly spoil them.
Therefore, we shall give general support to the Bill, but with the strongest warning that it can lead only to the development of broadcasting which we all want if the Government begin to look after the BBC somewhat more generously than they have recently.
I should like now to turn to the Bill itself. There was prolonged discussion in another place as to the length of time for which the IBA charter should be renewed, but the Government conceded that after

533
the eight-year span of the next ITV franchises, beginning in January 1982, these must be re-advertised for competitive tender for the awarding of further seven-year contracts. On this basis we are prepared to accept the 15-year extension in the Bill, which was, in fact, the Annan recommendation.
The most important clause in the Bill is Clause 3, which attempts to lay down in general terms what the Government expect a fourth channel to do. My colleagues in the other place tried to make these terms more specific, but the Government rejected this attempt and I think they were right. One cannot establish a new channel and tell its directors what to do. One can only lay down general terms and then see how adequately they are carried out. Anything more specific would tie the hands of the directors in a way that no independent director worth his salt would tolerate.
The words in Clause 3 are certainly general, but they are not ambiguous. Perhaps I may quote again two sentences; I know that the noble Lord, Lord Belstead, has already quoted them, but as this is the key to the Bill I shall do so again. The programmes are to contain,
"a suitable proportion of matter calculated to appeal to tastes and interests not generally catered for by Service I…to ensure that a suitable proportion of the programmes are of an educational nature; to encourage innovation and experiment in the form and content of programmes, and generally to give the Fourth Channel a distinctive character of its own".
So far, so good. These terms are a paraphrase of paragraph 15 of our own White Paper, and we agree with them. But general terms of this sort can be misinterpreted and gradually eroded, and in our opinion it is essential that there should be an independent source of monitoring and, if necessary, criticism to make sure that their spirit is properly maintained. That is the one thing that is missing in the Bill, and I shall propose a new clause to remedy that omission. I think that it can be linked to the Annan Report's suggestion in its recommendation No. 6 for periodical review, but we can discuss the details in Committee. The point is, the more general the definition of duties in Clause 3, the more essential is independent judgment as to whether the standards which were implied are, in fact, being met over the period.
534
We have had a very strong representation from the Open University about monitoring the educational content of programmes. In my opinion the right way to achieve results of real merit, whether artistic, educational, scientific or simply entertaining, is to give the director his head, check his results and change him if they do not come up to scratch. I congratulate the IBA on appointing my right honourable friend, Mr. Edmund Dell, as chairman of the subsidiary board responsible for running the new channel. I can think of no one better suited to the post, and it is up to us to see that he has his head. But I think we must check his results.
At the least we should see the subsidiary's articles of association which define its powers. It must be able to negotiate from strength and at arm's length with the ITV contractors for the services they need and the programmes they wish to buy. They will be paying the contractors for the programmes purchased. If they do not have this strength they will have to take what is given them and this will prevent them from developing their own concept of the new network. They will need powers to negotiate and trade in rights and properties as they think fit. TV4 will be a wonderful "shop window" for producers who, once their programmes are seen, can go on to exploit them commercially in the world markets. TV4 should benefit financially from this trading.
There has been some worry about having four representatives of the major programme contractors on the subsidiary board, but it does not worry me as much as it worries some of my colleagues. Under a strong chairman and with no more than a third of the votes they will not be able to plug their own interest unduly and will, I feel sure, be as anxious to make a cultural success of the fourth channel as any of their colleagues on the board.
The important point is that the subsidiary will be given a fixed sum with which to do its job and will therefore be wholly independent of commercial influences whether from contractors or advertisers, and here I may say that after due consideration I fully support the Government's refusal to admit competitive advertising into the scheme. We have had useful discussions with representatives of the

535
Incorporated Society of British Advertisers and representatives of the agencies, and both parties have emphasised to us that there is some discontent among those who buy advertising at having always and only to deal with monopolies. This one can understand; they thought and hoped that the fourth channel would provide an alternative to compete with the present contractors.
On reflection, and after some discussion with the IBA, we have conluded that the great virtue of the proposed system is that the new channel is allotted a fixed sum and no action of itself in relation to advertising can increase or decrease it, and above all that it need not always have a weather eye on the ratings. In so far as there is legitimate complaint from the advertisers and their agents, obviously the IBA must see to it. Under Clause 7(2)(d) complaints have to be listed in the annual report so there will be ample motive for them to put right anything that these show to be wrong. The advertising committee, to which the noble Lord referred, will certainly help in this. So we shall make no amendments under this heading.
This brings me to the question of sponsorship. In our White Paper we left the way open for sponsoring without giving positive approval. My own feeling is that sponsoring might be very useful to the new channel. As it works in the arts world today the advantage to the sponsoring company is strictly limited to the associaton of the company's name with a supposedly prestigious artistic event. I should like to see the fourth channel able to say to, for example, the National Theatre or the Royal Shakespeare Company, "Yes, if you put on a season of Ibsen and Strindberg, sponsored by the X company, we will show them at peak viewing times and the association with the company will he mentioned discretely at the beginning or the end".
I cannot see that this contains the same risks as competitive advertising. As far as I can understand the main Act of 1973, Section 8 outlaws sponsorship except as stated in subsection (6) for any programme broadcast in an educational series under Section 3(2) of the Act. I should like to feel that "educational" in this sense applies to serious music and drama and
536
art generally. If there is any doubt about this we should be inclined to put down an amendment. I do not know whether the Minister can enlighten me today, but this is an important question to which I should like to have the answer in due course.
One item I must mention here, to which the Minister referred, is that there is the strongest possible resentment in Wales at the Government's failure to carry out their clear promise to concentrate Welsh programmes in both Welsh and English on the fourth channel. My noble friend Lord Cledwyn will deal with this both today and in Committee, and I am relieved and happy to be able to leave this hot potato in his competent hands.
There are some good reasons, I think, for restricting advertising during times allocated to children's programmes, even though our own White Paper thought it unnecessary. A good deal of water has flowed under the bridge since then. I shall return to this in Committee. The only other item of major importance is the complaints commission. Here we are entirely in favour of what the Bill says, and will keep any detailed points until the Committee stage.
I have said nothing about the very important question of local radio, nor indeed of the problems of teletext, because my noble friend Lord Ponsonby will deal with these points when he sums up our views at the end of the debate. Let me repeat that we support a Second Reading for this Bill which, if we can make sure of the necessary safeguards, can create a fourth channel of the kind we all want to sec. But let me repeat also that this must not coincide with a general rundown of the BBC, which will remain, and must remain, the basis of broadcasting in this country.
4.27 p.m.
Lord WINSTANLEY: My Lords, I shall do my best this afternoon to resist the temptation to raise Committee points, many of which are floating about in my mind, since there will of course be other and perhaps longer opportunities to do that. Therefore, noble Lords will be glad to hear that I shall do my best to speak briefly on the broad intentions of this Bill. In that connection I am very grateful indeed to the noble Lord, Lord

537
Belstead, for explaining the broad intentions of the Bill so clearly to us.
I should like to deal with four main themes—there are a number, but four main themes arising under this Bill. First, that of the very necessary extension of the life of the Independent Broadcasting Authority; secondly, the provision of a fourth channel of television; thirdly, the allocation of that channel to the Independent Broadcasting Authority under the arrangements so clearly outlined by the noble Lord; and, fourthly, the entirely new matter of the establishment of a complaints commission.
With regard to the extension of the life of the IBA, I should have thought that that is something which would he welcomed on all sides of your Lordships' House. The IBA and the programme contractors in both radio and television which operate under its auspices have proved their worth beyond all shadow of doubt, and I think all noble Lords would wish to see the extension of the life of the IBA, together with these provisions for the IBA to appoint contractors to provide independent television and radio for periods of up to eight years. I think that part of the Bill would command the support of us all.
Secondly, with regard to the provision of the fourth channel, I would say at once that we on these Benches certainly believe that there is need for a fourth channel and that there is genuine scope for the expansion of television. I have no doubt that there is a great deal of unused, creative talent in our land which ought to be provided with more opportunities and more outlets. I also believe that the maximum guarantee of the things which we cherish regarding impartiality and the rights of minorities lies really in giving viewers a maximum range of choice in programmes. Here I mean real choice. I do not mean the kind of choice one has today in New York, where from 13 different channels one can choose between 13 different old films. I mean a real choice from a variety of programmes presented by a variety of people. That is the important point. The real safeguard for the kind of matters about which we in this House are all concerned lies in the number and variety of individuals who are responsible for programme-making. In so far as the provision of a new channel
538
increases that number it provides us with new safeguards and greater choice and is to be welcomed.
As to the decision to allocate the fourth channel to the Independent Broadcasting Authority, or at least to place the responsibility for the provision of this channel on the shoulders of the IBA, here I must echo some of the remarks of the noble Lord, Lord Donaldson of Kingsbridge. It seems to me that in our present economic difficulties and financial constraints it is logical to give this responsibility to the IBA under the arrangements outlined where a fourth channel can be provided at no additional public cost.
However, I should refer, as the noble Lord, Lord Donaldson, did, to the fact that at present it would be utterly impossible to place this responsibility on the shoulders of the BBC, and I am bound to repeat what I have said before in your Lordships' House; namely, that I regard a situation in which the BBC has become financially dependent on the Government of the day, on a continuing and almost month to month basis, seems to put at nought the whole of the arrangements envisaged in the charter of the BBC, which was designed to put the control and management of broadcasting at a distance from Government. It is time we thought whether the present system of the licence fee was the best, or indeed the only, method of financing public broadcasting, and I was glad to hear the noble Lord say that discussions along those lines were continuing. Nevertheless, it would have been impossible at this time to have given this responsibility to the BBC and it is therefore right to give it to the IBA under the arrangements as outlined.
I also welcome what the noble Lord said about the measures taken in this connection to separate the sale of advertisements from the actual business of programme making. Sometimes I think noble Lords and others have unnecessary fears and tend to feel that the duty to sell adverts by an independent television company might interfere with editorial decision and affect programme content. I digress briefly to mention my experience presenting programmes for many years for one of the independent television contractors. On one occasion in a consumer programme which I presented for 10 years I had occasion to refer to con-

539
tracts offered for the sale of certain articles by an advertiser with that particular television company and to advise viewers that they were not very sensible arrangements, the end result of which was that the programme company concerned—I will not mention which it was—immediately lost the advertisements of that company and therefore lost a great deal of money. Noble Lords may be interested to hear that instead of receiving a rebuke from the chairman of that company, I received a message of congratulations telling me that the fact that they lost those adverts showed I was doing the job properly. Thus, the fact that the independent television companies sell adverts does not mean that the business of selling adverts has any impact on programme content, though I accept that I have given just one example and that one swallow does not make a summer. I believe that, with a new venture such as this, perhaps it is right to put the two things at a distance.
As to the establishment of the complaints commission, it is obviously necessary to provide some reasonably open avenue through which complaints can be channelled and investigated by people who are not directly under the control of those who are complained about, and in so far as the new complaints commission does that, it is to be welcomed. I hasten to add that it seems a better arrangement than merely leaving the whole thing, as at present, to the admirable efforts of the indefatigable Mrs. Whitehouse, and I do not say that with any feeling of criticism; I believe that a commission of some kind such as is envisaged is probably desirable.
But at first sight the complaints commission looks to me very like the Press Council, and without any disrespect to noble Lords who have done distinguished and admirable work on behalf of the Press Council, I cannot honestly say that that body has been an entirely unqualified success. Here, however—with the complaints commission—there is a slight difference. I note that the areas in which complaints can be investigated are defined clearly in the Bill and that the Bill refers to quite important matters such as intrusions upon personal privacy. It is necessary that the privacy of private citizens should be defended, but perhaps they should be defended against anybody and
540
not only against the broadcasting companies. It is about 10 years since the Younger Committee recommended that the Press Council should be given powers to inquire into matters of the intrusion into privacy in relation to the press, and I wonder whether we do not need something more general, an Act, to protect the privacy of the individual citizen from intrusion, be it by the police, computers, the press, television or whatever.
Noble Lords will know that we on these benches also believe in a Freedom of Information Bill, and some noble Lords may think it a little inconsistent to campaign on the one hand for a Freedom of Information Bill and on the other for a Bill to preserve and defend the privacy of the individual. That is the kind of tightrope along which noble Lords on these Benches have many long years of experience of treading. However, I would broadly welcome the complaints commission, save to say it seems a little like the Press Council, so we shall have to wait to see whether it turns out to be a success, but I am sure it is right that an independent avenue for the channelling and investigation of complaints should be established.
Having outlined those as the main provisions and commented on them, I say at once that broadly we are in support of the Bill. The fact that I have not referred to the Welsh language does not mean it is not a matter of importance to noble Lords on these Benches. It is, but I think it better that it should be dealt with by people who speak and understand that language, and there are enough of them in your Lordships' House to deal effectively with those matters. Nor have I said much about the new provisions regarding independent local radio, and perhaps here I should declare an interest as a director of an independent local radio company. I am a little concerned about the extent to which the Government appear anxious to hedge in the IBA with all sorts of restrictions and rules regarding re-advertising contracts, this, that and the other. I should have thought that the IBA had proved beyond all possible doubt its ability to control the companies which operate under its auspices, its ability to protect the public interest and its ability to deal with infringements. I should have thought, therefore, that we should be a little hesitant about hedging in the IBA with too many rules. The

541
IBA has proved it can be trusted and I think we would be wiser merely to trust the IBA rather than to say, "We trust them, but we will put in this, that and the other provision just to make absolutely sure".
There are certain minor provisions in the Bill which I am sure should be welcomed with regard to changes in the old Section 4(2) of the Television Act which, for certain noble Lords who happened to be directors of independent television or radio companies, made it possible for them to say exactly what they liked on the BBC, but they could not utter a word on independent television or radio, and in so far as these minor provisions tidy that up, that too is to be welcomed. In conclusion, I would merely say that, broadly, we welcome the Bill and will give it all possible encouragement, although there are many points we shall wish to probe and examine in detail at later stages.
4.40 p.m.
Lord ANNAN: The noble Lord, Lord Belstead, is noted for his quite exceptional courtesy in your Lordships' House, and I wish to say how grateful I am to him and to the noble Lord, Lord Donaldson of Kingsbridge, for the extremely kind things that they said about the report of the Committee on the Future of Broadcasting. I want to give a warm welcome to the Bill and to congratulate the Home Secretary upon standing firm on numbers of matters on which he must have been under very strong pressure to yield. On one matter, which is of course of fundamental importance to broadcasting, I doubt whether he was ever much troubled; that is, that broadcasting should be under the direct control of broadcasting authorities. That is a principle on which both the Government and the Opposition agree, though there are still rumbles from an intransigent minority who want either a communications commission to supervise all the media, or a broadcasting council. I never thought that Mr. Whitelaw would be taken in by such agruments, and I could not be more pleased to see that he rejected the recommendation in the report of the Committee on the Future of Broadcasting for a public inquiry board for broadcasting.
I hope that I am not being too indiscreet when I say that that recommendation in the report was the best compromise
542
that could be reached between those on the committee who wanted a broadcasting council and those who, like myself, would have signed a minority report rather than recommend such a threat to liberty. In the end all that emerged was an inoffensive little proposal, which quite rightly has been ignored. Indeed, the BBC and the IBA have followed meticulously another proposal which was that they should themselves hold public hearings, which they have done with great assiduity. May I ask the Minister whether he would encourage both authorities to publish a brief summary of what they heard from the public and what they then did in response?
The Bill provides for another safeguard to the public which the Committee on the Future of Broadcasting recommended. That is the independent Complaints Commission, and I shall say nothing more about it, other than to add how glad I am to see it there and how pleased I am about the remit that it has been given.
The Bill is mainly about the fourth channel. Here again, I think that the Home Secretary has got it right. He set his face against an ITV 2 run solely by the companies, and he has also rejected the desire of the advertising agencies who favoured a fully competitive fourth channel. As the noble Lord, Lord Belstead, said, had the Home Secretary accepted those proposals, the quality of broadcasting would have suffered incalculably. The truth is that the demand for advertising is so great that it would have had very little effect on the price; so even the most hardened monetarist would have been robbed of that particular justification. Instead we are to have a service run by a company under the IBA.
Some of your Lordships may ask whether I mourn the extinction of the Open Broadcasting Authority. I answer, not at all. The Open Broadcasting Authority was born from an idea of Mr. Tony Smith, who, I may say, is one of the few good academic experts on broadcasting. They are not all that numerous, I fear. It was he who talked about setting up a foundation to run the fourth channel. Our committee took that piece of dough and began to bake it. I do not think that it got get very far in the baking before we had to finish our report. The new fourth channel is really the same loaf, only now it is done to a turn.

543
Some people argue that the new arrangements are a sell-out to the commercial television companies. That is rubbish. The Open Broadcasting Authority would always have had to have an enormous input from ITV, who alone could finance it. So both the OBA and the fourth channel are a charge on the Exchequer. But as the noble Lord, Lord Belstead, made very clear, the difference is this: the OBA would have been a permanent charge on the taxpayer, whereas if you put the fourth channel under the IBA and make it a charge on the levy, the ITV companies may eventually make profits and the Exchequer will recover the loss that it took by the increase in the levy which will then follow. I am bound to say that I think that Mr. Whitelaw has got this one right.
What is more, he has insisted that the independent producers should be given time on the air. I am very pleased to note that whereas elsewhere the Bill uses the term "suitable", in Clause 4(3) when it deals with the independent producers, the Bill speaks of a "substantial" amount of time. Channel 4, through the independent producers, has a chance to break not just the monopoly of the companies, but also the monopoly of power which the ACTT enjoys and ruthlessly exploits.
Mr. Whitelaw has also seen to it that the company that he has set up to run the fourth channel has a lively group of directors. I am sure that both sides of the House will welcome Mr. Dell's appointment as chairman, and I personally am reassured by seeing that not only Mr. Tony Smith, but also that redoubtable member of the Committee on the Future of Broadcasting, Mrs. Sara Morrison, are to be members of the hoard. The company is responsible for scheduling, and that is the most important matter of all, because by scheduling programmes either one can give choice to viewers or, alternatively, one can try to smash one's competitors' programmes operated on other channels.
I wish to emphasise that the company should not be treated by the IBA as yet another independent television company. Its purpose is defined in the Bill, and it is quite different from that of the companies
544
that run ITV 1. The company—not the IBA—must be responsible for day-to-day policy, because the company, and the company alone, can judge how best to use the facilities of the channel. The role of the IBA should be to monitor the output, not to control it. That, I think, is what a broadcasting authority has always done, and has always stood for in this country. In my view, in no circumstances should the company negotiate with trade unions or become involved in any way with industrial relations. Contracts and conditions of work are the concern of those who appear on Channel 4. So I believe that Mr. Whitelaw rightly puts his trust in the subsidiary company to do the right thing for the public, and yet at the same time to make in the end a reasonable profit for the broadcasters.
There is only one area in which I am sad to see anxiety about financial viability prevail over what I think is political and cultural good sense. A succession of reports, from the Siberry Report to the report of the Committee on the Future of Broadcasting, recommended that the fourth channel in Wales should be purely Welsh speaking. I am not a Welshman, but let me say this. Welsh is the oldest language in these islands. It is one of the dialects of the ancient Britons. Of course it is not the same language. Just as a modern Greek does not speak the Greek of the New Testament, so Welsh is not exactly the language that King Arthur spoke. But it is the tongue that a fifth of the population of Wales speaks today. One might say something like that about Gaelic or Erse. But the truth about the Welsh language is different. The language is slowly dying out, and perhaps more from television than from any other cause. For more and more children, English, not Welsh, becomes the mother tongue, the first language that they really learn.
Now I know that the IBA argues that a fourth channel in Welsh could never pay, and that, given a choice, the Welsh would prefer to have public money spent on social services rather than on subsidising a Welsh fourth channel. That is a specious argument that rests on hypothecation. One might just as well say that the Welsh deplore that so much is spent on hospitals and so little on education.

545
The second argument that the IBA use is that the English-speaking Welsh would be deprived and would turn their aerials towards English transmitters more than they do now. Well, why not? Why not make it possible for much of Wales to hear either output?—and you could do this by skilful engineering. The IBA then say, "Ah, but they would miss those hours of Welsh programmes which we will be transmitting." My Lords, those who do not understand Welsh in Wales will not be listening to them anyway. I think this decision will lead to political trouble which could have been avoided, but there is perhaps one way to minimise it. Will the Government conduct an inquiry in Wales to judge how public opinion lies on this issue?
I am a little surprised that the Home Secretary did not decide to break the monopoly of the BBC and the programme companies by compelling them to relinquish copyright over what programmes are to be shown next week. It is really a terrible bore to have to buy both the Radio Times and the TV Times. But I bear that with fortitude, because I am very glad to see in the Bill that local radio companies are no longer to be forced to include among their financial backers a proportion of local newspaper-owners who have shown that new local radio stations have not eaten into their profits.
On the other hand, I sympathise with the IBA's alarm that all radio contracts should be put up for "grabs" every eight years. I am not going to criticise the Government for failing to set up a local broadcasting authority, though I myself think that local radio as run by the independent local radio companies is one of the most important of social developments today, far more important than Channel 4. I think it is important because it is one of the things which, at a time of mounting unemployment, is going to provide, through the local radio stations, opportunities for people to broadcast and communicate about chances to get jobs. That is just one of the many social uses to which local radio is being put; and, here, I should like to pay tribute to many of the companies, and in particular one which I remember criticising in the report as being rather too fond of jingles. That is Capitol Radio, which I think has become a unique and first-class station.
546
But I am bound to say that an obligation of the kind which has, so I understand it, been put on the IBA is the surest way to turn that authority into a sprawling bureaucracy, and grossly to overwork the members of the authority—who, I may say, receive a derisory honorarium. How can the authority review 60 franchises, call for applications, examine consortia and hold public meetings at the rate, in some years, of about 10 a year?
My Lords, let me leave that and let me then say that I am far from sure that the way in which the levy is calculated is right; but I believe we must still give more time to consider this. You must not constantly pull up the roots of procedures to see how they are growing. But I believe that in a few years' time the way in which the levy is calculated, raised on profits, is a matter which must be reconsidered. It is this, I think, more than anything else, which has brought about the disparity in the salaries and wages which the ITV workforce expect to get and which the BBC workforce can hope to get. It is not only salaries and wages: it is perks.
There are some television companies —and I hasten to say that they are in a minority, and a comparatively small minority—in which the gargantuan appetite of the local union branches feeds upon the greed of top management. When companies have their own private aircraft—which, being regional companies, you would hardly think that they would need—is it any wonder that such scandalous practices of time plus four or five times over week-ends, or blackmail over the rate of the daily allowance when a crew is on location abroad, fluorish as they do now among the workforce? Overmanning and restrictive practices in ITV are as bad now as they were in the now defunct British film industry.
My Lords, reference has already been made to the lean times on which the BBC has fallen, and, like all of us in the public sector—universities alike—we are now bound to get yearly increases. Indeed, I think the BBC is very lucky to get a yearly increase. In the universities, in recent years, we have not known more than three months ahead how much money we are to get. But the whole question of whether the licence fee is the right way to

547
raise revenue for the BBC must always be a matter of public concern. I ask myself sometimes whether the BBC has quite made sufficient effort yet to cut its bureaucracy. I still maintain that the BBC is made to go on competing in local radio when its role is that of a great national corporation. The cuts it has suffered in its national radio services have been brought about partly by its determination to go on creating new local radio stations.
Now the BBC is in dispute with the Musicians' Union. I hope we shall find there is a satisfactory end to that dispute, but, again, I must say that it is a union which seems to be determined that none of its members should have his contract terminated, but that only the members of other unions should have their contracts terminated. The sure way to destroy good broadcasting is to insist on high premium payments, a rigidly closed shop, overmanning and resistance to any cut. On these grave matters the Bill is silent. But will the Home Secretary please keep this matter of comparative costs in the BBC and ITV under review? I was very glad indeed to hear the noble Lord say that there are these various options which are now under review and are being studied in the Home Office.
May I end by apologising that an engagement in my university will prevent me from being present at the close of the debate this evening, and by saying perhaps this. It is to me a matter of sadness that when I compare the state of broadcasting today with what it was when the Committee on the Future of Broadcasting examined it, I am bound to say that I think there has been a decline—a decline in morale, more even than a decline in quality. This has come about, I think, by the deterioration of personal relations at all levels throughout the industry. It is the national malaise from which we now suffer.
I think it is true, probably, in every walk of life that things have become much more difficult, and it is affecting output at the moment. I believe that a tremendous effort must be made by those in management to try to restore morale and to try to get, also, reasonable agreements between organised labour and management in the industry. That is extremely hard at the moment, owing to the turn that events
548
have taken and the way in which the services are often disrupted by sudden industrial action. Nevertheless, I think the principles of the Bill are quite right, and I also think that it gives the industry, or at any rate part of it, a chance to expand and create employment at a time when other industries are having the greatest difficulty in maintaining their present output. That is one of the main reasons why I give such a warm welcome to the Bill.
4.59 p.m.
Lord DRUMALBYN: My Lords, I should like to start by congratulating my noble friend Lord Belstead on the admirable way in which he opened this debate, and then go on to express my surprise, on this particular subject, at being put in to bat so high up the list. We have had the most knowledgeable (a nasty word, but it is meant well) speeches from those illustrious in the world of broadcasting, and I am to be followed by one who was chairman of the IBA; and here am I, coming in to bat now simply because on every point except one that has been mentioned I am in agreement with the speakers.
Your Lordships will not be surprised to hear that it is on the question of advertising and the sale of airspace, airtime. I have no interest to declare in this. I have a little experience on the fringes of it but I have no title to speak on this. On the other hand, I feel that the case has to be put and I am doing so more as a trailer for the Committee stage than as a substantive speech on the subject. I was grateful to receive from the authority an interesting note through the Head of information in which it says that the authority has appointed a panel of consultants with the intention that they should become members of the fourth channel company's board, with Mr.Edmund Dell as chairman of the panel and Sir Richard Attenborough as deputy-chairman. I should like to join the previous speakers in saying what a splendid choice has been made here.
It seems to be the intention of the IBA, as I think was said by the noble Lord, Lord Winstanley, to leave the programming of the fourth programme to its subsidiary and to confine itself to performing the important supervisory duties imposed on it by Clause 3 so as

549
"to give the fourth channel a distinctive character of its own".
I will not quote the duties therein imposed since they have been mentioned twice already. I agree entirely with the noble Lord, Lord Annan, in his dazzling speech, in what he said about the responsibility that the statutory subsidiary should bear. The IBA will have no easy task for it has to ensure not only that a proper balance and a wide range of subject matter are maintained in the programmes broadcast in each of the television contractor's companies' areas, but that a proper balance of subject matter is also maintained between ITV services and the fourth channel services. This is perhaps one of the most important duties laid upon the IBA in connection with the formation and inception of Channel 4. I should like to ask my noble friend whether I am right in supposing that, apart from the Welsh language services, Channel 4 services will be programmed nationally and not normally on an area basis. IBA have indicated that they hope to have the new service on the air by the end of 1981 or the beginning of 1982, and that at the outset coverage averaging 80 per cent. of the United Kingdom as a whole, with a minimum of 70 per cent. each in area, will be provided. So the fourth channel is to have a distinctive character to appeal to tastes and interests not generally catered for by ITV, and to be nationwide.
It is natural to expect that the subsidiary will do everything in its power to ensure that programmes on the fourth channel in the first few weeks and months will be of outstanding quality. Not only will they do so for reasons of amour proper and the desire to provide as good a service as they can, but because they recognise the need to establish a firm financial base from the start. The main source of finance ultimately will he advertising. I imagine that advertisers will share my view that a sizeable proportion of televiewers will, before the new service starts, study very carefully the advance notice of the programmes (which, under Clause 5, have to be given to those who sell air time) and will calculate accordingly the comparative value to them of taking time on the fourth channel. Whether they continue to support the fourth channel thereafter will depend on the comparative value for money that is offered to them
550
by the rates charged. It is very important to recognise this.
Of course, the fourth channel is to be of a distinctive character and it is to be nationwide. Advertisers will consider the extent to which the fourth channel succeeds in appealing to minority tastes, and will seek to obtain advertising "slots" for products or services which appeal to those sections of televiewers who share those tastes. However, it is important to understand that there is no way in which advertisers can influence programme content—and that is as it should be. It is right that the subsidiary which deals with programmes should not have any control or influence over the sale of advertising time; and the Bill deliberately excludes the subsidiary board from having any.
How best can the fourth channel be sustained by advertising revenue? What the Bill proposes is that the monopoly of the sale of advertising time at present enjoyed by the ITC companies in their own areas be extended to cover advertising time on the fourth channel. This proposal illustrates how insidious monopoly can be. After all, the IBA was set up because it was felt desirable to end the monopoly of the BBC. Ever since, there has been strong competition for audiences between the BBC and the IBA. Most people think that it has been healthy competition in that it has raised the standards of the BBC and encouraged the IBA to maintain high standards as well. Now, the IBA, the anti-monopolist par excellence, is advocating monopoly as between one of the services that it supervises and the other in the field of the sale of advertising time. This is no minor matter for it relates to the sinews of competition—namely, finance. I readily concede that the two services of the IBA—ITV and the fourth channel—are to be regarded as complementary. But at least there is bound to be a degree of competition between the fourth channel and BBC 2, for example, and, for that matter, between BBC 1 and ITV 1 as well.
I shall not weary your Lordships by arguing at length the case for having two separate organisations for selling advertising time in any one independent television contractor's area; but I must refer to the two main arguments that are commonly put up in favour of a single monopoly

551
organisation. The first is that, in any case, ITV will have to subsidise the fourth channel since the fourth channel will not be able to generate sufficient revenue to support itself. That is a proposition which the ITV contractors would hardly welcome as a permanent arrangement even though they have to do it in the run-up period to the start of the fourth channel. They would, in that case, have to support the fourth channel indefinitely, yet the fact is that the ITV contractors have shown themselves most anxious to get the air-time sales franchise for the fourth channel. They will not want to lose revenue to the fourth channel—and that is what it amounts to.
The IBA, on the other hand, estimate that, once the fourth channel becomes properly established, their total share of TV audiences will rise to about 60 per cent of total audiences and that the fourth channel's share of that 60 per cent. will be between 17 per cent. and 25 per cent. That gives a total range of income for the fourth channel of between £75 million and £112 million; but the programmes will have to be good to attract such revenue. It is surely absurd to argue that revenue of this kind is insufficient to justify a separate sales force for the fourth channel, which is estimated to cost about £1 million. Obviously, the independent television contractor companies could not do it without extra cost to themselves. It is not as though there would be extra cost if they take on the sales and advertising time for the fourth channel.
The second argument in favour of a single sales force is that competition between the sales forces of the independent television contractors and a sales force for the fourth channel would lead inevitably to a ratings war between them. That would result in less total revenue and thus, I presume, to lower quality programmes. Surely this is a totally unrealistic argument. For good measure, we are invited to look at the experience of the United States of America: by all means, but there we shall see a totally different scene. In the United Kingdom we have a regulatory body, the IBA, to which all schedules have to be submitted for approval—a statutory body whose duty is to supervise TV programmes on a complementary basis. In the United
552
States of America there are a profusion of competing TV companies and the regulatory body is the Federal Communications Commission, which is prohibited by law from interfering in matters of programming or air-time selling.
Moreover, the IBA's control has to be so exercised that in a real sense the independent television contractor companies and the fourth channel subsidiary will be selling substantially different products. I must make it clear that the suggestion put up by advertisers does not mean that the fourth channel subsidiary would be selling air-time. That would be done by separate agencies, as the noble Lord, Lord Annan, said, appointed or established by the IBA itself.
I come back to the point I made before that advertisers are seeking audiences from potential customers. It is intended that only one-third of the programmes, if I understand it correctly, put out by the fourth channel will be "popular"—in the sense that the independent TV contractors' programmes will be popular and seeking mass audiences. The kind of audiences which advertisers will be seeking, at any rate for the most part, on the fourth channel are those with special tastes, scattered all over the country—audiences which it is uneconomic for them to attampt to reach in any one independent company area, let alone in all their combined areas. No doubt in connection with the fourth channel's popular programmes the national advertisers will seek national coverage through the fourth channel, but advertisers and advertising agencies are anxious that there should be room for advertisers of specialist projects and services who cannot afford to advertise on TV at present.
I hope I have made it clear tlat there are strong arguments, both of principle and practicality, for calling into question the arrangements for the sale of air-time on the fourth channel proposed in the Bill. I am sure that your Lordships will wish to pursue this matter further at later stages of the Bill. I recognise that the present economic situation raises doubts about the level of advertising revenue in the next year or two, but I share the view of the noble Lord, Lord Annan, that advertising revenue is extraordinarily resilient. Even so, that makes it even more important that sales of air-time on the fourth channel should be conducted by people solely

553
concerned to ensure the success of the fourth programme.
5.14 p.m.
Lord AYLESTONE: My Lords, as is customary, I have to declare a small interest—I should perhaps say a minute financial interest—in an independent local radio company. In doing so, I should like to apologise to the Minister at this stage, and also to the House, because I shall not be able to stay much beyond seven o'clock this evening.
I welcome the whole of this Bill because I think that within it has been incorporated probably "the best of Annan". I was delighted to hear the noble Lord, Lord Annan, speak and to hear him gently and quietly put the idea of the local broadcasting authority to bed. It was an unnecessary setting up at a considerable expense of yet another authority to do work that is being done, and can be done quite as well, with all the requirements of programming that the Government may require, by the existing Independent Broadcasting Authority.
The Annan proposals on special programming for the fourth channel I heartily agree with, and have always endorsed. My quarrel with him and his committee was purely regarding the open broadcasting authority which, had it existed, would have cost something like £70 million, which could at that stage only have come from public funds. The Government which I supported when in office at that time thought that this was a proposal worth implementing. I did not agree then and I am glad to say it has now been put quietly away; but I repeat that "the best of Annan" is contained within this Bill.
I welcome the idea of the independent authority setting up a separate company, a separate body, under the distinguished names that have been mentioned already, to control programme content and to do what one might term the first scheduling of programming on what is to be a national channel. I say the "first scheduling" because there must always be an overall view of the content of the fourth channel in relation to ITV 1 so that you can get complementary programmes which will not compete with each other. It is right that the IBA should take upon themselves that function, as indeed they will do.
554
The content of the programme, as I said, is complementary and should include all the specialist things which people feel have been missing from both the BBC channels and the one ITV channel.
It is always very difficult to find out what these special programmes are. They are usually referred to as "minority programmes". I remember once having an argument at a meeting about what was felt to be a "minority sport". Someone who went to a pub locally and played shove ha'penny felt there should be television coverage in the pub for that particular sport. That is a minority interest and I do not think, even with a fourth channel, we can get down to quite that depth of minority sports; but there is a great deal that can be done. The proposal that programmes at first in the main should be provided by the independent programme companies is correct, because I doubt very much whether in the early stage there will be sufficient independent producers—and I quote the words of the Bill—
"…to produce programmes other than programmes from IBA contractors".
There are, of course, many independent producers producing programmes, but whether there are enough remains to be seen. I hope it will grow and extend beyond the creation of drama to include such things as children's programmes, preschool programmes and educational programmes on the fourth channel. Earlier today during Question Time the noble Viscount, Lord Eccles, asked whether there would be any educational programmes on the fourth channel. I think that perhaps your Lordships will not mind if I remind the House—I think it has been done before and that I have done it—that the first school programmes in this country were introduced to television by the independent body, by independent contractors, and not by the BBC. I have no reason to think that any aspect of programming will be omitted. In fact, it is the IBA's duty and the duty of the new bodies to see that that is not so.
I have another proposal, which may be considered a little revolutionary. Why not assist the BBC by purchasing for the fourth channel some of the best BBC programmes that have been transmitted over the last five or 10 years? Programmes are extremely costly, costing

555
many millions of pounds, especially historical series. I shall not mention any particular programme. But why do the BBC not sell them to the fourth channel, as will the independent producers and the independent television contractors? If the BBC would accept money made from advertising—and I know it is a little difficult for them—it would help them. Whatever they may feel about that, they sell their programmes in America, and in many other parts of the world, where the income for television comes, at least partly, from advertising.
The IBA's overall duty of scheduling is so very important, because it is only in that way that you will get the correct mix and the correct balance. The whole programme for the fourth channel will be extremely expensive to start with. The existing programme contractors—I say "existing", but perhaps I should say existing at that time, because before the end of this year some of the existing contractors may be just memories; I am sure that the IBA will not make changes for changes' sake, but they will unquestionably make one or two changes—will have to provide the money for the fourth channel and for the transmission of its programmes. It will be a particularly heavy burden.
We are told that the national broadcasting hours for the fourth channel may be something like six at first, and I imagine that the IBA will require a strict number of minutes only for advertising—probably six per clock hour, as at the moment. If that is so, it will take the programme contractors, whoever they may be, all their time to find the money to pay for the fourth channel. That is in the early stages and I think it will improve. Of course, the Government themselves may lose a little of their advertising revenue in the first years, when the programme contractors are having to provide money for the fourth channel. So the burden will be a pretty heavy one.
It is probably worth recalling—one hears this so often—the colossal sums of money that are made by programme contractors. There is no doubt that some of them have made a lot of money. I shall never forget the famous words used many years ago by a former Member of this House, now regrettably departed
556
from us, about "a licence to print money". But it was no longer so after that, because the Government slapped on a levy, which has increased and increased. I think that the current take for the Government is something like £50 million to £60 million a year in levy, which is in addition to normal taxation.
A few weeks ago, in reply to a question in this House, my noble friend Lord Taylor of Gryfe elicited the information that the programme contractors pay to the Government in corporation tax—that is, normal taxation—and levy something like 80 per cent. of gross advertising revenue. So it will not be easy to finance a Fourth Channel. Nevertheless, I think it can be done, with courage, and will be found to be worthwhile continuing in that way.
I should like, in this strain of talking about the financial situation of programme contractors, to mention something that is not generally known. But, certainly, within the last 10 or 12 years, three of the independent television contractors have been on the verge of bankruptcy and had to be helped out. They are not in that position now; they are in a much happier financial position. But that was the position within the last 10 or 12 years. So that, so far as the Fourth Channel is concerned, I welcome it and I am quite sure that it will be a success.
I should like to turn now, very briefly, to the proposed Broadcasting Complaints Commission, which I also welcome. In doing so, I pay tribute to the former bodies, one set up by the BBC and known as the Three Wise Men, and one set up by the IBA to look at the question of complaints about broadcasting. They did an excellent job, but you could not do the same kind of job if you were set up by the authorities, the BBC and the IBA, as you can do if it is a statutory body which is set up, as this new one will be, by Act of Parliament. The findings of such a body which is looking into complaints will be much more acceptable to the public, if they realise that they come from a statutory body.
I understand that the complaints are to be made in writing, which, too, is very important. The Broadcasting Complaints Commission will have full authority to see scripts, to hear tapes, to watch video records and to send for programme

557
producers and, if necessary, programme contractors, or whoever may be making the programmes. As the noble Lord said in introducing the Bill, the Commission will be restricted to looking at "unjust or unfair treatment" of complaints from individuals. Here I have one or two points on which I should like some elucidation, although I regret that I shall not be here to hear the winding-up speech and shall have to read Hansard in the morning.
I should like to ask the Minister to say, when he comes to reply, or perhaps to tell us at a later stage, whether a managing director of a company would be regarded as an individual, who could bring a complaint before the commission, because he felt that his company had been maligned in a television or radio programme. Or, perhaps, if a diplomat felt that his country had been unjustly treated, could he bring a complaint to the commission as an individual? We have had experience over the last few months of a programme—I shall not mention it by name—that caused a lot of distress in some countries. Would it be in order for a representative of that country, a diplomat or someone else, to take a complaint to the commission? That is the kind of question that one will have to ask, because in the number of things that they will have to consider they will be somewhat limited.
I am glad that the whole question of programmes generally is excluded from the review by the complaints commission, because the words in the main Act, that programmes must conform to "good taste and decency", are never very easy to define. Who would like to define, as the members of the Independent Broadcasting Authority and the BBC have to do, what is good taste and what is indecent? I suppose that we each have our own ideas. We could each have a go at it, but I doubt whether, finally, many of us would agree. It is the old point about one man's meat being another man's poison. But that is excluded and the normal programmes will continue, and it will be the responsibility of broadcasters to see that good taste and decency are adhered to. I hope that the existence of the Commission will not jeopardise what is known as investigative journalism. That is something which is so very valuable which the BBC and independent television contractors do in investigating a particular problem. They
558
may get some complaints about it, but that is fair enough if an individual feels that he is being maligned. They will perhaps have to be a little more careful with these programmes, but I hope that they will continue to make them because they are of extreme value.
We are told that the commission must not consider a complaint where legal action is possible. One cannot always be sure where legal action is possible about a complaint. But what would be the position if the Independent Broadcasting Authority, having listened to a complaint from an individual, found in favour of the individual and against the programme contractors? Is legal action against the programme contractors then possible, arising out of the complaints commission? One will have to look at these problems at the time, and think very carefully.
I have only one point to make on the composition of the Broadcasting Complaints Commission. That is its size. The Minister mentioned a membership of three. It would be better, perhaps, if there were a quorum of three and a membership of five. Some of us have had experience of very small committees. I am never in favour of large committees. Personally, I like committees of one, but that is the wrong thing to advocate. But five people, with a quorum of three, would probably be the right answer in this case. It is to be a quasi-judicial body. I hope that they will be aware of pressure groups. Pressure groups will be ganging up on them every time they are looking in.
Finally, the Bill gives to the IBA a life of 15 years. I think that this is right. At the end of eight years, the programme contractors, be they television or radio, will have their franchises readvertised. They may reapply and they will be looked at again. So far as television is concerned, I think that this is right. However, I am slightly worried about radio because 44 independent local radio areas have been approved by the Government, and something like 25 to 30 are already on the air. Therefore, as we near the end of the first eight years some of those independent radio contractors may have been on the air only for a matter of two or three years. It would be grossly unfair, after the expenditure of that kind of capital, if they were to fold up, simply because the eight-year period had been reached. It

559
is important in the case of radio that it should be a period of eight years from the time that they start to broadcast, or from the time that the franchise is granted to them. That would be much more sensible. Overall, as I said at the beginning, I welcome the Bill and naturally hope that it will soon pass into law so that the IBA can get on with the job.
5.33 p.m.
Lord FERRIER: My Lords, in rising to support this Motion it is not my intention to refer to the technicalities of administration, nor to the complexities of the financial aspects of the contracting arrangements—nor, indeed, to the problems of the Welsh language. I am not competent to do so, even if I felt so inclined. However, I think I am competent to turn to one particular problem which, as some of your Lordships are aware, has been a self-imposed concern of mine for many years. I refer to the reporting of the proceedings of Parliament to the people. The only regular, reliable, impartial channels for such reportage are the BBC's programmes "Today" and "Yesterday in Parliament". They are under the obligation imposed upon the Corporation by Clause 13(2) of the licence and agreement which reads, as noble Lords may remember:
"The Corporation will broadcast an impartial account, day by day, prepared by professional reporters, on the proceedings of both Houses of the United Kingdom Parliament".
I am suggesting that now is the time for this obligation to be applied also to a television channel.
It is necessary for me to emphasise that I am not—I repeat "not"—referring to the problem of televising proceedings. That is quite another matter. We decided long ago that this House would not address itself to such a provision before it has been adopted by the House of Commons, and that could be years ahead, if ever it should come to pass.
My reasons for taking the view that I hold are two-fold. The first reason is the failure of the newspapers adequately to provide a modicum of parliamentary information. The day-to-day doings of Parliament simply do not find a place in most of the tabloid papers. I except the Daily Mail, though they do not seem
560
to visit your Lordships' Chamber as often as they might. They simply do not find a place in most of the tabloid papers, unless there is some scandal, or crisis, or tragedy. They apparently feel compelled to give much of their space to subjects which may titillate the sponsors of the phallic worship, which seems to be the current norm.
My second reason is the fact that the BBC's radio programmes to which I have referred are, despite their excellence, broadcast at hours which detract from their availability to the general public. The ratings for "Today in Parliament" at 11.30 p.m. are absolutely minimal, and although "Yesterday in Parliament" has an audience of a million and more at 8.35 a.m., the audience is, I think your Lordships will agree, a "white collar" one. These programmes stand supreme as they are. They are the only ones where the producers do not seem to be obsessed, like so many broadcasts, with the paramount idea of entertainment.
To return to the press, the "heavies" of course do their best. In comparative terms it is a good best, although it bears no comparison to the coverage which they gave many years ago—one has only to refer to the volumes of The Times of long ago to see that—and even before the "Box" replaced the home fire as the heart of the household.
What of the "heavies" now, beset as they are by the print unions, whose lust for power and thirst for plunder is gradually, via The Times and now the Observer, choking the life out of the medium of the printed word? A leading article in The Times of 28th June is headed "The Fleet Street death Wish".
What can we do? As I see it, we should take advantage of the opportunity presented by this Bill to ensure that, so far as we can see ahead—until 1996, at any rate —every home is assured at least of one window opening on the democratic forum which Parliament represents. Just as the late Lord Egremont in 1966 said:
"…we ought to do more ourselves to communicate…more directly with all the people of this country whom we seek, in our deliberations here, to serve".—[Official Report, 15/6/66; col. 66.]
Dr.Shirley Summerskill said only the other day in another place:

561
"ITV and local radio are now accepted features of our national life, both wielding immeasurable influence on the thinking and standards of our culture".—[Official Report, Commons; 18/2/80; cols. 146 and 147.]
Lady Gaitskell in 1969 said:
"The primary object of broadcasting Parliamentary proceedings should be educational, to strengthen democracy".—[Official Report; 20/3/69; col. 1098.]
Local radio, I feel, can find its own Parliamentary material, chiefly of local interest, without compulsion. So why do I say that this is the opportunity? I turn to page 1 of the explanatory memorandum to the Bill, which reads:
"Clause 3…requires the Authority to ensure that Fourth Channel programmes contain a suitable proportion of matter calculated to appeal to tastes and interests not generally catered for by ITV; to ensure that a suitable proportion of the programmes are of an educational nature; to encourage innovation and experiment in the form and content of programmes; and to give the Fourth Channel a distinctive character of its own".
Does this not fit in here? It is to Clause 3 that I shall seek at the Committee stage to move an amendment in terms which can await the conclusion of this debate, probably or perhaps to add the very words of the BBC's licence Clause 13(2), to some part of Clause 3(1) of this Bill.
The Annan Committee report dealt with this subject in chapters 17 and 18, particularly in paragraph 1762 on page 290, but without making any recommendation such as I now put forward. There is no reference whatever in the report to the BBC's obligation, to which I have already referred. Lord Annan kindly invited me to submit a couple of papers in evidence, which I did, and in one of them there is a point which I wish to emphasise on this occasion as I believe it to be so important as to be essential to my present contention. It is this. Financial reasons make it difficult for commercial television to justify reporting Parliament commercially, and therefore it cannot be expected to do it unless it is obliged to do so by statute so as to provide a handle for the operators to calculate their advertising rates and adjust them to compensate for the value of time involved in the programme. The other day I attended a meeting with some advertisers, and, sure enough, they did not seem to think much of my idea. Of course, they did not; how could they? Nevertheless, I feel that this is a matter for Parliament to
562
decide. What is more, I feel it may turn out that a regular Parliamentary programme, no matter how brief, would attract attention from a range of viewer listeners who otherwise would not switch on at all and who might well be responsive to suitable speciality advertising.
When I put down a Question for Written Answer in June, when the planners were first appointed—rather an opening shot by me—the Home Office replied, saying:
"It would be inappropriate to require reports of the proceedings of Parliament to be broadcast day by day on a particular television service".
I was, to quote P. G. Wodehouse, if not actually disgruntled, certainly "gruntled". Why inappropriate? Does that suggest that it is not for Parliament to set down a particular requirement in a Bill if it so chooses? Obviously it is for the authority who has to operate it to decide how a requirement should be carried out, but my contention, I feel—and I trust many of your Lordships will agree—is not unreasonable and perfectly justifiable. John Bunyan's Man with the Muck-rake is for ever among us. He wrote:
"…the man did neither look up, nor regard; but raked to himself the Straws, the small Sticks, and Dust of the Floor".
The course I urge upon your Lordships represents my sincere belief and I dare to recommend it so that we strive to buttress our parliamentary democracy by using every possible means to bring Parliament to the people. It may be an obsession with me, but I believe I am not alone. Do not let us for ever be looking down, like that man. Let us look up. Let us look up.
5.45 p.m.
Lord HILL of LUTON: My Lords, when the Government decided to allot the fourth channel to Independent Television and to require that on that channel should be ensured a suitable proportion of programmes to appeal to tastes not generally catered for by Independent Television, and so on, their first task was to create the legislative basis for the channel, including those assurances, and subsequently to ensure in other ways that this original prospectus lasts. There will be some noble Lords who will recall the original prospectus of BBC 2. All I will say is that there have been great changes—frankly, changes that I have welcomed. But my point is that there have

563
been great changes from the original promise, the original prospectus.
I am really enormously reassured by the decision to appoint this subsidiary board, first consultants and then board members, and I am especially reassured by the proposed membership of that board, for a great deal will need to be done. It is one thing to devise attractive terminology to express one's objective; it is another thing in this world to secure it against all the pressures, not necessarily pressures from advertisers or from moneyed interests, but pressures from broadcasters who often get a little weary of the insistence that their work should continue in a field which is likely to attract a very small number of viewers. But my conclusion is that in so far as the legislative provisions are concerned, in regard to the proposals for the supervision of the programme, I think the Government have done as well as can be done at the outset, but they will appreciate, I hope, that a continuous careful watch needs to be kept on a development such as this.
Secondly, finance. Is that secure? Is it enough? All one can say is that it seems so—from 1982, £70 million a year from the companies; less, of course, advertising income they receive; less, of course, payment they receive by the supply of programmes, because this will be one of their expenses for deduction before levy is applied to their profits. There is just one issue that arises in my mind on the former point of the work in education to be done by the new channel. I confess my first thought was that the Open University should have been a requirement. On reflection, and particularly on studying the composition of this new board, I have reached the conclusion that that would be unnecessary, at least at the outset. But I have thought hitherto that the Open University is in a special position and that this channel, with this definition, with these objectives, should share with the BBC the putting over of these programmes. But on the second one—and I follow the noble Lord, Lord Ferrier, who has devoted the whole of his speech to this point—I want to say just a word about the broadcasting of Parliament. A requirement in sound, by that I mean of course the broadcasting of a
564
summary of Parliament; a requirement in sound but not in television.
I think it must be faced that the Hansard battle is over. To allow the reporting of Parliament in the printed word, to allow it in radio and to deny the main medium of communication with the people, in other words television, is a nonsense. People are entitled to know what goes on in Parliament. Of course, it must start down the corridor. I know that there are those who feel that it would involve a change in the character of the House of Commons. Well, that might not inevitably be a bad thing. They say that it will encourage the extroverts to be more extrovert than ever. Well, so be it. Such extroverts would soon find that the public reaction is not always one of sweet approval. But I do want to urge the point that the obstacles must be reduced, for the people are entitled to know what is said in Parliament and are entitled to have used for the purpose the medium which for them is the main medium of communication. I hope that sooner or later this issue will be faced and we shall have fewer of these excuses against what is an inevitable and a proper—and indeed a natural—justice to people that they should know what goes on.
There is a minor incidental point. It may be put forward by a political party at the next election that this Chamber should be abolished. Let us assume that they are entitled so to do; but for Heaven's sake let the people know what this Chamber is about before they are invited in one way or another to vote for its abolition. I want to say one or two other things, although I propose to be brief, for in general I like this Bill and indeed I doubt whether there will be very much in Committee that needs to be changed. The life of the ITA is to be 15 years, which could be extended, I think, to 20 years. That is pretty good. I sometimes wonder why it is necessary to come back even every 15 years to renew it. I suppose it is to require Parliament to look at it. I think Parliament should look at the broadcasting bodies every year on the basis of their annual report and that the clause which extends the life of the authority could even extend it to a longer period or even indefinitely. A more important point, though, is the length of the contract period of eight years. I think that could be extended. Bless my

565
soul! we had an interval, for one reason or another, of 13 years between 1967 and 1980. I would extend it even to 10 years, which would soon pass—or 12.
But let us not listen to the voices of those who say, "Cut out this contract phase". They say, "Let the authority keep an eye on companies, admonish here and there and when the admonition comes to nothing, call him up, re-advertise, invite competitors and judge it afresh". I think that would be an appalling system. In fact, one would need to make a public criticism of inadequacy before even comparing the existing company with the candidate. I believe it would be wrong—and, what is more, no one can serve in independent television without realising that as the time of the contract phase is coming along, there is—unconscious as it is, no doubt—a strange desire to improve the programmes. It is human nature. After all, there is a great deal involved. It is odd, but it is undoubtedly a fact. Let us not deny independent television that phase of brutal anxiety, for it does a lot of good, as does indeed a change from time to time.
I am glad of the decision on the complaints commission. It was while I was chairman of the BBC that the BBC made its inevitably tentative movements in that direction and independent television made some corresponding though different moves. When in fact there has been a bitter or unfair criticism or an unfair statement, it is difficult sometimes for broadcasting bodies to fit in the reply or the apology in the hope that it will reach the same audience. In fact, the habit had developed of what Harold Wilson called "a public offence but a private apology", and I felt strongly that a complaints commisson was necessary, even though for us to appoint it diminished its value. But we did get an ex-Speaker of the House of Commons, an ex-Lord Chief Justice and an ex-Ombudsman to give it the kind of respectability that, without them, it would not have had. I am sure that it is a good and a wise move, although the noble Lord, Lord Aylestone, raised some very interesting problems that have to be resolved before the final proposals are formulated, as to whether, for example, the person going to the complaints commission should denounce or renounce his intention of going to the courts in parallel.
566
Money. It may be true—I do not know—that there are some companies that are spending unnecessarily high amounts on salaries or otherwise so as to reduce their apparent or real profitability, and so to diminish the levy. I do not know whether that is true. If it is true, then there are ways of dealing with it, but I would urge that the Government should not be tempted to go back to the system which obtained before 1974. Then the levy was on the income; whether you were winning or losing you paid on the income. That was an absurd method and I hope that under no circumstances, or under any excuse, will it come back.
There is another little suggestion in those whispering corridors of broadcasting. It is that the Government might be tempted, seeing the disparity of cash between the BBC and ITV, and realising that there is a loss of fair competition between them as a result of that disparity—I am told that someone is nurturing the thought that the levy should be increased so as to create some of the lost comparability. That would be a wicked proposal. The licence fee of the BBC is inadequate, and the Government should be ashamed of setting it at that inadequate level, and they should not seek to wriggle out of it by increasing the levy so as to make competition fairer without fair treatment of the BBC itself.
One last point, and I put it very tentatively. After many years of anticipation, I am told that satellite transmission of television is very near. In the next two years the satellites will be up, allowing the transmission of programmes from the United States of America, France, Germany, Scandinavia. I know that the reception will require adjustment of domestic sets. But the results of this might be profound, there might be profound results on the advertising income of independent television for a start. Think what America might seek to do by the broadcasting of its programmes and its advertising material here.
It is no good saying people would not watch American programmes. Of course, they would. They watch them in large numbers now, sadly, but true. When you contemplate the possibility of a pirate station transmitting by satellite to this country, all I can say is that that development might lead to a need to recast our whole structure, our insular protected

567
structure. All I ask for is an assurance that the Government are looking at this problem. It could be that Channel 4 will be the last steam engine and that the method will be entirely different, worldwide rather than national and insular. It is very important that a great deal of thought should be given to this before the satellites, or the rest of the satellites, go up, for I am authoritatively assured that this is now about to begin, and thinking is going on about how to invade us for commercial or other purposes. Having said that, let me say, I think this is a good Bill, of course needing to be scrutinised in Committee; but it seems to me that the new service will get off to a sound start on the basis of this Bill.
6.2 p.m.
Lord CLEDWYN of PENRHOS: My Lords, the House will have listened with great interest to the speech we have heard from the noble Lord, Lord Hill of Luton. The noble Lord speaks with great authority; indeed, he is unique in the sense that he is the only one to have occupied the chairs of both authorities, and therefore what he says is of importance and must be listened to with great respect. I noted what he said about the future of this place, and he spoke very persuasively about the televising of Parliament. As to the future of this place, what I hear, and all the evidence points to this, is that the reputation of this House has risen considerably since people have been able to listen to the broadcasting of its proceedings; the prestige and authority of this House certainly seem to have increased in recent years as a result of the broadcasting of Parliament.
My Lords, I do not propose to follow the noble Lord in all that he has said. I agree that this is, on the whole, a good Bill, marred by one considerable defect. I propose to confine my remarks to the problems of Wales, as my noble friend Lord Donaldson has suggested, and to deal with the Welsh problem, Clause 20 and the following clauses. The implications of the Bill for Wales are profound and serious, and it is vital that the House and Parliament generally should realise this in good time.
The use of the Welsh language on television programmes has been the sub-
568
ject of discussion and argument in Wales over a long period. The increasing power and influence of television in our everyday lives has coincided with the continuing decline of the Welsh language. Those who passionately believe in its survival, and they are not few, also believe that the fourth channel should in Wales be devoted in the main and at peak periods to Welsh language programmes. These advocates include many who are not themselves Welsh speakers, and they include members of all political parties.
It may be helpful to an understanding of the present problem if I recall some of the events of recent years. In 1960 the Pilkington Committee on Broadcasting, after taking extensive evidence, was quite clear about the Welsh position. They said:
"The Welsh view, held very strongly, is that…the special needs of Welsh audiences cannot be satisfied. There must, we were told, be a Welsh programme which would portray the distinctive Welsh culture…According to some, such was the influence of television that unless in the very near future enough Welsh-speaking programmes were put on in peak viewing hours the cause of the Welsh language and of the Welsh culture would suffer irreparable harm".
That was 20 years ago, and by the early '70s the possible allocation of the fourth channel to Welsh language programmes was being recommended. In 1973 the Lord Mayor's Conference in Cardiff called on the Government,
"…to give special consideration to Wales"
in the use of the fourth channel. In November 1974 the Crawford Committee said:
"…we recommend that, whatever decision may be reached about the use of the fourth channel in the rest of the United Kingdom, it should in Wales be allotted as soon as possible to a separate service in which Welsh language programmes should be given priority".
Significantly, it went on to say:
"The cost would represent an investment in domestic, cultural and social harmony in the United Kingdom".
The next stage was reached in November 1975 with the publication of the Working Party on the Fourth Television Service in Wales—the Siberry Report (Cmnd. 6290). This report contained specific proposals concerning transmission, programme production and finance, and recommended that BBC and HTV should co-operate to produce initially 25 hours broadcasting a week in the Welsh language

569
on the fourth channel. The Government accepted this report, which was followed in March 1977 by the report of the Committee on the Future of Broadcasting—the report which bears the name of the noble Lord, Lord Annan. This report supported the Siberry proposals as a matter of high priority. I do not propose to quote from the Annan Report because the noble Lord, Lord Annan, himself has made a far more powerful contribution in favour of the point of view I am making than I could by quoting his report. I am grateful to the noble Lord for his most sympathetic remarks. He clearly understands the position very well.
Then in June 1978 the Welsh Language Council in its final report urged the Government to concentrate Welsh language programmes on the fourth channel, and, after publishing a White Paper on Broadcasting, declared its intention to bring the new Welsh language service into operation on the fourth channel in October 1982. They then introduced a Bill directing the Independent Broadcasting Authority to begin work on adapting transmitters. We therefore have had a series of authoritative reports over a period of nearly 20 years, all of which recommended that the fourth channel in Wales should be devoted to Welsh programmes. Of that there can be no doubt at all. It is very important that Parliament should understand that, for it is the background against which the present mood of the Welsh people should be regarded.
Then the General Election of 1979 intervened. At the time no one suspected that the process which had been commenced would be interfered with. I quote the Conservative Party Manifesto pledge, because this is the one which has, regrettably, been set aside:
"We are anxious to see Welsh broadcasting starting on the fourth channel as quickly as possible. We believe that this could be done more cheaply, simply, and at least as quickly if both the BBC and HTV Welsh programmes are transmitted on the fourth channel on an agreed basis under the overall control of the IBA…".
After the election the new Conservative Government repeated this pledge in the Queen's Speech in these words, undertaking that they would,
"give active support to the maintenance of the Welsh language and will seek an early start with Welsh broadcasting on the fourth television channel in Wales".
570
That was in May 1979. Mr.Nicholas Edwards, the Secretary of State for Wales, repeated that when he spoke in the debate on the Address following the Queen's Speech. But on 11th September 1979 the Home Secretary, in a speech in Cambridge, announced a complete reversal of the policy and said that it was now proposed to put Welsh language programmes on two channels, probably BBC2 and IBA 2. That is the history of what I am now seeking to explain to the House.
After the years of effort, after all the reports, after all the waiting, the promises were swept aside. The reaction in Wales was predictable: there was profound dismay and disillusionment in the Principality. It may be argued that there are people in Wales who take a different view, specifically those who fear the so-called Welsh language "Ghetto". That is to miss the main factor; namely, that after years of argument and discussion, when the Welsh language programme seemed to be within our grasp, it was arbitrarily snatched away from us and announced in an uninspiring ministerial speech in Cambridge. That was to add insult to injury.
It is difficult to know what caused the Government to reverse their policies and to subject the Welsh people to so grave an affront. It may have been the financial implications. Mr.Nicholas Edwards accepted that these were an important factor in a speech which he made in another place on 16th July. I have never been clear in my mind that this would affect public expenditure and I think that the position should be made clear once and for all. As I understand the position, the fourth channel would have been paid for mainly out of the recycled levy—that is, the tax rebated to the independent television companies. Some money would come from the licence fee, but obviously that would be an insignificant amount. Even so, the financial aspect is incidental to the main complaint that I have to make to the House this evening.
The Government have recently made a number of new proposals in response to the growing feeling in Wales. These were mentioned by the noble Lord, Lord Belstead, in the reasonable speech which he made when he moved that the Bill be read a second time. I warmly welcome

571
many of these new proposals, especially the additional money which the Secretary of State announced on 24th June would be made available towards promoting the language. His statement about a new Welsh language television committee to review television programmes in Welsh must also be studied carefully when it comes before us, probably in the form of a new clause moved by the Government in Committee.
I was rather disturbed by what I thought the noble Lord, Lord Belstead, said during his opening speech when he referred to a paid official—a scheduler—responsible for the programmes and taking the chair at the meetings to decide what the mix of Welsh and English would be. Perhaps that is more of a Committee point or a point which can be gone into during the later stages of the Bill.
I have the impression that the Secretary of State, Mr.Nicholas Edwards, has a real appreciation of the importance of the Welsh language and that he is seeking to repair the damage done by the reversal of policy. That again is to be welcomed. In Wales today we must build bridges and not tear them down. I believe strongly, however, that the Government must return rapidly and fully to their former policy. In a mixed programme Welsh will remain a secondary language; it will take a second place to the needs of the network and there will be constant pressure to demote Welsh language programmes to an inferior viewing slot. Welsh-speaking viewers will not have a channel which they can regard as their own and will have to switch channels frequently to watch programmes in Welsh. Why should we have to do that as regards what the noble Lord, Lord Annan, called the most ancient language in these islands?
Again, and regrettably, non Welsh-speaking viewers will feel deprived and irritated by the presence of Welsh programmes on their channels. They will tune permanently to programmes from England and will not receive Welsh news and other features about Wales. That could create a dangerous sense of alienation and could widen the gulf in Wales which we should all be seeking at this time to bridge. But once the new proposals are operating they will become
572
entrenched. It will not then be easy to establish the fourth channel for Welsh programmes. Once the machine has started moving it will move inexorably and there is not a noble Lord in this House who knows how difficult it will be to extricate ourselves from that position once the machine has gone some way.
I have been deeply saddened by Mr. Gwynfor Evans' statement about his intention to go on a hunger strike. He and I have argued and debated on public platforms, and in another place, for a very long time. I have great respect for his integrity and dedication to his party and to his country. But I believe that he is deeply mistaken, for the consequences of his action could be incalculable. We must fight with the weapons which are available to us within the democratic process. There are times when we can feel frustrated beyond what seems tolerable, but I think that it is right that we should persevere. I think that I know how Mr.Gwyfor Evans feels at this time. He sees the Welsh language and the way of life he treasures declining slowly, and he has concluded that some action must be taken, if necessary by him personally, to seek to stem or to halt that decline if he possibly can. The Government's reversal of policy, on what he regards as a major issue, symbolises for him the cold disregard which Governments feel for Wales. That is what he would say.
I make a plea to the Government and to Mr.Gwynfor Evans: there is another way for both to follow. The Government, for their part, have the opportunity to be magnanimous, and I hope magnanimous enough to reconsider their position. That would be an honourable course. It is a small step, but it would bring a harvest of great goodwill in Wales. I hope, too, that Mr.Gwynfor Evans will reconsider his course of action and decide to serve Wales in constructive ways for many years to come. The opportunity to find some common ground for agreement will arise during the Committee stage. I hope that the Government will think very carefully about this. It is not yet too late for the Government or for Mr.Gwynfor Evans. Both must perhaps give a little on the way towards a settlement. But find a settlement we must because it would be a major tragedy for this country if Wales were to slide into further discontent and dissatisfaction.
6.18 p.m.
Lord BIRKETT: My Lords, I, too, must apologise for being unable to hear the start of this debate and for being unable to stay to the end of it. I hope that I shall be forgiven more readily because what I have to say this afternoon is so exceedingly short. However, before I put in my pennyworth I must take a moment of your Lordships' time to take issue with the noble Lord, Lord Annan, over one comment that he made.
Your Lordships will recall that he described our much beset film industry as totally defunct. To say that straight on top of a Bill which is to restore the National Film Finance Corporation, and in fact to do something to rejuvenate the film industry, seemed a little unkind of him. I realise that he used the phrase as part of a lesson to us all of the grim consequences of intransigent behaviour on the part of unions, and those dangers are, indeed, only too carefully to be regarded. Nevertheless, I believe that "defunct" is going too far. We know that one swallow does not make a summer, but how many films do we have to make to have an industry?
However, as regards the Bill before us this afternoon, I should like to say that I too, of course, welcome it and look forward enormously to the increase in variety which it will provide for us all. I am rather happy that economic circumstances will make it very difficult to provide much more variety beyond the fourth channel. I think that it would be dreadful if we ever achieved the degree of variety that they have in the United States, simply because it is so various that it is impossible to choose and one becomes not a selector of one's entertainment or information but a mere button pusher. However, as I say, I think that economics will defend us from this danger without our really needing to push the matter.
I have only one real complaint to make of the Bill and it is a complaint which echoes something which the noble Lord, Lord Drumalbyn, said earlier. I think that it is unwise in the matter of advertising to place the selling and control of it into utterly the same hands as those in which it is currently placed for ITV. It is already a monopoly and there are many advertisers who believe that that monopoly acts quite against the best interests not merely of the advertisers themselves, but
574
of the public in general. I shall not weary your Lordships with recounting the various abuses which they believe to exist, because they are small and detailed and in many cases difficult to prove. Nevertheless, it is a monopoly and to perpetuate it at this stage would, I think, be a mistake. I hope that the Government will look very carefully at that before going forward with it.
I am well aware that, in the matter of advertising as in the matter of programmes, too great an injection of novelty and independence is to be feared simply because it may perhaps not be able to be relied upon. I have been an independent producer all my life and I welcome the thought that independent producers will be given a much bigger share of the cake this time round. But I am not so blind as to realise that a cake composed entirely of independent producers might be construed as a cake composed only of crumbs, with nothing to hold it together. So I see the danger of emphasising too much the merits and the benefits of independence.
But in the case of selling advertising time and the controlling thereof, which, after all, is not only for the advertisers but for the public in general, to leave a very major slice indeed of the control and, therefore, the running of that programme in one hand, or in one pair of hands, if you prefer it, is seriously unwise, and I hope that the Government will reconsider it.
6.21 p.m.
The Earl of BESSBOROUGH: My Lords, I should like to make a few very brief remarks so as not to be too repetitive. As a director of one of the very first, original independent television companies 25 years ago—and I served with them for nearly 10 years until I joined the Government—and as, like the noble Lord, Lord Aylestone, a small minority shareholder in a local radio station, I am of course, like many others, very interested in this Bill. For several years I was also chairman of the Institute for Educational Television, on which the noble Lord, Lord Wolfenden, also sat; and I have always been an advocate of more educational television, and expecially a university of the air, which I proposed in your Lordships' House some considerable time before Sir Harold Wilson or the noble

575
Baroness, Lady Lee of Asheridge, took up the idea and successfully brought the Open University into being.
Like other noble Lords, I think that the Bill is just about exactly right and that my right honourable friend the Home Secretary and my noble friend Lord Belstead should be complimented on it. I shall confine my brief remarks to just a few points; first, the question of the levy, which was touched on by the noble Lord, Lord Hill of Luton; and, secondly, the question of programmes, education and the reporting of Parliament.
First, as we know, and as the noble Lord, Lord Hill, told us, until 1974 the levy was based on revenue. At that time the then Government accepted the argument that this method disrupted the planning and production of programmes, particularly when the level of revenue could not be confidently predicted. It also led to frequent changes in the levy rate, and gave the Government perhaps too little when times were good and the companies too little when times were bad. I think that the noble Lord, Lord Hill, agrees with this. Legislation therefore changed the levy to the present system of a charge against profits.
There have recently been suggestions that in current economic circumstances a reversion to the previous system would reinforce the companies' own control of costs. The arguments accepted in 1974 are, I believe, equally valid today. I also believe that any change could be damaging at a time of economic uncertainty, with the new fourth channel about to be launched. To cut down programme expenditure on ITV because the BBC is short of funds would imply that competition for audiences matters more than giving the best possible service. I think that this would be a bad reason for returning to a system which proved to be unsatisfactory.
I accept generally the idea of a levy on the independent local radio companies, but I certainly think it inequitable not to allow losses to be carried forward by new stations before they become liable to levy. It takes some local radio companies perhaps five years before they become profitable. Should they, in effect, pay a levy before that? Is this really fair?
576
I gave my noble friend very late notice of that question, but I ask it of him and I hope that he will be able to reply to it, either at the end of the debate or at least in writing.
As regards finance for the fourth television channel, we know that, under the terms of the new ITV contracts, from 1982 companies will be required to pay a total of some £7 million a year to the IBA as subscriptions to finance the new channel. Until 1982 the authority will certainly need to borrow money to provide funds for programmes as well as for the engineering required. I think that the companies will begin to recoup the heavy subscription charges on them only when the new service is operating. They should do so from the sale of advertising and from payments for any programmes that they supply. The sooner the new service is operating satisfactorily, the sooner can the yield of the levy on the companies to the Exchequer be restored to its present level, and eventually be increased.
With other noble Lords, I should like to say that I think the authority should be congratulated on the appointment of Mr.Dell as chairman and Sir Richard Attenborough as deputy chairman of the panel, with Mrs.Sara Morrison as a member of it. I look forward to the announcement of the names of the senior executives; of course, Lord Thomson of Monifieth will be a quite admirable chairman of the IBA in succession to Lady Plowden, who, if I may say so, has performed yeoman—or should I say yeowoman—service.
On education, I am glad that the authority wishes to develop the opportunities offered by the new channel for extending the scope of educational broadcasting, and I hope that the Open University will play its full part, even if not all its viewers and listeners necessarily seek to take degrees.
On reporting Parliament—and this is my final point—with all respect to the noble Lord, Lord Ferrier (who is re-entering the Chamber now)and to the noble Lord, Lord Hill of Luton, I do not think that this need be a statutory requirement. I say this with great respect to them because I agreed with a great deal of what both noble Lords said, and especially

577
all the other remarks which the noble Lord, Lord Hill, made on other subjects. I am sure that there will be a good deal of it on all radio and television channels, and particularly on special occasions. We know the extent to which LBC reports Parliament outside the hours which the BBC reports it at night and in the morning. But I am not sure that much more of it would necessarily enhance the prestige of Parliament. I mean no disrespect to your Lordships. I think that many of your Lordships make speeches of very great value—sometimes perhaps of considerably greater value even than those made in another place. But, for reasons which I, belonging to this House of Parliament, would rather not specify too precisely, I am not certain that it would necessarily assist us in gaining popularity with the public.
Just before concluding—I do not think anyone has done this—I should like to dispel the illusion that the BBC, at great expense, trains producers whom the independent companies then lure away. The hard figures which I have from one of the main five ITV companies during 1979 are as follows: the total number of staff in their particular company is 1,800. They recruited in 1979, 166. Of these, only six were from the BBC, and of those six two have been on only temporary contracts. I am assured that these figures are accurate and indeed sworn on oath and fully audited.
All in all, I hope that this Bill will go through Parliament swiftly. We need a fourth channel as well as Cefax and Oracle and, above all, Prestel, which I hope will soon be available throughout the country. I find it of great value in London and in the Library of your Lordships' House. In this way television in the future should certainly be able to meet many of our essential needs for information. What will happen when satellite television comes in I do not know, but I was interested in what the noble Lord, Lord Hill, said on the subject. I believe that my noble friend Lord de la Warr may go into it in further detail, but it is certainly something that the Government must think about.
6.32 p.m.
Lord HOOSON: My Lords, like the other speakers I must apologise to the noble Lords, Lord Belstead and Lord
578
Donaldson, that I did not hear their speeches in opening this debate. I suffer certain occupational hazards which prevented me from being here today. I must declare not an interest but a potential interest, in that I have accepted an invitation to be chairman of a company which is competing for the franchise in one of the areas controlled by the IBA.
I welcome the Government's determination to see a fourth television channel broadcasting in this country in 1982. Our country enjoys fine television, possibly the best in the world, but it could be better. I am sure that the fourth channel will make it much better. The present limitation on channel choice has shackled our producers and programme-makers to what is termed the mainstream; to entertainment of mass appeal always striving to win the ratings battle by appealing to what?—the lowest common denomination in popular taste.
That is no bad thing in itself, but it inevitably stifles innovation and invention. That great broadcasting institution of the BBC has suffered over a period of time the fate of all institutions; a heirarchy of settled ideas, a set of traditional assumptions about the traditional way of doing things. The IBA tends to go the same way. Fixed policies, less room for adventure. The fourth channel is an adventure, and I welcome it.
I would have peferred an open broadcasting authority of the sort recommended by the Annan Commission. I have some doubts about the institutional ability of the IBA to guide the fourth channel. But then half a loaf is better than none, and as far as it goes, though it does not go far enough, I welcome this Bill. I shall not say very much about it at this stage in its progress. I simply wish to highlight a few things which it fails to do, or could have done better, in the hope that my objections may cause the Government to think again; or at least that it should be taken up in more detail in another place.
Let me therefore turn to some sections of the Bill, and in particular I want first to come to the question of Wales. I do not want to reiterate the arguments of the noble Lord, Lord Cledwyn. Suffice it for me to say that I agree with every jot and comma of what he had to say. In my experience, there is nobody closer to

579
moderate opinion in Wales than Lord Cledwyn. We have never been in the same party but I appreciate that he is close to the heart of informed Welsh opinion. I have no doubt that the Government should rethink this whole policy. Not because Mr.Gwynfor Evans is threatening to go on hunger strike unto death. The reason the Government should rethink this policy is that they are opening up a potentially enormous political chasm unnecessarily.
They should revise their policy because they gave a solemn pledge to the people of Wales. There is a cynical view experienced in Wales that this pledge was very lightly put aside, and needlessly put aside. I think also they had considered the policy. Wales is a country where one-fifth or so of the population speak Welsh, and that section of the population also speaks English, and four-fifths do not. But, of course, the fifth that do—and I count myself among them—cherish the language enormously. There has been no greater threat to the existence of the Welsh language and culture than the influence of the mass media. The Elizabethan or Tudor monarchs may have tried to stamp out the Welsh language, and neither this Government nor any modern Government have tried to stamp it out, but it has been stamped out more effectively by the effect of the mass media. That is why it is so important that the Government should adhere to their pledge. I do not think I need say anything more about it at the moment. This will be developed in other places, but the Government should think hard about this matter.
The second criticism is that the board should be independent of both the Government and of the IBA. It would be accountable of course to the new broadcasting complaints commission set up by this Bill into the law of the land, which I shall refer to in a moment. But to make it, both in theory and in practice, a mere subsidiary of the IBA is to give to existing interests in commercial television too great a behind-the-scenes influence in its operations.
Thirdly, I want to say a few words about the legal restraints on broadcasting, and the duty placed upon the IBA under the 1973 Act. It is right if I give simply one example. A "World in Action"
580
documentary about corruption in the secret service was delayed until every single detail of the allegatons made in the programme had been published in the newspapers and raised in Parliament. This is one of the deficiencies from which we suffer because of this duty placed on the IBA.
The Annan Committee thought that these powers of the IBA should be relaxed for the fourth channel, and that programmes should be subject only to the general law of the land. I am in favour of this. May I put my personal view on what I think the fourth channel should do. I hope to see on the fourth channel a true market place of ideas in which programmes which are committed to particular viewpoints are aired and made. I want to see programmes occasionally on the fourth channel which shock; which jolt me, for example, out of my own complacency about my own profession or about the law generally; or which jolt me about particular social conditions. I want to see Welsh television producers presenting programmes which are unashamedly commited to their ideal of the cause of the Welsh people. I want to see black producers producing programmes giving their views, and making no bones about the evils of racial discrimination as they see it.
I should, in short, like to see the fourth channel develop some full-blooded television, not diluted by Government spokesmen or the ubiquitous defenders of the status quo. I regret that this Bill has not taken up the Annan recommendations and lifted the hand of IBA censorship from the fourth channel. The law of the land controls the author, the playwright and the film-maker. It should be quite sufficient to control the fourth channel programme, in any event from gratuitous excess, subject to a further remark I have to make.
The new Broadcasting Complaints Commission is a new body which is likely to fall into an old trap. There is no doubt that some form of redress is required for those who are unfairly treated by television, and I welcome the establishment in principle of this tribunal and the extension of its remit to include the three existing channels. But at all cost one must avoid the danger that it will become simply a Press Council of the air, a tooth-

581
less and paper tiger derided by those on whose respect it depends. I fear that, as the Bill stands, the Broadcasting Complaints Commission has all the hallmarks of hot air, and I will indicate three deficiencies as they appear to me.
First, it is to sit in secret; a complainant will not have his complaint published, except to the extent and in the language and words the commission chooses to adopt in its report. Nor will the broadcasters be able to make public answer other than to the same extent. We are here dealing surely with questions of elemental justice, and justice must always be done, if it is to be seen to be done, in public—not in this case by a court, and I should hate to see these proceedings turned into a legal beanfeast—and by a tribunal which can be seen to be listening to the evidence put before it and can be seen to be adjudicating fairly.
My second criticism is that the commission must have some power to discipline if it is to be at all effective. The only power it has under the Bill as drafted is to order a television station to make a televised retraction. That may be sufficient in certain cases, but it will be impossible in other cases to make a retraction without giving further credence to the original wrong. Consider, for examples, certain libel apologies in the magazine Private Eye; a classic example of quasi-legal "tongue-in-cheekery". Suppose an injustice takes the form of a long visual programme full of impact. Is the commission to have the services of a camera crew and a new and fresh director to make another long programme setting the story straight? The answer is, No. There must be occasions when a power to fine or order recompense is the only effective way of correcting the original abuse.
It is no use saying, especially to a lawyer who practices sometimes in the libel courts, that a complainant can sue for libel. There is no legal aid available for defamation and only the very wealthy can afford to gamble massive legal fees and wait for years before a libel action comes on for trial. The commission should, in my view, serve as an alternative to libel proceedings. In fact, I go so far as to say that the present situation of the libel law is so iniquitous that I should like to see a complaints procedure
582
established entirely with regard to television and replaced by this commission with power to hear complaints speedily and to offer suitable remedies.
My third criticism is that, as the Bill is presently worded, the commission could decline to hear any complaint which might be made the subject of a libel action. The concept of libel is so all-embracing that most allegations of injustice and unfairness could be pursued in the courts if the victims have the necessary wealth and patience to continue with an action. I do not think the prospect of legal action at some time in the future should be any basis for the commission declining to hear a complaint. This section of the Bill needs further careful thought and attention if it is to serve a valuable purpose.
I wish to make one last suggestion. I have criticised the IBA for a number of its controversial decisions and have given one example which I think was particularly unfair to the programme workers —I could recite others, but I have deleted them from my speech—and I could cite others concerning the BBC. Against those decisions, programme-makers at present have no redress. Why not give the programme-maker, male or female, the right to complain to the commission against unfair or unjust treatment by the IBA, BBC or an independent television company? These are all great monopolies and they have really been placed above any accountability to their employees and contractors, and I think it is time to modify that privileged status. In my view, the IBA should be required to defend its decision, for example, to delay the "World in Action" programme on corruption in the secret service if it has a good defence. It could be considered by the commission at the behest of the "World in Action" team. Similarly, the BBC has declined to show films made at considerable public expense and has declined to give reasons.
The Broadcasting Complaints Commission, as the Bill stands, will investigate complaints only about programmes which are shown, and I hope the Government will at least consider enlarging its terms of reference to enable it also to consider complaints about decisions not to show. We should take this opportunity of recognising the fact that the viewing

583
public can suffer, from decisions which do not permit them to view, as much as they can suffer from decisions which permit them to view. Those are criticisms I make in outline but which I shall seek to develop in Committee.
The fourth channel is an exciting prospect and it could be an important development in our country—the development of television to serve minority, and even majority, interests presented in a thought-provoking and fresh way—and we must not be afraid of the implications of having a television channel which is not controlled by "Auntie BBC" or by the constraints which have been placed by the IBA on the existing companies. It is a great challenge, but unless the Government heed the words of the noble Lord, Lord Cledwyn of Penrhos, in relation to my country, then the prospects of any peace resulting from the introduction of the fourth channel in Wales will be very remote indeed.
6.48 p.m.
Lord RAWLINSON of EWELL: My Lords, some 20 years ago I was chairman of the Conservative Party Back-Bench Committee on Broadcasting and got involved in the politics leading up to the allocation of the third channel. I emerged from that with a very healthy respect for the resourcefulness and, putting it politely, dedication of senior officials both of the BBC and the companies on their determination to get what they wanted, and the scars still remain upon me.
I welcomed then a third channel and I welcome even more a fourth channel because every channel weakens the monopoly of a very great power, and it is very great power which has been created in the hands of those who control this medium. And, of course, that power is not really in the hands of those senior officials; it is basically in the hands of the producers, and the producers of the different programmes cannot but help reflect their own attitudes and views about affairs, about life and about politics. They cannot avoid it, and I am sure there are many noble Lords who have gone for interview at the various broadcasting authorities and have encountered the programme where you can see when you are going to get the half-volley and when
584
you are going to get the yorker, and, generally, the interviewer cannot help his his own attitude.
We have become a nation of television watchers on a much wider scale than anywhere else in Europe, and we have done so because of the technical excellence, indeed brilliance, of broadcasting. One has only to compare our broadcasting with that of the United States. Even the advertisements in this country are far superior to those which appear in American broadcasting. It is due to this remarkable excellence that there has developed a total habit of television watching—far more so than among many other peoples of the world.
Of course the producer has a captive audience—so unlike the producer of a film, who has to rely on commercial success to stay in business, or the director of a film, who will not receive another assignment if he is not successful. The situation may be a little different with the subsidised theatre, but it still depends upon actual results, whereas the producer of the television programme is not subject to the same pressures. It has always seemed to me that the sanction with regard to this monopoly should be more channels and the freedom to choose. So I am indeed glad that we are now to have the fourth channel.
The presentation of politics on television has been a matter of concern and debate from when television was first widely watched. We all know that television has taken over from the traditional media and indeed the institutions involved with the debating of politics. I wholly agree with the noble Lord, Lord Hill of Luton. I have always believed that Parliament should be televised. It is absurd to deny Parliament the great influence of television, thereby transferring to the studio the real debate which influences the public. Long gone are the days of Gladstone in the Cambridge Corn Exchange, where the gas lamps caught fire when he was probably in the second hour of his speech. No one noticed, so magnetised were they by the great old man. Now one has to have the ability to appear skilfully and persuasively on television. Good heavens!, my Lords, think of Lord Chancellor Brougham getting down on one knee to beg this noble House to pass the Reform Act.

585
Can your Lordships imagine that happening nowadays? There was an idiosyncratic performance on television the other day of Marshall Hall, when in the forensic style of those days he really did point to God's Western Light and call for the jury to let the Western lady free.
Now all of that has totally gone, styles have completely changed. It is the power to debate on television that matters. To deny television coverage to Parliament, which has the power with regard to politics, is utterly absurd. I hope that the televising of Parliament will come, but I realise, as the noble Lord, Lord Hill of Luton, said, it must come down the corridor first.
Furthermore, with regard to politics, it has always seemed that the producers are so trained in entertainment that their idea of a good political programme is a quarrel. There must be a confrontation; otherwise there are no fights or excitement. I recall the terrible trouble that Sir Frederick Ayer and myself got into when we were debating the death penalty. We had come a long way, and we were given two minutes each. We were very angry with the producers, who became disappointed because we had a short and reasonably civilised discussion. That was not what the television people wanted. It seems that there have to be current affairs spectaculars, with one person shaking his fist at another. Television people believe that this is the most effective way of presenting political debate. I do not believe it.
Interviewers overseas seem to be able to elicit from the person whom they are interviewing his point of view. I do not know to what extent they go in for the prima donna style of interview, but I believe it to be very important that the person being interviewed be given the opportunity to project his point of view. I wonder whether we in this country will ever be able to tolerate the kind of thing that took place in France, for instance. President Giscard and M. Mitterand, when they were candidates, debated across a table for almost two hours. All of it was on television. It was an intelligent, sophisticated political debate. I cannot see any producer in this country allowing such a debate to take place on television between the Prime Minister and the Leader
586
of the Opposition. I hope that the fourth channel will take upon itself the determination and courage to present politics in a manner more civilised, sensible and sophisticated than that of the other channels.
The only other point to which I want to refer relates to the complaints procedure. I welcome this. I am sure that other noble Lords who have served in the other place had the same experience as I had. A large proportion of one's postbag consisted of letters from people complaining about something that they had seen on television. The complaints were not so much about bias or balance, but more about a matter of taste. There were continual complaints about the erosion of standards; and there has been an erosion of standards. Of course one becomes accustomed to hearing foul language if it is used all the time; but think of the shock of it, my Lords! Remember the famous Bernard Shaw word which at the time caused such a sensation. Such language becomes ordinary, common coin of the realm. Because it is used so often it becomes totally acceptable. Yet it causes deep offence to many people because it has been imposed upon the nation by the few who say that this is how people actually speak. I always wonder whether in fact they do so much. I know that in the control room of a television studio it is thought that they speak in this way, and perhaps they do in the barrackroom. But most people do not use much of the language that apparently must be used in order, it is claimed, to convey a realistic impression of modern conversation.
When as a Member of Parliament one passed on complaints, one always received a bland rejoinder to the effect that one was the only person who had written. One was told, "We have had very few complaints". Always the implication was that one's personal views were totally out-of-date, and that one was stuffy and unrepresentative. That made one smile a little, in that one had at least been elected, whereas the person writing the letter certainly had not. Therefore, I always advised my constituents to write direct to the BBC or to ITV in order to make their complaints, since the volume of complaint is based on the flood of letters.

587
I hope that the Complaints Commission will be very robust in directing approved publication of its findings. I would say to the noble Lord, Lord Hooson, that no newspaper will accept that it should put an apology on page one, even where it is paying vast sums in damages. It would rather pay many more thousands of pounds than print a withdrawal or apology on its front page, or give it the same prominence as the original article. I believe that there can be a very effective sanction indeed if the commission is robust enough to demand sufficient prominence and give real directions with regard to publicising, including publishing the names of those responsible for the programme that has been found to have offended. The name of the producer should be set out where the commission finds that there has been an offensive presentation. With great respect, I do not agree with the view of the noble Lord, Lord Hooson, with whom I usually agree, that you could introduce powers to fine. I do not believe it is that. I think that those who are going for defamation will go for defamation, and will hope to get, and will get, very substantial damages. But it is the offensive, the tasteless, that I think this power will in fact be effective to meet.
On that, I have the greatest respect for (as other noble Lords have said) the broadcasting authorities. I think the BBC sound, both in music and in drama, is one of the most remarkable productions that any nation has the privilege to enjoy. I read the other day (I have no doubt many noble Lords saw the report) of the child who preferred sound because, as the child said, the pictures were much better. So I think the system of broadcasting under authorities, which is a sophisticated system, requires sensible handling. It requires officers of the calibre of my noble friend Lord Hill of Luton or the noble Lord, Lord Aylestone, to be in charge of those authorities; and I have confidence that their successors will carry out their task, too. It has worked, and I think it will work now that we have a proper commission with a proper complaints machinery, and, as I have said, I hope it will act on them with determination and with robustness. My Lords, I certainly welcome this Bill.
7.1 p.m.
Lord WILLIS: My Lords, I think I might begin by helping the noble Lord, Lord Aylestone, out of a dilemma. He was worried, I believe, about a definition of good taste and decency. In the Writers Guild of Great Britain, our definition of good taste and decency is the man who would never dream of drinking a glass of vintage port without having his trousers on. That needs thinking about.
I ought to begin, too, by declaring an interest. I have interests in commercial radio and I am a freelance writer for television. In fact, I am probably one of the few noble Lords who work on, as it were, the other side of the fence. I have toiled (if that is the word) in the vineyards of television for over 31 years. Sometimes the grapes have been sweet, sometimes they have been sour, and sometimes it has not seemed like a vineyard at all; I felt like Ruth, who stood in tears amid the alien corn. But one way or another, I have enjoyed it; and for that reason and for reasons which I am going to go into in a few moments, I welcome with certain reservations the Bill which is now before your Lordships' House.
I particularly welcome the proposal to set up the fourth channel. It has been suggested that there will be not enough talent to service such a new channel. This is not my experience. The truth is that there is a whole reservoir of talent which is not being used, or is being underused, at the moment. For years there has been ossification in television, with no real expansion, and there are hundreds of talented people who feel frustrated by lack of opportunity. Paul Fox, the perceptive managing director of Yorkshire Television, has in fact said that he would be sorry to be anybody aged 50 who was in the middle ranks of television at the moment, because there is simply no way of moving forward.
The opening of a new channel will break the log-jam and give fresh opportunities to writers, directors and other creative workers. It will also provide a much needed shake-up to the established ITV companies, and even to the BBC, because the fourth channel will have to recruit its key personnel from both the BBC and ITV, and the vacancies thus created will accelerate the promotion

589
of those who have been waiting in the wings.
I hope, however, that the IBA will not see the arival of Channel 4 as the answer to all the problems of ITV. I admit that I have a small vested interest here, but nevertheless, even if I had not, I would still say that a shake-up at the very heart of the ITV network is urgently needed. The same people have been in charge of ITV 1 for too long. They have done a good job, but it is time that some of them, at least, moved sideways to give way to others with a fresh approach and new ideas. We ought to say something new, in new ways, as the Annan Report said, on ITV 1 also; and, as I shall show, unless we do that the fourth channel itself will be in jeopardy.
So, with the allocation of the new franchises just around the corner, the IBA has a unique opportunity to breathe new life and fire into the whole network. I hope—I believe—that they will forsake the rubber stamp and make some bold and exciting changes when they issue those franchises. So we shall go into the decade with a revitalised ITV 1 and a new outlet for talent in the shape of a fourth channel. It is an exciting prospect for people within television, and I welcome it; and it will bring lasting benefits to the viewer.
My Lords, I have a number of specific points I wish to make, but before doing so I want to make one or two general comments. I have said that I give a qualified welcome to the Bill. My first qualification is that I fear we may be discussing a measure which is already being overtaken by events. We may be chasing a receding bus, as some of the other speakers have indicated. This Bill fixes the pattern of broadcasting almost until the end of this century, and fixes it into the present pattern. But, my Lords, technology is no respecter of patterns, or of Governments, and the truth is that we are now at the beginning, as other speakers have said, of a communications revolution which may well shatter—in fact, I believe it will shatter—our present broadcasting system and destroy many of the assumptions on which this Bill is based.
For example, the Annan Committee considered the cost of providing a 24-channel TV cable network throughout the country, and concluded that the nation
590
would not be able to afford such an investment until the 1990s. This assessment, through no fault of the Annan Committee, has now been proved completely wrong. The rapid development of fibre optics, for example, means that the capital cost can be immensely reduced. Television can now be transmitted over lines which could not carry it before. Broad band systems would give us the opportunity to introduce genuine small-scale community television. There is no reason why a set should not have 24 buttons rather than four—and it can be done cheaply.
The action committee on the film industry has estimated that if two million people paid a subscription of £5 a month for cable television, the income from that would be £120 million. If only half of those holding TV licences today subscribed £5 a month—that is, 9 million people—the revenue from cable television would be £262 million a year, or more than double the present revenue of the BBC. If your Lordships can imagine a situation in which you can have the opportunity to show first-run feature films in your own living room, and have access to the greatest talent in the world—ballet, orchestras, et cetera—you only need 3 or 4 million people and you would have an entirely new network which was paid for via cable television.
But consider, my Lords, the effect of that on BBC Channel 2 and the present Channel 4 that we are discussing. The drain of audiences away from the Channel 4 that we are proposing now would mean that the advertisers would abandon it to a great extent. So, as I say, we are discussing a situation which is going to change almost overnight. It is all on the doorstep. In the United States, cable television and pay television are now making enormous strides. Let me stress that I am all in favour of it; I want the viewers to have the maximum choice, but we ought to have these things in mind when we are considering such matters as the fourth channel.
The idea expressed in this Bill that the British people will take their television entertainment from four prescribed channels until the end of the century is nonsense; and it is made to look even more suspect by two other developments. The first is the growth in the video disc or videogram market. It is now possible,

591
as your Lordships will know, to buy video machines which will record TV programmes and play them back, or which will play back pre-recorded programmes. You can even buy a machine now which you can time to record a programme three weeks later if you are on holiday abroad. I have such a machine and I have already purchased some 30 programmes, most of them films, which I can show on my television set when there is nothing on the established channels which interests me.
Coming soon—it is already here in fact —is the video disc, something like a floppy gramophone record which will give two or three hours of recorded entertainment. It is likely that you will be able to buy such a machine to play floppy discs through your television for about £100 as the price comes down, and to buy one of these discs for £3 or £4. Soon you will be able to go to W. H. Smith or Marks and Spencer or Tesco and for a few pounds buy a selection of discs or you may be able to borrow them from a local library or radio rental store.
All this will give audiences yet another choice and make further inroads into the audiences which now watch the existing television channels. Finally, as we have already heard, there is satellite television. Today, we have Radio Luxembourg broadcasting to a large section of our population. Tomorrow—and I mean tomorrow—we will have "Luxembourg" television beaming international TV programmes to Britain and the rest of Europe. Unless we get an international agreement, there will be nothing to stop them and there will be the situation in which viewers will not talk just about the fourth channel and pressing one more outlet button on his "box", but will have available a dozen or so other channels and programmes.
I welcome this wider choice, but it seems to me that this Bill has not considered the implications of it. There is, there must be, a limit to the total amount of advertising in the system. If the existing television companies find their audiences moving off to watch their own private recorded films on discs or to "Luxembourg" television or to watching cable television, their revenue will fall and it will not be easy for them to finance the
592
fourth channel or pay the levy. That is the crucial point.
The other point concerns the implications for creative producers. New technology has thrown up some terrifying new problems in respect of the defence of copyright. Every time a viewer records a television play or a programme he is breaking the law and is stealing from the writer, the actor, the director and others. It is now popular to record programmes and invite people in to see them—all illegal! They are taking money from my pocket and from the pockets of my colleagues. We have been talking about this for a long time but we see still no defence on the horizon. The problems are monumental, but it should not be beyond the wit of man to find a way of perhaps taxing the machines at source, or taxing the video discs or the videograms or reproducing machines and putting the funds into the Performing Rights Society or some other body of that kind to distribute to the people concerned. There must be a way. This wholesale theft must be stopped.
The other general observation concerns the BBC, which has been mentioned by a number of speakers. The Bill does not purport to deal with the BBC. None the less, anything that concerns half our television system must affect the other half. I do not wish to see the BBC handicapped by lack of finance; nor do I think any far-sighted executive of the independent sector would wish that. Very serious damage is already being done to the BBC because of lack of adequate funding. The licence fee has been a political shuttlecock for too long. The Home Secretary has now said—and I was staggered to hear it—that he will not reconsider his decision to put no further increase on the licence fee until 1982. That will do great damage to one of our great national institutions. It is an alarming statement. I hope the Government will amend it. It is shortsighted in the extreme to starve the BBC into a state of debilitation as is now being done!especially in view of the extra competition that this Bill provides and the extra competition coming along in the way that I have indicated. May I beg the Government to review the situation again? Will they give some consideration to the idea that decisions on the BBC licence fee should now be removed from the political arena and that an independent

593
body something like the Boyle Commission should be set up to decide the annual level of the licence fee? Let us get rid of it as something which political parties bandy about from time to time.
The final general observation concerns breakfast television. This is not specifically mentioned in the Bill; but the authority has asked people to submit applications for a possible new service. It is my view, strongly held, and it is the view of many creative people that this is not the moment to take such a decision. I have personally found no great demand for breakfast television. If we had breakfast television now, I should either have to have breakfast in bed or on a tray in the sitting room—because that is where the two sets are. I certainly could not eat it any longer in the dining room or in the kitchen. And that would apply to a lot of people. Seriously, I have not had a single letter demanding breakfast television and saying that the whole nation is being frustrated because they cannot see Robin Day or David Frost early in the morning—or even Anna Ford. I have dozens, even hundreds, of letters regarding the fourth channel, and so on. This is a manufactured demand and we should resist it. The IBA and the television system in general has enough on its plate with the fourth channel and possible changes in ITV 1 without taking on this additional burden. Breakfast-time television will inevitably take away some advertising from the independent radio sector as well, just at a time when it is developing nationally; and may sap some finance from ITV itself. We could come back to this in five or six years. Let us resist it at the moment. I hope IBA and the Government will listen to those words.
Now for one or two specific points. The first concerns independent producers and the fourth channel. There are some independent producers who see the fourth channel as a kind of Shangri-La, a promised land where all their dreams will come true. Others see it as a kind of bank or pay-out point where you insert a script and the money comes out. It will be none of those things. The harsh reality will be more cruel. When I tell your Lordships that the real cost of producing a one-hour drama production on tape or 16mm film is £150,000 per hour (and it is steadily rising every week) you will understand the
594
problem. It means that the cost of seven or eight one-hour programmes for the fourth channel could be £1 million—and then they have only got enough for one week! That is £50 million a year if you want to do seven or eight independent programmes. That is more than half the money allocated to run the channel.
It will not be quite like that. The present ITV1 contractors will be able to supply programmes at a lower cost because they will get some return for their expenditure by screening the programmes first on Channel 1. Moreover, they will be able to absorb a modest amount of the budget as normal overheads which they must pay anyway. In this way, they will hold a definite advantage over the independents, who cannot be sure that their programmes will be repeated on ITV1 and who will have to pay the full cost of hiring studios, crews and so on. And the independents will not enjoy any levy relief. This may seem an obscure point, but it is at the very heart of this business of ITV 2 or Channel 4 being a home for independent productions. I hope it will be a point that the Government will take on board.
It will be a great tragedy if the high hopes of the independent producers were to be frustrated by this problem. I feel that the only solution is for the IBA to insist that independent programmes made for Channel 4 should have equal access to Channel 1, provided that the quality is right. It must go across the board. You cannot put the independent producers in a Channel 4 ghetto. If you do that, you doom them to live in a ghetto and give all the plums to the existing ITV 1 companies. So the independents must have equal access to Channel 1 and Channel 2 in regard to independent television. If that is not done there is no way that independent programmes can be economically viable, except for the odd case, and the whole business of supporting independent producers will go by the board.
Turning briefly to independent radio, I should like to make one or two points. Speaking personally, I welcome the introduction of the levy on commercial radio profits, but I would question the level at which it has been set, and I would ask the Government to look at this. Certainly, it seems to me that commercial radio has been placed at a disadvantage in relation to the commercial television companies.

595
For example, a secondary rental payment of 55 per cent. and a 40 per cent. levy on the remaining 45 per cent. give independent radio a marginal tax rate of about 73 per cent., but the independent television companies have a tax ratio of only about 67 per cent. if you add it all together. So a new industry which has no reserves, some of whose members have not even paid off their capital costs, is being asked to pay an even higher rate than television companies which have been established for 20 or 30 years. Therefore, I would ask the Government to look at those figures again. Perhaps the solution could be found in the timing. If the Government would agree that the provisions relating to the levy would not come into force until ILR has achieved 80 per cent. coverage of the country, we might be able to solve the problem. By that time the ILR network would have been established and our obligations to finance it fulfilled. The Government are now asking for independent local radio to set itself up, pay its own capital costs and at the same time finance expansion and pay a high rate of levy. It seems unfair and unreasonable. I am not against the levy, but I would ask the Government to look again at the figures.
I should like to make two further points. I should like, very warmly and very deeply, to support the points made by the noble Lords, Lord Cledwyn, Lord Hooson, and other speakers about Welsh television. The Government are riding for a fall here, creating a rather dangerous situation. I do not know whether they are aware of the feeling in Wales, but I certainly think they should take note of what was said in the debate and reconsider their attitude.
Finally, I should like, as other speakers have done, to pay tribute to the noble Lord, Lord Annan, and his committee, who I think provided the backbone of the Bill before us and did a fine job. I am sorry, with him, that we are not setting up an independent radio authority, but perhaps we can come back to that some time. In the meantime, I should like to welcome the Bill.
7.23 p.m.
Lord NATHAN: My Lords, I should open by declaring my interest as chairman of a company which is applying for a pro-
596
gramme contract, but what I have to say has no bearing on the matter. It is a privilege to follow the noble Lord, Lord Willis, not least because he has pointed out what I believe is true—that, contrary to so much thought at the present time, there will be a great deal of discussion on broadcasting, including independent broadcasting, over the next few years. It will not be deferred until the late 1990s, as was suggested on one occasion. The reason is precisely that which the noble Lord, Lord Willis, gave; namely, that the pace of technological advance is such that the arrangements made so largely in this Bill will be overtaken by events.
That is not to say that I think the Bill is a bad Bill. I think it is a good Bill, and it is in the context of the Bill as it is that I should like to make a short point. Of course, the heart of this Bill lies in the proposals concerning a fourth channel, and the heart of a fourth channel lies in Clause 3(1)(c) which says:
"to encourage innovation and experiment in the form and content of programmes".
This has been touched upon by many other speakers, and in particular by the noble Lords, Lord Belstead, and Lord Donaldson, in the context of drama, to some extent in relation to education, but not in relation to news.
It is in that context that I should like to say a word or two. The independent television organisation for the broadcasting of news is ITN. It has one centre of editorial policy—the editor himself. In this country, for television news there are two centres of editorial policy: the BBC and ITN. The question that occurs to me is whether the creation of the fourth channel should not be seized as an opportunity for expanding from two to three the centres of editorial policy. One is very much reminded of this by the difficulties, according to the press, now being encountered by the Observer and indeed, according to this afternoon's edition of the Evening Standard, also by the Express group, who apparently require to reduce their manpower. So the matter is imminent; it is upon us.
Television, of course, is a major source of national and international news and I suggest it is undesirable in principle that there should be only two main sources. It would be almost unthinkable that the Government or any Member of

597
your Lordships' House would accept that it would be a good thing for there to be only two major newspapers in this country. It has to be borne in mind that for many reasons television news now has as great, if not greater, an impact in the formation of opinion and the giving of information than newspapers. So I think there is a case to be made for concentration upon the question as to whether the fourth channel should be used as a means for creating a further source of news.
Of course, this is not a matter, certainly by legislation, for Government to determine. It is a matter for the management of the fourth channel. Nevertheless, it is a matter of sufficient interest to your Lordships' House to have a view expressed by the Government on this matter. It may be said, rightly, that the establishment of a fourth channel by itself imposes a substantial expenditure on programme contractors; and it may be said, further, that the expense of an additional source of news is not practicable because this would add a further burden upon them, and indeed upon others.
I believe there is a possibility of avoiding the duplication of substantial organisations like the ITN, and I believe it is possible to introduce closely-knit, smaller news organisations, perhaps somewhat on the pattern of what ITN once was. There are many ways of producing news programmes without the very heavy expenditure incurred by the BBC and the ITN. What is important are first-class journalists and journalism and a variety of editorial policy in the selection of news and its presentation. These seem to me to lie very much at the heart of the need at the present time in broadcasting in this country. Governments of both parties have accepted the desirability to maintain as many newspapers with independent editorial policies as possible. It tends to be frustrated by economic difficulties: hence the importance of increasing the number of centres of editorial policy in television. It would be interesting to know the Government's views, not just in the short term upon the introduction of a fourth channel but also, in the longer term, as to what their policy and views might be in this respect.
7.29 p.m.
Lord CRATHORNE: My Lords, like other noble Lords, I should also like to welcome this Bill. There have been so many fascinating speeches that I certainly do not want to reiterate a large number of excellent points that have been made from all parts of the House. I should like to touch on two local radio points, if I may. First, I must declare an interest as a director of an independent local radio station in the North-East. The noble Lord, Lord Willis and the noble Earl, Lord Bessborough, have raised the question of the levy, and I am told we shall be hearing from the Minister about that point.
The point that I should like to go into in slightly more detail has been raised by the noble Lord, Lord Winstanley, and the noble Lord, Lord Annan, and that is the question of introducing an amendment requiring the IBA to open up each local radio contract to competitive tender at intervals of not more than eight years. As your Lordships know, the current ILR system is a three-year rolling contract, and from personal experience, I can assure your Lordships that this is no mere rubber stamp. The IBA do, indeed, monitor performance very carefully and there have been four or five instances when the IBA have deferred this contract roll-over. Each radio station, at the end of each year, receives a report from the IBA—it is rather like an end of term report at school—which enumerates what the IBA deem to be the good or bad points in a company's performance. These annual reviews keep the companies very much on their toes and the threat of a contract not being renewed is very real.
My point is that the IBA already have wide powers to control radio companies under present legislation. They have flexibility to help the industry and individual companies to develop a useful and popular service. The new proposals curtail this flexibility, by imposing the need to take a specific action at a certain time, irrespective of need. In effect, some of the discretion of the IBA will be withdrawn and one can only draw the conclusion that the IBA are not considered sufficiently impartial or competent to judge in this matter. Surely this lack of confidence in the IBA is not justified.

599
Also, there is no evidence that ILR companies consider that they have the right to a franchise in perpetuity. The IBA's powers and method of operation make it quite clear that this is not so. A company has to continue to earn the right to retain the franchise and has to pass this annual test of competency. Also, the IBA keep a close eye on what the listeners think about each station and although the numbers listening is not the only yardstick, it is certainly an important one. But other measurements of attitude are available and are used. If the IBA are not satisfied that the listeners are satisfied, clearly they are going to take great note of that.
The purpose of inviting applications for a franchise which already, in the opinion of the IBA, operates satisfactorily, is surely pointless and diverts valuable time and resource from the task of providing a good local radio service, with the audience as the real losers. Think too, my Lords, of the enormous administrative burden that will fall on the shoulders of the IBA. Within the fairly near future, we will have 60 ILR stations, but just taking the 44 existing contracts these will have to be re-advertised at the rate of one a month between 1983 and 1985. One of the most unsatisfactory "spin-offs" of this additional burden on the IBA, could be to slow up the process of advertising new contracts to bring local radio to parts of the United Kingdom where it is now not receivable. This would surely be most regrettable. Several noble Lords have queried the desirability of applying the eight-year contract instead of the three-year roll-over system, which seems to work very well. I look forward to hearing from my noble friend Lord Belstead what he has to say about this point, when he sums up what has been a most interesting debate.
7.34 p.m.
Baroness SEEAR: My Lords, I wish to intervene for a very short time to make what many people would perhaps regard as a Committee point, rather than a matter for a Second Reading debate. However, it certainly is worth raising at Second Reading, because there are general issues connected with it which need further examination. I am referring to the questions raised in Clause 25, which imposes a requirement of provision for training,
600
and powers to raise money for training of people entering the industry. This is a welcome clause, but I suggest that it ought to have gone very much further. We could even now elaborate the requirement for training, to give something far more ambitious than is suggested in this clause.
The broadcasting industry, as a whole, is clearly a large and growing industry with a great many diverse skills and areas of knowledge, all of which can be improved and developed by training. It is plainly an industry which will get larger. Aspects of it touch high technology and new developments in technology of a very important kind. I should like to suggest to your Lordships that, for the broadcasting industry as a whole, we need something along the lines of an industrial training board, so that there could be an overall view of what is needed in training and what the possibilities are, and proper provision made to see that systematic training is introduced for this industry.
There are a number of reasons why this is of great importance. I have already said that it is an expanding and diverse industry and an industry which is making calls over a wide range of skills and knowledge. But, also, we are a very under-skilled country. I do not think we have quite woken up to the fact of how much we have lagged behind in the bank of skills in this country. It is quite clear that, in the future, we shall have to increase the stock of skilled manpower and womanpower, right throughout the country.
At the present time, there are difficulties in providing the additional training facilities which we really ought to be providing, and which are being cut back—this is a matter for another debate—and hampered for economic reasons. Here in this industry we are able to tap resources outside state resources, which could be used for the development of skills. Since this is an industry in which a considerable amount of money becomes available, it is too good an opportunity to miss to see that a higher proportion of the resources that have become available, because of the development of the broadcasting in all its aspects, should be devoted to training for development, to give more opportunity to people to acquire skills and to raise the level of performance in this growing industry.

601
I should like also to suggest that we should seize the opportunity, if we can do something more ambitious in the training field, to do something for groups of people who are singularly under-represented in the skilled categories in this country, particularly for women, many of whom are employed in broadcasting but, to an overwhelming extent, in a restricted range of jobs and at a low level, and also for ethnic minorities. My noble friend Lord Hooson said, in referring to the fourth channel, how stimulating it would be to see a black producer producing a programme which dealt very starkly with the issues of the ethnic minorities. But there is a role for the ethnic minorities inside the work of the industry.
Here is an opportunity to provide training facilities for groups of people who get extremely little training at present and who occupy to an overwhelming extent the unskilled jobs in our economy. So if we could expand Clause 25, which makes a gesture towards the need for training—I am thinking in terms of something along the lines of an industrial training board—and if at the same time we could use those sections in the Race Relations Act and in the Sex Disrimination Act which allow special training for groups of people underrepresented in the skills for which training is being provided, we would, at one and the same time, raise the level of work of all kinds inside the broadcasting industry, increase the stock of skilled manpower and womanpower in the country and do something to give help in an area which would have great appeal to the groups concerned to get into jobs of a higher level than they are likely to get unless special steps of this kind are taken to assist them.
7.41 p.m.
Lord HARRIS of GREENWICH: My Lords, I propose to raise three issues in this evening's debate: first, the question of the fourth channel service, secondly the issue of public meetings being held by the Independent Broadcasting Authority on the applications for the new contracts, and, lastly, the question of the taxation of independent television companies. Before doing so, I must declare an interest. I am the chairman of an independent television company. At the same time I must declare a former interest, in that for five years I was responsible to two Home Secretaries for broadcasting policy.
602
During that period of office, we set up the committee which was headed by the noble Lord, Lord Annan. During the same period we received the noble Lord's report and published a White Paper on the then Government's decisions on policy for the future. I was at that time closely involved in the discussions on policy contained in that White Paper, but I must make it clear at the outset that on two major issues I differed from my colleagues. I am bound to admit that I am not an admirer of ministerial memoirs, which always seem to demonstrate the infallible judgment of the author. I do not—for that reason, if not for others—want to appear to be either smug or self-righteous. While I was a Minister there were a number of matters upon which the judgment of my colleagues will no doubt be judged to be a great deal superior to my own. Nevertheless, on these two issues I remain firmly committed to the view that I was right.
The first question is one which I do not think has been touched on today, for very natural reasons. It does not flow from the Bill. It relates to some of the proposals contained in that White Paper concerning the structure of the BBC. I did not think that those proposals were either wise or practical. Indeed, I believe that if the Labour Government had been returned last year, they would have abandoned them. The proposals had won few friends and could not, I think, have been implemented without adding immeasurably to the size of the BBC's bureaucracy, causing at the same time a great deal of suspicion and ill-will, both within the BBC and outside it.
I come now to the question which has been discussed at considerable length in our debate today, and very properly so; namely, the fourth television service. I did not agree—I very much welcome the speech which we have heard today on this matter from the noble Lord, Lord Annan—with the recommendation contained in the Annan Report, and adopted in the last Government's White Paper, for a new Open Broadcasting Authority. Certainly I did agree with the underlying philosophy behind their proposal. Public interest did demand not only that the new channel should produce programmes that were different from those appearing on the existing independent television channel

603
but also that the existing dominant power of the five network companies should not be carried over into the new channel.
It was essential that the regional companies—which often find it extremely difficult to get their programmes accepted on the network—and independent producers, a point which was touched on by my noble friend Lord Willis, should be given an opportunity to provide a broad range of programmes for the new channel. However, it remains my view that it is unnecessary to create a new statutory authority in order to achieve these objectives. My colleagues did not agree. The Government came down in favour of the Open Broadcasting Authority.
It is only right to say just this about the matter. There were, I fear, two elements in this decision which illustrate all too clearly why this country has experienced such grievous economic difficulties over the last two decades. The first was the ability of a small, skilful and highly articulate lobby to impose their wishes on a Government. I have the highest personal regard for several members of this lobby, not least Mr. Anthony Smith who I am delighted to see is to be involved in the new fourth channel service, but I believe that it was entirely wrong to accept their views.
As the House will recall, the suggestion—it is an entirely logical proposal—was that the new Open Broadcasting Authority's service should be financed not by spot advertising, the kind of advertising which is carried currently by independent television, but by a combination of block advertising (which means advertising magazines) and commercial sponsors. I, as a Minister, came to the conclusion that there was no possible way in which such a service could be self-financing. It would have required permanent support from the Treasury. On the basis of the evidence which I saw, I concluded that the Open Broadcasting Authority would cost at least £35 million a year at 1978 prices. Almost certainly, in my view, it would have cost a great deal more than that.
I did not see then, nor can I see now, on what possible order of priorities it would have been right to finance a new commercial television service on such a
604
lavish scale. Indeed, I think that our fellow citizens would have considered that a Government which implemented such a programme had, bluntly, taken leave of their senses. Do not ever forget that at that time—and, indeed, at this—the National Health Service, to take just one example, was being deprived of essential life sustaining equipment because of the need to cut back on capital expenditure in the public sector. It did not seem to me to be possible to envisage, whatever might be said in a White Paper, that in reality such a scheme could be carried through.
That brings me to the second point I want to make—it flows very much from the first—namely, the failure of Governments of differing political persuasions to maintain a proper control over public expenditure and to resist apparently attractive schemes presented to them by influential pressure groups. The OBA proposal was not of course inherently objectionable. It could no doubt have been afforded by a country such as West Germany, sustained by a prosperous economy. But in Britain—a country which had been buffeted by seemingly endless economic crises for two decades—the OBA was, in my view then, as it would be now, an expensive irrelevance.
That being so, I welcome the fourth channel proposals in the Government's Bill. I believe that they will achieve most, if not all, of the objectives of those who favoured the idea of an Open Broadcasting Authority and that the cost to public funds will be fairly limited. Now that the Bill will soon become law, I very much hope that everyone will do their best—I very much hope that they will—to make the new fourth channel service what it deserves to be; namely, an outstanding success.
I turn now to the second issue I wish to raise; that is, the question of the public meetings being held by the Independent Broadcasting Authority in connection with the new licence applications. While I was a Minister at the Home Office, dealing with this matter, I was, of course, well aware of the lack of enthusiasm of the independent television industry for this particular proposal. Nevertheless, I thought it right that companies which do in fact have a monopoly franchise should be made more accountable to their local communities. Since then I have had the opportunity of

605
attending some public hearings in Australia, and also one of the Independent Broadcasting Authority's public meetings in this country.
I do not think it right to speak at length on this subject tonight because the public meeting in my own company's area will be taking place in September; that being so, I do not think it would be appropriate to make comments on the substance of this matter this evening. However, I should like to say just a few things about them. First, they are not statutory. Clause 23 of the Bill gives the authority to hold such meetings in the future, but of course the commencement order is not going to be made until the last of the current series of meetings has been held. Nevertheless, the meetings are clearly part of the licence-granting process; that is made absolutely clear, and rightly so, in the notices which are distributed by the authority at the meetings which are taking place. That being so, I very much hope that both the authority and the Government will discuss the experience of these meetings once the licences for the new contract period have been granted.
As I have indicated, I am certainly totally in favour of giving the public the right to comment on the record of independent companies, both about their programmes and also about their financial structures. But I think it is only right to say—and, if I may say so, we have all got a fair amount of experience of this sort of thing—that there is some risk that these meetings can be packed by small, unrepresentative groups which sometimes have close associations with one of the applicants for a licence. Certainly it is true that the chairman of the IBA's meetings asks that those who propose to make any comments should declare a financial interest if they have one. But as no one is compelled to give an address or to submit to cross-questioning, there can of course be no certainty that this is done. And it is only fair to say, on behalf of the persons concerned, that they might declare that they had no financial interest and that they would have one only if their particular group succeeded in obtaining a licence. Having said that, I think it only fair to add that the meeting which I attended, which was in Manchester, was handled by the member of the IBA who presided with, in my view, the greatest skill. He dealt with
606
infinite good humour with the many issues raised and I thought he put up a very impressive performance indeed.
I think it is clearly necessary that this system should be reviewed as soon as the present licence procedure is completed. Although I know that the greatest care has been taken to devise procedures which are as fair as possible to all concerned, I believe that such a review will clearly be necessary. As I indicated earlier, for the moment at least I will leave this point alone, reserving to myself the right to come back to this issue in the New Year.
That brings me to the third principal issue I wish to raise this evening; that is the question of the taxation of independent television companies. The present system of taxation, as I think is well known, was devised by a Conservative Government and implemented by a Labour Government in 1974. Now we are told the Government are considering the matter, to see whether it should be changed once again. The critics of the present scheme argue that the present system of taxation is highly unsatisfactory. Some of the critics, I may say, come from the BBC. It is argued that the present system encourages extravagance by independent companies; that it allows them to snatch talented stars from the BBC by offering them grossly inflated salaries; and that—to take another example often given—it leads to independent companies offering to pay absurdly high prices for feature films, which, again, damages the BBC.
I should like to deal just with the two examples I have given. BBC television has a staff of more than 17,000. Last year, Independent Television gained precisely four staff from the BBC in the £15,000-plus pay bracket and also made a net gain of four staff in the £10,000 to £15,000 pay bracket. That is precisely eight people, and we are talking about a BBC staff of 17,000. I am bound to say that it does seem to me, in the light of those figures, that it is not really possible to take that particular complaint very seriously.
Lord DONALDSON of KINGSBRIDGE: My Lords, will the noble Lord give way?
Lord HARRIS of GREENWICH: Yes, of course.
Lord DONALDSON of KINGSBRIDGE: My Lords, this is a matter of great interest. I said something slightly in opposition to this, and I do not wish to say anything that is not right. If the noble Lord is talking of the £15,000 level, how many are there? That is the figure that matters if four were lost there. And if the noble Lord is talking of the £10,000 level, how many are there there? That is what matters to the other four. Clearly, most of the 17,000 people at the BBC are not paid more than £10,000—or are they? I do not know.
Lord HARRIS of GREENWICH: My Lords, all I would say to my noble friend is that the total number we are talking about is eight. With great respect to him—I listened to his speech with great interest—it seems to me that this particular charge really does fall apart. We are talking about precisely eight people; that is the net number in 1979. With great respect, it is impossible to take seriously a suggestion that there has been a massive outflow of talented people—this is the charge constantly put about—from the BBC to Independent Television when, as I have pointed out, the number involved is eight.
I come now to the second question; that is, the question of the price paid for feature films. Certainly I was very much concerned about this problem when I was a Minister, and I went into it very thoroughly. But I am bound to tell the House that the suggestion that Independent Television were responsible for driving up the price of feature films as a result of their reckless bidding—and that is the charge—was, I discovered, demonstrably untrue. Some of the worst examples of reckless bidding were those that came from the BBC, not in fact from Independent Television. I say this not to argue that there have not been occasions when independent television companies have behaved foolishly and have been extravagant; I have not the slightest doubt that a number of them have. All I am saying is that this particular propaganda, so sedulously propounded by a number of people, is, in my view—and I have given two particular examples to demonstrate this—singularly misplaced.
I would say only this to the Government on the question of taxation. Here I very much join the noble Lord, Lord Hill of Luton, in what he said. I hope the
608
Government will be extremely cautious when looking at the question of taxation. Certainly I think the case for some change is made out. Taking a slightly self-interest example, it seems a little odd that the free slice, whereby the smaller independent television companies do not pay levy on the first £250,000 of profits, has remained unaltered for six years despite the fact that we have experienced runaway inflation in this period. If allowance were made for inflation that figure would not be £250,000; it would be more than £600,000. Obviously this is only one such example, but I think a case for serious examination has certainly been made out.
But I hope the Government will be very careful about creating further uncertainty in the industry. With the heavy increases in rentals being introduced, and with large subscriptions having to be paid for the fourth television service, companies are now facing massive additions in their payments to the Independent Broadcasting Authority—in some cases the total increases covering both the areas that I have mentioned will amount to as much as 500 per cent. In such a situation it seems to me to be pretty fanciful to suggest that the central problem in television is the excessive profits of the independent television industry, particularly when they pay a rate of tax of 83 per cent. or more on those profits. I think that particular criticism may well have been justified—indeed in my view was justified—when the late Lord Thomson of Fleet made his celebrated remark about it, but I do not believe it is any longer true.
The last point I want to touch on is this: I want to say a few words about the Independent Broadcasting Authority itself, and particularly about the salaries or payments made to members of that authority. Although there has been an improvement (I think in the lifetime of this Government) in the salaries paid to members of the authority, they are still, in my judgment and in the judgment of many others, miserably rewarded for the important services to the state which they carry out. At the moment the authority is having to work under immense pressure because of the present review of licence franchises. The burden of work on members is extremely heavy and, as I pointed out, the payments made to them and admitted by

609
Governments can hardly be described as generous.
It is in fact extremely difficult to recruit the sort of people one wants to carry out important work of this character. There is an immense amount of work involved in terms of reading the voluminous papers being produced in relation to these particular licence applications at the moment, when in fact they are as badly rewarded as they are. I recognise that the Parliamentary Under-Secretary is in no position to do anything about that this evening, any more than I was in a position to do it when I sat in his place. Of course these matters have to be negotiated with other Government departments, but I very much hope that Ministers will recognise that if we want to attract the people whom we want to carry out this important work, they must be properly rewarded for their work.
In saying that, the only encouraging thing that I see in this Bill is that Clause 28 gives the authority the power, subject of course to the consent of the Secretary of State, to pay pensions to members of the IBA. I very much welcome that. It is an extremely important development, and it is very satisfactory indeed that we have at least made some progress in rectifying this problem that has been with us for a very long time, certainly from the days when the noble Lord, Lord Hill of Luton, was chairman of the IBA.
Having said that, all I will do is to repeat that I welcome the Bill. I believe that on the major issues arising from the Annan Report it is right and I hope that, despite its remarkably slow progress so far, it will soon be on the statute book.
8.4 p.m.
Earl De La WARR: My Lords, the fourth channel has been talked about for so long that it is refreshing that at last the necessary enabling Bill is before us. I think that the Government's plans are right and that the structure which this Bill sets up will work. It has my full support. I want to talk about a few of the wider aspects of the television scene—the problems and the possibilities—in order to help us to try to see where the fourth channel will fit into the broad spectrum of the next 10 years of television. I am extremely grateful to the noble Lord, Lord Willis, for the eloquent way in which he painted his broad canvas.
610
First, the problems. Not surprisingly they lie in the field of finance. It seems to me that too many people think that the two present sources of finance, set licences and advertising, are together a kind of modern-day widow's cruse which will never run dry or even low. I think that today the broadcasters themselves know that this is very far from being the case. I am sure that adequate finance from the two present sources will become more and not less difficult in the future.
So I believe that we ought to think very carefully about the third way of raising money—that is by direct payment from the viewer. It is a way that applies to all other forms of mass entertainment—be it cinemas, theatres, books or sport. As a concept, it can hardly be said to be revolutionary. In the United States subscription television, or pay television—which is the same thing—is a major growth industry. The viewer pays either for special programmes or for a special channel. In both cases of course they are free from advertising.
Pay television began on cable systems. But the majority of television sets do not have access to cable, particularly in the large cities and conurbations. So now "broadcast" pay TV is beginning to grow. There are two broadcast stations in Los Angeles, one in Detroit, one in Newark, New Jersey, one in Fort Lauderdale in Florida and many more are on the way. Security—that is the prevention of piracy—is achieved by broadcasting the picture and the sound in scrambled form, with a set-top device in the home to unscramble it and in so doing to bill the viewer.
I am very glad that my right honourable friend the Home Secretary is shortly to authorise the start of some pay TV experiments on existing cable networks in this country. These can start within a few months of the green light being given. Indeed, I had a hand in pressing for them—on one occasion in your Lordships' House in the days when I had an interest to declare. They will be very valuable marketing tests as well as a much needed shot in the arm for cable.
I am also extremely interested to know that the BBC is very keen to do pay television and that they have made a submission to the Home Secretary to

611
try their own large-scale experiment, broadcasting it by satellite. I hope that the Government will treat this bold idea with the interest and sympathy which I believe it deserves. This brings me to the future of satellite broadcasting, about which the noble Lord, Lord Hill of Luton, spoke with so much eloquence and knowledge. The sort of satellite broadcasting we are now talking about is where a picture is thrown up to the satellite as it hovers above the Equator and is then retransmitted over a wide area, back to its own country of origin. If a British satellite of this type is thrown up it would be able to beam up to five channels which could be picked up by cable operators where cable existed, and also be received direct by the individual householder on a domestic aerial. The shape of the aerial would be that of a very large saucer about 30 inches across, albeit at a cost of £200 to £300 to each household for the aerial and its associated equipment.
I understand that the Government are now receiving, at their own request, evidence from all parties likely to be interested in the future of a British satelilte, and that it is in this context that the BBC have put in their pay TV proposals. This includes evidence from British Aerospace, who see a lot more international business being generated once Britain gets into the satellite broadcasting business itself.
The French and the Germans have already made up their minds. They will be launching their own television satellites in 1983 or in early 1984. French channels—and the noble Lord, Lord Hill, spoke about this—will be receivable in the southern half of this country. As each picture channel has two sound channels attached to it, one or more programmes could quite easily be broadcast in the English language, with profound consequences for broadcasting in this country, particularly if it were to happen that the French leased one of their channels to Radio Luxembourg to do a radio-Luxembourg in pictures into this country.
While discussion is centring on expansion in the field of broadcasting, there is another quiet revolution taking place, a revolution in which—and this is the important thing—the transmitter plays no part. This is the imminent arrival of
612
the video-disc machine, which will be on the market here in 18 months at the latest. Your Lordships will already know—the noble Lord, Lord Willis, discussed it—of the video-cassette machine which can play a pre-programmed cassette or enable its owner to record broadcast programmes for playing at a time of his own choosing. The video-disc machine, which will play but not record, will cost about the price of a medium-sized colour set, and will play what I call a visual gramophone record costing between £10 and £15, not in the early days less than £10.
This is really the concept of the book rather than the broadcast. Viewers will be limited in their choice of programmes only by the number of discs published and their ability to buy or rent them. Programmes will not be confined to feature films, although they will probably start that way. They will be educational and commercial too, such as, I suggest, mail order catalogues. Indeed, programmes that were originally broadcast could well be available on the disc too at a later date. I see the video-disc, and to a lesser extent the video cassette—because it is much more expensive—developing over the next 10 years into a mass market and thus a major contributor to the output of the television set.
There are other ways by which the television set can receive information other than off the air. The ordinary telephone cable is one of them. This technique is well on the way to developing into two-way usage, so that a housewife could receive on her screen, say, a list of supermarket prices and place her order by the use of her own remote control box. At the moment the sets that will work off the telephone cable are very expensive; they cost over £1,000 each. But in due course I suppose they will become cheaper, and this could develop into a sizeable market. Certainly the Post Office, who run this service which we now know as Prestel, think that this will happen. They are already selling their know-how to other countries, of which I think the first was Germany.
Some of these technologies will have the effect, for the first time, of removing from the Government and their agencies the control over at least part of the output of the television set. The Government will need to come to terms with this and

613
make sure that they do not stifle new developments in the name of preserving good order, but instead encourage them in the name of British enterprise.
I believe, like the noble Lord, Lord Hill, that the fourth channel may be the last of the old order of things in broadcasting as we have come to know it. The next decade will produce in the field of electronic entertainment some very exciting new developments. We must all await them with the keenest anticipation.
8.18 p.m.
Lord PONSONBY of SHULBREDE: May Lords, at the end of a long debate one hesitates to speak for any length of time, and I shall try not to be too long in my remarks. I think that while your Lordships have given general acceptance to the Bill, we have during the last few contributions had interesting star-gazing speeches which the Government will find it rather hard to act on, not knowing the true validity of the assumptions on which these speeches have been made. In this connection we have had speeches from Lord Willis, Lord Hill, and most recently the noble Earl, Lord de la Warr. This leads me to say that Lord Willis had meant to give his apologies to the House for not staying to the end of the debate; he passed me a note saying that he had to go and toil in his vineyard.
My Lords, there have been a number of interesting proposals made this evening concerning the Bill, and the proposal made by Lord Ferrier concerning a broadcast report of Parliament was one of great interest. I think that, when the noble Lord, Lord Hill, referred to it, he in fact thought the proposal was for live reporting of Parliament, which, as I understand it, was not Lord Ferrier's proposal. There was also a very interesting suggestion from Lord Aylestone that the BBC should be able to buy programmes from the fourth channel, and that seemed to be something else which the House would no doubt like to consider when we come to Committee stage.
At the beginning of his speech my noble friend Lord Donaldson of Kingsbridge welcomed the proposal for a Complaints Commission. I should like to join him in that welcome. A number of noble Lords raised questions of detail about the
614
composition of that commission. In particular the noble Lord, Lord Aylestone, raised the question of whether, in fact, corporate complaints should be allowed. That is a matter which no doubt your Lordships will wish to look at in Committee.
It is a useful innovation that a Complaints Commission should be proposed, and a particularly novel suggestion as regards the composition of the commission is that the dead can take a complaint to the commission. That has been referred to in some quarters as the Plantagenet point—the descendents of Richard III could lodge complaints if, in fact, Richard III was defamed—as is fairly frequent—on the television channels. But more to the point, one would think that if there were defamation of people nearer at home, not so many generations ago, then one would have cause for making a complaint. That could have implications in other areas. For example, as regards the spoken word and literature there could arise the question of whether the dead can sue. But the proposal is not that anybody should be able to sue, but rather that he should be able to register a complaint.
Of course a number of comments have been made by noble Lords to the effect that the proposed Complaints Commission is a body which has no power; it only has the power of publicity. The noble Lord, Lord Hooson, suggested that perhaps it should have power to discipline. No doubt that again is something which noble Lords will wish to look at during the Committee stage. Also the size of the Complaints Commission was mentioned. There seem to be a number of forceful arguments for saying that its size should be increased from three to five members.
When the noble Lord, Lord Belstead, opened the debate this afternoon—and this, in a sense, is my specific task this evening—he mentioned that the development of independent local radio was one of the most heartening developments during the past few years. I certainly agree that that is so. It has generated considerable community involvement in a number of different ways. Also, a number of independent local radio stations have provided a great many very useful services of one sort or another for the local community. One point which

615
concerns us is that a number of local radio stations are profitable, and some indeed very profitable, and those stations should be much more accountable for the profits that they make than appears to be the case at present.
At present local radio stations pay both a primary and a secondary rental. Some are able, with the agreement of the IBA, to retain some of their secondary rental for specific projects which are of social or artistic importance. It is not the case that all independent local radio stations deal with these retained secondary rentals in the same way in their annual accounts. The accounts do not necessarily show how much secondary rental has been retained by the individual stations.
I mentioned that a great number of useful projects are paid for out of retained secondary rental. For example, as regards London there is Capital's "Help Line", and another example is Radio Orwell's "Right to Work" series. The money has been generated for these projects publicly, in the sense that it is secondary rental which has not been paid across. The public, therefore, have a right to know the extent of these monies which should have been paid to the IBA, but which individual companies have been able to keep for specific purposes.
Apparently it is not possible for the IBA to furnish details of the amount of secondary rental retained by the individual companies. One would expect the IBA to provide details and the programme contractors to be able to give details of the secondary rental payments which they have made and retained, and details of the refunds and retentions in their own accounts. That aspect of the local radio stations requires some clarification. Clause 17 of the Bill specifically makes provision for grants by the IBA to contractors for "programmes of merit". One welcomes this clause and one assumes that it will become operational for those contractors who are unable to benefit—as a number are at present—from the retention of secondary rental.
I am sure that the Government are right in proposing to amend the Bill so as to ensure that all contracts, including those concerning independent local radio, are re-advertised after a period of eight
616
years. A number of objections have been raised in your Lordships' House this evening to that suggestion. Objections were raised by the noble Lord, Lord Crathorne, the noble Lord, Lord Winstanley, and other noble Lords, who thought that the right to decide whether contracts should be re-advertised was a matter for the IBA to decide and not something which Parliament should lay down.
The noble Lord, Lord Hill of Luton, said that he was doubtful about what the period should be—whether eight years, 10 years or 12 years—but he was quite certain that a time should always come when there had to be a re-advertisement of the franchises and that a procedure of admonition was not the right way to go about this situation. The noble Lord, Lord Annon, referred to the very heavy burden that this would put on the members of the IBA and the OBA, with the necessity for 60 meetings to be held and a very heavy work involvement for members of the authority. The noble Lord, Lord Harris of Greenwich, referred to the fact that members of the authority were very overworked already. That is, to some extent, illusory. Although one can envisage a situation of keen competition for the franchise in Manchester, London or Glasgow, one can also envisage a situation as regards some of the smaller local radio stations where there will be unlikely to be this heavy competition and workload on re-advertisement because those will not be the stations which are generating very profitable services. As I said, I thought that the Government were quite right to insist on this re-advertisement procedure.
I thought that the noble Lord, Lord Harris of Greenwich, raised an interesting point about the question of public meeting procedure and whether, in fact, this would be entirely beneficial. No doubt, again, this is a matter at which your Lordships will want to look further. The teletext proposals, which we come to in a later clause in the Bill, are of interest and the proposals seem broadly right, but I think that one would want to look at how these services develop over a period of time. Indeed, it might be that one ought to write into the Bill a period for review. I have raised a number of points on the Bill but, as other noble Lords have done, we on this side of the House give a general welcome to the Bill. I am

617
sure that there are many points of detail which we should want to look at in Committee.
8.31 p.m.
Lord BELSTEAD: My Lords, although I agree with the noble Lord, Lord Ponsonby of Shulbrede, that, with the wide range of speeches which have been made in your Lordships' House today—which are the product of a very wide range of experience which has been brought to bear in this debate—it is, therefore, not entirely easy for the Government to respond with firm announcements of action because so many points, interesting though they are, go very wide, none the less, this has been a very valuable debate because, first and foremost, it has shown a wide measure of agreement about the general character of the fourth channel which this Bill seeks to establish. Of course, it was in this that the Annan Committee showed the way and it is fair to claim that Clause 3, together with the important provision for opportunities for independent producers in Clause 4, should translate the widely-held desire to have a distinctive and original programme service into legislation. Perhaps I may embark on the very first answer which I have to give in this reply. My answer to my noble friend Lord Drum-albyn is that this is to be a national television service, but, of course, it will be for those running it and for the IBA to decide as the service develops what regional variations may become possible.
Secondly, I should like to express my appreciation for, I think it is fair to say, the wide welcome in most generous terms which has come from all Benches for the way in which the subsidiary is being set up by the IBA. Perhaps I could inject this particular remark. It is worth noting that under Clause 7(2) the general report of the IBA, which under main Clause 31(3) must be laid before both Houses of Parliament, shall include an account of the way in which innovation and experiment have been encouraged on the fourth channel. I am saying that your Lordships have given a generous welcome to the way in which the subsidiary is being set up, but Parliament will be able to ensure that the subsidiary keeps on its toes, which I am sure it will continue to do.
618
Thirdly, I should like to make a general point which has been made many times during the proceedings on this Bill in another place. It is that it is not always appropriate to make provision in legislation for everything that we consider to be desirable. It is worth remembering that two of the essential needs which were identified by the Annan Committee for broadcasting were flexibility and editorial independence. None the less, my impression of this debate is that, broadly speaking, your Lordships—with the exception of the noble Lord, Lord Hooson—have welcomed the provisions of Clauses 3 and 4. It is not that the noble Lord did not welcome them, but I do not think that he wanted them to affect the IBA. He wanted to see the IBA taken away as regards control of the new television channel. Perhaps this is a matter to which we can return at another stage of the Bill.
However, I also realise that there are matters which some noble Lords—even though they may take this broad view—would perhaps still like to see spelt out rather more specifically in the Bill. If I may, I should like to refer to two. One, which was a reference made by the noble Lord, Lord Donaldson of Kings-bridge, the noble Lord, Lord Hill of Luton, and my noble friend Lord Bessborough, concerned the work of the Open University. As the Bill is designed to extend towards the end of the century, we need to avoid making over-detailed provision for particular types of broadcasting. In that context, the Government are none the less committed in this legislation to ensuring that educational programmes appear on the new service, and that is why Clause 3(1)(b) is in the Bill in addition to the general requirement in the 1973 Act for the dissemination of education. It is important for that to be noticed.
The remit of the IBA's Educational Advisory Committee will extend to the fourth channel and the IBA has already indicated that it proposes to devote about 15 per cent. of the fourth channel time to educational programmes. I understand that the Open University and the IBA are having talks at the present time, particularly about the possibility of continuing education services from the Open University—I understand that those talks are still under way.

619
The other matter which was spelt out in some detail was the point made by my noble friend Lord Ferrier, whom I am delighted to see has advanced to the Front Bench. In essence, my noble friend drew attention—and received some support from the noble Lord, Lord Hill of Luton, and indeed my noble friend Lord Bessborough—to the matter of reporting the proceedings of Parliament. My noble friend Lord Ferrier suggested that the IBA should be required to include on the fourth channel regular reports of the proceedings of Parliament. An obligation of that sort would be similar to that laid on the BBC in their licence and agreement, as my noble friend said, which, however, is more general in that it does not specify on what service, or even on what medium, the reports should be broadcast. In practice, as my noble friend said, the BBC broadcasts a regular radio report each evening and each morning, but a requirement of the kind which my noble friend suggests for the fourth channel would be much more specific than any other as to the nature of the content of the channel.
The broadcasters must have the freedom to put together a service which, in their expert judgment, is viable and worthwhile. However, I do not necessarily rule out a place for a parliamentary report on the fourth channel, though I have some doubts as to how—when our proceedings are not yet televised—television could contribute to such a report. But this is a matter to which we not only should, but I expect shall, return at the next stage of the Bill.
I spoke for a certain length of time at the beginning of the debate about the question of Welsh television. The only point I should like to make in response to the noble Lord, Lord Cledwyn of Penrhos, and the noble Lord, Lord Hooson, is that I would ask the noble Lord, Lord Cledwyn, to believe that the words in the gracious Speech about the early start of Welsh language television on the fourth channel were meant to mean—and so far as I could see did mean—that an early start should be made on the volume of Welsh language broadcasting on the fourth channel, and not that all Welsh language television should be on the fourth channel. In saying that, of course, I immediately admit to the noble Lord that we had changed our minds, but I think that
620
we are being honest to the words in the gracious Speech when I say to your Lordships' House that I know that the engineering for the fourth channel for Wales is a priority and that when, as we hope, the fourth channel opens in 1982 the best estimates are that the coverage for Wales will be greater than it will be for the rest of the country.
Lord CLEDWYN of PENRHOS: My Lords, I am grateful to the noble Lord for that amount of clarification, If in fact. as he said, the Government had changed their mind by the time of the Queen's Speech, then that should have been made clear, because so far as Wales was concerned we were not aware that the Government had changed their mind until the Home Secretary made his speech in Cambridge on 1lth September. The noble Lord has made an extremely serious statement. It was certainly not clear to anyone of us at all that the Government had changed their mind in the wording in the gracious Speech. This was really not a satisfactory state of affairs. I only hope now that the Government can be persuaded to change their mind again.
Lord BELSTEAD: My Lords, I said that I would not substantially say any more on this subject, and I am not going to do so, because I made quite a long passage on this in my speech in the beginning, to which the noble Lord and the noble Lord, Lord Hooson, responded, and this is a matter which all of us ought to look at again when we come to the Committee stage of the Bill.
May I next say that I agree with the noble Lord, Lord Donaldson, that we depend upon Annan really for this Bill although we have not followed the recommendation for the OBA for reasons to which I referred at the beginning of the debate. But if we are to depend upon advertising for financial viability, which we believe that the fourth channel will achieve, them we must ensure that advertising does not have an adverse effect upon the nature and the quality of the programme service.
At the end of his speech my noble friend Lord Drumalbyn spoke in favour of a sales force for the selling of advertising on the fourth channel, committed to the success of the fourth channel alone. I understand the case which my noble

621
friend is putting forward. But I believe that my noble friend is not giving due weight to the problem that the ITV contractors are financing the start of the fourth channel. They will not recruit more than a small fraction of the subscription which they are going to pay by selling programmes to the channel, and it is in their interests to sell as much advertising as possible.
I may be wrong, but I did not discern from my noble friend's speech any alternative suggestion as to how the working capital of some £70 million to £80 million which is going to have to be raised at the start in order to establish the fourth channel can be raised, unless it is by the system which is laid down in the Bill—namely, for the money to come from the ITV contractors but for them to have the ability to sell the advertising.
Having said that, may I add two things? First, this is again a matter which my noble friend and other noble Lords would want to look at in more detail in Committee. Secondly, advertising interests have much to gain from the advent of the new channel. To put it at its lowest, there will be a considerable increase in the time available for advertisements on television. But what is perhaps even more important is that there will be a different kind of advertising time on offer, deriving from the different nature of the programmes to be broadcast on the channel.
I would only add that I remind your Lordships about the setting up of the Advertising Liaison Committee under Lord Thomson of Monifieth, which is already meeting and which I believe is going to be an important force in bringing together the advertising and broadcasting interests. Just to remind your Lordships that we have not let matters rest there, we have included in the Bill a requirement on the authority to include in their annual report an account of the complaints they have received about the advertising practices of their contractors and of the action they have taken in relation to these.
The noble Lord, Lord Donaldson, spoke about sponsorship in his speech, raising the question of sponsorship of music, drama and art. The noble Lord referred to Section 8(6) of the 1973 Act, which, in effect, prohibits sponsorship
622
subject to certain exceptions listed in subsections (7) and (8) of Section 8 of the 1973 Act, and in particular the exemption in Section 8(8) of programmes broadcast in an educational service provided under Section 3(2)(c) of the 1973 Act.
The noble Lord asked whether "educational" included serious music, drama, and art. I have to say that it does not—at least not in the way I believe the noble Lord has in mind. That exemption in the 1973 Act was a limited exemption intended to ensure that if the IBA were to arrange for educational broadcasting services of an experimental nature to be provided otherwise than by a programme contractor it should not fall foul of that part of Section 8(6) which prohibits material which could reasonably be supposed to have been included in return for payment to the authority. I understand that this exemption has never been brought into use. But, may I make clear that there is nothing, so far as I know or am advised, to prevent the showing on ITV, or the fourth channel, of events which have themselves been sponsored. The noble Lord spoke about that also. The main Section 8(7)(c) of the 1973 Act specifically allows,
"items consisting of factual portrayals of doings, happenings, places or things [where these] do not comprise an undue element of advertisement".
What is ruled out is the sponsorship of programmes themselves. On that I must say that I think that the legislation is right.
My noble friend Lord Crathorne spoke about the readvertising of contracts. Incidentally, the noble Lord, Lord Harris, made some interesting remarks about the holding of public meetings, but, if the noble Lord will forgive me, I would prefer to take that away and look at it. On my noble friend's point, may I say that Clause 23 of the Bill amends Section 12 of the 1973 Act to require that no programme contracts should last or be extended for more than eight years in all; furthermore, before the IBA enters into a new contract for provision of programmes it will be required to take steps to sound public opinion in the area concerned by means which may include the holding of public meetings.
We intend—and this was announced by my honourable friend the Minister of

623
State in another place at Report stage—to add to this a requirement that the IBA should, before it enters into any contract for the provision of programmes, invite applications for that contract. This will not preclude the IBA from entering into a further contract with the same contractor, but it will reinforce their duty to ensure competition and to assess the incumbent's performance against the potential of other applicants. If I may say so, in general terms because of the lateness of the hour, I think that is right. It is absolutely no reflection on the practices of the IBA, which have been exactly along these lines. Here again, if my noble friend feels that he would like to return to this at a later stage of the Bill, I would be very ready to do so.
May I also turn to a general point about the levy which was made by the noble Lords, Lord Harris, Lord Donaldson, Lord Annan, and my noble friend Lord Bessborough? All of them in general terms gave expression to some unease, particularly about the marginal rate of the levy. I know I am repeating what has been said in another place, and therefore briefly, as my right honourable friend the Home Secretary indicated in another place, both he and the Chancellor of the Exchequer are presently undertaking a review of the whole operation of the ITV levy. The Government's reasons for undertaking this review are that we are anxious about the high marginal rate produced by the present profit-based levy system, which of itself we realise creates very little incentive towards cost consciousness in the companies affected. Not-withstanding that, we do not propose to introduce amendments to the Broadcasting Bill.
I think your Lordships who know more—many of you much more—about this than I do, will have also read that we are thinking that maybe in the end some amalgamation of the present levy system and the old levy system may be the right way forward, although we very much take to heart what the noble Lord, Lord Hill, said, that the previous levy based on revenue was something which was found not to work, and indeed was agreed not to work by both the present Government and the present Opposition.
The noble Lord, Lord Aylestone, asked
624
a direct question to which I can give a direct answer. The managing director of a company on behalf of the company—similarly, a diplomat on behalf of his or her country—can make representations to the complaints commission. I give that answer to the noble Lord in his absence because I am sure the House would like to hear that answer.
I thank my noble friend Lord De La Warr and the noble Lord, Lord Hill of Luton, for their interesting speeches about satellites. Lord Hill asked me a direct question—for an assurance that we were looking at that important development—and I give him that assurance. The Home Secretary said in March in another place that he had decided to initiate a study of the implications of establishing a United Kingdom direct broadcasting satellite service by about 1985, which would be the earliest practicable date possible. The study is being carried out with urgency by the Home Office in close consultation with other interested Government departments, the broadcasting authorities and such other organisations as may be directly interested. We are pressing ahead with it as fast as we can and my right honourable friend intends to polish a paper setting out the results of the study about the end of the year.
My noble friend Lord De La Warr and the noble Lord, Lord Willis, then spoke in particular about the coming and future of video-discs. I will look at their remarks and draw them to the attention of my right honourable friend. My noble friend also spoke about subscription television, and I thank him not only for his remarks but for the welcome he gave to the policy which my noble friend is following in this respect. I will not repeat what he said, but I think he would agree that we are making a positive response to the obvious wish, as we see it, of some people to go in for subscription television. It will be extremely interesting to see where exactly that leads.
The noble Baroness, Lady Seear, spoke about the desirability of setting up industry training boards in connection with the training requirements in the Bill. In this field, as the noble Baroness well knows, training cannot be done in exactly the same way as for cameramen, journalists, technicians, producers, presenters

625
and engineers, all of whom need rather different skills. The new clause in the Bill, by requiring the IBA to report on training, will allow Parliament and the public to scrutinise what is being done in all those areas; and that alone will mean that the matter will be coming back regularly to your Lordships' House for us to look at again.
I have left many questions unanswered, but I shall now endeavour to write to noble Lords to whose points I have not replied. I see around me many noble Lords to whose speeches I listened with extreme interest, and that applies to the noble Lords, Lord Nathan and Lord Hooson, particularly Lord Hooson's remarks about the complaints commission. If the House will forgive me—because some of us have the pleasure of another debate—I will conclude by saying that I hope I have been able to satisfy noble Lords on the points that have been raised. Even if noble Lords are not satisfied on every individual issue, I hope there will be agreement that, in general, the Bill is a worthwhile measure, which will help to preserve and develop broadcasting of the quality which we in this country have for so long enjoyed and have come to expect.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

CIVIL AVIATION BILL
Brought from the Commons; read 1a, and to be printed.
FINANCE (NO. 2) BILL
Brought from the Commons; read 1a, and to be printed.
DUNDEE PORT AUTHORITY ORDER CONFIRMATION BILL
Brought from the Commons; read 1a, then (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read 28 and reported from the Committee.

THE PAROLE SYSTEM
8.56 p.m.
The Earl of LONGFORD The Earl of LONGFORD rose to ask Her Majesty's Government what steps they propose to take to deal with the grave defects of the present parole system.
The noble Earl said: My Lords, I feel I must begin on behalf of all noble Lords who are still in the Chamber by thanking the noble Lord, Lord Belstead, for doing duty so nobly after his prolonged ordeal on another subject. Many years ago, when I was a young and, in my own eyes, promising Minister, I remember replying to three debates on one day. When dealing with the third subject I was accused of gross frivolity; I was, admittedly, getting rather tired by then—the noble Lord, Lord Donaldson of Kingsbridge, would say "bored"—but I am sure that such a fate will not befall Lord Belstead, and I am thankful to him for stepping into the breach once again.
We last debated the question of parole in March last year. Since then the number of those in prison and the extent of the overcrowding have set new records. One report after another, meanwhile, has emphasised the need for shorter sentences. When we debated these matters last year, there had already been the report of the Parliamentary Select Committee, and since then there has been the report of the all-party Penal Affairs Group, with which the noble Lords, Lord Donaldson and Lord Hunt, among those speaking tonight, are particularly associated. There has also been the report of the May Committee, which was set up by the former Home Secretary, Mr. Merlyn Rees, endorsing earlier reports of the Home Office Advisory Council in regard to prison sentences.
There is general informed agreement that the sentences passed by judges in this country are too long, alike by absolute standards and by comparison with other countries. The present Government's White Paper entitled The Reduction of Pressure on the Prison System states:
"The case for shorter custodial sentences has been increasingly widely canvassed and accepted during the past few years. The Government supports this case, both as a valuable means of bringing demand for prison places closer to the supply of places and, more importantly, on general penalogical grounds".
The Home Secretary, Mr. Whitelaw, has more than once indicated that he accepts those conclusions, and I will quote only one extract from his speech on 15th July to a NACRO conference. He said:
"There must be some change in sentencing policy so that no one is kept in prison, whether on remand or under sentence, for a day longer than is absolutely essential".
The objective indicated may sound platitudinous, but let me underline the first words that I quoted:
"There must be some change in sentencing policy".
Reasonably interpreted, that can mean that in the view of our Home Secretary prisoners must spend less time in prison.
The three most obvious ways of achieving shorter sentences are as follows. The first is to restrict the length of the sentences passed by the courts, whether this be done by legislation or indirectly by influence. The second way is to increase the normal remission of prisoners from a third to, say, a half, as in Northern Ireland, where admittedly a parole scheme does not operate. Thirdly, the parole system itself could be operated more liberally, as some of us have often enough in the past recommended in this House.
I wholeheartedly support the endeavours being made under the first two headings, but it is the third—the liberalisation of the parole system—that concerns us directly this evening. The news from the Parole Board is not at first sight encouraging. Its last report achieved a new level of self-satisfaction; that was saying quite something. On 29th April the noble Lord, Lord Harris of Greenwich, chairman of the Parole Board—who I appreciate under our rules is unable to address us this evening, and who is well respected in this House—told the Parliamentary all-party Penal Affairs Group that the paroling rate had now reached something of a plateau, with just under 50 per cent. of those considered each year being granted parole. He told the group that there was no indication of the proportion rising further.
On the face of it that gives a firm negative to those who should like to see the parole system play its part in reducing the prison population. But I do not quite despair. I remember a reference to a plateau a few years ago when the propor-
628
tion of those paroled was much lower than now. To his credit the then Home Secretary, Mr. Roy Jenkins, stepped in and issued new guidelines.
My first submission is that it is clear that intervention by the present Home Secretary will be necessary if there is to be any significant increase in the granting of parole. I earnestly beg the Home Secretary to adopt such a course, if he is really genuine—as I am sure he is—in seeking to bring about shorter custodial sentences. But a reduction in total numbers in prison is not by any means the only argument for extending parole, though at the moment it is perhaps the most relevant one.
In 1964 I was chairman of a Labour Party committee which was the first body in this country to report in favour of a parole system, and I am still glad that our report in that respect was adopted. What weighed with me most at that time, and has continued to do so ever since—and this would apply whether or not the prisons were overcrowded—was the view of parole as holding out hope and encouragement to prisoners which would not otherwise exist, and in that sense greatly enhance the prospect of moral reform. Along with that would go the function of a parole system in enabling prisoners to gain some insight into their own characters, into the defects which had led them into prison, and into the best way of overcoming those defects.
Those healthy processes that I have just touched upon would depend on the parole system maintaining a reasonable amount of credibility and reputation for fairness in the eyes of prisoners and on the prisoners being given some idea when they are refused parole how they can do better next time. Well, I hope that not even the members of the parole board themselves—not even in their most complacent moments—would claim that at present they have much credibility in prisoners' eyes. Of course they might argue, with some show of plausibility, that prisoners are suspicious people and that it is almost impossible for parole decisons to be widely applauded in prisons. However, I have no doubt that the credibility of the Parole Board and the reformative benefits of the system would be vastly increased if reasons for refusing parole were given. We have raised this matter

629
before, and we shall do so again until the system is altered, and no doubt other speakers this evening will turn to it.
I must now move on to deal with the practical consequences that would be involved if our parole system ceased to be a paper, bureaucratic exercise, with certain undertones of Kafka, utterly remote from the prisoners whose lives it determines. I would deal with the way that it would have to be organised if it were to become humanised and personal.
A number of authorities have proposed the establishment of regional parole boards. The noble Lord, Lord Hunt, has done so, and may do so again this evening; I have not had any advance knowledge of the contents of his speech. I believe that this is the view of NACRO, which has done such splendid work in this field, and later in the debate we shall be hearing from its president, the noble Lord, Lord Donaldson of Kingsbridge. If regional boards were established, the prisoners should be given the right to appear before them, with legal representation, including legal aid, if necesary, and should be given reasons if they were refused parole. I f local review committees were abolished and the regional boards made recommendations direct to the Home Secretary, this would also reduce the appalling length of time that at present it takes to make a decision.
Steps to ensure consistency would need to be incorporated into the system. A national Parole Board might well be retained to act in an advisory and training capacity, with a view to reducing inconsistencies, and some form of appeal system might be introduced—an appeal either to the national board or to another authority.
In some excellent notes supplied to me by NACRO—and no doubt Lord Donaldson may develop some of their ideas more effectively—it is suggested that such reforms would result in a more satisfactory procedure, and with that I entirely agree; but they suggest to me that they would not in themselves ensure that more people would be granted parole. There, I am more optimistic than some of those in NACRO. I have no doubt in my mind that one of the difficulties about the Parole Board giving reasons is that their reasons, if given, would in many cases appear most unconvincing. Without going
630
into details, I return to a case I mentioned in an earlier debate, that of Mr. Poulson. I can only ask, as I did once before: Why was he not given parole the first time? He was given parole later. We do not quite know why he got parole later, but one is bound to ask why he did not get it the first time.
Many of us, including Lord Hunt on an earlier occasion, have expressed the opinion that the Parole Board's decisions contain a large element of re-sentencing, and this they would hardly be able to stand over if the reasons were dragged into the daylight. I conclude, therefore, that if reasons were given a good many more people would in fact get parole, if only because the Parole Board would not be able to defend the sort of reasons which are tending to weigh with them all too often now.
That, however, is a somewhat speculative judgment. I entirely agree with a suggestion which reaches me from NACRO, that there should be a statutory presumption in favour of parole, similar to the presemption in favour of bail under the Bail Act 1976. If parole was not granted, the regional board would have to give its reasons for overriding the presumption. As I say, I will leave the development of some of these ideas to other speakers.
I must turn aside for a moment to say a word about parole in regard to life prisoners. I said a good deal about this when I opened a debate on life prisoners in March of this year, and I will keep my remarks down to a minimum. It is certainly in regard to life prisoners that the parole system is seen at its most inhumane, and if any Minister doubts that I can only ask him to go and talk to a few life prisoners to see whether or not he agrees with me. We are told that parole is a privilege, and not a right—certainly a meaningless remark if we are dealing in moral terms. But in practice a prisoner has a right to be considered after serving a third of a determinate sentence.
In the case of a life prisoner, there cannot, of course, be any such thing as a third of a sentence. A life prisoner, then, is at the mercy of the executive, which may well mean that he is at the mercy of the Parole Board—a Parole Board anxious to stand in well with the Home Office,

631
and the Home Office anxious to cause its Minister as little embarrassment as possible. It is now three years since the noble and learned Lord, Lord Gardiner, Lord Hunt, Lord Carr and I called on the Home Secretary and begged him to accept the modest plea that after 10 years, at the outside, a life prisoner should at least be considered for parole. That modest plea has not yet been granted.
I wish that I could persuade the noble Lord, Lord Belstead—so sympathetic a figure—that it is possible for a more or less rational person like myself to find something positively wicked—I repeat, wicked—in the attitude of the authorities towards parole for life prisoners. The Minister may brush that aside, because he knows that he is not wicked. We know he is not wicked. He may be too modest to say so, but he knows that he is a good man, and we know that he is a good man. We know that the Home Secretary is a good man; but good men can be involved in wicked systems. If we doubt that, we have only to remind ourselves of a million Russian prisoners sent back after the war to the cruel destiny awaiting them; and those concerned were good and honest men.
Turning back to parole more generally, my objection to the present system is twofold. I am horrified by its callousness and also by its ignorance. Also, I wanted to bring in a third point, the sluggishness with which it is conducted; but I shall leave that to other speakers. Before I conclude, I must take an illustration of the case of Mr. Charles Richardson of whom the general public has become aware of late, although, from an over-ripe experience, I could have produced many other cases. Charles Richardson, as most noble Lords will remember, walked out of an open prison at the beginning of June. He announced that he would be giving himself up in due course, and when last heard of was likely to give himself up in the next few days.
I do not need to tell the House that I do not justify his action and from the beginning I have expressed the hope publicly that he would return to prison as soon as possible. But his story and the long, arresting letter to The Times raised, as that paper said in a leading article, important issues for anyone
632
interested in parole; and, indeed, there were leading articles in a whole number of newspapers at that time.
Charles Richardson was sentenced to 25 years in prison for crimes that shocked all who read of them. He has been in prison for 14 years and, to my certain, first-hand knowledge, has made a strong and positive contribution to the life of Maidstone Prison where I visited him quite often. I visited him later in the open prison from which he moved out. The Maidstone Prison newspaper, which he helped to edit, impressed everyone. The rector of Mary-le-Bow in a letter to The Times said that he had had a long talk with him last year. The rector described him as "considerate, thoughtful and gentle". Certainly, the prison authorities could not understand why he did not receive parole. He was, in fact, refused parole seven times.
The question that I want to ask is this. I do not know whether the Minister will feel that he can dispose of it this evening, but this is not a question in the end, I am afraid, which any ministerial reply, however effective, can dispose of finally. Why should we suppose that the Parole Board would be able to make a wiser assessment of Richardson than the prison authorities on the spot who knew him well and who were entirely in favour, to the best of my knowledge, of his getting parole? They used to ask me in the prison what the Home Office have got against him. They seemed surprised to know—they not having attended many of these debates—that I am not in the Home Office's confidence.
We are bound to ask: what, indeed, have the Home Office got against him? Are we to conclude that somewhere in those vast piles of what I may be forgiven for calling "bumph" concerning him, the Parole Board discovered secrets unknown to those from whom most of the "bumph" must have emanated; or are we to conclude that they were falling into the dangerous habit of re-sentencing, which I touched on earlier; or are we to conclude that they were saying to themselves, "Richardson did terrible things. He must serve at least two-thirds of his sentence. Parole as normally understood does not apply to him, whatever he is like now and whatever service he would render to the community if he

633
came out"? Or are we to conclude that the Parole Board, or the Home Office, or the Home Secretary, said to themselves, still more crudely, "The public would not like it if Richardson got parole"? There to judge from the press reactions, they may be right or they may be wrong; but, right or wrong, if that was their motivation, I would regard that as discreditable.
We can discuss parole either in administrative or in human terms. The trouble in the latter case is that one is bound to take one or more particular instances; but I have tried, taking my speech as a whole, to link up administration and human decency. On the last occasion I called for the kind of independent inquiry which had been recommended by the parliamentary committee and others. I repeat this evening that call for an independent inquiry. I am afraid that I have no confidence whatever in the capacity of the authorities to judge themselves in this matter. They are bound to be as fallible as I should be, as we all should be, in their situation. I do not trust them to reach a fair-minded judgment, and I am sure that they certainly would not trust me if the roles were reversed. Strictly speaking, I consider that the Home Secretary is capable of putting matters right himself, but that would involve a degree of concentration on his part on one of many of his responsibilities, a degree of concentration which we perhaps can hardly expect of him. Therefore, I return once more to the call for an independent—I repeat "independent"—inquiry, and I very much hope that this plea will be echoed by other speakers.
9.20 p.m.
Lord HOOSON: My Lords, at this late hour I shall resist the temptation to follow the noble Earl, Lord Longford, in some of the points he has made. I am sure he will forgive me if I say with respect that I think he generalises a bit too much. In fact, it is so easy to generalise on these things and, having spent a lifetime in practice in the law, I would not like to think of the number of murder cases, for example, in which I have prosecuted or defended. The essence of the parole system is that you deal with each case in particular. This means that, if you are looking at it in human terms, it is necessary to look at what the person did as well as the very general considerations which
634
the noble Earl rightly put forward. At the conclusion of some cases at times I have felt deeply sorry for the person involved, whether I had prosecuted or defended. In other cases I have been absolutely horrified at the sustained cruelty of what I have heard related in court.
I think one of the criticisms of the parole system is that it is too generalised at present, and it is too much of a mystery. I am going to resist the temptation to talk about the general defects of the parole system, to which the noble Earl has rightly called attention, and instead dwell upon the one particular defect which I think can be remedied very shortly, and which I think—I am sure that the noble Earl will agree—should be remedied as soon as possible. This is that the whole process of parole is far too much of a mystery. The prisoners do not know exactly what is taken into consideration. You have the result, which is testified to by so many prison officers, of the unhappiness caused because of the uncertainty of the whole procedure.
In the very valuable booklet produced recently by NACRO there is a passage which I should like to quote because it is shortly set out there—the epitome of the views expressed by the Prison Officers Associations in the words of Mr. Peter Waugh, who was speaking on behalf of the association. I should like to quote from the evidence given to the House of Commons Expenditure Committee on the reduction of pressure on the prison system. It reads as follows:
"One of the problems of parole is not just the disappointment at not getting it; it is not knowing the reasons why they do not get parole. This is a question that people like me face every day. A man comes to me and says 'I did not get parole', and I say 'I know, I am sorry, lad'. Then he says What did I do wrong?' and I say I do not know … We have submitted reports and everybody has submitted reports'. So then he says Can you tell me how to put myself right so that I will be more favourably considered?' and I say, 'No, because I do not know either'. These are the factors which create the problems, not the fact that a man is disappointed".
I entirely agree with that. Over the years one can understand that there have been reasons, as the parole system has developed, for not giving reasons. They become less and less sustainable as the years go on. I think we have now reached the stage when reasons, broadly, should be given. I can think of cases in which

635
I have been involved where one might say that the particular nature of the offence, without going into details of it, would be sufficient to dictate that there should be no parole. In other cases, it may be that there has been certain behaviour within a prison or indeed the medical reports may indicate that parole should not be granted because it may be dangerous to grant it. All these things are very important but, broadly speaking, I think it is important that a prisoner should know and I see no reason why we should keep up this mystery any longer. I think the time has surely been reached when the Home Office could give broad reasons and that would be the greatest single reform that could take place in the parole system at the present time.
I am sure that the noble Earl, Lord Longford, has been right to raise this matter again at the present time and I am sure also that he will forgive me if I have criticised him sometimes on particular matters; but I do appreciate the great service which he has rendered to the community generally by raising a matter which otherwise might not be raised in this way, because there is a change of climate at the present time, as he so rightly said. Lord Lane, our new Lord Chief Justice, has twice in recent weeks drawn attention to the fact not that, if the noble Earl, Lord Longford, will forgive me, prison sentences are too long, but that some prison sentences are too long and that there are many sentences which are unnecessarily long, everything considered at the present time. So I think the time is right, for a variety of reasons, for us to consider ways of reducing the prison population, and one of the most effective means of doing so is a well-oiled, efficiently working and properly reasoned parole system.
9.26 p.m.
Lord HUNT: My Lords, I should like to follow the noble Lord, Lord Hooson, in thanking the noble Earl, Lord Longford, for putting down this Unstarred Question and, almost in the same breath—and I hope he will understand me—to reveal the fact that I rise with very little enthusiasm to contribute to this debate on the Unstarred Question. I probably share this lack of enthusiasm with the noble Lord, Lord Belstead, but
636
for different reasons. His reason. I feel sure, is that he has endured a very long session this evening. He has increased the enormous admiration that I have for him, and he has my sympathy. I sent him a note saying that he could absent himself from the Chamber and go for a drink while I was speaking, but he has been good enough to stay.
My lack of enthusiasm is because I find it very disappointing—if I may say this to the noble Lord, Lord Belstead—that we should once again be discussing the subject of parole in the absence of the Home Office internal review which was expected, as I recall, shortly after we last discussed this subject 15 months ago. I undestood that it was shortly going to be ready and that it had already been in progress for quite a number of months, stretching back into 1978. My first question, therefore, to the Minister is: what is the position regarding this review? Is it shortly going to appear? Is it the Government's intention to publish it?
We now have the Parole Board's report for 1979, and the noble Earl, Lord Longford, made what seemed to me to be some somewhat derogatory remarks about that report. I should like to differ from him in saying that I think it is an excellent report. In fact, I hope it will not be held against me that I am, in any way, trying to blow my own trumpet, when I say that it is in a long tradition of excellent reports by the Parole Board, stretching back to 1968. I intend no reflection on its present chairman, or the immediate past chairman, Sir Louis Petch, when I point out, as indeed has the noble Earl, Lord Longford, that it is the "mixture as before".
The statistics, the paroles granted annually in that year, the time spent on parole on average by the aggregate of prisoners, the so-called recall or failure rate—they are all very much the same as they have been for four years past. The explanations and the arguments in justification of the system as it stands—indeed, as it has existed, with some modifications under the 1972 Criminal Justice Act, since its inception in 1967—are advanced with the clarity and cogency of a detectably legal pen. As the chairman said—and I am so glad that he has remained here this evening to listen to this debate—it has rested on a plateau for

637
several years. I admit that it rested on a lower plateau during my time, from 1970 to 1973. The signatories to the report would appear to believe, as perceived by the board, that there is no case for change and no prospect of advance. Would the Minister say, when he comes to reply, whether, in essence, this view will accord with the findings of the Home Office inquiry? I think it is true to say that, for some time past, it is no longer a view shared by many people who are involved in the operation of the scheme from the outside.
I am a firm believer in the parole system. What I have to say in the following few words will sound very critical, but in no sense are they critical of those who operate the scheme—the board, the committees, the prisons, the probation service or the Home Office—and who try to make the present system work. But there is a considerable amount of concern and criticism. There have been a number of unofficial inquiries, and research has been done. The Howard League is currently conducting an inquiry. The Conference of Chief Probation Officers and the National Association of Probation Officers have already written reports. There have also been a number of academic studies in which distinguished criminologists, most of whom have actually served on the board, have taken part. I could name half a dozen highly respected academics who have all recommended fairly radical reforms.
The House of Commons Expenditure Committee which has been mentioned already more than once this evening, was sufficiently impressed, even in 1978, to call for an independent official inquiry into the scheme. Last year I thought that it would be more sensible to wait for the publication of the Home Office's internal inquiry before a decision was taken on an independent inquiry, but now, 15 months on since we last discussed the subject, I no longer think so. There is no doubt that none of the various inquiries to which I have referred can carry as much weight as an independent, official inquiry, and I believe that such an inquiry is now needed.
During the nearly seven years that I was chairman I, too, had an "inside" view of it. I am quite prepared to admit that from the inside at that time I was a trifle
638
smug. It seemed to me that the system was essentially sound. I had no doubt that all those involved on the board and in the committees were caring, skilful, highly responsible people who were very thorough and concerned about the public interest as well as that of prisoners. We thought that its admitted shortcomings were inevitable and that there was little to be done. For some time past I have had another view, and that is as an informed outsider. I believe that the scheme does need radical change.
I touched last year on the main lines which I thought would be right. This is not the occasion for blueprints for this or any other scheme, but I hope it will be acceptable—we have heard this evening about giving reasons—if I give reasons why I still believe that these changes are needed. Always within the context of a discretionary scheme—I do not believe that it should ever become a legal right for prisoners to have parole—what I think is now needed is to devolve, to simplify and to speed up the procedure. With important qualifications—I shall come back to that in a moment—it could, and should, be made more independent of the Home Office. The massive documentation, even for the run-of-the-mill, low risk and nonviolent category of case, is like using a sledgehammer to crack a great many small nuts. The average size of a dossier would not mean very much, but the smallest one is between 20 and 30 foolscap pages. A large dossier for a prisoner who is serving a long sentence and who may have come up more than once for parole is anything up to 150 pages of foolscap.
The structure is top heavy, with a parole unit at the Home Office of some 60 civil servants who in fact make nearly all the decisions, both for or against parole, on behalf of Ministers. The National Board for England and Wales has grown from 17, when we started the scheme in 1967, to just about 50 today. Notwithstanding the greater discretion now granted to the Home Secretary under the 1972 Act to accept recommendations directly from the LRCs, all the 10,000 odd cases—I am subtracting the cases of those who refuse parole and who "opt out", as the expression goes—still have to be processed by the Home Office. The scheme has become too cumbersome, too slow and too institutionalised.

639
My case for change is quite pragmatic, and I am not one little bit sentimental about this. It is based on two main factors, one positive and the other negative. The positive factor is the consistently low incidence of re-offending while on parole by the great majority of men and women, notwithstanding the fact that the percentage of paroles granted over the years has increased very considerably. A decade and more of experience has produced the positive evidence that the Home Secretary's advisory board, in combination with the committees, are amply competent to keep the granting of parole within limits acceptable to the public. The number of cases actually referred to Ministers, on which the Home Secretary or Ministers on his behalf disagree, has been in single figures for a number of years. Last year I noted the astronomic figure of disagreements as actually 13 cases! This is surely proof that the advisory system can become a decision-making system.
The acceptable limits, of course, have still to be tested. In Canada and the United States, for a number of years, 20 per cent. of failures or recalls have become tolerable, and I see no reason why they should not be equally acceptable here. After all, it is not the number of prisoners granted parole and it is not the number recalled to prison for infringements of their licence which is likely to give rise to public anxiety and objection; it is the occasional serious crime committed while on parole; it is the exceptional notorious offender who is granted parole, whether or not he or she represents a serious risk to the public. Such cases as those, in my strong opinion, would continue to be seen and considered by Ministers, as they are at present.
My second reason—the negative one—is the apparently negative fact, supported by Home Office research and by evidence supplied by the Scottish board, that the parole scheme has paid only marginal dividends in reducing the incidence of re-offending after the end of the parole period, notwithstanding supervision and support. Within a two-year period of release from prison, there is apparently little difference in the longer term in the re-offending rate of those who have had the benefit of parole and a comparable sample of those who have not. From these
640
facts I think it reasonable to make two deductions. The first is that decision-making, in the great majority of cases, can be entrusted to those who presently advise the Home Secretary, without arousing public opposition and within acceptable parameters of public safety. This would greatly simplify and speed up the procedure and obviate the need for a good deal of the present centralised machinery.
The second deduction I draw is that a policy of significantly shorter custodial sentencing would be no less effective, far less costly and much more humane. But in the absence of any assurance so far from the judiciary that there will be such a change in practice, and without legislation to enforce it, it is essential for that reason alone to retain a paroling system. Under such a revamped system as I have tried to justify and explain the Home Secretary, of course, would remain answerable to Parliament for its operation. He would still appoint, and he could, if necessary, sack the chairman of the national board and of any subsidiary boards. He would appoint the members of the board and of any subsidiary boards and he, or Ministers on his behalf, would personally make decisions about certain defined categories of case and in respect of certain particular offenders. In both cases there would be established criteria for those who should be reserved for consideration by Ministers.
But for the remainder—and this is the main point—the majority of the 11,000 prisoners who annually become eligible for consideration, whose performance and whose risk potential have become highly predictable in the light of a decade of experience of the scheme, there would be simpler criteria, much less documentation and a strong presumption in favour of parole. Here I totally agree with the point the noble Earl, Lord Longford, has made on behalf of NACRO. This would produce a more devolved and speedier system of decision-making.
As regards the local committees, which of course at present are formed and work in relation to each prison which holds prisoners eligible for parole, I support—as the noble Earl, Lord Longford, predicted that I would—those who advocate a much smaller number of rather larger regional boards in place of the 70 underemployed local review committees whose

641
aggregate membership is no less than a thousand people. I intend no adverse reflection on the LRCs in making the point that regional boards would be able to draw on a wider range of qualified membership and would benefit from having a wider perspective over all the prisons in their region. There would be less inconsistency than there undoubtedly is at present.
At the same time—and here I come back to another point made by the noble Earl, Lord Longford—I envisage those boards holding their meetings at each of the various prisons in their catchment areas, and prisoners would have the opportunity, if they so wished, to appear before those boards to have the system explained to them (as the noble Lord, Lord Hooson, has pleaded that they should) and could be interviewed if they preferred to be seen personally. A lot of the mystery of the scheme and its working I think would be resolved in that way.
My Lords, nothing that I have said should be construed as negating the great contribution which the present system and those involved in it, on the boards and on the committees, in the prisons, in the probation service and the Home Office, have made towards a more enlightened penal system than we had before 1967. Thanks to this system—and it is well worth remembering this for those who knock the parole system—some 45,000 prisoners have been released earlier, and some of them much earlier, than was prescribed by the courts, without serious detriment to public safety. Thanks to parole and thanks to the help of the probation service, a large number of offenders have been helped to keep within the law and within the norms of society. I believe at any time there are some 3,500 men and women who would otherwise be in prison but, thanks to parole, they are not. That number would require accommodation, in terms of prisons, of something like five medium-sized prisons. I think one can say that, thanks to parole, we have a closer knit and more humane penal system. That this is so is due in no small measure to the experience, the skill, the caring, the sense of responsibility and the public interest of everyone involved in the process.
Finally, my Lords, may I remind your Lordships that in 1967 parole was seen as a great leap forward in penal reform;
642
but, like everything else, the parole and the penal system as a whole must be inherently dynamic, and I contend that it is now in danger of having become too static and even, as I used to be myself, a little complacent. At the risk of sounding pessimistic and even a trifle cynical, I beg leave to doubt whether, despite the many reports to which I have referred, which have called for changes, the major changes which I now believe to be overdue will be made until or unless there is an officially appointed independent inquiry. Despite my lack of enthusiasm, I believe that this debate this evening will have served a useful purpose if the Minister will give some assurance that an independent inquiry will follow the Home Office report. So will he give that assurance?
9.44 p.m.
Lord MILVERTON: My Lords, I feel highly honoured to be able to speak in a debate in which noble Lords such as the noble Earl, Lord Longford, the noble Lord, Lord Hooson, and the noble Lord, Lord Hunt, have taken part. Possibly the only criterion I have for saying anything in a debate like this is that I have always been interested in the subject and also that as a priest one does have ex-prisoners appearing on one's doorstep or even those who have absconded either from prison or from borstal. The impression which is left on one, so far as I am concerned, is this; how can we help these people to find a place, a meaning in life?—that is, the great majority who, one feels sure, would want to deep down. Therefore, I would agree with other speakers who have said that no time and no energy would be wasted, or could be wasted, in finding out the most effective and best parole system, a system which would really help the man or woman to "re-find" life again, especially those who are not so strong-minded as others, those who are easily led astray, to re-find what perhaps they had earlier in their lives, a meaning, a hope, and also moral and spiritual purpose.
So I would say to the Government: Use all the energy, all the thought you have to help in the most positive and practical way in the parole system. We are not saying, of course, that there is no crime which can be committed; I would say that probably most prisoners

643
realise they have committed a crime. But the purpose of those of us who have been able to keep straight is to try to help others to do the same. If those who come out on parole are given all the help and means to say to themselves, "I wish to get away from a life of crime and use whatever abilities or gifts I have to lead a life of positive creation", the more we can have the ex-prisoners doing that, the more they can perhaps influence other prisoners, the more likely it is that we will be able to lessen the prison population. Presumably, ex-prisoners being able to give a lead and example to other prisoners is the most likely way to make them feel that they want to change. So for the not so strong-minded let us put all our energy and thought into seeing how we can help them, and perhaps help their families to help them. For those who are more strong-minded, let us use all our power of reasoning to persuade them to see, through their power of reasoning, that they could change to a better way.
In that very small way, that is my contribution. As I say, my only qualification to say anything on this subject is my little experience of coming across prisoners as a priest, and my concern for men and women who, I hope because of my faith, I believe one should not just dismiss because they have been unable to keep straight. As I said, I am sure the majority of them realise they have committed a crime, and in trying to bring them to better ways one is not dismissing the fact of crime. So let the Government not be afraid to use all the energy, thought, knowledge and wisdom that they can get from any quarter to ensure that we have a parole system which is positive and creative—let them use all the knowledge they can to improve our parole system.
9.50 p.m.
Lord DONALDSON of KINGSBRIDGE: My Lords, I am grateful to my noble friend Lord Longford for raising this matter. I did not like the way in which he raised it because I do not believe that criticism of the Parole Board of the kind he made is at all justified. However, I agree with pretty well all of his conclusions, so we shall probably get on all right.
644
The Parole Board is doing what it was set up to do. In my opinion the time has come to look again at what it was set up to do and to alter it. I, too, have obviously looked at the NACRO paper on parole. However, I shall choose one particular solution which is rather a radical one which will not be put into practice tomorrow, but in my opinion it is the only one which really makes sense.
The success of the Parole Board has been phenomenal. Last year, to which the noble Lord, Lord Hunt, referred, almost one in two people out of 10,000—the noble Lord, Lord Hunt, said 11,000 and he may be right, but the figure I was given was 10,000—eligible for parole got it, and 8.8 per cent., of whom half had committed no crime, were recalled for one reason or another. In other words, in that time one in two of all these men was released and society was no worse off, and what is even more important it did not think it was any worse off.
The noble Lord, Lord Hunt, was absolutely right in saying that in the early days of the Parole Board every action taken by the board ran the risk of putting up the back of society. That situation has changed. Society accepts—it probably does not study the figures very carefully—one in two out of 10,000 being released considerably before the time for which they were sentenced.
My philosophy—and I have said it often enough in this House—is that prison does more harm than good, so any scheme which gets 5,000 people in a year released before their time is good. That is absolutely fundamental. But, of course, there are real difficulties to which all noble Lords who have spoken this evening, have referred. The main one to my mind is not the lack of reasons—that is a symptom rather than a cause—but the arbitrary nature of the decision. The real point is that parole is given on the personal judgment of two or three people who, admittedly, have to agree, but it is not given on a series of hard reasons. The only bodies in British justice who really are entitled to give arbitrary decisions on personal grounds are the courts—that is what they are for. The courts who decide to give a man 10 years rather than five years, are making an arbitrary decision based on their personal judgment.

645
I should like to rake two matters before I come to the main case that I wish to make. First, I gave evidence on behalf of NACRO to the noble Earl, Lord Longford, in 1864, or rather, it was 1964—although it feels like 1864!—and one of the matters in his report, in which we were most interested was the parole scheme. I think that it was an absolutely major step forward and I am very proud that my party, with incidentally a great deal of help from the party opposite, brought it in as the law of the land in 1968.
Then about six or seven years ago Dr. Roger Hood came to a party—he is an Oxford don and criminologist—which I gave downstairs in the Cholmondeley Room on behalf of NACRO and made a most impressive speech attacking the very principles of parole. I was taken aback at first, but have gradually come round to his way of thinking. He has now formulated an alternative scheme, which I believe is the best solution before us, and I shall give a very brief and crude outline of it.
His scheme is that for all prisoners eligible for parole now, with sentences of three years and under, the whole parole system should be scrapped and they should get automatic release after a certain period. In Northern Ireland we did it after 50 per cent.; I should rather like to see it done after 33⅓ per cent. but that may be asking too much. Over three years sentences are, in his view, divided into two classes, one of which is the very serious class where the judge decides that the man's offence is too bad for him to have the automatic release after a certain period. What happens is that he is then considered for parole by the Parole Board, with an interview and at the right time when he would normally be allowed the automatic discharge. There would not be very many of them compared with the number considered now, so this could be done extremely thoroughly.
Then the other class of sentence over three years would be the sort of man of whom we all know instances; the sort of man who has committed a white collar crime of a fairly serious sort and gets a long sentence, but who is in no sense a danger to society and could perfectly well be let out at the end of half or a third of his sentence, whatever the rule was. So this plan has automatic release for all but those
646
people whose crimes the courts think are too serious to give it to them. I believe that this could work. I think that it needs to be thought out very much more carefully than I am explaining now, but the figures are rather interesting. Roughly speaking, between 10 per cent. and 15 per cent.—I do not have the exact figure—of the receptions to prison each year are in the 18 month to three-year category. So 10 per cent. would come out straight away. I, personally, would apply this not only to 18 months, but I would put it right down to a month, so that you would reduce the sentences of your short-sentence people at the same time. These are the sort of matters that could be discussed.
It is very interesting that at the moment one in two people out of 10,000 are released every year. I am saying that we should release the other one as well. The position is that, if this were done, one in two of all offenders would offend again within two years, so that you would certainly get a certain number of offences, but you will get them anyway when they are let out. Therefore, the danger to society is absolutely minimal.
This sort of thing is radical in the same way as the Parole Board plan was radical. This will not be done without a great deal of discussion and a great deal of thought. So it is absolutely essential to have the Committee which the noble Earl, Lord Longford, and the noble Lord, Lord Hunt, have demanded. It must be an independent committee, for the very simple reason that the job of a good civil servant is to stop his Minister making rash acts. What we want here is precisely a rash act. If we do not get a rash act, we shall not get any change.
I should like to say a few words about the lifer. I agree with my noble friend that it is intolerable that there should not be a specific period within which a lifer must be interviewed for parole. I would say seven years is the longest anyone should be kept without being interviewed. I do not of course agree that there is anything wrong in Richardson, or anybody else, being turned down six or seven times because this is what the Parole Board is for. I do not know their reasons, and I have no doubt they are perfectly good ones.
But you have to decide whether you would rather have the embitterment

647
that Richardson got through being turned down, or the embitterment that Lavaglio got for not being interviewed at all for 13 years. I believe it is better to interview a man, review a man's case, but turn him down, than not to review it at all to his knowledge. Therefore, I am in favour—and this is a thing which could be done not by legislation but by the Home Secretary tomorrow if he wanted to—of saying that every lifer has the right to an interview with a parole board (it depends whether we make the changes we are talking about whether he would go to the local board or what) within seven years.
The only thing I want to say further is that if you put this scheme back to one month you would get between 85 per cent. and 90 per cent. of the entire prison receptions of the year getting shorter sentences through this method. I believe it could be done without any risk to society at all, and I believe it would go a long way to removing the really bad thing in parole, which is the misery which lack of information and lack of reason, and with lifers lack of an interview at all, causes. I believe this misery to be very great, very bad, and I believe it could quite easily be avoided. I know that this is a very radical scheme and I do not expect everybody to jump up and say, "Oh, my goodness, obviously that is right". But as a matter of fact I believe it is, and I shall go on with it when we have our regular meetings on these subjects, to which we are very glad to welcome the noble Lord, Lord Hooson, as a new member.
10.3 p.m.
Lord BELSTEAD: My Lords, I am grateful to the noble Earl, Lord Longford, for giving us the opportunity this evening to debate parole, because I take to heart the expression of opinion which has come from several noble Lords that it is possible to fall into a belief that a system is right in every respect, and it needs people, such as the noble Lord, Lord Hunt, who was the first chairman of the Parole Board, and the noble Lord, Lord Donaldson, who has just spoken and who has had a deep and long interest in these and other penal matters, and Lord Hooson, who is at the Bar, my noble friend Lord Milverton speaking from his own particular point of view as a member of the Church, and also we have with us the chairman of the
648
Parole Board, to give us their views. In those circumstances, it is not a mere politeness to say that we therefore have had expressions of opinion this evening which are bound to make the Government think.
None the less, I could have wished that the noble Earl's Question was a little less heavily loaded. I am sure your Lordships would not wish me tonight to anticipate all the points at issue which will be set out in the review of the first 10 years of the scheme. My answer to the noble Lord, Lord Hunt, is that the Home Secretary has said in another place that this report will be available in the autumn.
I should like first to look at principles. There are those who would wish to see parole replaced by an increase in remissions. There are others who consider that parole should be determined by the courts at the time of sentencing. There are yet others who would like selection for parole to be more like a trial in open court with all the documents available to both sides and with legal representation readily to hand.
These proposals arise, I think it is fair to claim, from criticism that parole is re-sentencing or because selection for parole is simply an administrative process. I wish to make it clear that parole is not re-sentencing. A prisoner on licence is still serving the sentence passed on him by the court; he has simply exchanged the constraints of prison and supervision by prison officers for the constraints of his licence conditions and supervision by probation officers. We do well to recall the statement in the 1965 White Paper entitled The Adult Offender, which stated:
"Prisoners who do not of necessity have to be detained for the protection of the public are in some cases more likely to be made into decent citizens if, before completing the whole of their sentence, they are released under supervision with a liability to recall if they do not behave".
Perhaps the words used in that White Paper are rather redolent of another age, but none the less they state succinctly what parole is all about.
I know I say this to noble Lords who know much about the subject, but I say for the record that the essence of parole is that it is selective, conditional and rehabilitative in its intention, and in considering a prisoner for parole the local review committees, the Parole Board

649
and the Home Secretary each in turn tries to strike a balance between two principal factors; on the one hand, the likely benefit to the prisoner and society in rehabilitative terms of release in order to serve the balance of the sentence under supervision in the community and, on the other, the likely risk to the community of someone being at large while still serving a sentence.
The noble Earl expressed appreciation of the Secretary of State's declared hope that shorter custodial sentences in suitable cases should be more frequently given. But there is world of difference between expressing and sincerely meaning that hope, and impinging directly on sentencing practice against which those who are giving sentences might react simply by giving longer sentences in order to negate it. That is a particularly important point in view of the proposal put forward by the noble Lord, Lord Donaldson, which I know my right honourable friend will want to look at carefully.
I say it is an important point because at present one of the advantages of parole is that evidence does not suggest that sentences are in any way being adjusted by the courts to take account of parole. One could of course invest power to grant parole in the courts at the time of sentencing. While the arguments for that may have some validity in the case of short sentences, I do not think the same can be said of those given longer sentences, whose reaction to the sentence is an important element in deciding on parole. Those objections would to a large extent be overcome by proposals to change the administrative nature of the parole selection process to a quasi-judicial process; but apart from the resources required to administer a quasi-judicial system for some 10,000 cases a year, I wonder whether there is any reason to suppose that such a process would give different or better results.
That leads on to the noble Earl's criticism that the present process anyway is unfair because prisoners do not know why they are not being granted parole. The noble Lord, Lord Donaldson, spoke about that, and the noble Lord, Lord Hooson, asked whether, broadly, reasons could be given for parole decisions. Well, my Lords, in recent years a good deal of sympathetic consideration has been given by the Parole Board and by successive Governments to
650
the possibility of giving reasons for the refusal of parole. However, the practical difficulties have been considerable. Local review committees and Parole Board panels usually consist of four or five members who may be unanimous in their recommendation against parole, but who may differ slightly on the reasons.
It would take a skilled draftsman considerable time (in consultation of course with the panel members) to produce an agreed full statement of the various reasons for the outcome, and this would have to be done in 5,000 cases a year. Because of this, following the line favoured by the noble Lord, Lord Hooson, experiments have been conducted by the Parole Board and local review committees to see whether, in each case, reasons might be selected from a stereotyped list. There is no doubt that some such procedure could be adopted, but the experience of those overseas parole schemes which have gone down this road has, I understand, indicated quite clearly that stereotyped reasons give prisoners little satisfaction and give rise, inevitably, to demands for further elaboration; in other words, reasons for the reasons.
I suggest that that in turn would lead, inevitably, to the involvement of the courts or some other form of appellate procedure and to the disclosure of the confidential reports made on the prisoners as part of the parole system. Such a course would represent a significant shift in the concept of parole from being a privilege to being a right and would not be practicable under the present scheme. We would be dealing with an entirely new type of parole scheme in which it would certainly be open to question whether the reports that would be produced, if confidentiality no longer applied, would be sufficiently frank to allow the present confidence in release decisions to be maintained. In case your Lordships feel that I am simply being resistant to what has been said this evening, I should say that in thinking about the case for the giving of reasons one must very carefully take into account that at the end of the day it could well lead to an overall reduction in the number of people who actually receive parole.
Rather than anticipate further the outcome of the review by attempting to deal in the short space of time available with the many other different and often

651
contradictory proposals which are put forward for changing the present arrangements, may I mention, as the noble Lord, Lord Hunt, very fairly did, the successes achieved by the present scheme.
In respect of some 10,000 prisoners who qualify for consideration for parole each year, each case is carefully considered in the light of the full and frank reports made by prison and probation staff intimately concerned with all aspects of the prisoners circumstances, bearing in mind the legitimate interests of society as a whole; and with the opportunity in each case for interview by a member of the local review committee. Fewer than 10 per cent of the number released each year have their licences revoked, and of these fewer than half are recalled for conviction for a further offence. I hope that at least we can agree that this achievement cannot lightly be dismissed. These results have been obtained by the careful application of those principles of selection to which T referred earlier and the cautious extension—I know that it has been cautious—of them to more and more prisoners during the 12 years since the inception of the scheme. As the noble Lord, Lord Hunt, recognised in his speech, this shows that the system is working without having counter-productive effects upon the rest of the criminal justice system.
The noble Earl and the noble Lord, Lord Donaldson of Kingsbridge, have mentioned life-sentence prisoners, but since in March of this year we had a very full debate, and part of it at any rate concentrated on the arrangements for the release of life sentence prisoners, if your Lordships will forgive me, I shall not reply to this matter this evening, unless the noble Earl particularly wishes me to do so. However, in conclusion may f say that I—
The Earl of LONGFORD: My Lords, I do not mean this in any offensive way, but would it not be possible for the noble Lord to go and talk to some of these life sentence prisoners? Could he not have a real conversation with a few life prisoners, as the noble Lord, Lord Hunt, did repeatedly when he was chairman of the Parole Board?
Lord BELSTEAD: My Lords, there is an indication always, if I may say so, in what the noble Earl says when he speaks on the subject of life sentence prisoners, that in some way they are dealt with at official level only, and Ministers really have no idea what is going on at all. I must just say before this debate ends that this simply is not so. Quite apart from instances in which particular cases are brought to their notice by Members of this House or another place, Home Office Ministers are probably more closely involved with life sentence cases than with any other aspect of the work of the Home Office. Almost all proposals relating to the release or continued detention of such prisoners are submitted for approval either to my honourable friend the Minister of State (or, under other Administrations, it may be, the Parliamentary Under-Secretary, who currently is concerned with that field of work) or to the Home Secretary personally.
In his speech, the noble Earl specifically asked that parole should be considered always, as of right, after 10 years. This is a matter to which I referred at great length when we had our previous debate in March, but may I just say that, in particular, any proposal which, if adopted, would lead to the detention of a life sentence prisoner for more than 12 years is always submitted—
The Earl of LONGFORD: My Lords, I do not want to interrupt but—
Lord BELSTEAD: No; let me finish this, and then I will give way to the noble Earl. Such a proposal is always submitted to a Minister, as also is any proposal that he or she should be released. I hope, therefore, that the noble Earl will accept from me that the suggestion that in some way—it has been suggested by the noble Earl again in the debate this evening —Ministers really have no idea what is going on in the life sentence field, is quite unfounded.
My Lords, if I may conclude, as I said earlier I am grateful to the noble Earl for initiating this debate, because I realise that, quite apart from his interest and his compassion in this subject, the noble Earl has a very long experience of it—and I repeat that I take to heart the fact that expressions of concern have been made in the debate this evening. They are

653
expression of concern, may I say, which have no reflection on the way that the parole unit is worked in the Home Office, where people work devotedly, I think, for very long hours on the scheme; and no reflection on, I was going to say, the devoted work of the Parole Board and the local review committees, to whom I should like to pay tribute.
My Lords, I should like, finally, to make just two points. First—and I just put my view, which is the view of the Government the critics of parole are divided, it seems to me, as to the changes they would like and the means of achieving them. This suggests that any proposed reforms do not need to be swept aside but need to be very carefully examined, and, as I suggested earlier in the context of the parole scheme —indeed, in the context of the criminal justice system—one has to look at matters as a whole.
Secondly, I really think very strongly that we must be careful not to seek change for change's sake. By this, I am not suggesting that the parole scheme is perfect, but I do believe that by and large it fulfils its purpose well, and is worked, as I have just said, by people to whom we have a great deal to be thankful. To that extent, although I certainly take away with me and will report to my right honourable friend the Home Secretary the views that have been expressed this evening, I think the parole system still meets the needs of society and of prisoners, and gets them, as far as it can, fairly balanced.

COAL INDUSTRY BILL
Brought from the Commons, read 1a, and to be printed.
CRIMINAL JUSTICE (SCOTLAND) BILL [H.L.]
Returned from the Commons agreed to with amendments; the said amendments to be printed.
SALVATION ARMY BILL [H.L.]
Returned from the Commons agreed to with amendments; the said amendments considered and agreed to.
  FORCE FEEDING OF PRISONERS
  FORCE FEEDING OF PRISONERS
  SEAL PUPS: THE SWEYN HOLM CASE
  SEAL PUPS: THE SWEYN HOLM CASE
  WORK EXPERIENCE ON EMPLOYERS' PREMISES
  WORK EXPERIENCE ON EMPLOYERS' PREMISES
  UNEMPLOYED RESIDENTS: COUNTRY OF ORIGIN
  UNEMPLOYED RESIDENTS: COUNTRY OF ORIGIN