Sitting of 9 June 1980

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  ORAL ANSWERS TO QUESTIONS
  Mr. Speaker: Once again I appeal for short supplementary questions and answers. I remind Ministers that they are not bound to answer more than one supplementary question if more than one is asked in the same effort.
  ORAL ANSWERS TO QUESTIONS
    INDUSTRY

      Telephone Equipment
      Mr. Dykesasked the Secretary of State for Industry whether he is yet able to announce the results of his review of the possible introduction of private sector competition for the telephone equipment market.
      The Minister of State, Department of Industry (Mr. Adam Butler): Not yet. We have almost completed our extensive
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      consultations with interested parties, and my right hon. Friend expects to make an announcement about our detailed proposals shortly.
      Mr. Dykes: I thank my hon. Friend for that answer, but does he agree that the fact that the Post Office supplies the lines and the basic installations that does not mean that private equipment should not be used at the business end of the telecommunications market? Will my hon. Friend confirm that the Government are keen that that should possibly include conventional hand sets as well as all the other ancillary equipment?
      Mr. Butler: It is our intention to open up the supply of equipment as widely as possible, and we have to consider the question of hand sets along with everything else.

      Industrial Grants
      Mr. Dalyellasked the Secretary of State for Industry if he will take powers to provide industrial grants to firms which can prove financial loss as a result of Her Majesty's Government's policy of sanctions towards Iran.
      The Secretary of State for Industry (Sir Keith Joseph): No, Sir.
      Mr. Dalyell: Is the Secretary of State against the principle of compensation?
      Sir K. Joseph: I understand that there is no precedent for giving compensation in such cases.
      Mr. J. Enoch Powell: Did the Secretary of State see the article in The Daily Telegraph recently, which suggested that as a result of sanctions there might be an increase in our trade with Iran which might deal with this question altogether?
      Sir K. Joseph: No, Sir.

      Inmos
      Mr. Rentonasked the Secretary of State for Industry when he proposes to announce his decision regarding further investment of public money in Inmos.
      Mr. Viggersasked the Secretary of State for Industry if he will make a statement on the future of the Inmos project.
      Mr. Douglasasked the Secretary of State for Industry if he will make a statement on the future of the Inmos project.
      Sir Keith Joseph: I am conscious of public concern on this matter. It presents complex and difficult considerations. Proposals are being considered by the parties concerned, but they are commercially confidential and there is nothing I can say about them at present. I will make a full statement as soon as possible.
      Mr. Renton: While, obviously, my right hon. Friend wishes to reach the right decision on this complex and important matter, does he not think that his apparent indecision is causing damage to Inmos, its employees and the British microelectronics industry as a whole? Will he speed up his statement, and when he makes it will it contain a definitive view on whether there is a viable future for such a small manufacturer as Inmos?
      Sir K. Joseph: My hon. Friend will, surely, recognise that since the beginnings of commercial negotiations are in hand it would be wrong to abort them when they are being considered by the NEB.
      Mr. Viggers: While the ability of those involved with the Inmos project is undoubtedly exceptional, is it not an extraordinary commentary on Socialism in action that the previous Socialist Administration should have set up a share incentive scheme that will provide £6 million for each of the three main participants—two of whom are Americans—if the project is successful?
      Sir K. Joseph: Without confirming or contradicting the figure used by my hon. Friend I can say that when the Conservative Party was in opposition I thought it rather admirable—and I still do—of the Ministers concerned to recognise the value and effectiveness of private entrepreneurial motives. Whatever one may think about the application in this case, the acceptance of the principle was not to be condemned.
      Mr. Douglas: Notwithstanding his strictures on confidentiality, does the Secretary of State concede, that it is vital that he clarifies this matter as soon as possible and gives a clear indication that this is the type of project to which he would give assistance through the National Enterprise Board?
      Sir K. Joseph: Yes, Sir.
      Mr. Grylls: Does my right hon. Friend agree that since, apparently, nobody really knows whether Inmos will succeed or fail, it might be wiser to let the first investment in Colorado Springs mature to see whether it is successful before deciding on the second investment? That would give the Government time to receive an independent view by outside experts—not committed to the scheme one way or the other—before the second investment is considered and decided upon.
      Sir K. Joseph: I am sure that the NEB will read my hon. Friend's comments and take them into account.
      Mr. Palmer: Does not the right hon. Gentleman, with his ministerial experience, understand by now that British private enterprise is not particularly adventurous when it comes to taking risks? Does he agree that if the State does not invest, in whole or in part, Inmos will not happen at all?
      Sir K. Joseph: I accept neither proposition in its unqualified form.
      Mr. Squire: Does my right hon. Friend accept that Government Members support his Department's determination to reduce investment in declining industry, but that they will expect the Department to look sympathetically at all investment in expanding industries, particularly when private industry has declined to take part?
      Sir K. Joseph: I have told the House that there is a commercial interest in Inmos from the private sector which the NEB is now testing.
      Mr. John Evans: Is the Secretary of State aware that most people who are worried about this technology are alarmed at his vacillating weakness? Is it not time that he made a decision and insisted that the new production unit went to a development area?
      Sir K. Joseph: The hon. Gentleman is asking me to make good a failure in arrangements made by the Government whom he supported when they were in office. Surely it would be imprudent for me to force taxpayers' money upon the NEB when commercial interests are expressing an interest in replacing some of the taxpayers' money?
      Mr. John Silkin: I thank the right hon. Gentleman for his praise of my right hon. Friends and his acceptance of the principle that they enunciated. Does he agree that considerable praise is due to the capitalist countries, including Japan to the extent of over £500 million a year, which put Government money into such spheres?
      Sir K. Joseph: On the contrary, it was my right hon. Friends who accepted the principle that ventures tend to go better if those who invest in them stand to gain from success. As for the comparison with Japan, the right hon. Gentleman is taking into account a lot of public sector support for public utilities, which also occurs in this country.

      Regional Assistance
      Mr. Strawasked the Secretary of State for Industry what is his estimate of the effect of the withdrawal of regional assistance to industry from many parts of the North-West upon manufacturing output and investment in the North-West.
      The Under-Secretary of State for Industry (Mr. David Mitchell): It is not practicable to estimate the detailed effect of changes in regional aids on manufacturing output and investment in the North-West. The changes in regional industrial policy announced last July were designed to concentrate assistance, where it was most needed.
      Mr. Straw: Is the Minister aware that since the Government's announcement last July unemployment has shot up in the North-West, including areas where assistance has been withdrawn? How much further must unemployment rise before industrial assistance is restored to such areas?
      Mr. Mitchell: Where there is a change in the relative position of one travel-to-work area compared with others, we shall be prepared to consider fresh evidence if the hon. Gentleman presents it to us.
      Mrs. Kellett-Bowman: Will the Minister consult his colleagues about the problems of dereliction, which still afflict parts of the North-West? Will he see whether it is possible to retain the 100 per cent. dereliction grant to assist such areas?
      Mr. Mitchell: The Government are reviewing the position of derelict land clearance areas in places that are due to be downgraded from assisted area status in 1982. When the Government have completed that important review, we shall make an announcement accordingly.
      Mr. Robert Sheldon: Is the hon. Gentleman aware that the Government's policies are creating a gulf between the North and the South? Does he agree that we are experiencing a further industrial decline of the North while the South faces less difficult problems? Does he accept that that can be put right only by a return to the type of regional policies operated by the previous Government?
      Mr. Mitchell: The right hon. Gentleman should know that the policies pursued by the previous Government led to assistance being spread so widely that it was not really effective. We are seeking to concentrate assistance on the areas where it is most needed—the special development areas, and places such as Liverpool, Glasgow and Newcastle which, since the 1930s, have suffered most and have not been successfully treated under past policies.
      Mr. Nicholas Winterton: Is my hon. Friend aware that I accept the basic strategy behind the Government's regional aid policy, but does he agree that the removal of any form of regional status from many areas of the North-West means that they are not eligible for any aid from the

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      EEC? Since the areas have to compete with many areas in the EEC that receive regional aid, can a formula be devised to ensure that places that do not have special development area status can apply for EEC funds?
      Mr. Mitchell: It appears that all the available funds from the EEC will be fully utilised in the assisted areas. Our priority is to give help to the areas where it is most needed.
      Mr. Allan Roberts: Is the Minister aware that the excuse that he gives for cutting regional assistance in the Northwest—that he wants to concentrate more help on development areas such as Merseyside—does not bear examination, because help to development areas is also being cut? Is he aware that industry on Merseyside is becoming dissillusioned with the Government because they are restricting applications for regional assistance, making regulations more difficult and putting a barrier on investment, even in development areas?
      Mr. Mitchell: The hon. Gentleman will know that we are not extending assistance to projects that will go ahead anyway. We are opening up a difference of 7 per cent. between special development areas and development areas which concentrates the assistance on special development areas.
      Mr. Fletcher-Cooke: When can the North-East Lancashire development association expect an answer to the deputation that went to see the Minister's colleagues some time ago? Is he aware that the association has been awaiting an answer on the question of an extension of time between now and when assistance is removed? When my hon. Friend talks about concentration and gulfs, will he explain why the area represented by my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) will continue to receive assistance while Darwen will not, although it needs it just as much?
      Mr. Mitchell: The representations made by the North-East Lancashire development association are being carefully considered. Of course we shall be prepared to consider my hon. and learned Friend's representations about Darwen if there is a change in Darwen's relative position compared with that of Lancaster.

      Regional Policy
      Mr. Dormandasked the Secretary of State for Industry what action he is taking to assess the effect of the regional policies instituted in 1979.
      Sir Keith Joseph: Most of the changes that I announced on 17 July last year do not take full effect until 1 August this year. But the health of the economy of these regions does not depend primarily on the amount of regional assistance they receive ; it depends on the vitality and competitiveness of industry and commerce there and the degree of co-operation between managements and work forces.
      Mr. Dormand: Is the right hon. Gentleman aware of the rapidly deteriorating position of the Northern region? If he really believes what he has just said, he is living in cloud-cuckoo-land. Is the right hon. Gentleman further aware that the effect of the policies that he announced last year is the opposite of what was intended? Does he agree that there is a lack of business confidence? Has he read the newspaper report describing how one of the most successful North-east businessmen is contemplating building a factory in the United States? Will he issue a report on the effect so far of his statement?
      Sir K. Joseph: The effect of different stages of regional policies cannot be judged until several years after they have been implemented. I remind the House that by August 1982—that is at the end of the transitional stage—88 per cent. of the working population of the Northern region will still be in an assisted area, and 81 per cent. in a special development area or development area.
      Sir Anthony Meyer: Does my right hon. Friend consider that, even after the fining down operation that he has carried through, the regional policies of the Government are sufficiently sharp and discriminating to deal, in particular, with short-term intense difficulties, such as occur in parts of my constituency, where male unemployment is approaching 25 per cent. in certain places?
      Sir. K. Joseph: Yes, and I think that the House should recognise that by removing, over a period of three years, the competition with the special development

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      areas and the large number of assisted areas that are being reduced in status, the likelihood of new expansion in those areas most needing expansion is sharply increased.
      Mr. Barry Jones: In view of the rapidly increasing unemployment rate, should not the right hon. Gentleman now consider whether he should totally revamp his regional policies and pump in even more and massive financial aid?
      Sir K. Joseph: The hon. Gentleman speaks as though what he calls massively increased aid comes out of the air. It does not. It comes out of the pockets and the handbags of the taxpayer and causes damage, perhaps even in the assisted areas as well as everywhere else.
      Mr. Les Huckfield: Cannot the Secretary of State understand that the combination of downgrading areas and the relaxation of industrial development certificate policy, coupled with enterprise zones and the fact that every forecast is now predicting a decline in manufacturing production and investment, will have the effect of undermining any regional policy? Is he not intending to do any specific monitoring of the effects of these policies?
      Sir K. Joseph: I totally disagree with the hon. Gentleman's diagnosis. He speaks as if it were possible to shift extra resources into the regions without any damaging effects elsewhere.

      Small Businesses
      Mr. Foulkesasked the Secretary of State for Industry which of his measures to support small businesses has been most successful.
      Mr. David Mitchell: It takes a considerable period for the effects of changes in policy to show themselves. The restoration of incentives and the reduction of burdens are likely to prove most successful in improving the business climate, once interest rates have been reduced.
      Mr. Foulkes: That is an amazing reply. Does the Minister agree that public expenditure cuts, the level of sterling and the high interest rates are proving even more devastating to small businesses than they are to large businesses? Since, far from providing one extra job
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      in every small business, the level of liquidations and bankruptcies is much higher than ever, does it not show up the Government's oft-repeated statements of support for small businesses as a lot of empty rhetoric?
      Mr. Les. Huckfield: That is the real world.
      Mr. Mitchell: I accept that many small business men are today mesmerised by the consequences of the high level of interest rates that they are having to pay on their borrowings, but that is a temporary phenomenon. When interest rates come down, small business men will find that, in a multitude of ways, we have changed the climate for their benefit.
      Mr. Kenneth Carlisle: Does my hon. Friend agree that the biggest boost to small businesses in the long term will be the curbing of inflation, and that therefore the Government must be steadfast in their policies in order to bring about a lasting fall in inflation?
      Mr. Mitchell: My hon. Friend is right. Inflation is a destroyer of jobs, a destroyer of businesses and a destroyer of business growth. Labour Members who peddle the causes of inflation have little right to complain when we have to deal with the problem.
      Mr. Hardy: Before the last general election the hon. Gentleman and his colleagues appeared to be on very good terms with, and frequently to meet, organisations representing, or purporting to represent, small business men and the self-employed. Will the Minister tell the House what is the relationship today between those organisations and Ministers in the Department? Is it as cordial as it appeared to be before last May?
      Mr. Mitchell: The hon. Gentleman is correct in saying that before the general election I maintained a constant stream of contacts with organisations representing small firms. It is also true that, since I have been in office as a junoir Minister with responsibility for small businesses, I have continued, on a basis that has been more open than it has ever been, regularly to receive all the organisations representative of small firms.
      Mr. Kenneth Lewis: Is my hon. Friend aware that all the good that the Government are trying to do, and have been

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      doing, for small businesses will be undone if interest rates carry on for too long at a very high level? Will he therefore press upon his right hon. Friend, working within the Cabinet, to get a phased reduction of interest rates so that we go down by two points not too far from now instead of waiting for a big reduction later on? That, at least, would help small businesses.
      Mr. Mitchell: I know that my right hon. and learned Friend the Chancellor of the Exchequer is aware of the points that have been made by my hon. Friend, and I am sure that he will take them into account in his calculations about how soon he can make the move that has been asked for.
      Dr. John Cunningham: In spite of what the Under-Secretary said, it has not taken the Government's policies very long to produce massive increases in company liquidations. The hon. Gentleman said that we would have to wait for the results, but they are already apparent. Is it not clear that reductions in public expenditure and reductions in private sector investment programmes and capital outflows, together with high interest rates, are creating a situation in which it is becoming impossible for small business men to make investments in small businesses attractive? Is not that the death knell of small business opportunity?
      Mr. Mitchell: On the contrary. Once interest rates come down, hon. Members will find that we have made a substantial number of changes, by reducing burdens and by reducing taxes, that will restore incentives to small business men. In addition, the hon. Gentleman should take account of company births as well as company deaths.

      Industrial Policy
      Mr. Cadburyasked the Secretary of State for Industry to what extent the industrial policy of Her Majesty's Government is taking account of the effects on industry of the low real rate of return which industry is making, especially in the manufacturing sector.
      Mr. Adam Butler: Raising the profitability of British industry from the dangerously low levels of recent years is a major objective of our economic and industrial policy.
      Mr. Cadbury: My hon. Friend will be aware that industry's real rate of return is now down to about 2 per cent., which is dangerously low. Will he and his colleagues do more to encourage British management to explain economic reality to its employees so that we are more likely to get realistic pay settlements in the coming pay round?
      Mr. Butler: I confirm that my hon. Friend's figure is about right for the present time. He might note that the figure has been in the region of 3 per cent. since 1974. One of the features of post-war British industrial history is that too much has been taken out in wages, and another is that insufficient profitability and investment have been allowed for. It is a message that must be put across again and again because the present profitability levels are too low, and that will prejudice jobs and prosperity in the future.
      Mr. Woolmer: Will the Minister confirm his Department's latest official forecast that manufacturing investment will fall by between 8 and 12 per cent. this year, with another fall by the same amount next year? Is not a reduction in manufacturing investment of 25 per cent. in two years a disastrous record for the Conservative Government? Will the Secretary of State go to the Cabinet meeting on 16 July to demand the expansion of the economy, and not its destruction?
      Mr. Butler: It is true that, faced with worldwide recession, the level of investment is likely to be lower in the coming year, and the forecasts are also lower. But investment depends upon a large number of factors : first, on profitability, and, secondly, on having the funds available for that investment. It also depends on confidence in the future, and confidence in the future will come about when the battle that we have waged against inflation is successful.
      Mr. Kenneth Baker: Does my hon. Friend agree that the profitability of British industry is inhibited and reduced by two factors : on the one hand, as my hon. Friend said, by unrealistic wage settlements, and on the other by a very high level of interest rates? On the first the Government can exhort, and on the second they can act. When does my hon. Friend expect a steady and continuing reduction in interest rates?
      Mr. Butler: This subject has already been raised, and it is rightly a matter of concern to the House. However, as the Prime Minister, the Chancellor of the Exchequer and my right hon. Friend have made clear on many occasions, a reduction in interest rates depends upon getting down both the public sector borrowing requirement and the level of public expenditure. When that is done, and when the money supply is clearly seen to be under control, interest rates can fall.
      Mr. John Silkin: I take as an example the low-wage industry of textiles, where it is acknowledged that wage settlements do not play a part. As high interest rates and the high value of the pound are playing their part in that industry, and as the Government refuse to limit the penetration of imports and have cut down on regional assistance that might help, can the Minister say how the real rate of return is to be increased?
      Mr. Butler: The right hon. Gentleman has moved some way from the point, but I do not think that his references to wage settlements in the textile industry are correct, because in certain sectors of that industry wage rates are good. In the textile industry, just as much as in any other, it is important that those settlements should be of moderate nature in the coming wage round. The right hon. Gentleman also alleged that the Government were doing nothing to deal with low-cost imports which affect the textile industry. He is as well aware as I am that Government support for the multi-fibre arrangement is strong. We have said that there will be another arrangement when the present one runs out. However, his party, and he personally, while supporting the multi-fibre arrangement, are apparently advocating a policy that would take us out of Europe and destroy that protection.
      Mr. John Silkin: Is the hon. Gentleman really saying that where an industry, in part, has good wages, that means excessive wage settlements, because that was what he talked about earlier? Of course it does not. If he is saying that, can he tell us in what way the Government are preparing for a real rate of return—because that was the question—in this industry that will save it from extinction, or is he saying "I shall not deal with import penetration or increase the grants "?
      Mr. Butler: The right hon. Gentleman's point was that there were low wage levels in the textile industry. I corrected him, because wage rates are high in certain sectors of that industry. As to the return on investment in the textile industry, there is at present a sufficient level of protection through the multi-fibre arrangement. That gives management and those who work in the industry the opportunity to put their house in order so that they can earn sufficient in the future.

      Ship Repairing Industry (Merseyside)
      Mr. Allan Robertsasked the Secretary of State for Industry what discussions he has had about efforts to maintain a ship repairing industry on Mersey-side.
      The Under-Secretary of State for Industry (Mr. Michael Marshall): The Department is fully aware of the difficulties being experienced by the ship repair industry generally, and it was for this reason that last year we extended the home credit scheme to conversions. The market remains depressed, however, and the level of ship repair activity has to be a matter for the commercial judgment of the companies involved.
      Mr. Roberts: This is proving a fascinating Question Time. Is the Minister aware that two weeks ago one of his colleagues in the other place—the Minister of State, Ministry of Defence—promised a delegation of Merseyside Members that discussions would take place with the Secretary of State for Industry or his Department about the CBS ship repair yards on Merseyside, which are threatened with closure? Is he further aware that if those yards close the ship repairing skills that exist will be lost to the nation for ever and that there will be no ship repair yards at all on that coast?
      Mr. Marshall: I am aware of the conversations to which the hon. Gentleman referred. As he said, my noble Friend the Minister of State, Ministry of Defence, had conversations with CBS Engineering, but he had to tell it that, on the defence front, there were not many potential orders in the pipeline and that a commercial approach would have to be adopted.
      Mr. Kilroy-Silk: Is the hon. Gentleman aware that there have been thousands of redundancies in the ship repair and other industries on Merseyside since the Government came into office, most of which have been directly attributable to their policies? Will he therefore, at the Cabinet meeting in 16 July, ask his right hon. Friend to support a change in economic and regional policies, or, alternately, would he like to admit that he is proud of the ever-lengthening dole queues on Merseyside?
      Mr. Marshall: I cannot accept the hon. Gentleman's premise. The decline in that business has been consistent over a number of years. No one enjoys it, and no one wants to see anything but a change in its fortunes. However, the world shipping industry faces great difficulties at the present time.

      British Steel Corporation
      Mr. Hooleyasked the Secretary of State for Industry what additional capital will be made available to the British Steel Corporation in the period 1981 to 1983 to continue the process of modernisation.
      Mr. Chapmanasked the Secretary of State for Industry when it is intended to set the cash limits of the British Steel Corporation for 1981–82.
      Mr. Michael Marshall: The Government expect to announce the BSC's external finance limit for 1981–82 later this year at the same time as the limit for other nationalised industries. This would include provision for BSC's investment in fixed assets. It would be premature to take a view on the provision of funds for 1982–83. My right hon. Friend will, of course, be discussing these matters with the chairman-designate when the latter has had time to take stock.
      Mr. Hooley: Is the Minister aware that, even in the present state of world steel demand, a sustained and high level of investment is essential for a modern steel industry, and that that investment cannot be turned off like a tap because of ideological monetary dogma?
      Mr. Marshall: I note the hon. Gentleman's comment, but he will perhaps appreciate that Mr. MacGregor, the chairman-designate, has recently said that since the plans to produce a capacity of 15
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      million tonnes were made the problems of the BSC have been increasing rather than decreasing.
      Mr. Chapman: While in no way wishing to discourage sound capital investment projects in the BSC, may I ask whether my hon. Friend recognises that, in the allocation of taxpayers' money, priorities suggest that most people in the country would be well satisfied if the reduction in the BSC's external financing limits next year compared with this year was of the same order as this year compared with last year?
      Mr. Marshall: I appreciate the force of my hon. Friend's question. The fact is that the corporation has received more than £4 billion in the last five years, of which about £2½ billion have gone into capital investment. The British taxpayer cannot go on putting in large sums of money unless he sees some return on the massive investment that has already been made.
      Mr. Michael Brown: Does my hon. Friend accept that if the Government are to make any funds available to the BSC for capital projects those funds should be reserved strictly for capital projects, such as the furthering of continuous casting within the BSC?
      Mr. Marshall: I am certain that the BSC will take note of my hon. Friend's point. It is certainly one that I have argued in times past.

      Steel Requirements
      Mr. Hardyasked the Secretary of State for Industry what is his estimate of the total volume of steel which will be required by the United Kingdom during 1980 and in 1981.
      Mr. Michael Marshall: This assessment of the market is a matter for the steel industry and not for my right hon. Friend.
      Mr. Hardy: If Mr. MacGregor concludes that the very low level of steel production currently envisaged is inadequate to meet the national requirement for steel, may we take it that he and we will be assured that without hesitation there will be approval and encouragement for increased activity?
      Mr. Marshall: Obviously, when the chairman-designate comes forward with

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      his proposals we shall want to look at them very carefully. One wants to see the thrust moving in the way suggested by the hon. Gentleman. However, he must appreciate that until we have had the chance to assess the impact of the strike and the degree of lost markets it is difficult to take a firm view.
      Sir Anthony Meyer: Does my hon. Friend accept that 15 million metric tonnes of liquid steel is not necessarily the ideal level, but that there may be distinct advantages in giving the British Steel Corporation a longer period than is envisaged at present, in order to reach the optimum level, which might be higher or lower?
      Mr. Marshall: My hon. Friend has followed these matters closely, and he makes a valid point about the uncertainties in the level of steel making. However, he will recognise that at a time of particular difficulty in the steel industries throughout the world, the problems currently facing the BSC are problems about which we shall need to take a firm view as and when the new chairman has had an opportunity to study these matters with care.
      Mr. Urwin: Has the Minister attempted to make an estimate of the decline in the quantity of coal that will be required by the steel industry? In that context, how many miners' jobs will disappear in the foreseeable future?
      Mr. Marshall: The right hon. Gentleman tempts me to go down avenues which you would not approve, Mr. Speaker. I shall give him my private opinion on matters concerning another Department when I meet him outside this Chamber.

      Growth Industries (West Midlands)
      Mr. Gwilym Robertsasked the Secretary of State for Industry what steps he is taking to encourage the development of growth industries in the West Midlands ; and if he will make a statement.
      Mr. David Mitchell: The Government's policies are designed to encourage the development of competitive growth industries throughout the country.
      Mr. Roberts: Does not the Minister accept by now that that answer must seem pretty hollow to the 3,000 men who
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      have been made redundant by Lucas, and to the tens of thousands more who will lose their jobs in the West Midlands this year? Will he consider the need to encourage the development of Government research centres in the West Midlands, of which the area is devoid? They act as useful forecasts for high technological growth.
      Mr. Mitchell: I join the hon. Gentleman in regretting the loss of the jobs concerned, but, as he will recognise, jobs are available only when, as the result of co-operation of men and management, goods are produced at a price that the customer is prepared to pay. That is the essential problem that lies behind the unemployment to which he referred. I shall examine his suggestion of a research and development centre in the West Midlands.
      Mr. Stokes: Is my hon. Friend aware that some of my rougher friends in industry in the West Midlands ask why the Government cannot set an example by cutting down bureaucracy more quickly and controlling wage awards, instead of getting industry to do their dirty work for them?
      Mr. Mitchell: As my hon. Friend knows, from observing newspaper reports and the complaints of the Opposition, the Government are doing their best to cut down on the Civil Service and bureaucracy.
      Mr. Winnick: The reply that the Under-Secretary gave to my hon. Friend the Member for Cannock (Mr. Roberts) is totally inadequate. There is a jobs crisis in the West Midlands, with ever-increasing redundancies and closures. What do the Government intend to do to help the West Midlands, and where is there any evidence of the galvanising of employers that the Government promised when they took office?
      Mr. Mitchell: With regard to the specific problems of the West Midlands, there has been cause for complaint for a long time that industries are being enticed away from it by the large area of the country that has had assisted area status in the past. By concentrating assistance on the areas that need it we have taken away some of the pressure on the West Midlands having seduced from it projects that would otherwise have been developed in that area.
      Mr. Grieve: Is my hon. Friend aware that the policy on IDCs that was pursued by the previous Government has done immense damage to industry in the West Midlands? Does he agree that the rundown of the motor industry is at the root of a great deal of the troubles in the West Midlands, and that that rundown will be arrested only when there is wage restraint in the motor industry and a wholehearted co-operation between the work force and management, for the well being of industry?
      Mr. Mitchell: My hon. and learned Friend is right to draw attention to the importance of the motor industry in that part of the country. He is also right to draw attention to the fact that wage settlements, and those who negotiate them, must take account of the ability of the industry to pay. If industries pay too much, men may lose their jobs as a direct result of extravagant wage claims forced upon employers.
      Mr. Russell Kerr: Bank employees, please note.
      Mr. Les Huckfleld: As the bulk of the British Leyland closures will take place in the West Midlands, and as heavy redundancies, including those at Lucas, are already taking place throughout the component industries, will the Minister tell the House what the growth industries in the West Midlands are expected to be?
      Mr. Mitchell: It is not for the Government to decide what should be the growth industries in the West Midlands. It is for the Government to create the climate in which men and management will seize the opportunities themselves. The substantial changes contained in two Budgets have already set in train the changes that are necessary to recreate the incentives for people to do that.

      European Regional Development Fund
      Mr. Knoxasked the Secretary of State for Industry what was the total value of the grants made to industry in the United Kingdom from the European regional fund in the most recent 12-month period for which figures are available.
      Mr. David Mitchell: In the 12 months ending 6 June 1980, grants of £96·5 million from the European regional development fund were approved for the United
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      Kingdom in respect of industrial projects.
      Mr. Knox: Does my hon. Friend agree that that figure provides further evidence of the benefits that accrue to this country because of our membership of the EEC, and particularly to those areas affected by the decline of the steel and shipbuilding industries? Is he satisfied that the United Kingdom is receiving its fair share of the 5 per cent. non-quota section of the European regional development fund?
      Mr. Spriggs: Tell him what it is costing Britain.
      Mr. Mitchell: I agree with my hon. Friend about the benefit to the United Kingdom of EEC membership. With regard to the European Steel and Coal Community, it is true that substantial help towards the problems caused by the retraction of the steel industry will flow from European funds. With regard to my hon. Friend's final point, the answer is that we are anxious to secure for Britain everything that is available from the EEC at present.
      Mr. Campbell-Savours: Following the Prime Minister's statement that our budget contributions to the EEC will be reduced in favour of increased regional assistance, will the Under-Secretary tell the House what form that increased regional assistance will take? Perhaps he will make a statement to the House in order to help hon. Members representing regional constituencies.
      Mr. Mitchell: I am sure the House will recognise that the arrangements have been so newly made that it is not yet possible to make a detailed statement on the way in which Britain's drawings from Europe will be affected. I assure the hon. Gentleman that every possible means will be explored to obtain whatever is available.
      Mr. Hill: Is my hon. Friend aware of the report of the Select Committee on European Legislation &c, in which it was pointed out that over the last two years less than 50 per cent. of the money available was programmed for the United Kingdom because so many schemes were not being put forward in time?
      Mr. Mitchell: I am grateful to my hon. Friend for drawing attention to what has

      21
      been happening. I shall ensure that in the future we shall learn a lesson from what he has said.
      Mr. Crowther: Will the hon. Gentleman explain how it is beneficial for Britain to pay phenomenal amounts to the EEC in order to receive back trivial sums, such as £96·5 million? Would it not be far better for the Government to give that sum, and a great deal, to British industry by not paying it to the EEC?
      Mr. Mitchell: The hon. Gentleman will know that that is a matter that has exercised Governments of both parties. For the last five years Labour Members and their Government have talked about it. This Government have succeeded in making an agreement that changes the balance substantially in our favour.

      National Enterprise Board
      Mr. Cookasked the Secretary of State for Industry if he will direct the National Enterprise Board not to sell its 50 per cent. holding in Ferranti.
      Mr. Adam Butler: No. Sir.
      Mr. Cook: Does not the Minister share the views of his leader, that Governments should not interfere in industry? If so, can he explain why he has interfered with a stable arrangement that provides the basis for a remarkable expansion of that company, which has increased its factory space in Scotland by 50 per cent. in six years? Is he prepared to contemplate this company being taken over by GEC, with which it is in all too successful competition?
      Mr. Butler: The hon. Gentleman cannot at one and the same time advocate interference and non-interference. The NEB has said that it intends to sell its share in Ferranti. It is required by the Government's draft guidelines to do so, having regard to the interests of the taxpayer and the company.
      Mr. Nelson: I welcome my hon. Friend's reaffirmation of the commitment of the NEB and the Government to dispose of industrial assets. However, will he accept that there is concern at the growing number of disposals that are not offered for subscription by individual members of the public, thereby not encouraging the widest share ownership? Will my hon. Friend give an assurance
      22
      that, even though Ferranti is being disposed of to one company, he will pay due regard to the need to encourage the widest possible share ownership of public assets, and not encourage private deals between these holdings and one or two select merchant banks or large industrial companies?
      Mr. Butler: The way in which the 50 per cent. shareholding in Ferranti is disposed of is still a matter for the NEB. I am not aware of any bids yet forthcoming. We have always said that there is merit in wider share ownership, including by the employees of companies, but we have to reconcile that with the need to obtain the best return for the taxpayer.

    SHOPLIFTING OFFENCES (SENTENCING POLICY)
    Mr. Adleyasked the Attorney-General when he last issued guidance to magistrates on sentencing policy in shoplifting cases ; and if he will make a statement.
    The Solicitor-General (Sir Ian Percival): No specific advice on sentencing for shoplifting is given to magistrates. General advice on sentencing policy is part of the training that magistrates are required to undergo before entering upon their duties.
    Mr. Adley: Is my hon. and learned Friend aware that as a result of the pressure on court and police time it is clear that in certain parts of the country the police are encouraging people to plead guilty to shoplifting, regardless of whether there was an intent to steal, in order, as the police say, to save time and embarrassment? Is that not an incitement to commit perjury? Will my hon. and learned Friend make sure that magistrates are aware that it is their duty to ascertain that there was a clear intention to steal before someone can be convicted of this crime?
    The Solicitor-General: I dare say that there may often be an inclination on the part of persons who find themselves before a court to plead guilty to get the case over quickly and/or o avoid publicity, but it would be wrong for anyone to bring pressure to bear on them to that end. I confirm what my hon. Friend

    23
    said. What he called shoplifting is simply one instance of theft. In common with all other thefts, it is an essential ingredient of the offence that the person charged with it intended dishonestly to take and keep the goods. That element must be established by whoever is prosecuting. It is not enough that there should be mere possession of goods. My hon. Friend also referred to the duty of the court to satisfy itself that a plea of guilty is made in full understanding and knowledge of the ingredients of the offence by the person concerned. I confirm that as a well-established and well-known principle of the administration of justice in our courts.
    Mr. Archer: Does the hon. and learned Gentleman recollect that even where there is a plea of guilty, shoplifting cases, as the Attorney-General was kind enough to agree with me at Question Time on 24 March, cover a whole range of situations, from deliberate professional crime to lapses of mind, and that these are matters that should be taken into account by those who have to decide whether to prosecute? In the next circular, will the hon. and learned Gentleman remind magistrates of their power to deal with prosecutions which ought not to have been brought, by way of costs?
    The Solicitor-General: As a practitioner, I happily confirm what was said by my right hon. and learned Friend the Attorney-General on the date quoted. Circulars are a matter for my noble Friend the Lord Chancellor, but no doubt he will see what the right hon. and learned Gentleman said.
    Mr. Hill: Does my hon. and learned Friend agree that perhaps the police could advise the management of stores and supermarkets, since prevention is the best policy? Surely, a lot of the blame could fall on the shoulders of management that has too few staff and displays its goods in a haphazard way.
    The Solicitor-General: I am sure that in some cases that may be so. It is no bad thing that these points are frequently aired in this House. My hon. Friend's question began by suggesting that a further duty should be placed upon the police. That I would doubt.
    Mr. Douglas-Mann: Is the Solicitor-General aware that in many magistrates' courts a form for application for legal aid is issued in shoplifting and other cases that requires the defendant to disclose previous convictions and the nature of his defence? Will the Law Officers take steps to ensure the withdrawal of this offensive and damaging form?
    The Solicitor-General: In common with all other matters relating to magistrates' courts, this is one for the Home Office. It is under consideration in the Home Office now.

    IRAN (SANCTIONS)
    Mr. Dalyellasked the Attorney-General what increase in staff numbers he estimates will take place in his Department to deal with cases and alleged cases of breaking of sanctions against Iran.
    The Attorney-General (Sir Michael Havers): None.
    Mr. Dalyell: Does not that answer prove that Iranian sanctions are a most futile form of gesture politics that will achieve nothing other than insult? Does the right hon. and learned Gentleman look forward to a re-run, in even less satisfactory circumstances, of his Bingham debate?
    The Attorney-General: The reason why there is no need for any extra staff in my Department, in that of the Director of Public Prosecutions or in Customs and Excise is that we do not believe that there will be an unusually large number of breaches, and we expect to be able to deal with those that arise with our existing staffs.
    Mr. James Lamond: Is one of the methods that the Attorney-General intends to use to deal with this matter similar to those that he used for Rhodesian sanctions, that is, that anyone who is approaching retirement age or who has retired can safely breach the sanctions against Iran provided he has sufficient documents in his keeping to prevent any case from being brought against him?
    The Attorney-General: That is a twisting of what I said in my statement. The principal reason for the decision by the Director of Public Prosecutions in

    25
    respect of the Bingham report was that it was considered by counsel, by the Director and by myself that the likelihood of conviction was not high enough to justify proceedings. We do not expect that in this case it will be too difficult for us, the Director or Customs and Excise to deal with these cases.

    SHOPLIFTING OFFENCES (PRIVATE PROSECUTIONS)
    Sir Anthony Meyerasked the Attorney-General whether he will review the law governing private prosecution in cases of alleged thefts from retail stores.
    The Solicitor-General: My right hon. and learned Friend the Attorney-General is satisfied with the system as it operates at present. Both the Director of Public Prosecutions and my right hon. and learned Friend the Attorney-General are always willing to consider the facts of any particular case referred to them.
    Sir A. Meyer: Does my hon. and learned Friend think that it is right that certain stores, most notably the Army & Navy, should be able to pursue a policy of automatic prosecution for shoplifting offences without making any attempt to satisfy themselves that there has been any intention to steal? Does my hon. and learned Friend accept the consequential damage to the reputation of people who have done the State some service?
    The Solicitor-General: I am sure that my hon. Friend will agree that it would be wrong of me to comment on any particular cases. However, I can answer the substance of what he has in mind. Mere possession of goods is not enough. If prosecutions were launched automatically without reference to the question of intention that, of course, would be open to criticism. Intention is an essential element. Anyone who undertakes or contemplates undertaking the duty of prosecuting should satisfy himself that there is evidence of intention. It is then for the jury or the magistrate to decide whether that evidence of intention is adequate. Finally, of course, the court has a further power to deal with the matter through costs if it forms certain views about the prosecution.
    Mr. Lawrence: Is my hon. and learned Friend aware that if there is any impli-
    26
    cation in the question of my hon. Friend the Member for Flint, West (Sir A. Meyer) or, earlier, of my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) that police officers deliberately either introduce prosecutions or ask for pleas of guilty in cases where they know that the accused is innocent, that is utterly preposterous? If the defence in summary cases, many of which are shoplifting cases, were provided with the statements for the prosecution, that would substantially assist in the administration of justice and the speedy conviction of the guilty.
    The Solicitor-General: On the first question, I am happy to repeat that it would be wrong for anybody to bring pressure to bear upon any accused person, in any circumstances, including prosecutions for this offence, to plead guilty when there is any doubt whether that is the right course to take.
    On the second matter, I should be happy to give my hon. Friend a substantial answer if he would care to talk to me about it afterwards.
    Mr. John Morris: On a point of order, Mr. Speaker. In view of the Solicitor-General's reply to my question on jury vetting on 28 April that the Attorney-General would like to deal with these matters personally, may I ask whether the Attorney-General has given notice that he intends to deal with and ask permission to answer question No. 31 today?
    The Attorney-General: Further to that point of order, Mr. Speaker. I had intended to make a statement today, but the House will recollect that only last week there was a decision in the Court of Appeal. I am considering that matter in consultation with my right hon. Friends. I still hope to make a statement at the earliest possible moment.

NUCLEAR ALERTS (UNITED STATES OF AMERICA)
Mr. Dalyell Mr. Dalyell (by private notice) asked the Lord Privy Seal what representations he has made to the United States Government following a second military and nuclear alert within four days.
Mr. Speaker: Mr. Dalyell.
Mr. Dalyell: My question was accepted for answer by the Lord Privy Seal, but I assume that the Secretary of State for Defence is now to answer.
The Secretary of State for Defence (Mr. Francis Pym): On Tuesday 3 June and Friday 6 June a technical problem in a computer that is part of the North American Air Defence Command caused a strategic alert. In both instances the error was detected very rapidly by the normal exhaustive checking and verification procedures. The United States authorities are, of course, investigating these incidents, and we are in consultation with them.
Mr. Dalyell: In those three minutes on Friday and in the crucial minutes of the alert on Tuesday, what action did the American strategic forces based in Britain take, and when and how were the Prime Minister and the Defence Secretary informed?
Mr. Pym: The answer to the first question is "None, Sir." There was an alert in the United States because the alert system is automatic when the system shows up an alarm, but that was checked by the verification procedures and found to be false and therefore the forces concerned were stood down. This alert is, of course, an entirely defensive procedure. It carries with it no other implication than that the forces are automatically alerted. No action took place so far as United States or any other forces in this country were concerned.
In the statement issued by the Pentagon after the first incident it was explained that it had not been necessary to inform Secretary Brown or other Cabinet officials until after the event, because it was discovered so quickly.
Mr. Eldon Griffiths: Is it not a fact that this is one of a very wide and diverse range of early warning detection devices and that it is a cause of some satisfaction that so wide and sophisticated is this range that no single one could cause the dangers to which the hon. Member for West Lothian (Mr. Dalyell) has alerted us? Many of us have large numbers of American forces in our constituencies. In this country at least, is not all early warning information shared between the United States and the United Kingdom?
Mr. Pym: That is so. There was no input from any of the ballistic missile early warning systems. The error was in a computer.
Mr. Newens: If there were a breakdown in a computer at a time of high tension and if an attack were presumed to be possible, does the right hon. Gentleman agree that there would be a real danger that decisions would be taken that might lead to war through accident? Is there not a case for action being taken to make us more secure and safe than we clearly are in these circumstances?
Mr. Pym: On the contrary. No one instrument is allowed in any circumstances to be responsible for alerting the forces. There is a cross-check procedure, which I think is effective, and it certainly worked rapidly in this instance. I do not think that there is the slightest danger—nor ought anybody to suggest it—of, as it were, triggering off some kind of war by mistake, because the alert procedure is defensive. The fact that the United States forces were immediately alerted gives reassurance that they are permanently able, on a defensive basis, to take off if necessary. Because this is a complex procedure and it is crosschecked, the hon. Gentleman's fears are not well-founded. I think that we should be reassured that there is a procedure that will prevent a mistake of this kind.
Several Hon. Members rose—
Mr. Speaker: Order. This is a private notice question, not a statement. However, I will call two more hon. Members from either side.
Mr. Tapsell: Were press reports accurate in claiming that a faulty computer was indicating that rockets were likely to land on the United States within three minutes—if that was the nature of the faulty advice being given by the computer? Is my right hon. Friend able to reassure public opinion in this country that exhaustive inquiries and checks are possible in that situation?
Mr. Pym: I can indeed give that reassurance. I shall be informed when the investigations are completed. However, nothing indicated that anything was on its way to the United States. The fault was

29
in the computer. Nothing was shown on any of the radar systems. That is why it was indicated very quickly that it was a mistake. I think that that is a matter of reassurance.
Mr. Frank Allaun: Does not all this mean that British cities could be wiped out if cruise missiles were launched from our territory in error, on United States command? Is the Secretary of State aware that on the previous occasion it was not just the computer that was at fault? American bombers were launched to the point of no return—the so-called fail-safe line—before it was found to be a mistake and they were recalled. Is it not clear that the bombers seen on Russian radar screens were real bombers and, therefore, that an American mistake could lead to a Russian mistake and the whole of us going up in flames?
Mr. Pym: No, Sir. That is a grotesque picture. I assure the hon. Gentleman that the alert system does nothing more than put appropriate forces in a suitable condition to respond, if necessary. It is necessary to appreciate that it implies no authority to do anything other than to take off from the ground. I also point out that if, as no doubt happens from time to time, there are mistakes in computers on the other side of the Iron Curtain, none of us knows about them.
Mr. Gummer: Is it not greatly to the credit of the West that we live in a free society and know when mistakes have occurred? Is it not further greatly to the credit of the system that we now know that when a mistake occurs it is quickly rectified, even though minutes matter at this time?
Mr. Pym: I am grateful to my hon. Friend for what he said. Obviously, this is an important matter and it is entirely right that the whole of it should be fully investigated. That process is already in hand.
Mr. Maclennan: Does the Secretary of State agree that his somewhat bland answers this afternoon do not fully satisfy the need to explain to the British public precisely what happened and that whereas one episode of this kind may be comprehensible, twice looks like carelessness? Will he take this opportunity of placing in the Library a full statement of exactly what he understands to have happened,
30
because in the course of answering a private notice question he may not find that possible?
Mr. Pym: As I explained in my original answer, the United States is carrying out investigations and we are in consultation with it. The full details are not yet available. Whereas we have a strong interest in this issue, as have all our allies, the responsibility on this occasion is that of the United States Administration. We are in full consultation with the United States on exactly the basis that the hon. Gentleman would wish. We are involved in the fullest consultation and discovery of what went wrong.
Mr. Rodgers: I hope that the right hon. Gentleman will recognise that these events have caused deep concern among many who are strong supporters of NATO and accept the inevitable need for nuclear weapons, short of world-wide multilateral disarmament. I hope that he will take especially seriously the remarks of my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) about giving full details and a full explanation of what happened, and that he will make representations to that effect.
As for American nuclear weapons situated in Britain, is it the fact that here, as in the United States, an initial warning is based upon one computer and that the same sort of error could arise even if it were corrected at a later stage? Will the right hon. Gentleman confirm that if it ever came to the use of such bases in the United Kingdom in the circumstances that we have had described today, it would be a matter of joint decision between the United States and Her Majesty's Government?
Mr. Pym: Yes, I can confirm the right hon. Gentleman's last supposition, which relates to the situation when a threat exists. I can assure him that I share his concern. Naturally, everyone is concerned that such a mistake should have happened. That concern is shared by the United States authorities. I do not think that anything that I have said indicates that I take other than a most serious view of the matter, as, I am sure, does the whole House. I shall consider what more could or should be said when more details are known. As the right hon. Gentleman knows, computers are linked on both sides of the Atlantic.

31
There is no one instrument that is responsible for the whole alert system.
Several Hon. Members rose—
Mr. Speaker: Order. I have received three applications under Standing Order No. 9. Two of the applications relate to Northern Ireland and the third relates to the topic of the private notice question.
Mr. Cryer: On a point of order, Mr. Speaker. The issue raised by my hon. Friend the Member for West Lothian (Mr. Dalyell) is one that transcends all others. Can we not extend the time for questions on the private notice question? It is a highly important topic. I am sure that there are many in the House who feel that the Secretary of State for Defence is being unbelievably smug about the most important issue for mankind, namely, whether it survives. If Parliament is to have any importance we should spend more than about eight minutes on questions on such an issue.
Mr. Speaker: I allowed six questions arising from the private notice question. A private notice question is different from a statement. I must retain the distinction between the two.

NORTHERN IRELAND (TERRORIST ACTIVITIES)
Mr. J. Enoch Powell: 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 renewal at the past weekend of the attack upon the territory of the United Kingdom from that of the Irish Republic."
During the past 48 hours there have been at least five major incidents which clearly form a pattern and represent a deliberate intention. There were major attacks by car bomb in Londonderry and Dungannon. There was the deliberate murder of a UDR man in Newtownbutler and there was an ambush directed at a Royal Ulster Constabulary party, which did not fully achieve its object, in Newtownhamilton, in County Armagh. Most serious of all probably was a battle in which the Army was fired upon from across the frontier and in which, I understand, hundreds of rounds were fired.
I do not think that there is any need to draw attention to the specific or important nature of these events. However, if we are to prevent the continuance of the attack and the loss and endangering of more lives, it is essential that the Government should have the opportunity at the earliest possible moment to indicate in public that they have brought to the attention of the Government of the Irish Republic the serious consequences if these activities continue to be based upon the territory of that country and if steps to prevent their being so based are not urgently taken. I regard this as self-evident cause for anxiety and of the need for early and urgent debate in the House.
Mr. Speaker: The right hon. Member for Down, South (Mr. Powell) gave me notice this morning that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the renewal at the past weekend of the attack upon the territory of the United Kingdom from that of the Irish Republic."
The House listened, as I did, with concern and care to what the right hon. Gentleman said. The House knows that

33
it does not lie in my power to decide whether or when the Government should make a statement on the serious continuing position in Northern Ireland.
The House has told me to give no reason for my decision when such an application is made. I listened with anxiety to what the right hon. Gentleman said, but I must rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

NUCLEAR ALERTS (UNITED STATES OF AMERICA)
Mr. Frank Allaun: 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 two computer errors last week which led to the starting of American bomber engines and to the missiles of the Strategic Air Command being put on a higher alert, which would have led to the danger of Britain being involved in a nuclear war if the mistakes had not been discovered in time."
This is an important issue because, in my view, the most likely cause of world war three is that of accident. This is the third false alert in seven months. The danger that we face is far greater because of the degree of tension between East and West. Despite the hot telephone line which, thank goodness, exists between Moscow and Washington, a mistake could still be interpreted.
I submit that we should debate the need to reduce the tension so that even if a mistake occurs—in my view, with the increase of missiles on both sides it is bound to occur sooner or later—it will clearly be regarded as and seen to have been a mistake. If we move in the other direction and heighten the tension and have cruise missiles on our soil, the danger becomes much greater.
We are given to understand that a submarine-launched missile would take nine minutes to hit American cities. That means that an American commander might be prepared to wait three minutes but not necessarily beyond nine minutes. That expresses the danger.
We should have the debate for which I have asked because a mistake, as my hon. Friend the Member for Keighley
34
(Mr. Cryer) has said, would leave to the greatest blow that life in Britain or in any other country could suffer.
It would be irredeemable because most of these missiles have no power of de-fusion or recall once they have been launched. Therefore, I urge that we should debate this matter urgently.
Mr. Speaker: The hon. Member for Salford, East (Mr. Allaun) gave me notice before noon today that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter, namely,
"the two computer errors last week which led to the starting of American bomber engines and to the missiles of the Strategic Air Command being put on a higher alert, which would have led to the danger of Britain being involved in a nuclear war if the mistakes had not been discovered in time."
I listened carefully to the exchanges between the Secretary of State and those who questioned him this afternoon, as I know all hon. Members did. The House has instructed me to give no reasons for my decisions on applications under the Standing Order. I have to rule that the hon. Member's submission does not fall within the provisions of the Standing Order, and therefore I cannot submit his application to the House.
Mr. Kilfedder Mr. Kilfedder rose—
Mr. Speaker: Does the hon. Member still wish to pursue his application?
Mr. Kilfedder: Yes.

NORTHERN IRELAND (TERRORIST ACTIVITIES)
Mr. Kilfedder: 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 upsurge in the terrorist campaign by the Provisional IRA in Northern Ireland over the weekend, resulting in death, injury and destruction ; the shooting across the border from the Irish Republic ; and the safe refuge provided by the Irish Republic after a callous secretarian murder by the Provisional IRA."
It is unique to have two applications under Standing Order No. 9 on the same subject, but the situation in Northern Ireland is grave. However, I shall be brief since the House has already heard

35
from the right hon. Member for Down, South (Mr. Powell).
I must stress that the Ulster people's patience has been stretched to the limit. They have suffered cruelly and shown remarkable patience and restraint despite the bloodshed, death and destruction of the Provisional IRA campaign of terror, and they cry out for an end to their agony, which would not be tolerated in any other part of the United Kingdom for 11 days, let alone 11 years. After a lull, the Provisional IRA has demonstrated once again that it laughs at weak security measures, weak laws and weak government by unleashing one of the worst weekends of violence in Ulster this year.
On Saturday afternoon a part-time Ulster Defence Regiment member, Mr. Richard Latimer, who was the sixth member of the UDR to die this year, was cold-bloodedly slain in a shop in the village of Newtownbutler, in front of his 11-year-old son, by provisional IRA gunmen. The thugs then got into a car and sped across the border to the safety of the Irish Republic. It is four years ago this month that my own cousin's wife was murdered by the IRA. She had no claims to any political or religious hatred of any kind ; she only bore the same name as I did, and her killers are now in the Irish Republic. Then there was the attack on the Army, on a band of soldiers entering their helicopter near Crossmaglen, who were fired upon from the Irish Republic side of the border. The House should take note of the deplorable and deteriorating situation along the border. We must have some action from the Government.
The House is the only political forum to which the Ulster people can appeal for their basic right as British citizens—the right to life, peace and freedom from fear. They look to this House for a military offensive and an end to the restraint which the Government have imposed on the security forces in Northern Ireland. This House is the only place in which the Ulster people can expose the hypocrisy of Mr. Charles Haughey, the Irish Prime Minister.
There is an urgent need for a debate so that the Ulster people can show that they reject what has been said at the meeting between the two Prime Ministers. They want to get rid of the smugness and
36
they want to see the extradition of IRA terrorists who are safe in the Irish Republic. They demand an all-out military offensive to wipe these vermin from the face of Northern Ireland.
Mr. Speaker: The hon. Member for Down, North (Mr. Kilfedder) gave me notice before noon today that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believed should have urgent consideration, namely,
"the upsurge in the terrorist campaign by the Provisional IRA in Northern Ireland over the weekend, resulting in death, injury and destruction ; the shooting across the border from the Irish Republic ; and the safe refuge provided by the Irish Republic after a callous sectarian murder by the Provisional IRA."
The House will appreciate that every hon. Member who has the responsibility of a seat in Northern Ireland would echo the condemnation that we have heard today of the violence in the Province. But the House knows that I do not decide whether the matter is to be debated. I merely decide whether it should be debated tonight or tomorrow. The hon. Member for Down, North must receive the same reply as the right hon. Member for Down, South (Mr. Powell), that I cannot rule in his favour.
I must tell the House that, in view of the obviously deep feeling in Northern Ireland, I allowed the hon. Member to repeat the application. I hope that on other issues, when I have already given a ruling, that ruling will be accepted and other Members will not raise the matter again. However, I understand why it was done today.
Mr. Winnick: On a point of order, Mr. Speaker. I do not want to minimise in any way the horror and tragedy of Northern Ireland. However, it seems to me that, with the greatest respect to the hon. Member for Down, North (Mr. Kilfedder), his application under Standing Order No. 9 was an abuse of our procedures. His application was on the same subject as a previous application a few moments ago which had been refused by you, Mr. Speaker.
In the debate that we had a few months ago, I argued that applications under Standing Order No. 9 should continue to be made on the Floor of the

37
House and not in your office, Mr. Speaker. However, today many of us were deeply concerned about the statement made by the Secretary of State for Defence, and hon. Members could have put in five or six applications under Standing Order No. 9, one after the other. I think that it is wrong that an exception should be made on one subject and not on others.
Mr. Speaker: I understand the feelings of the hon. Member for Walsall, North (Mr. Winnick), and I know that the House also understands. However, I confess that I did not want the people of Northern Ireland to feel that I was refusing an expression of opinion on this serious matter. I genuinely hope that, in order to protect the Standing Order No. 9 procedure, there will not be a repeat performance.
Mr. Dalyell: On a point of order, Mr. Speaker. I suppose that I, of all 635 Members of the House, should be the last to dispute any decision on the Standing Order No. 9 procedure, and I stress that I am not doing so. Understanding that there is a difference between a private notice question and a statement, may I suggest that it could be conveyed to the Secretary of State for Defence that there were a number of very important questions that could have been asked today by many hon. Members, across the spectrum of opinion? We can hardly claim to be satisfied by the Secretary of State's replies. That is not a reflection on him, and I do not for one moment accuse him of complacency. I merely point out that it is difficult, in the context of a private notice question, to satisfy the House on such a delicate issue, involving as it does the whole question of the Pearl Harbour mentality of the United States Air Force.
Mr. Speaker: Order. The hon. Gentleman must give me a point of order on which I can rule.
Mr. Dalyell: I hope that the Leader of the House will see fit to persuade the Secretary of State for Defence, if he needs any persuading, to make a statement tomorrow.
Mr. Speaker: I was generous to the hon. Gentleman in allowing him to make his point, which was not strictly a point of order.

ORDERS OF THE DAY

  HEALTH SERVICES BILL
  As amended (in the Standing Committee), further considered.
  4 pm
  Mr. Speaker: Before calling the right hon. Member for Lewisham, East (Mr. Moyle) to move new clause 9, I should indicate to the House that I have decided not to select amendment No. 2 but to select amendment No. 3 in its place. A revised list of amendments incorporating that change is being issued.

  HEALTH SERVICES BILL
    New Clause 21

      HEALTH SERVICE STAFF COMMISSION
      ' (1) It shall be the duty of the Secretary of State to appoint, within one month beginning with the date of the passing of this Act, two Commissions to be called the National Health Service Staff Commission and the Welsh National Health Service Staff Commission ; and the Commissions—

      (a) shall consist respectively of such persons as the Secretary of State may from time to time appoint as members of the Commission after consulting the bodies appearing to him to represent persons employed in England, or, as the case may be, employed in Wales who are liable to transfer in pursuance of section 1 of this Act and any other bodies appearing to him to be concerned with transfers of such persons in pursuance of that section ; and

      (b) shall in the case of the National Health Service Staff Commission exercise its functions in relation to England and in the case of the other Commission exercise its functions in relation to Wales.

      (2) It shall be the duty of each Commission—

      (a) to keep under review the arrangements made by relevant bodies in recruiting and engaging employees and the arrangements made in transfers in pursuance of section 1 and this Act and to give advice to the Secretary of State and the relevant bodies with respect to the arrangements ;

      (b) to consider and advise the Secretary of State on any matter which he refers to the Commission as being a matter which in his opinion arises in connection with persons liable to transfer in pursuance of section 1 of this Act ;

      (c) to consider and advise the Secretary of State on the steps required to safeguard the interests of persons liable as aforesaid ; and

      (d) to arrange for the consideration of representations made to the Commission by an employee transferred from the employment of one health authority to that of

      39
      another objecting to such a transfer and for the giving of advice to such employees by the appropriate Commission ;

      (e) shall so advise health authorities that no officer employed by a health authority at the date when the Commissions are appointed shall be deprived of employment within the National Health Service on consequence of this Act save with his express consent freely given to his employing health authority and the appropriate Commission in writing ;

      and each Commission shall have power to take any steps which it considers are appropriate for the purpose of selecting and recommending to Regional or Area District Health Authorities and special health authorities persons whom it considers are suitable for employment by any of those authorities.
      (3) The Secretary of State may—

      (a) give directions to each Commission with respect to its procedure ;

      (b) give directions to relevant bodies with respect to the furnishing by them of information requested by the appropriate Commission and with respect to the action to be taken by them in consequence of advice given by that Commission ;

      (c) pay to any member of either Commission such remuneration as the Secretary of State may determine with the approval of the Minister for the Civil Service ;

      (d) defray any expenses incurred with his approval by either Commission in the performance of its functions ; and

      (e) wind up either Commission in such manner and at such time as he thinks fit ;

      and it shall be the duty of a body to which directions are given in pursuance of this subsection to comply with the directions.
      (4) In this section "relevant bodies" means bodies from and to whose employment persons are liable to be transferred by virtue of section 1 of this Act.'.—[Mr. Moyle.]
      Brought up, and read the First time.
      Mr. Roland Moyle: I beg to move, That the clause be read a Second time.
      In passing, Mr. Speaker, I thank you for your indulgence in selecting amendment No. 3 in place of admendment No. 2.
      In moving this clause we give the Government an opportunity to enlighten the House and employees of the Health Service about their broad approach to personnel problems and the human factor in the reorganisation. I stress the phrase "broad approach", because on the Labour Benches we accept that protection of staff and redundancy arrangements are essentially for negotiation
      40
      through the Whitley machinery. Nevertheless, when the Health Service was last reorganised the House legislated to provide a staff commission to protect the staff. That staff commission clause was contained in the National Health Services Reorganisation Act 1973. We are not breaking new ground. That is why we have to raise the matter on the Floor of the House.
      The Minister will remember that we raised the matter in Committee, and were not satisfied with reactions to the clause. We did not vote in Committee, because we wanted to leave maximum freedom for negotiation on the Whitley machinery. However, we gave notice that we should return to the matter on Report. That is why we have retabled new clause 9 in exactly the same terms as in Committee. The new clause almost exactly mirrors the 1973 clause. There can therefore be no major objection in principle to its acceptance by the Government.
      One of the main reasons why this reorganisation in the Health Service is being carried out is to improve the morale of employees, which was badly shattered as the result of the reorganisation carried out by a Conservative Government in 1973. The human factor is therefore very important. Once the reorganisation has been carried through, we must ensure that we do not return to the situation that prevailed between 1973 and 1980.
      The signs are that the Government are mishandling the industrial relations side of the reorganisation even at this early stage. They told us in Committee that they did not want to disclose the details of their approach to these problems in Committee because they wanted to be precise and make precise proposals to the staff. To some extent we accepted that. We appreciated that the Government could indicate only a broad approach, and that certain problems exist Having consulted the staff side of the Whitley council, we find that its criticism of the Minister is that he is being vague with it. The hon. Gentleman was vague with us in Committee and is being vague with the staff through the Whitley machinery. Do the Government know what they are about in carrying out the reorganisation? If so, this is an opportunity for them to tell us.

      41
      It is clear beyond peradventure that the staff side wants a staff commission to look after the interests of its members. I do not suppose that it is particularly concerned that it should be a legal staff commission, as opposed to an administrative one, but it feels that it needs a staff commission to look after the interests of its members in the coming reorganisation. The staff side has had much experience of such machinery.
      The unions worked with staff commissions when the GLC was set up in the early 1960s ; when the local government reorganisation was carried out by the right hon. Member for Worcester (Mr. Walker), who is now Minister of Agriculture, Fisheries and Food ; and on the new towns reorganisation and the Health Service reorganisation in 1973, as I have already said. It feels that the management and staff members of the Whitley council, committed to the guidelines issued by the council—which would have caused the trouble in the first place and upon which a staff commission would have to adjudicate—would not be the ideal body to carry out and supervise the reorganisation. A staff commission would have a chance for a second look at the situation, uncluttered by any preconceptions arising from the negotiation.
      In addition, the staff representatives are not keen on one of the hon. Gentleman's bright ideas—local, regional, area and even lower-level negotiations on staff redundancy.
      In Committee the Government rejected a staff commission. I hope that they have reconsidered the matter and will now accept the idea. The opportunity for legislation in this House is disappearing. If the Government want to give the staff side legal guarantees of security during the reorganisation, they have an opportunity this afternoon, which will not arise again. The idea of a staff commission cannot be rejected in principle or drafting detail. As I said, the Conservative Party accepted a commission in 1973, and we have put forward that same clause for adoption today. It is not time for Government undertakings. If a staff commission clause is introduced by the Government in another place, we shall want to debate it when the Bill returns to this House.
      If the Government embark on a reorganisation of the Health Service with-
      42
      out a staff commission, they will not carry the staff with them, and will prejudice the final outcome of the reoganisation. The idea that there should be a sub-committee of the Whitley council to negotiate the reorganisation is entirely different. That would be a different piece of machinery for an entirely different purpose, and does not meet the desires of the staff side.
      Two other points arise. There are groups of functionally organised disciplines whose members stand to be decimated as a result of reorganisation, such as some nurse managers, works officers, catering officers, laundry officers and many others. These people have had a system of functional report up to area level, and that is threatened with extinction, together with a number of professional jobs.
      I know that the functional organisation is a matter of controversy within the Health Service. However, the individuals concerned have been sent there by the Government to do jobs in those places. They have done those jobs conscientiously, in accordance with their best lights. In some cases they have made considerable improvements. It will be through no fault of theirs if those jobs are done away with. We have had no indication from the Government so far that they even recognise that there is a problem for such groups. I hope that the Government will say something about their future this afternoon.
      Finally, there is a major change in the mood of the staff in terms of the reoganisation and its timing, of which the Government should be aware. I believe that the permanent secretary to the Ministry has mentioned reorganisation taking place over four years. I have said that it might take two years. The National and Local Government Officers Association would like the reorganisation carried out as rapidly as possible, and based on an appointed day.
      That is a mood that we must take into account in approaching the reorganisation. The view is simple. It is based on the fact that if reorganisation is piecemeal across the country and spread over a long period, those who are reorganised first will not be aware of all the jobs that are coming up in the NHS for which they might apply when they lose their jobs and

      43
      are forced to decide about their future employment.
      The staff would like the reorganisation to be confined to as short a time as possible, so that if they are then declared redundant they will be aware of the wide range of employment available throughout the NHS when they have to take a decision about moving elsewhere.
      A staff commission will be necessary to ensure that the staff know that there is a powerful independent body to look after their interests. The Government will be wrong if they continue to resist the plea of the staff side of the Whitley machinery for a staff commission. We shall be pleased to hear what they have to say about it.
      Mr. Paul Dean: I agree with much of what the right hon. Member for Lewisham, East (Mr. Moyle) said about the need to deal as expeditiously and fairly as possible with the feelings of the staff about reorganisation, but I part company with him on his preferred method of doing that.
      There is no doubt that another reorganisation, following quite speedily on the previous one, will inevitably create another area of uncertainty for the staff concerned, some of whom are being reorganised for the second or third time in their professional lives. It is necessary that the Government should take seriously the uncertainty that is bound to be created by such a situation.
      I also agree with the right hon. Member for Lewisham, East that the sooner that the reorganisation is completed the better, so that those who may have to change jobs may know as quickly as possible where their new responsibilities will lie. I am sure that there is no argument on either side of the House about those general principles.
      However, I doubt whether setting up a new body is the right way to go about it. Safeguarding the interests of the staff on reorganisation is primarily a matter for the established bodies. It can be argued that the Whitley councils have not been entirely satisfactory to some in their method of operation, but they represent an established, well-known procedure which has existed for many years. It would be much more satisfactory to use that established machinery rather than to
      44
      set up a new body which would inevitably lack experience of the problems involved and would lead to delay rather than to speedy decisions for the staff concerned.
      If one considers the propositions in the new clause and the detailed duties of the commission one sees that it would be a well-meaning, busybody advisory committee, which would be much more likely to hold up the process of reorganisation and getting people into new jobs. I hope that my hon. Friend the Minister for Health will be able to assure the House that decisions will be taken as speedily as possible, in the interests of the staff concerned, but that he will resist the invitation to set up a new body which would not be in the interests of the security of employment of the staff.
      Mr. David Ennals: The Government would be well advised to accept the new clause. There are strong feelings among the staff on a variety of issues, one of which is the proposed reorganisation. It was a traumatic experience for them in 1974 when they were put through a reorganisation imposed by the previous Conservative Government, which led to many difficulties and much sorting out. Those of us in the succeeding Labour Government had to spend much time getting the position settled again.
      4.15 pm
      To embark on reorganisation again, as both sides of the House recognise that we need to do, will impose further strains on the different sections of the staff. We know the difficulties in industrial relations and the need for staff to be able to meet round the table in order to avoid some of the difficulties that have beset the NHS over the years.
      There is a great deal of ill feeling, concern, and even anger about nurses' remuneration. I am not suggesting that a staff commission should replace the Whitley council negotiations, but the Secretary of State has done a great disservice to the nurses, including the Royal College of Nursing and the trade unions, by seeking to suggest that the 14 per cent. cash limit imposed by the Prime Minister and the Secretary of State on nurses puts them into a comparable position with the medical profession.
      The Secretary of State grossed up some figures and said that pay awards since April 1978 to both doctors and nurses

      45
      totalled about 65 per cent. Anyone who makes inquiries into the matter will discover that that is not so and that the comparisons are grossly misleading. I have done my own arithmetic, taking April 1978 as the base line for both doctors and nurses. Nurses received a 9 per cent. increase in that April, followed by a Clegg award of 20 per cent., the adjustment of hours, worth roughly 6·7 per cent., followed by the 14 per cent., on offer now. That takes us to 58·5 per cent. The grossed-up figure for doctors is 65 per cent. There is a sharp difference.
      I know that when the differences were put to the DHSS it was claimed that like was not being compared with like because the total salary bill for nurses and doctors was involved. There are more nurses employed now than there were two years ago and it may be that the total payment for nurses has gone up by 65 per cent. However, I know that there has also been a substantial increase in the number of doctors and dentists. Therefore, the Government are not comparing like with like.
      In the Secretary of State's attempts to deal with the problems that have been raised by the Royal College of Nursing and will be raised by the nurses' unions, he does not help his cause—I say this with some experience—to try to fool or mislead the organisations on such matters.
      I hope that the establishment of a new staff commission would lead to better relations between one section of the staff and others so that we should not have the present sort of conflict. I hope that the Secretary of State or the Minister for Health will come clean about the comparison that the Government have sought to make between the doctors—I accept that an 11·7 per cent. rise was a commitment undertaken by both sides of the House and that the rate of inflation took it up to over 30 per cent.—and the nurses, whom, we are told, have to live within a 14 per cent. increase. There is no more important group than the nurses in the National Health Service. It is important that there should be co-operation between nurses and doctors and others who work within the Health Service. I hope that Ministers will come clean so that the public and the nurses are not mislead—
      Mr. Stanley Orme: My right hon. Friend will perhaps recollect what the Minister for Health and the Secretary of State had to say about the previous Government's treatment of the nurses. He will recall the criticisms that were made and the stand that they took at the time. That can be contrasted with what is happening at present.
      Mr. Ennals: It is true, looking back over the last 12 years, that the biggest improvements in nurses' pay have occurred under Labour Governments and not under Conservative Governments. I did not wish to make a point of that, although I agree with my right hon. Friend. If the Secretary of State and his ministerial colleagues think that they will be able to force the nurses into a totally different position from that of the medical and dental profession, they have another think coming.
      I have seen anger among the nurses. Nurses have been angry with previous Governments, including the Government in which I was Secretary of State, but I do not think that there has been a time when they have felt more angry than they are at present. Their anger is increased when they see the Secretary of State deliberately distorting the figures and making comparisons that the nurses know do not stand up to examination.
      Mr. Laurie Pavitt: I wish to commend strongly the new clause moved by my right hon. Friend the Member for Lewisham, East (Mr. Moyle). It was interesting to hear the contribution of the hon. Member for Somerset, North (Mr. Dean). It is a typical instance of how hon. Members on both sides of the House who are knowledgeable about these matters can have the same objective but differ about the means of achieving it.
      I hope that the Minister will be more forthcoming than he proved to be during a similar debate in Standing Committee. The concern is already apparent. One has only to go back to 1973, to the period before the 1974 Act and its appointed day, to recall how morale in the Health Service was shattered from top to bottom because no one knew what was happening or when it would happen. It was perhaps no coincidence that the 1974 Act came into effect on 1 April, All

      47
      Fools' Day. The Act has certainly proved an all fools' Act. The Opposition have supported the Government in trying to rectify some of its worst provisions.
      The problem of morale in the National Health Service extends back for an even longer period. One of the contributory factors has been uncertainty about the future. I remind the Minister of answers that he has given me about what is to happen in my own health authority. The area medical officer has resigned. It is not known when or where changes will take place. Throughout the country, 90 area health authorities are to be replaced by between 150 and 190 district authorities. How that is supposed to save money baffles me.
      The uncertainty about the number of people in posts between now and the time when the reorganisation comes into effect will mean a further lowering of morale in the National Health Service. It has been suggested that the problems can be solved through some medium of the Whitley council. Lord McArthy's report on revision of the Whitley councils was far-reaching. With due respect to Administrations of both parties, little has happened. My view is that the Whitley council machinery is not the best for the Health Service. Only 10 years after the Act was passed in 1948, doctors had contracted out entirely from the Whitley council machinery and had their own review body.
      When the future of jobs, the transfer of jobs and the protection of employees are involved, the new clause could solve the problems that lie ahead in the next two years. The comments made by my right hon. Friend are relevant to the situation in which the nurses find themselves. I recall the fight in which area nursing officers and the nurses in the district management teams were involved. There seemed to be one scale of salaries for finance officers and other administrators and another scale for medical officers. In the reorganisation that took place in 1973 and 1974, the nursing officer was always bottom of the list That is what lies behind the new clause put forward by the Opposition. It is an attempt to get some sense into the change-over.
      The big problem faced by nurses in the past two or three decades is that they
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      catch up only temporarily and, two or three years later, find their conditions of service eroded in comparison with professions supplementary to medicine and especially the medical profession. Nurses are not especially political. They are not particularly attached to party labels. In my experience, nurses have not been especially anxious to see a Labour Government. It was with some delight that I noted that the journal of the Royal College of Nursing paid tribute to the fact that the only time nurses have received anything was while a Labour Government were in power. The Halsbury award, made at the time that Mrs Barbara Castle was Secretary of State, was a breakthrough. By 1978, however, that award had been eroded. The nurses are to have a ballot—
      Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I am sorry to interrupt the hon. Gentleman. His right hon. Friend referred to nurses' pay, but this is not a debate on nurses' pay. The hon. Gentleman should stick to the new clause. He can allude to that matter, but not debate it.
      Mr. Pavitt: I am endeavouring to relate my remarks to the new clause. This provision might be relevant if there were to be negotiating machinery for the transfer, and the safeguarding of conditions, of employees, especially nurses. I accept your ruling, Mr. Deputy Speaker. The matter is very much on the periphery of the new clause and I shall not pursue it much further. The ballot taking place in the nursing profession over its conditions of service and whether for the first time it should take industrial action is a further argument that I would put to the Government. If the nurses could see a little daylight, at least on the issue of the transfer of engagements, this might help the Department and Ministers in defusing the future situation.
      We face a situation of blight. Hon. Members know the situation that exists when it is discovered that a new trunk road is to go through one's constituency. The whole area immediately becomes subject to blight. I submit to the Government that the new clause seeks to prevent a serious blight over a whole range of posts that are now at risk.
      Apparently the accepted proposal, although the Bill only provides permission

      49
      to do it, without taking it any further, is to transfer responsibility from 90 area health authorities to between 150 and 190 district authorities, with all the officers concerned—administration, paramedicals, medicals, the nursing service and even the architects and surveyors of the present regional health authorities. All the 1 million people employed by the Health Service are likely to be affected.
      My right hon. Friend's attempt to rescue the Government from their dilemma, therefore, should be commended and accepted.
      4.30 pm
      Mr. Reg Race: This debate is very important to the staff of the National Health Service, and I hope that the Minister will make a clear statement about how he intends to deal with the staff in the proposed reorganisation. His statements so far have been confusing and contradictory. On many occasions the staff have not understood precisely what the Minister has been saying to them, not through any fault of their own but because the statements have been to say the least unclear.
      I wish to draw attention to some developments today to which the right hon. Gentleman should have some regard when he replies to this debate. I refer to the decision of the NALGO conference today when discussing the reorganisation of the National Health Service. It has decided to give its executive authority to take industrial action about the reorganisation of the NHS and specifically to black work on the reorganisation envisaged in the Bill because of the way in which the Government are dealing with the pay dispute with the administrative and clerical staff in the Health Service. There is a direct link therefore, between the way in which the Government deal with the pay negotiations of the administrative and clerical staff and the way in which they respond to this new clause. I hope that the Government will have serious regard to that when deciding whether to establish a staff commission.
      A staff commission, amongst other things, is really a question of confidence. Government supporters often talk at great length in economic debates about the importance of confidence for the good of the economy. They tell us of the need for the City of London to have confidence in the future. The staff of the
      50
      National Health Service need to have confidence in the future as well, and I should have thought that the establishment of a staff commission would give the staff in the NHS that confidence. The absence of such a commission may result in their believing that the Government have it in for them or intend to act in a way which is against the interests of the more than 1 million people who work in the Service.
      I draw attention to the fantastic disparity between the policy which the DHSS is following and that being followed by the Department of the Environment. The Department of the Environment is establishing a staff commission to deal with the 5,000 people who are being transferred from the GLC to the London boroughs as a consequence of the sale of council estates by the GLC to the London boroughs. A staff commission is to be appointed to deal with them. An order has been laid before this House and approved to deal with that question for 5,000 people. Yet here we have the Secretary of State saying that it is good enough for 5,000 people but that it is not good enough for 1 million people. That is convoluted logic which I do not understand. Many people in the National Health Service will be deeply dismayed by the Government's failure so far to give clear assurances about this matter.
      My right hon. Friend the Member for Lewisham, East (Mr. Moyle) said that the Whitley council staff side wanted a staff commission. It was my hope that the Minister would be in a position to respond positively to that statement and to establish a commission along the lines agreed with the staff side of the Whitley council or those set out in new clause 9. If that does not take place, we may be in for a period of serious mistrust and distrust on the part of NHS staff about the Government's intentions.
      I know about discussions going on at the moment in a number of trade unions which have members working in the National Health Service about the way that they propose to deal with some of the present industrial disputes with the Government in the Health Service. I refer especially to the administrative and clerical staff dispute, the nurses' pay dispute and the trouble with those in the professions supplementary to medicine. There are those in those unions arguing

      51
      that one of the ways of persuading the Government to change their minds about their decision to freeze the nurses' pay offer at 14 per cent. is to say that, if the Government want this reorganisation so badly, one of the actions that might be taken by the unions to pursue their claims is to black the reorganisation work which will be carried out at area and regional level and also to black work in the NHS dealing with the area and strategic plans, the closures of hospitals and—another clause in this Bill—the compulsory cash limit.
      The Minister ought to have regard to those views, which are being discussed at the moment, because one way of dealing with these problems would be to establish a staff commission in this area. At the very least, that would give the administrative and clerical staff especially the feeling that the Minister was not trying to bludgeon through a proposal which was against their interests.
      I come back to an argument which I put forward to the Minister in Committee. If we do not have a staff commission or something very like it to deal with reorganisation and the change in engagements which will flow automatically from the establishment of a staff commission, the Secretary of State will have a great deal more work to do.
      One of the interesting features of new clause 9 is its fine print. I remind the House, for example, of subsection (3)(a) :
      'The Secretary of State may … give directions to each Commission with respect to its procedure" ;
      and there is a string of proposals set out in the clause designed to do one thing and one thing only—to establish machinery whereby people can take disputes about jobs, gradings and other matters and resolve them in a way which does not involve their political masters either at the level of the health authority or at that of the Secretary of State.
      I am sure that my right hon. Friends the Members for Norwich, North (Mr. Ennals) and Lewisham, East will accept the honesty and logic of doing that. There is nothing worse than political intervention in what are essentially individual cases. I should have expected the Minister to respond to that kind of approach, because it is eminently sensible from his own point of view.
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      Reference has been made to the importance of industrial relations in the National Health Service. In my view, if the Government do not accept something very like new clause 9, they will be accused, correctly, of deliberately worsening industrial relations in the NHS. I am sure that that is a brickbat that they will wish to avoid. Therefore, in their own interest it would be advisable if they were to accept something on the lines of new clause 9 before we move any further since we shall have an extremely argumentative debate later this evening about the impact of certain measures that the Government are about to take in the NHS.
      No doubt reference will be made later—at greater length than in this debate—to nurses' pay and the pay of administrative and clerical staffs. The Government will have to tell us what they propose to do about that in relation to the Bill, and if they do not introduce something like a staff commission to deal with the problems of the NHS they will be in for a much rougher ride than is necessary.
      Dr. Roger Thomas: I emphatically support new clause 9 and the setting up of a staff commission. May I say what a pleasure it is to see a Welsh Minister on the Government Front Bench? We did not have the pleasure of the presence of a Welsh Minister in Committee when we were discussing the reorganisation of the NHS in England and Wales. I am glad that something has been done to rectify that.
      There is a general acceptance of the need for a change aimed at the simplification of structure and management arrangements in the NHS. The general principle involves the removal of a tier of management and the need to strengthen local management. Our main concern is how this change is to be managed and whether the likely extent of disruption entailed in such change is fully understood. It is beginning to be fully understood by the staff who will be affected by the changes.
      Effective measures must be planned in order to minimise any harmful effects on the services, the patients and the morale of staff. Much Government thinking appears to be centred on the elimination of waste and general inefficiency in management. Such aims are admirable, but they are undoubtedly limited in scope

      53
      and distribution and they must not be achieved at the staff's expense.
      In planning the integration of services, much has been achieved over the past five years. However, I immediately stress my doubts about the Government's current proposals and thinking because I fear that they may put into reverse what should be a continuing process. It has to be emphasised that the turbulence that followed the reorganisation of 1974 contributed to the demands for more change. Those demands led directly to the present proposals.
      4.45 pm
      I believe that the Government wish to avoid wholesale upheaval, but disruption will be inevitable since so much that is proposed is deep and radical. The proposals apply not only to individual career prospects but, more seriously, to the service as a whole. For a considerable period management effort will be diverted by the dismantling of existing structures and the designing of new ones. Permeating all this will be uncertainty about the future which could undermine the resolve of those who have to tackle the more difficult problems.
      At the individual level changes will be all the more disruptive for staff because they will come so soon after the 1974 reorganisation and will, in so many cases, affect those most affected by the changes of 1974. For some there will be demotion. That is sometimes called lateral promotion. The changes will mean blocked career progression and foreshortened career structures. Sadly, it will be inevitable that with such changes management effort will be both diverted and diluted. It may not always be a case of patients first.
      An Act of Parliament does not achieve change in itself ; it merely formalises the beginning of a process that will take a number of years during which pressure for further change will build up, just as it built up in 1975 and 1976. I fear that that pressure will build up, if we are not careful, even before these changes are fully implemented.
      The Under-Secretary of State for Wales (Mr. Wyn Roberts): The hon. Member for Carmarthen (Dr. Thomas) will, of course, be aware that we do not anticipate a major upheaval in Wales. We have stressed that at paragraph 47 of
      54
      "Patients First". We have also stressed the need for stability. The hon. Gentleman will also know that we have said that consultations will pay particular attention to staff interests.
      Dr. Thomas: I thank the Minister for his remarks, but, as he has reminded me in answers to parliamentary questions, he has received more than 500 representations from people at all levels in Wales about health services. That is a fair amount of representation. The people of Wales will not be content to see a reorganisation in England while being told that everything in the garden is lovely in Wales. It would be a good thing if we in Wales could discuss changes in the Health Service here in Parliament and not through extra-parliamentary means such as the leading columns of the Western Mail.
      I fully support new clause 9, which advocates the setting up of a staff commission. There is much discontent and misgiving in Wales and it is sad to reflect that the Minister may not be aware of it.
      Mr. William Hamilton: New clause 9 does not include provision for a staff commission for Scotland. That is not to say for a moment that we are not concerned about the implications of the provisions of the Bill for staff problems in that country. My hon. Friend the Member for Wood Green (Mr. Race) referred to the decisions that have been taken by NALGO at its conference in Eastbourne today.
      As the House knows, I am sponsored by the Confederaton of Health Service Employees which will no doubt be taking decisions on these precise matters at its conference next week. There is a good deal of concern about the implications of the Bill for staff employment. We shall no doubt have the chance to discuss, in the early hours of tomorrow morning, the Secretary of State for Scotland's paper "Structure and Management of the NHS in Scotland". Page 11, when dealing with implications for staff says :
      "The Secretary of State recognises that although his proposals do not involve any major reorganisation of the service "—
      though that is challenged—
      "they have considerable and wide-ranging implications for many members of staff. The Government intend to be as fair as possible

      55
      to all staff involved in the changes ; and at an appropriate time will be discussing with staff interests arrangements for the filling of posts and for the protection of the interests of those adversely affected."
      That is all and I presume that that means, by implication, that there will be the fullest consideration within the Whitley council procedure and with all the relevant trade unions. I guess that that will be the gist of the Minister's answer. But the Whitley council machinery is not adequate. The Minister and the Departments recognise that the Whitley council machinery leaves a lot to be desired. That is one of the reasons why we are putting forward the proposition in the new clause.
      Though I have racked my brains, I find it difficult to see any merit in the Bill which is designed to do two things. It aims, first, to transfer resources from the public to the private sector in order to make people understand that their health depends on the depth of their pocket rather than on the willingness of the taxpayer to foot the bill for our health services. That is the main purpose of the Bill.
      It is significant that the White Paper produced by the Scottish Office lacks any public relations element compared with the White Paper produced by the English Department. At least the English Ministers try to kid the people that patients come first. The Scottish Office is honest and more brutal. It never mentions patients once in its document. The English Department is disarmingly deceptive. It tries to convince the people that it is concerned about patients—but not about nurses. I shall say something brutal to the Minister about that later.
      Whatever the merits of the Bill, there is no doubt that, since we are dealing with the second major upheaval in the National Health Service initiated by a Tory Government, whose record is appalling, there will be a deepening crisis of confidence among the staff and users of the Health Service. When the full implications of the Bill are realised there will be a serious deterioration in the morale of employees—and there are 1 million of them. The Health Service is one of our major industries.
      The Bill, with the Government's overall policy to cut public expenditure on every
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      other social service including education and housing, will lead to increasing bitterness among employees. In a relatively modest way we are seeking to remedy the situation. We are trying to decrease the bitterness and to give workers the knowledge that they will participate in any discussions that affect their jobs, their promotion prospects and the Service. The Government would be well advised not to reject the new clause out of hand. They should not argue that the Whitley machinery is adequate to deal with the problems.
      If the Government cannot accept the new clause they should at least accept the principle behind it and emphasise the imperative need to negotiate with and consult the staff at all levels. If a worker in the Health Service, or anywhere else, loses his job he will find it almost impossible to get another. No alternative employment is available in many parts of the country, not least in Scotland. I hope that the Minister will not reject the new clause out of hand without outlining in detail how he sees the solution to the problems that will occur during the transitional period.
      Mr. Frank Haynes: I am not as worried today as I was in Committee ; because we appear to be getting one or two approving nods from the Government Front Bench. However, I am worried because in Committee the Minister threw the document by the Royal Commission on the National Health Service into the Thames and said that he was not prepared to accept its contents. He said that he and the Government would make up their own minds about what was to happen to the National Health Service. I have seen nods of approval. I hope that that is an encouraging sign.
      I sincerely believe that my right hon. and hon. Friends who have contributed to the debate are correct. The Conservative Government made a hell of a mess of the last reorganisation of the Health Service. Some of us were involved in that in one way or another. The lowering of the state of morale which occurred at that time is being repeated. Each individual fears what will happen within the Health Service. The message is loud and clear in my area. People are frightened to death about what will happen this time.

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      A commission such as that suggested in the new clause would give each individual in the Health Service the opportunity and right to know about and to contribute to the shape of the Service. There is a feeling of bitterness. People remember what happened last time. They are all jockeying for positions in preparation for what is to happen. Certain individuals will be hit, as they were on the last occasion. Jobs will be given to people whose faces fit. I believe that the suggestion in the amendment is correct. I hope that, in the interests of everybody who works in the National Health Service, the Government will consider seriously what has been said.
      The Minister for Health (Dr. Gerard Vaughan): I have listened with great care to what the Opposition have said because this is an important matter. The right hon. Member for Lewisham, East (Mr. Moyle) put the case for a staff commission reasonably and clearly. Naturally, we are as concerned as any Opposition Member that we should get the matter right this time. Large numbers of people are involved. We are seeking a procedure which will be sufficiently flexible to enable individuals to be considered and properly fitted in because their careers are at stake.
      The hon. Member for Fife, Central (Mr. Hamilton) said that there was need for consultation at all levels. I took that point strongly. We shall not be able to carry the restructuring through without the good will of the staff. I believe that we have that good will and that the majority are as fed up as we are with the present structure and want to see a change. At the same time, they are anxious and insecure about how the restructuring will affect their careers.
      The Opposition are on the wrong track in going for a national staff commission. I believe that the staff side of the Whitley council was wrong when it at first took this line.
      5 pm
      I was interested in the remarks of the right hon. Member for Lewisham, East to the effect that the staff side was still in favour of a staff commission, because I had hoped that it was coming to the same conclusion that we had reached—that this time something slightly different would be more to its advantage. There
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      was a national staff commission in 1974 and it was very widely criticised, largely because of the lack of flexibility in regard to individual appointments. As I have already indicated, we are very concerned that that sort of problem should not arise again.
      There is a problem over timing. We should all recognise that. I was very sorry when the hon. Member for Wood Green (Mr. Race) started to convey what sounded suspiciously like threatening remarks from some of the unions that, if necessary, they would slow down the whole process if they could not get then-way. That would be a most unkind and inhuman action to take.
      There is a problem over timing. If we go very fast, it will be difficult for individual members to be looked after properly. If we go very slowly—allowing time for more individual variation—we shall leave large numbers of people in a state of uncertainty for a long time. So we have to strike a balance, if we can, that is fair between those alternatives.
      We hope that our timetable is a reasonable one. In July, we shall publish our paper, the regions will report back to us by the end of February next year, and then we shall be able to start implementing the changes.
      Mr. Moyle: What the Minister has said on timetables is helpful, but the crucial issue with regard to the staff is how long the reorganisation will take, beginning with next February. Will it be a year or two years, three years, or even four years, as some people in the Department have said?
      Dr. Vaughan: I do not think that we can answer that question clearly until we have seen the advice that comes back from the various regions and until we have seen the exact procedure that the staff side wants to follow.
      Dr. Brian Mawhinney: My hon. Friend has said that he expects to hear from the regions in February and then to implement the changes. For how long does he expect the matter to be in his Department between the time of referring back and the beginning of implementing? Will it be a matter of weeks or of months?
      Dr. Vaughan: I should like to satisfy my hon. Friend on this, but I think that

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      we have to wait until we see the response from the Health Service to our paper in July. We shall then have a much clearer idea how much change is involved.
      Mr. Pavitt: Will the hon. Gentleman be giving advice about the advertising of posts, or must all this wait until after the Department has considered the February replies? Where posts are now vacant or are about to become vacant, will he be giving advice to the authorities concerned?
      Dr. Vaughan: I should like to go a little further in my remarks as to what we have in mind. We have come to the conclusion that it would be to the greatest advantage of the staff if guidelines were laid down centrally, and if these were then applied locally as flexibly as possible. It is felt that the central arrangement for this should be through a special independent small body, derived in conjunction with the Whitley Council but nevertheless an independent body.
      The staff side was not at all happy about this and put to us that it wished the procedures to be agreed between management and staff sides within the Whitley Council machinery. We have accepted this. The important thing now is that we get down quickly to discussions of our proposals between the joint management and staff sides. There should be discussions on how posts are to be filled, on protection of pay, on the terms for premature retirement, and, in the last resort only, redundancy.
      A joint mechanism for these discussions has now been agreed within the staff side, and that is the special sub-committee of the general Whitley council. We have made offers to the staff side on this and we are awaiting its response. That is why I was particularly concerned when the right hon. Member for Lewisham, East said that he thought that the staff side was still dissatisfied, because my information is that it is not. I hope very much that my information is correct.
      Mr. Race Mr. Race rose—
      Dr. Vaughan: So that the staff in the National Health Service might be kept fully in the picture, my Department wrote to the administrators of health authorities on 4 June, giving as much detail as we could of the offers that we have made,
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      and asking that this information should be circulated as quickly and as widely as possible.
      We have in mind what I believe are clear safeguards. First, we wish to safeguard salaries. We are suggesting that for older staff—people over 50—salaries should be safeguarded indefinitely. For people under 50, we believe that salaries should be safeguarded for at least five years.
      Mr. Moyle: This again is very helpful, but will the Minister say whether the safeguarding includes upward adjustments for inflation, as well as the preservation of the figures of the salaries at the time when the reorganisation takes place?
      Dr. Vaughan: I shall come back to that, in a moment, if I may. [Interruption.] It is all right for some hon. Gentlemens to laugh, but the right hon. Member for Lewisham, East has said over and over again how important it is to have the matter absolutely clear and correct for the staff.
      As many hon. Members know, we also have in mind a safeguard concerning early retirement. We believe that our scheme will go a very long way to reducing any need for compulsory redundancies. Here again we are offering, where the management agree, premature retirement for people over 50, with an immediate payment of pension and a lump sum calculated on an enhancement basis related to length of service.
      Then there will have to be a procedure for local appeals. If someone feels that he has been wrongly treated, it is essential that there should be somewhere to turn in order to appeal against it. We have said all along that there must be a proper and effective appeals mechanism, and we shall be happy to discuss this in detail with the staff side.
      Finally, we believe that there should be some local flexibility in regard to the details of shortlisting appointments to posts.
      We see that as a package that will safeguard the staff, showing them that we have their interests at heart.
      At the moment, we are opposed to a single national day of change, but we have asked the Whitley council—and through it the sub-committee—to consider the possibility of regional days of

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      change, so that there would be in one part of the country a day of change rather than having it piecemeal throughout a region.
      Hon. Members may be interested to have some information about the constitution of the sub-committee. I can at the moment give them information only concerning the management side of the sub-committee, because clearly the membership of the staff side is entirely a matter for the staff side. But, broadly speaking, we have in mind, first, that there should be five members of the general Whitley council. We believe that this will reflect a clear Whitley interest in the negotiations.
      Secondly, we believe that there should be five members comprising a representative regional team of officers—that is, one from each of five regions—to reflect the role that the regions are playing in the reorganisation.
      Thirdly, we believe that there should be representatives of NHS management in Scotland and Wales, reflecting the special characteristics of the proposed reorganisation outside England.
      Finally, it is proposed that there should be representatives of the Department of Health.
      I hope that hon. Members will agree that that represents an all-embracing, wide-ranging group of people and that if we cannot get justice for individuals out of that there is something very wrong. On that basis, I ask the House to reject the new clause.
      Mr. Race: Before the Minister sits down, may I ask whether I understand him correctly? Will the management side of the sub-committee be composed entirely of officers of authorities rather than members of authorities? That is a very important point indeed, because—
      Dr. Vaughan: On a point of order, Mr. Deputy Speaker. I do not know whether the hon. Gentleman is making a second speech, but I had sat down.
      Mr. Deputy Speaker: I had not appreciated that the Minister had sat down. I thought that he was giving way to the hon. Gentleman. As the hon. Gentleman has started, will the Minister be prepared to answer his question?
      Dr. Vaughan Dr. Vaughan indicated assent.
      Mr. Race: Thank you for your assistance, Mr. Deputy Speaker.
      My point relates to the composition of the management side. Will it be entirely composed of officers, or will there be representatives of the members of regional health authorities? As I understood joint negotiating machinery procedure, the employers' side—if one likes, the bosses' side—consists of representatives of the employing authorities, which in the case of the NHS means the area health authorities where individual contracts are kept. Therefore, one would have thought that on the joint sub-committee there would be representatives of the employers in the NHS, namely, the area health authorities as at present constituted.
      I hope that the Minister can enlighten us on that point. It would be a break from tradition, and I believe a retrograde step, if the sub-committee did not contain people who had been appointed to positions on the area or regional health authorities as well as people who simply represented the interests of officers or senior management.
      Dr. Vaughan: There will be both members and officers.
      I was asked about salaries and any uplifts. The over-50s will be protected fully—that is, they will be indexed. The under-50s will be protected fully for five years, and thereafter on a mark-time basis. For example, if one is then on a £6,000 a year salary, one's salary will stay at £6,000 a year until the salary of the grade to which the officer has been downgraded overtakes it. I hope that that answers the question.
      Dr. Alan Glyn: The question of the change-over and whether it should be national or regional is important. Has my hon. Friend had any indication from the staff side as to which it would prefer?
      Dr. Vaughan: As I have just said, we are against a national appointed day. We have put it to the regions that they should perhaps consider local—that is, regional—appointed days.
      Mr. Moyle: We have had an interesting debate and have had a much more informative reply from the Minister than

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      we did when we discussed this matter in Committee. He has given us some interesting and useful information. However, some of the comments which have been made during the debate demand a reply.
      First, I was surprised that the hon. Member for Somerset, North (Mr. Dean) called new clause 9 a busybodying clause, because it was one for which he, along with all the other members of his Department, voted in 1973. I ask the House also to bear in mind the views of my hon. Friend the Member for Brent, South (Mr. Pavitt), who brings the voice of experience to our debates in connection with this reorganisation. Looking around the Chamber, I notice that very few of us who took part in the debate then are here now, but my hon. Friend took part in it. Everything that he said in 1973 about uncertainty is a problem which, unless we are very careful, could be faced in 1981 and 1982.
      5.15 pm
      My hon. Friend the Member for Wood Green (Mr. Race) indicated that the room for manoeuvre is rapidly contracting. I had not seen the report that the NALGO conference had decided to black work on reorganisation. If that is true, it lends emphasis to everything that we have said about the need to handle the morale of the staff and relations with the staff with consummate care and to do our utmost to satisfy it. My hon. Friend raised an interesting point—that there is to be a staff commission to supervise the reorganisation within the GLC housing department affecting 5,000 jobs overall. My calculation is that in the Health Service reorganisation 4,500 jobs will go—not that there will be 4,500 sackings of necessity, but that 4,500 jobs will not exist when reorganisation has ended. On top of that, I believe that many thousands of other jobs will be shunted around the countryside. Therefore, if a staff commission is required for 5,000 people, a staff commission is certainly required for 4,500 jobs which will go as well as many thousands more which will be altered.
      Dr. Mawhinney: The Minister made his view clear—that such an attitude on the part of NALGO would be extremely unfortunate. Would the right hon. Gentleman care to associate himself with my hon. Friend's remarks?
      Mr. Moyle: If I may say so, industrial relations upsets are always unfortunate. What I am now trying to do is to give the best advice that I can to the Government as to how they might avoid the unfortunate circumstances to which the attention of the House has been drawn.
      The Under-Secretary of State for Wales intervened in the speech of my hon. Friend the Member for Carmarthen (Dr. Thomas). Interventions by Welsh Ministers in our debates have been beasts of such rare quality that I hope I shall not be accused of giving undue prominence to the hon. Gentleman's. He said that he would be prepared to receive representations from staff in Wales about the NHS situation there. Last time, Wales had a staff commission to do that sort of thing. Therefore, his offer to receive representations does not seem to be totally adequate on this occasion.
      The hon. Gentleman also made a positive statement about not intending to do anything with regard to the Health Service in Wales. The Government are going through a process of consultation, and I do not think it is entirely sound for Ministers to make positive statements at this stage. However, there is a growing feeling of opinion in Wales that there should be a regional health authority for Wales, on the ground that health problems in Wales are discussed and resolved in private within the Welsh Office whereas in England all these matters are thrashed out in open debate in the regional health authorities. Therefore, the hon. Gentleman ought to take those points into consideration.
      Mr. Wyn Roberts: I did not say that there would be no change. I said that we did not want an upheaval and that there was a need for stability. I was, of course, quoting from "Patients First". The same applied when I said that there would be consultations with staff. I am saying not that there will be no change but that there will not be an upheaval of the sort which the hon. Member for Carmarthen (Dr. Thomas) seemed to be encouraging in calling for a staff commission. I was not quite sure which side the hon. Gentleman was on, or whether he was for change or against it.
      Mr. Moyle: We are glad to have the hon. Gentleman's clarification. I have now reciprocated by telling him that

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      before long he will receive representations to the effect that there should be a regional health authority for Wales. I take it from his remarks that he is prepared to consider that suggestion with an open mind.
      The Minister made some important contributions to the discussion, but he overstated the importance of the special sub-committee. The staff side is in favour of the special sub-committee as machinery for negotiating the settlement of the terms and conditions of service that will be applied to staff who are involved in redundancies. That is a step forward, and the staff welcome it. However, the Minister is making a mistake in believing that the staff side will consider that that special sub-committee by itself will be enough to keep the staff happy. I reiterate that, in addition to the special sub-committee, they will want a staff commission, and they will continue to press the Government for such a commission. Staff throughout the country will feel unsupported and insecure if they do not have the umbrella of a staff commission.
      The special sub-committee will be formed substantially of active members of the Whitley council. The Minister said that there would be at least five members of the Whitley council on the management side, and presumably a similar number on the trade union side. They will be regarded as influential people in the Whitley council. The sub-committee will reach agreement not only on pensions, preservation of salaries and so on, but also on job filling. The Whitley council and the sub-committee will, in the view of the staff, become enamoured of their work. If a dispute arises subsequently on the reorganisation, it will be referred to the Whitley council, which will settle the problem entirely in terms of the agreement reached.
      An independent staff commission is required to be able to look a second time at those matters, because if there is a dispute the guidelines of the agreement of the Whitley council will be the cause of the dispute. Therefore, the staff will want a second look at their individual fates through a staff commission. It is therefore, a matter of considerable regret among Labour Members that the Government are refusing to accept the idea of a staff commission.
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      The staff commission that was set up in 1973 was criticised in the initial stages of the reorganisation, but as the reorganisation continued it improved its work and standing, and it was eventually accepted. As a result of the experience of 1973, the trade unions on the negotiating side of the Whitley machinery now want a staff commission again. It would be a small concession by the Government, but it would be a great concession for the employees of the National Health Service if they felt they had the protection of a staff commission.
      Dr. Vaughan: Does not the right hon. Gentleman agree that the likely membership of the management side—five Whitley council members, five representatives of regional teams and representatives of Scotland, Wales and the Health Department—is wide ranging? The membership of the staff side is for the staff side to decide. It will be able to bring in an equally wide-ranging membership if it wishes.
      Mr. Moyle: That is standard industrial relations procedure, and, in a sense, the wide-ranging composition of the special sub-committee will be a difficulty if there is discontent with its decisions during the course of the reorganisation. It will be more difficult to change the mind of the Whitley council through that special sub-committee procedure. Therefore, the Government would be well advised to look again at the idea of a staff commission.
      The Minister set out some parts of his timetable. Will he tell the House in February, after he has received the reports from the regional health authorities, the period during which he expects the reorganisation to take place?
      Mr. William Hamilton: This is a United Kingdom Bill, and I gathered only in the last intervention of the Minister that he was speaking for Scotland as well as for England and Wales. He did not make that clear in his opening remarks. Do the Government presume that the timetable to which the Minister referred applies equally to Scotland, because the timetable that the Scottish Office envisages is different from that enunciated by the Minister?
      Mr. Moyle: If the Under-Secretary of State for Scotland were to try to intervene in my speech on those pertinent

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      matters, I should have no hesitation in giving way briefly to enable him to clarify the position.
      The hon. Member for Windsor and Maidenhead (Dr. Glyn) asked whether the Government had heard from the staff side about whether it wanted a regional or national appointed day. The main staff association involved would like a national appointed day. The Government should bear that in mind.
      Having waited in vain for an intervention by the Under-Secretary of State for Scotland—he shakes his head, so I shall continue to wait in vain—we shall ask permission of the House to withdraw the new clause, because we feel that these matters are basically best negotiated between management and staff in the Whitley machinery before the consequences of any decisions are inserted into the Bill. We shall not seek to force the issue by calling for a vote on the new clause, but the Government must not believe that because of that we do not feel strongly about it. We cannot reiterate too strongly that we believe that the Government will be making a substantial mistake if they do not concede a staff commission to the staff side of the National Health Service.
      Mr. William Hamilton: May I press my right hon. Friend to press the Under-Secretary of State for Scotland to intervene and to make clear that he is thinking along lines parallel with those mentioned by the Minister representing England and Wales? It is not good enough for the Minister to set out a timetable which obviously applies to the United Kingdom. The sub-committee is clearly United Kingdom machinery, and presumably the timetable is a United Kingdom timetable. It is the responsibility, duty and obligation of the Under-Secretary of State for Scotland to stand up now and say that he goes along with that. Otherwise, what other part of the Bill will give him an opportunity to do so? Or will he give an undertaking that at some time during the course of our proceedings he will state in detail the timetable for the reorganisation of the Health Service in Scotland?
      Mr. Moyle: My hon. Friend is a magnanimous man. He has given the Under-Secretary of State for Scotland at
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      least one hour's notice that he will raise that matter on new clauses 17 and 18.
      Dr. Vaughan: There will be an opportunity shortly for a debate on Scottish matters and my hon. Friend the Under-Secretary of State will speak to that point then.
      Mr. Moyle: We are grateful, and we look forward eagerly to hearing the Under-Secretary's comments on behalf of Scotland. I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 11

      PHARMACISTS REVIEW BODY
      ' (1) As from the commencement of this Act the Secretary of State shall set up a body to be known as the Pharmacists Review Body consisting of a chairman and four other members with experience of professional and commercial life and a knowledge of industrial relations with power to send for persons and papers and the initial period of service of such persons to be three years.
      (2) The terms of reference of the Pharmacists Review Body shall be to consider annually the terms and conditions of service of those pharmacists providing pharmaceutical services under Part IV of the National Health Services Act 1977 and to make recommendations to the Secretary of State.'.—[Mr. Moyle.]
      Brought up, and read the First time.
      5.30 pm
      Mr. Moyle: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: Before we begin discussing the clause, I must remind the House that we are on the Report stage, not the Committee stage. That means only one speech per Member.
      Mr. Moyle: We propose the clause in no spirit of political recrimination because we believe that we must look anew at the problems of the remuneration of pharmacists. I became aware of the basic insecurity of pharmacists when I was a Minister. I remember being particularly exposed to that feeling of insecurity during a debate on 29 June 1978. As a result of that debate, I personally felt that we ought to have a system of arbitration for the remuneration of pharmacists. Consequently, over a period—and the Government machine on that occasion moved far too slowly—we came up with the Franks committee, which examined

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      the problem. It eventually produced a number of recommendations, one of which was that there should be a permanent body for the review of pharmacists' remuneration. It also made a number of individual representations on the subject.
      Unfortunately, when the Conservatives came to power, they were unable to accept the Franks committee recommendations in their entirety. I concluded at that time that ad hoc arbitration was not the way to deal with this matter. Basically, the contract under which independent contracting pharmacists under part II of the appropriate Act operate is so complex that no group of professional people faced with a one-off ad hoc arbitration could possibly do the job competently. It is much too difficult. There must be a permanent body.
      I understand that the Government asked the Review Body on Doctors' and Dentists' Remuneration to look at the problem, but it replied that, much as it would like to help, it was overloaded. I can understand that. Anyone who became a member of the body we propose for reviewing pharmacists' pay would have to accept references on a complex series of matters which would have to be studied and which would be a considerable burden even for those who handled them on a regular basis.
      I think therefore that we should set up a pharmacists' body along the lines spelt out in new clause 11. I am not saying that the Opposition stand by every dot and comma of the proposal. If the Government come up with other suggestions which are a slight modification of our proposals, we will be prepared to look at them with an open mind. However, we think broadly that there should be some machinery for independent review, either at first hand or as a reference, from initial negotiations, from the Government It should be composed of people with the relevant commercial, industrial relations and professional experience.
      Perhaps initial service on the body should be for three years to give the Government a chance to review the idea in the light of experience. The body should consider the terms and conditions of service of pharmacists, make recommendations to the Secretary of State, and be empowered to take evidence from where-ever it wishes.
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      The clause is aimed at the implementation of early-day motion No. 548 which has been on the Order Paper for some time and which has been signed by a substantial number of hon. Members from both sides of the House.
      Dr. Vaughan: It might be helpful if I spoke now.
      I am glad to be able to tell the House that in asking for an independent review body for pharmacists the Opposition are knocking at an open door. I have been negotiating with the Pharmaceutical Services Negotiating Committee a package based on the Franks panel recommendations. I met the committee's representatives again this morning and we agreed the terms of reference of an independent review panel. Our agreement is still to be ratified by the full committee when it meets on Wednesday. However, I understand that the negotiating team will be recommending acceptance.
      I hope that this development will mark the end of a dispute which all agree has gone on for far too long, and that we shall now be able to go forward together in a spirit of constructive co-operation.
      We have agreed that the panel will be able to advise on any aspect of retail pharmacists' gross remuneration, and that it should be available to help resolve any disputes at the invitation of either party. I trust that now that we appear to have secured the substance of what the right hon. Gentleman is seeking he will be prepared to withdraw the motion.
      Mr. Lewis Carter-Jones: I welcome the observations of the Minister. He will be aware that the number of registered pharmacists in this country has fallen substantially. There are two possible advantages to the Health Service from what he has told us. First, the pharmacy service may improve. Second, it is possible that the NHS will save a considerable amount of money.
      At present pharmacists have on their shelves substantial quantities of duplicated drugs. A wide variety of those drugs are identical in type. The only difference is in the price. The fact that chemists have to keep these stocks presents them with a severe cash flow problem. Part of the representation they have been making has concerned the substantial sums required to maintain their stocks of drugs.

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      For example, one anti-depressant called Tofranil costs £3·25 per 100 tablets. An identical product under the generic title costs 34p. However, such is the situation facing chemists that they have to carry stocks of the two drugs. Substantial sums of money are tied up in the stockroom and, understandably, when pharmacists negotiate with the NHS they expect substantially higher remuneration because of the level of stocks that they have to maintain.
      The numbers of chemists particularly in rural areas, but also in the towns have declined because of the low level of remuneration aggravated by the high level of stocks that they have to maintain. The latest number of pharmacists is 31,718.
      The problem is highlighted by the medicines review committee which is considering the 35,000 drugs which were available on the National Health Service nine years ago, and which number has now been reduced to 20,000 to be reduced even further in the next 10 years. But many chemists believe that their task would be made a lot easier if the DHSS accepted the recommendation of the Merrison report on the National Health Service and the recommendations of the Medicines Commission in its 1978 annual report.
      Acceptance of generic prescribing would lead to substantial savings for the National Health Service. I have with me a list of drugs. I am astounded at the difference between generic prescribing and proprietary brands. The general practitioner practises his art more skillfully when he goes in for generic prescribing because he prescribes the medicine, not the proprietary brand. For example, for the hypertension range of drugs the price of proprietary brand drugs is double that of generic drugs. For rheumatic diseases, generic prescribing is a third of the price of the best selling proprietary brand. An anti-depressant generic drug is one-tenth the price of a proprietary brand.
      The reason that I am advancing this argument in favour of the review body that the Minister is considering setting up is that, according to the terms of the new clause, the people on the review body must indicate that they have commercial skills and judgment. Anyone with commercial skill and judgment will
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      realise that if a product is being charged 10 times its normal price, to say the least, someone is being a bit crooked. That is the kindest word that I can use. At the same time, a reduction in the number of drugs prescribed and the extended use of generic prescribing will lead to considerable saving in the demand on the Health Service.
      Mr. W. R. Rees-Davies: I congratulate my hon. Friend the Minister on the announcement that he has made about setting up a review body. I believe that it will be valuable in a narrow way in dealing with some of the problems that arise for pharmacists.
      How wide will be the scope of the review body? Will it be able to review not only remuneration but the duplication of drugs and the points made by the hon. Member for Eccles (Mr. Carter-Jones)? Alternatively, will it be limited to the terms and services of pharmacists? I imagine that it will go wider. If so, what will be its nature and scope? Great savings can still be made in this area by advising on the types and classes of drugs which can best be prescribed without annulling the individual power of the doctor to prescribe.
      Mr. Andrew F. Bennett: I welcome the setting up of the review body. The Minister seemed to imply that, having agreed to set up the review body, everything would be sweetness and light and that he could sit down at that point. It seems to me that setting up the review body can at best be only a mechanism to get improvements. The key point is how much money the Government are prepared to put up. The follow-up to that is how much money the community is prepared to spend on a good pharmacist service. All that the review body can do is to try to share out the available money. The crucial point is how much money will be available.
      From my experience in my constituency I have the feeling that there is some unease. Chemists who work in small shopping areas feel that their livelihood has been threatened in recent years not necessarily by the treatment that they have had from the Government but by the general climate of shopping patterns which has developed. They are more than a little concerned about the future of their service.

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      Many of my constituents feel that they do not have a chemist's shop near enough. The old traditional areas still have chemists' shops within reasonable walking distance for the elderly or those in poor health or within the distance that they can happily ask a neighbour to go for prescriptions for them. On one of the new council estates in my constituency people have to walk three-quarters of a mile to a chemist's shop. People who are sick have the problem of getting someone else to go for them and they feel that that is a serious imposition.
      5.45 pm
      One of the newest blocks of deck access flats in the neighbourhood has lost its chemist's shop. The pharmacist did not feel that it was sufficiently remunerative to continue in business in direct competition with town centre shops which are just sufficiently far away that the elderly and the sick feel that the extra journey to get prescriptions is unreasonable.
      I wonder to what extent the new review body will be able to solve the problems. Pharmacists have told me that in practice their pharmacies are in part subsidised by sales of other medicines or other goods and that they cannot survive on the pharmacy side alone. They now find the other side of their business threatened by the supermarkets. Some of them feel aggrieved that people use their shops merely for prescriptions and choose to go to other shops where sometimes prices are a little cheaper—probably because of bulk purchasing—for other goods that traditionally they bought from the chemist's shop.
      The chemists therefore feel concerned, as do many other small shops, at the way in which they are threatened. People with cars or those who find getting about easy find it attractive to go to the supermarket or the super store where prices are cheaper. But for those who do not have cars—the elderly and those on limited means—the corner shop and the local chemist are still extremely important. I hope that in any review the social and community aspects of the chemists' work will be fully taken into account and recognised.
      There is another danger that we have to face. Many chemists feel that by opening
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      fairly long hours, and often putting on a service in the evening, they are tied to their shops. There is evidence that newly trained pharmacists prefer to work for large multiples in town centres where they have a shift system or regular hours than for a small shop with longer hours. I hope that the review body will ensure that the small chemist's shop is retained as a feature of smaller shopping centres and as an effective help to the elderly and the sick who need to get their prescriptions with the minimum cost.
      Finally, I wish that we could get more pharmacists established in conjunction with health centres. Many health centres fail to attract pharmacists. It seems unfortunate that people should have to go one way to get prescriptions and in a different direction to get them made up. I hope that the review body will seek progress. However, I warn the Government that the key point is how much they and the community are prepared to make available for the provision of a prescription dispensing service.
      Mr. Ennals: I am delighted that the Minister has accepted the basis of the new clause. Many of us know that pharmacists who have been in negotiation with the Department felt that they were going to be part of a package much of which they found distasteful. After all, it is eight months since the Franks report recommended that there should be a review body. It has taken the Department a long time to reach its conclusion. While congratulating the Minister and his colleagues on their decision, I must also congratulate my right hon. Friend the Member for Lewisham, East (Mr. Moyle) and my hon. Friends on having pressed for the review body and on having ensured that it has been established.
      I think that we all recognise the important role of the pharmacist in our society. My hon. Friend the Member for Stockport, North (Mr. Bennett) has referred to it. The pharmacist's role may become even more important when the cost of prescriptions is increased to £1. The pharmacist will be asked increasingly which is the most important of the three or four prescriptions that the individual is presenting. Members of the public will seek increasingly the advice of the pharmacist. I deplore the fact that they will have to do so, but that is an example of

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      the important role that the pharmacist undertakes.
      I agree with my hon. Friend the Member for Stockport, North that there is great concern about the reduction in the number of pharmacists, especially in rural area. The problem came before me when I was Secretary of State. The Department negotiated a new system of payments so that those in small pharmacies were able to obtain a higher rate to enable them to keep in business. That system operated inevitably at the expense of larger pharmacists who were making profits that were unnecessary. That system decreased greatly the rate of reduction of the number of pharmacists.
      I agree with my hon. Friend the Member for Eccles (Mr. Carter-Jones) that the Department should be considering carefully what savings can be made when prescribing. It is not appropriate to consider the Royal Commission's proposals at this stage, but the Department should be considering them carefully. A limited list drawn up by the professions could well lead to savings of £30 million, £40 million or even £50 million. It will not be easy to negotiate with the professions, but I have no doubt that the pharmacists will be willing to take part in such negotiations.
      I am delighted that the decision has been taken. It will be warmly welcomed by the pharmaceutical services' negotiating committee, with which I had dealings over many years. I congratulate my right hon. Friend the Member for Lewisham, East on having pressed the Minister and I congratulate the Minister on having responded to the pressure imposed upon him.
      Mr. Pavitt: I join my right hon. Friend the Member for Norwich, North (Mr. Ennals) welcoming the way in which the Minister has acceded to our request. I congratulate the Minister on making the announcement with much less waffle around the edges than on previous occasions.
      As the hon. and learned Member for Thanet, West (Mr. Rees-Davies) and some of my hon. Friends have said, the immediate question that arises is the length to which the review body will be able to go. Its establishment is a long overdue measure because the way in which phar-
      76
      macists' remuneration has been set has been about the greatest dog's dinner of any negotiating machinery. The highly differentiating ingredients that form the machinery are more in number than the greatest polytablet that the pharmaceutical industry can produce. The fact that the review body will be able to consider the problem of remuneration is a giant step forward.
      The Minister has made it clear that this decision will have an effect on retail dispensing chemists. Will hospital dispensing doctors and the way in which they work come within the purview of the review body? The Minister will know that when there is a shortage of hospital dispensers the dispensing has to be done by outside dispensers. The review body will be considering one sector whole the other sector may be part and parcel of its considerations.
      One of the issues that has been holding up negotiations is the objection that pharmacists have had to dispensing doctors in rural areas. It is a longstanding problem. The review body may have within its remit the ability to do something to overcome the rather acrominious speeches of the past 10 years on pharmacists' objections to the role of rural dispensing doctors.
      I pay tribute to my right hon. Friend the Member for Norwich, North and his predecessors on account of the increase in the number of health centres over the past 15 to 20 years. The problem of the way in which medicines are dispensed is one that has caused pharmacists to have real doubts. I believe that the pharmacist should be a member of the general medical services team. The pharmacist dispenses medicine, but he has to give advice. The closer the relationship between pharmacists and doctors, the more likely it is that we shall be able to provide the service that patients require.
      Problems will arise when prescription charges are increased to £1. The tax collecting problems of the pharmacist will be much greater and his advice will be sought increasingly. Increased prescription charges will hit most hard middle-aged ladies at the time of the change of life. I am surprised that there has not been far more of an outcry from ladies. It is a tax on illness that will hit ladies more than men. Ladies who visit

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      the pharmacist will be seeking advice. They will be given one, two or three prescriptions at a time. It will be necessary for the pharmacist to have his remuneration adjusted to take account of the service that he is giving.
      The Minister will recall that one of the most iniquitous acts against the consumer took place at the beginning of the Conservative Government's administration 10 years ago. In 1970–71 bodies such as the Consumer Council were axed. That Government axed one of the most important bodies on medicines and pharmacy—namely, the McGregor committee, which had the responsibilty of considering the efficacy of drugs. It dealt with the problem that has been mentioned by my hon. Friend the Member for Eccles (Mr. Carter-Jones), that of deciding which of 10 different but similar drugs should be used for a particular purpose. When the McGregor committee was axed there was no way of embodying it in the Medicines Commission. There was no way of bringing it within the Medicines Act 1968.
      When my hon. Friend the Member for Eccles was talking about what are known as "Me too" drugs I was reminded of a reply made by the Minister in response to one of my questions on Beta Blockers. The reply spread over five foolscap pages. It set out drugs that did the same thing. The prices of the drugs varied tremendously. There were enormous discrepancies between the lowest priced and the highest priced. It may be possible for the review body to make inroads into the tremendous waste that takes place.
      I know that Ministers of all parties have always tried to implement the national formulary and to get prescriptions made up rather than to use brand names. The responsibility is a heavy one and I do not think that the review body will be able to go too far. It will be interesting to know whether it will be allowed to go into the question at all. The case for the extension of the provision of drugs through the pharmacist is heightened by the fact that for every nine general practitioners there is one commercial traveller calling upon them on behalf of the drug companies, in an endeavour to sell more drugs. That is part of the prob-
      78
      lem of remuneration. If a large amount is being spent on the ingredients of drugs, the amount of money available for the pharmacist is reduced.
      I pay tribute to the Pharmaceutical Society of Great Britain. Since the National Health Service came into existence the society has done a tremendous job for the pharmacist and on the way in which medicine should be provided. It acts more or less as a university. I am sure that it will be delighted, as the whole House is delighted, by the fact that the Minister has reacted to the pressure put upon him and has been prepared to accept the principle set out in the new clause.
      6 pm
      Mrs. Sheila Faith: I agree with the hon. Member for Brent, South (Mr. Pavitt) that the House is delighted with the Minister's decision. Many hon. Members have been pressing for the setting up of just such a review body and have signed an early-day motion to that effect. Up to now pharmacists were members of the only profession receiving a large proportion of their income from the National Health Service who did not have such a review body. I am very glad that this state of affairs will no longer continue.
      Mr. Moyle: Having listened to the Minister of State, I am very much minded to seek to withdraw the new clause. However, in order that my hon. Friends can be fully informed, before I do so I shall put a few questions to the Minister.
      Will the pharmacy review panel consist of an accountant, a lawyer, an economist, an industrial relations expert and someone with experience in retailing? Will the Department and the pharmacists continue to negotiate their pay problems in the first instance, and will the matter go to the prarmacy review panel only if there is a dispute? Will that panel be primarily concerned with settling the net profit margin? Will the Franks profit formula apply from 1 July 1980, and will pharmaceutical contractors be paid £2,000 a year for the advice that they will give on drugs to members of the public? If this is so, we welcome the principle as a move in the right direction.

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      Am I right in believing that there will be a discount inquiry in the autumn, conducted between the pharmaceutical negotiating committee and the DHSS? Until then, will the discount be maintained at the rate of 1·54 per cent.? Also, is it true that there will be a panel to deal with technical and statistical disputes ; and will this panel comprise an independent chairman and others, that independent chairman being a member of the pharmacy review panel?
      Finally, is it correct that all the disputes that have been raging in the pharmaceutical area up to now will be wiped out and that both sides will start from 1 July 1980? I am sure that my hon. Friends will be interested to hear the Minister say "snap" and confirm that this is the situation.
      Dr. Vaughan: I do not know how often I shall find myself in the happy position of being able to answer questions of the kind that have just been put to me. I have not yet discussed in detail with the PSNC the composition of the panel, but we have agreed in principle that it will follow very closely the lines that have been suggested in the new clause—a chairman plus four members with experience of the kind that the right hon. Member for Lewisham, East (Mr. Moyle) suggested. It will include a lawyer, an accountant, someone with knowledge of industrial relations, someone with knowledge of professional activities and someone with knowledge of commerce. The panel will be free to answer any matters concerning remuneration which arise within the existing contract. It will not be free to go into matters of medical products and issues of that kind. I confirm that the date set is 1 July, and that £2,000 a year will be paid as a basic practice allowance which has been agreed in principle.
      There will be a discount inquiry this autumn. Meanwhile, the rate will be kept at 1·54 per cent. There will be a technical disputes panel, and the chairman of that will be a member of the overall pharmacists' panel. There will be continuing discussions between the Department and the pharmacists—that will be the basic forum in which disputes will be looked at. Only if they cannot agree will the matter go to the new panel.
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      On the right hon. Member's final point, this clears all outstanding disputes. It wipes the slate absolutely clean. It is with some pride and satisfaction that, after five years of disquiet in this area, I can tell the House that we have reached such an agreement.
      Mr. Ennals: I just wish to make quite certain that one of the proposals that the Department had made has also been withdrawn—the clawback of the £2·3 million included in the 1978 remuneration, as part of the £5 million which the Department has injected into the new system of payment, and to which I referred in my speech? Will the Minister confirm that the attempt to claw that back has been withdrawn?
      Dr. Vaughan: I do not think that I can go any further today than the statement that I have already made. There are a number of matters that we are still considering. We must await the outcome of the meeting tomorrow.
      Mr. Carter-Jones: I have played too much rugby to be taken in by the dummy now and then. The question of finance and drugs was raised. One of the problems faced by the chemists and pharmacists is that they must stock and pay for extra drugs on their shelves because there is no generic prescribing. Therefore, this review body must look at the question of the additional cost of stocking the shelves of a dispensary with drugs which would not be needed if we had generic prescribing.
      Dr. Vaughan: I really do not think that I can go any further. However, I can tell the right hon. Member for Norwich, North (Mr. Ennals) that the answer to his question which he put a few moments ago is "Yes".
      Mr. Moyle: I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New clause 12

      AMENDMENT OF SCHEDULE 12 TO NATIONAL HEALTH SERVICE ACT 1977
      'In Schedule 12 of the National Health Service Act 1977, in pararaph 1(1), after subparagraph (a) there shall be inserted—
      "(aa) The supply of any drug, medicine or appliance to a recipient of invalidity benefit ;"'.—[Mr. Hannam.]
      Brought up, and read the First time.
      Mr. Race: I beg to move, That the clause be read a Second time.
      The reason why I am moving the Second Reading of the new clause, which was tabled by the hon. Member for Exeter (Mr. Hannam), is that he has laryngitis. I am sure that we all wish him a speedy recovery from that affliction. I do not know whether I shall make the same speech as he would have done—probably not—but I think that we shall make the same overall points.
      The purpose of the new clause is simple—to give free prescriptions and appliances to individuals who are in receipt of invalidity benefit. That is an objective that has been shared by many hon. Members on both sides of the House for many years.
      There are a number of reasons that could be advanced for pursuing this policy. The first is that we have a complicated system of exemptions that allows a large number of people not to pay prescription charges, either for drugs or appliances.
      This matter was referred to in a written answer on 13 March, in which the Under-Secretary of State for Health and Social Security listed the current exemptions. Hon. Members will know what they are. Primarily, exemptions are given to retirement pensioners—men over 65 and women over 60—expectant mothers and children, individuals suffering from specified medical conditions, such as diabetes, epilepsy and Addison's disease, those who are in receipt of supplementary benefits or family income supplement and individuals whose income is slighty above supplementary benefit level but who could be properly regarded as being among the low paid.
      Those are the general exemptions for claiming free prescriptions for drugs and appliances.
      As the price of prescriptions increases, the exemptions will become more important. When prescription charges are 20p or 30p an item it is not so damaging to have a narrow range of exemptions, but when prescription charges are £1 an item, as they will be from December, it is different. That is a strong argument for including this substantial group of invalidity beneficiaries within the exemption limits.
      Those who qualify for invalidity benefit should be compared with those already
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      exempt from prescription charges. Having paid one's national insurance contribution and received 26 weeks' continuous or linked sickness benefit, one is entitled to the long-term national insurance benefit—invalidity benefit. It is paid to a wide range of people with serious medical conditions who have been unable to work for at least six months. There is also provision to grant invalidity benefit to certain people who have not paid national insurance contributions, but that affects only a small number.
      About 600,000 people are in receipt of invalidity benefit at any one time, which is a substantial number. We do not know how many of them would be affected by the new clause. Some of those who would be entitled to free prescriptions under the clause would have been entitled anyway under other exemptions. It is difficult from the Opposition Benches to estimate the number involved, but it would certainly be fewer than 600,000. Perhaps the Minister can give us an indication of the number.
      When one compares the categories exempt from prescription charges for specified medical conditions with the groups in receipt of invalidity benefit, it is obvious that there is a great similarity. The medical conditions qualifying for exemption include diabetes, Addison's disease, epilepsy, a continuing physical disability that prevents the patient from leaving his residence except with help from another, and so on. The disabilities were set out in a written answer at column 605 from the Under-Secretary of State on 26 March to my hon. Friend the Member for Barking (Miss Richardson).
      Those who are entitled to invalidity benefit are in a similar position, although they do not appear on that list. For example, those who suffer from cancer and chronic heart conditions may be in receipt of long-term invalidity benefit, yet do not qualify under the exemptions. Both those diseases are as serious as many of the conditions specified in the list. No. logical distinction can be drawn between the existing list of exemptions and the other categories that we wish to include.
      6.15 pm
      There are a number of other reasons why exemption should be granted. In the Social Security (No. 2) Bill the Government dealt a substantial blow to invalidity

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      beneficiaries, those in receipt of industrial injuries benefit and the unemployed by cutting benefits by 5 per cent. in real terms in the November uprating. Their benefit will rise by only 11½ per cent. in November. It is therefore especially appropriate for the House to consider the new clause at this time. It would be of substantial benefit to those invalidity beneficiaries at present not able to claim free prescriptions.
      The Government have recognised the difference between invalidity benefit and other benefits cut in clause 1 of the Social Security (No. 2) Bill, when the Secretary of State gave the House a pledge that invalidity benefit would be restored to its real value after a period, given the absence of serious economic constraints. I do not accept that approach as entirely logical, and nor would many of my hon. Friends. However, it shows that, in the Government's own terms, there is a cast-iron case for granting exemption to invalidity beneficiaries.
      I wish to make our position clear. In arguing for the new clause we do not go against the Labour Party's position of seeking to entirely abolish prescription charges when next in government. It would be a substantial move in that direction to exempt a large number of the very poorest in our society, who face serious medical and social problems through no fault of their own and who have to pay prescription charges, which have increased dramatically under this Government and are to increase further dramatically.
      For those pressing reasons, I hope that the House will agree to the new clause.
      Mr. Andrew F. Bennett: I have great pleasure in supporting the new clause. Like my hon. Friend the Member for Wood Green (Mr. Race), I regret that, although the hon. Member for Exeter (Mr. Hannam) is in the Chamber, he cannot give voice to his feelings. It would have been helpful to have views from both sides of the House and I am a little disappointed that the hon. Member has not been able to find one of his hon. Friends to support the new clause.
      There is considerable concern about the numbers who face hardship at present and will face even greater hardship because,
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      although they receive invalidity benefit, they are not entitled to free prescriptions.
      My first question to the Minister is to ask whether he believes that any one on invalidity benefit is rich or well off. The number of invalidity benefit recipients who have other means must be a tiny proportion of the total. The vast majority have incomes well below two-thirds of average earnings. They are at the income margins and, although they may not qualify for supplementary benefit, their income is only just above the qualifying level.
      Such people will find a £1 prescription charge a considerable imposition, particularly when, as so often happens, they are given two or more prescriptions at the same time. The argument that season tickets can solve that problem involves a major misunderstanding. It is the assumption of those with a bit of spare cash in their pocket that one can spend money now in order to save money in the future. For those on low incomes, that is not possible. That problem arises in other schemes, including the fuel saving scheme. My experence of those on low incomes is that they find it difficult to make the initial outlay in order to save in future.
      Another problem is that there is no refund if the total cost of the season ticket is not spent. Most people live in hopes that their health will improve and that the number of prescriptions that they need will diminish. That is why they tend to think that it is not worth buying a season ticket.
      Others find that their health fluctuates considerably and that sometimes they do not need to spend as much as the cost of a season ticket. Instead of saying that the season ticket is a solution to the problem, the Government should accept the new clause and exempt those in receipt of invalidity benefit.
      If the Government insist on making a charge, they should consider offering invalidity benefit recipients a reduced charge that would be likely to add up to no more than the cost of a season ticket—in other words, a season ticket in small instalments. However, that would become administratively complicated, and no doubt the Minister would use that as an excuse for not introducing such a scheme. However, he should accept that the season ticket is an unsatisfactory arrangement.

      85
      The list of illnesses raises a number of problems. Many groups are campaigning to get the name of their disability or illness added to the list. That is a rather unfortunate form of campaign. It would be better to lobby, as has been done on the new clause, for help for all those on invalidity benefit, rather than to try to squeeze one more category on to the list of prescribed illnesses.
      It is slightly ironic that there are some with diseases on the list who get free prescriptions for all their ailments, even though they are better off, in health and money terms, than those with diseases that are not on the list.
      The Minister may say that those just above supplementary benefit level may apply for an exemption under the means test that is provided. Perhaps he can give us some evidence of how many apply in that way, because my impression is that the test is pretty cumbersome and that many people end up paying almost as much as they save after going through the test. It is not satisfactory and if the Government made a broad band of exemptions they could consider how many would be saved having to go through the test.
      If about 50 per cent. of those receiving invalidity benefit already get free prescriptions, because they are on supplementary benefit or because of their age or the fact that they have one of the prescribed illnesses, the Government have to consider giving exemptions to only a fairly small number of beneficiaries. A concession would not cost the Government a great deal, but it would be important to the individuals who find it difficult to manage their budgets.
      A doctor pointed out to me recently that one of the advantages of knowing that someone is exempted from prescription charges is that he can be prescribed two or three items that improve his comfort without necessarily improving his health greatly. One of the difficulties that doctors experience when they visit someone who is on a low income but who has to pay charges is that they tend to feel that they have to concentrate on the medicines and not prescribe any of the items that could make his care that much easier for him or for those who are looking after him.
      I hope that the Minister will consider the case carefully and will give us, not
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      merely sympathy, but an assurance that the Government will take action.
      Mr. Alfred Dubs: Like my hon. Friend the Member for Wood Green (Mr. Race), I hope that we shall be able to do away with prescription charges before too long. In the meantime, the new clause represents a significant measure of progress for a smallish group who are not able to afford to pay charges.
      The concern about prescription charges is that the fact that there is a charge, soon to be £1, means that certain individuals who need medical help are denied the chance to have the sort of medical treatment that their doctor wants to give them.
      It is at least an anomaly that not all those receiving invalidity benefit are entitled to free prescriptions. Injustice is a fairer description of the difficulty in which they find themselves. Because some are not exempted—we do not know how many—it has been suggested that a season ticket might be sufficient for them.
      However, in addition to the arguments already advanced, there is another reason why a season ticket is unlikely to be satisfactory. By the nature of the illnesses or diseases from which some of those on invalidity benefit suffer, their need for prescriptions will fluctuate. They do not necessarily need a steady flow of medication month in and month out. It is, therefore, difficult for them to calculate whether a season ticket would be a good buy.
      For those who are hard up, the calculation about the season ticket is a particularly unfortunate one to have to make. It puts pressure on those who are not so well off or as advantaged as their colleagues. A season ticket can be expensive. It costs £12 and is liable to go up to £16, in line with the increase in prescription charges. It will be interesting to hear whether the Minister expects to be able to keep the price of a season ticket below £16.
      There is another reason why those on invalidity benefit are particularly hard hit if they have to pay prescription charges. We know that there are those in all groups who underclaim their entitlement to benefit and that there are some in receipt of invalidity benefit who are reluctant to subject themselves to the means

      87
      test that is necessary in order to get free prescriptions.
      We do not know how many beneficiaries are affected, but we know that many have considerable personal dignity and do not wish to subject themselves to the humiliation of having to be means tested for free prescriptions. I would have thought that for that reason, if he does not accept the other arguments, the Minister should accept the amendment. We are talking about a small group of people to whom injustice is being done. It is right that they should be entitled to free prescriptions.
      6.30 pm
      Mr. Pavitt: The case has been made so comprehensively that I shall not detain the House for long. I was not surprised to see the name of the hon. Member for Exeter (Mr. Hannam) attached to this new clause. The whole House pays tribute to the hon. Gentleman for his work for the disabled in the all-party group. Hon. Members are aware of his feelings of compassion that lead him to be associated with a new clause of this kind.
      The House has heard that the Opposition are not endeavouring in any way to water down Labour Party policy to get rid of all prescription charges. These charges are a tax on the sick that only the sick pay. Our manifesto in 1964 spoke of our intention to abolish health charges. All prescription charges were abolished on 1 February 1965. But that exemption, unfortunately, lasted for only a year. The manifesto was superseded by the Treasury. A year later, on 1 February 1966, the then Minister, Mr. Kenneth Robinson, had to reimpose prescription charges.
      One of the many fights that I have lost—I seem to lose more than I win—was as one Back Bencher among many Labour Members at that time, apart from those on the pay roll vote, who tried to avert that decision. When the announcement was made that prescription charges would be re-imposed, the Minister said that the Government would exempt the elderly, children and the chronic sick. In the event, following negotiations with the British Medical Association, it was impossible to designate those who were, or who were not,
      88
      chronically sick. To the list given by my hon. Friend the Member for Wood Green (Mr. Race) that the Department now has in operation, I can add 34 complaints—such as Parkinson's Disease where medication is required for the rest of the sufferer's life—reckoned by most medical practitioners to rank as chronic sickness.
      It is a sin and an iniquity to regard the season ticket as the answer for those on invalidity pension. A person obliged to put up with chronic illness for the rest of his life has to pay £12 or £16 as a poll tax for the privilege of trying to alleviate the symptoms of his pain.
      The new clause should commend itself to the whole House. It is a small item of justice. The Labour Party did not say at the last election that it would abolish prescription charges immediately. We said that we would phase them out. The late Dick Crossman said that we should phase out all charges and that prescription charges would be the first to go. One of the most compassionate areas in which phasing out could take place is covered by the new clause. I hope that the Government will accede to the new clause for all the cogent arguments that have been put forward.
      Mr. Carter-Jones: I should like to associate myself with the remarks that my hon. Friends made about the hon. Member for Exeter (Mr. Hannam). The hon. Gentleman was not a member of the House when we got through the Alf Morris Act, but he has worked hard and diligently, since coming to the House, to see that it is implemented. We are pleased to see the hon. Gentleman in his place, but we are sorry that the disease prevents him from rising. His complaint is not one of the exemptions. He could have got free medication if he was receiving benefit at that time.
      As a broad general rule, those receiving invalidity benefit are very poor. That is a good starting point to adopt over distribution of invalidity benefit. If certain wealthy people, through the passing of this new clause, gained exemptions, I should be happy to see that happen until such time as prescription charges are abolished. The numbers are difficult to calculate. It is stated that, in 1977, 557,000 people were receiving invalidity benefit. Of that figure, 80,000 were exempt from charges on grounds of age or

      89
      because they received supplementary benefit. It is estimated by Disability Alliance that 37 per cent. of the balance were not exempt on the grounds that they suffered from a prescribed disease. My guess is that this leaves 120,000 people who would benefit. Those people are recognised in society as being extremely poor. Such a move would be extremely valuable to them.
      When one considers some of the disabling diseases that are not covered by exemptions, the mind boggles. My hon. Friend the Member for Brent, South (Mr. Pavitt) is correct. I have a small list that I find surprising. It is appalling that sufferers of multiple sclerosis should not be exempt. Spina bifida and severe arthritic conditions are not included in the exemptions. These are conditions that require substantial quantities of medication. I ask the Minister to grant exemption from prescription charges to all in receipt of invalidity benefit. If the Minister says that these people can submit themselves to another means test, I say that he knows that we have argued the case for many years. There are far too many means tests for the disabled. We do not want another.
      The Under-Secretary of State for Health and Social Security (Sir George Young): The House has heard a series of glowing tributes by Opposition Members to my hon. Friend the Member for Exeter (Mr. Hannam). I hope that this will not embarrass him among the Conservatives in Exeter or with the Whip' Office. As many hon. Members have said, my hon. Friend is a hard campaigner for the disabled. It is a campaign that transcends party barriers, and a campaign with which I was happily associated until the last election.
      I have enormous sympathy with the object behind the amendment, which is aimed at improving the position of invalidity pensioners. Unhappily, there are some formidable obstacles in the way of conceding this exemption. They are obstacles that the previous Government were unable to overcome, and obstacles that we are unable to overcome.
      The receipt of disability or invalidity benefit does not in itself convey automatic exemption from prescription charges, apart from war disablement pensioners who are exempt from charges for medi-
      90
      cines needed for treating their accepted pensioned disablements. Exemption from prescription charges is based broadly on medical or financial need. Exemption on medical grounds is based on the fact that all those suffering from one of the exempt medical conditions are virtually certain to require prolonged continuous medication. That is not necessarily the case with all invalidity benefit recipients, many of whom, happily, do not require a lot of prescriptions.
      Many recipients of disablement and invalidity benefits do qualify for exemption under the present exemption arrangements ; for example, because they are suffering from one of these specified medical conditions or because they are in receipt of supplementary benefit or family income supplement, or because their income falls below a certain level.
      The qualifying levels for low income exemption were raised when prescription charges were increased in July 1979, and again on 1 April 1980, thus extending entitlement to more people. The existing exemptions from charges will continue when the prescription charge goes up to £1 on 1 December, and the low income exemptions will be revised on the same date. Prepayment certificates will also be available at favourable rates for those who need frequent prescriptions. I wish to say a word about those in a moment.
      From the latest figures available, which date back to 1978, more than 130,000 recipients of invalidity benefit in Great Britain were known to qualify for exemption on age grounds or because they were in receipt of supplementary benefit. Information is not available for any of the other exemption categories. Invalidity benefit recipients totalled approximately 708,000 in 1978 and included those in receipt of the contributory invalidity benefit, the non-contributory invalidity pension and housewives' NCIP. So, basically, the present system gives help to those invalidity pensioners who need constant medical attention because they satisfy the exempt medical conditions, or on grounds of a low income.
      The cost of exempting all recipients of invalidity benefit from the 70p charge who are not otherwise exempt would be about £2½ million. If one estimates the cost on the assumption that invalidity benefit recipients required 50 per cent more prescriptions than the average

      91
      patient, the cost would be about £4 million.
      Apart from cost—and this is where we move to the real problem—there are the conflicting claims of the various groups, many of them mentioned in the debate, including people who suffer from serious medical conditions such as cystic fibrosis, glaucoma, chronic bronchitis, emphysema, multiple sclerosis and muscular dystrophy who, in terms of prescription needs and numbers, to my mind seem to have a much stronger case. From the many letters that I have had from hon. Members over the past six months on this subject, I am bound to say that they have pressed this harder than they have the cases of invalidity pensioners. There are many other examples of exemption categories that have been pressed on the Government, including people who retire early, dependent wives of pensioners, and widows.
      It is very difficult to deal with invalidity pensioners without considering the conflicting claims of the others. I have a lot of sympathy, for example, for those who suffer from cystic fibrosis. We had an interesting debate some time ago initiated by my hon. Friend the Member for Burton (Mr. Lawrence). If it was the intention to extend it, I should look at some of the medical grounds rather than at a blanket exemption for all invalidity pensioners.
      Mr. Ennals: Do I understand, therefore, that the hon. Gentleman is looking at this list of very serious conditions? Is he in negotiation with the medical profession to see whether its members would accept them for inclusion?
      Sir G. Young: I shall deal with that later in my remarks.
      The real problem that we have to face is that wherever we draw the line there will be hardships and anomolies. I make the point to those hon. Members who have contributed to the debate that they would create more anomalies and hardships by pressing this exemption rather than some of the others.
      It might be fairer, through the use of the season ticket, to improve the position of those who need medicine regularly, for whatever reason, relative to those who need medicine on a more casual basis, which happily is the position of
      92
      most of us. This is one of the roads down which the Government are progressing. A prepayment certificate is worth while currently for anyone who needs more than six items on prescription during a period of four months, and more than 17 items during a period of 12 months. However, as from 1 December this year, when the cost of both certificates and prescriptions will be increased, the increase will be less proportionately for certificate holders than for prescription charges generally. This makes the purchase of a prepayment certificate a more attractive proposition. The new prices of £15 for an annual certificate and £5·50 for one for four months mean that they will be worth while for 15 prescriptions a year rather than 17 prescriptions.
      Mr. Pavitt: Disgraceful.
      Sir G. Young: The hon. Member for Brent, South (Mr. Pavitt) shouts "Disgraceful ". His Administration had the opportunity to extend this exemption to this category of patients. They were pressed to do so constantly by hon. Members on both sides of the House. They did not do it. I hope that the hon. Gentleman will address his criticism equally to his right hon. and hon. Friends.
      Mr. Pavitt: I have.
      Mr. Ennals: The hon. Gentleman has referred to the previous Administration. Since the previous Administration kept prescription charges as low as 20p per prescription, the issue is different from that which he is proposing of 70p now and £1 in December.
      Sir G. Young: On the contrary, it would have been far cheaper for the previous Administration to have extended this exemption than it is for the present Administration to do so.
      We have continued to think about the representations made on this matter, and we have decided reluctantly at this stage not to approach again the General Medical Services Committee in an attempt to have another look at the exempt medical conditions. Any approach to the medical profession would have to include a large number of conditions such as those mentioned in the debate. This would increase the cost substantially of any exemption.

      93
      6.45 pm
      An alternative approach, which has been suggested recently, would be to abolish the list of exempt conditions and rely instead on far more preferential prepayment certificate arrangements. It could be argued that in theory this would be fairer in that prepayment certificates would be available to all and would save money for anyone whose condition required it. On the other hand, it would mean taking away exemption from some of the chronically sick who now enjoy it, and I do not think that that would be the right course to follow at the moment.
      I come now to some of the matters raised in the debate. The hon. Member for Stockport, North (Mr. Bennett) asked about the incomes of those on invalidity benefit. It is not a means-tested benefit, so we do not have any realiable information on recipients of invalidity pension. The hon. Gentleman also said that doctors would more readily prescribe more than one item if they knew that a patient was exempt. The doctor has no means of knowing whether the patient is exempt on income grounds unless the patient volunteers the information to the doctor.
      Mr. Andrew F. Bennett: Does the hon. Gentleman agree that almost any doctor visiting a patient in his home quickly gains an idea of the financial hardship that exists simply by looking round the house, at the furnishings and at the amount of food available? When treating someone with the sort of illness that we are discussing, it is normal for the doctor to inquire from the patient, or from the person looking after him, whether he is in financial difficulties. It is pretty obvious to him when he prescribes medicines what the family circumstances are.
      Sir G. Young: That may be the case when the doctor visits the patient in his or her home, but I do not see how it could possibly be the case when the patient visits the doctor at his surgery. The hon. Gentleman implied that the doctor knew whether a patient was exempt. I am making the point that that is not necessarily so unless the patient volunteers the information.
      Mr. Carter-Jones: Does the Minister agree that a doctor would ask whether a person was claiming it and, if he was not, why he was not?
      Sir G. Young: That is a question that should more properly be addressed to the medical profession. Some doctors may not want to ask their patients about their incomes. That is a question for the medical profession rather than for a politician to answer.
      I want, finally, to play a card which all Ministers keep up their sleeves when in difficulty, which is to say that the amendment is technically deficient. It would exempt only hospital out-patients in receipt of invalidity benefit from payment of prescription charges. I have no doubt that the intention was to effect a general exemption from prescription charges for all people in receipt of invalidity benefits.
      Schedule 12 provides in paragraph 1(1):
      "No charge shall be made under section 77(1) … in relation to the supply of drugs, medicines and appliances referred to in paragraph (a) of that subsection".
      That paragraph (a) limits the exceptions to the supply of drugs, medicines or appliances otherwise than under part II of the 1977 Act. The exceptions do not therefore extend to such supply as part of the pharmaceutical services. These services are dealt with in paragraph (b) of section 77(1) and in paragraph 1(2) of schedule 12, which do not extend the statutory exemptions to the services which the hon. Members have in mind.
      Mr. Andrew F. Bennett: I am sure that the Minister would agree that if the House approved this clause he would have the technical expertise to get it right in the other place.
      Sir G. Young: I have no doubt that that is the case. If the will of the House was such that it wished to carry the clause, the Government would respond to it.
      I have outlined the serious problems facing any Administration seeking to extend the exemption categories. I hope that I have convinced hon. Members that there are more deserving people to qualify for exemption than the specific category of people whose case they have pressed in this debate.
      Mr. J. W. Rooker: I, too, extend my sympathy to the hon. Member for Exeter (Mr. Hannam). It must be galling for him to

      95
      have tabled a selected new clause that is supported by the Opposition and not have the chance to move it. Nevertheless, he is here with us and he will have the opportunity to draw the attention of the Government and Ministers—I noticed that a Government Whip sat next to him throughout the debate—to the seriousness of his convictions.
      I shall not repeat many of the points that have been made in the debate. The case is clear-cut and precise. It is probably far more precise now because of what has just been said by the Minister about the technical deficiency of the clause.
      I wish to make two points that have not been made relating to the income of people in receipt of invalidity benefit. One of my hon. Friends referred to cuts in that benefit being imposed by the Government in the Social Security (No. 2) Bill, which is now in the other place. However one juggles with the figures—and the Minister has said that some people in receipt of invalidity benefit are exempt because of medical conditions or because they receive supplementary benefit—the House knows and the country knows that there are 400,000 people in receipt of invalidity benefit, whose income is less than the personal allowance and less than the tax threshold whose benefit will be cut in November in lieu of taxation.
      There is no getting away from that. That cut in benefit will, in some cases, amount to almost £1 a week. They are the people whom we seek to assist with this clause. Even if the clause is technically deficient, I am sure that if the Minister were to accept it, because the deficiency is minor a manuscript amendment would be in order. We would not need to wait for the Government to put the matter right in another place.
      The Minister says that the cost of accepting the clause—I presume that he gave us figures based on the clause as drafted—on the basis of the 70p charge would be 12½ million. That is about the sum that the Government will pay to the American bank to secure the services of Mr. MacGregor for the British Steel Corporation, and that demonstrates the scale of the priorities that we see weighed in the balance.
      The arguments of Government Ministers about why the previous Government
      96
      did not increase charges are irrelevant. There was not a lot of pressure from many of the categories mentioned by the Minister when the prescription charge did not increase between 1974 and 1979. The prescription charge of 20p went down catastrophically in real terms because of inflation in those years. As the Minister said, in that situation it would have cost very little to abolish prescription charges. As he knows, that commitment was made by the previous Government in May 1979.
      It would have been easy to phase out, or to abolish, Health Service charges on the basis that the prescription charge had not been raised for five years, so it is no good Ministers asking us why we did not do it. The pressure on those whom we are seeking to help with the new clause was not there at that time.
      The Government are making matters more complicated by increasing prescription charges with such rapidity, though Ministers say that prepayment certificates can be obtained. In order to keep a check, so that we can advise our constituents where the break-even point might be, we shall all have to carry around calculators and slide rules. People outside the House will not be truly aware of their rights as the system becomes more complex and as it changes more frequently in relation to charges. There has been no commitment that the threshold of £1 for a prescription charge will not be breached.
      Mr. Ennals: Does my hon. Friend agree that the administrative costs of this succession of increases, from 20p to 45p, from 45p to 70p and from 70p to £1, will probably be more than the cost of accepting the new clause?
      Mr. Rooker: That is likely. It will be interesting to see the figures, because the Minister did not give the House many figures. He admitted that the Government were not sure about the income limits of people on invalidity benefit. He said that 130,000 people were exempt for one reason or another, and that 708,000 were in receipt of the benefit and related benefits. I repeat that we seek to assist those whose benefits are to be cut by the Government under the provisions of another Bill.
      This is an all-party new clause. It is significant—and I understand the reasons why the hon. Member for Exeter was

      97
      unable to speak—that not one Conservative Member has spoken in this debate on behalf of the disabled and those who are at the sharp end of the catastrophic increase in prescription charges. Many times during the debate there have been as many as 20 Conservative Members in the Chamber yet none of them spoke to put a view that would provide an excuse for voting for their own Government. Not one of them spoke on behalf of the disabled who are affected by this clause. When one realises the categories of people who are affected and who will require large numbers of prescriptions and large amount of medication—such as cancer sufferers and those with a serious heart condition—but are not exempt, there is no excuse for the silence of those hon. Members.
      We have no hesitation in seeking the will of the House by calling for a Division. As my hon. Friends have pointed out, it is no watering down of the Labour Party commitment, given in the general election and repeated continually from this Dispatch Box, that we shall seek to abolish all health service charges, including prescription charges. That has been made difficult by the Government continually increasing prescription charges, but we must take every opportunity in opposition. Therefore, I ask my hon. Friends to support the new clause.
      Question put, That the clause be read a Second time :—
      The House divided : Ayes 126, Noes 177.

      Division No. 342]

      AYES

      [6.57 pm

      Abse, Leo

      Foot, Rt Hon Michael

      Orme, Rt Hon Stanley

      Adams, Allen

      Foster, Derek

      Pavitt, Laurie

      Allaun, Frank

      George, Bruce

      Powell, Raymond (Ogmore)

      Alton, David

      Gilbert, Rt Hon Dr John

      Prescott, John

      Ashton, Joe

      Ginsburg, David

      Race, Reg

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

      Graham, Ted

      Rees, Rt Hon Merlyn (Leeds South)

      Barnett, Guy (Greenwich)

      Hamilton, James (Bothwell)

      Roberts, Ernest (Hackney North)

      Beith, A. J.

      Hamilton, W. W. (Central Fife)

      Robertson, George

      Benn, Rt Hon Anthony Wedgwood

      Harrison, Rt Hon Walter

      Rodgers, Rt Hon William

      Bennett, Andrew (Stockport N)

      Haynes, Frank

      Rooker, J. W.

      Booth, Rt Hon Albert

      Healey, Rt Hon Denis

      Ross, Ernest (Dundee West)

      Bottomley, Rt Hon Arthur (M'brough)

      Heffer, Eric S.

      Rowlands, Ted

      Bray, Dr Jeremy

      Hogg, Norman (E Dunbartonshire)

      Sandelson, Neville

      Buchan, Norman

      Holland, Stuart (L'beth, Vauxhall)

      Sever, John

      Callaghan, Jim (Middleton & P)

      Home Robertson, John

      Short, Mrs Renée

      Campbell-Savours, Dale

      Homewood, William

      Silkin, Rt Hon John (Deptford)

      Carter-Jones, Lewis

      Hooley, Frank

      Silkin, Rt Hon S. C. (Dulwich)

      Clark, Dr David (South Shields)

      Hughes, Robert (Aberdeen North)

      Silverman, Julius

      Cocks, Rt Hon Michael (Bristol S)

      Jay, Rt Hon Douglas

      Skinner, Dennis

      Cohen, Stanley

      John, Brynmor

      Soley, Clive

      Cowans, Harry

      Jones, Rt Hon Alec (Rhondda)

      Spearing, Nigel

      Cox, Tom (Wandsworth, Tooting)

      Jones, Barry (East Flint)

      Spriggs, Leslie

      Craigen, J. M. (Glasgow, Maryhill)

      Kilroy-Silk, Robert

      Stewart, Rt Hon Donald (W Isles)

      Crowther, J. S.

      Kinnock, Neil

      Stott, Roger

      Cryer, Bob

      Lamborn, Harry

      Thomas, Dr Roger (Carmarthen)

      Cunliffe, Lawrence

      Lamond, James

      Thorne, Stan (Preston South)

      Cunningham, Dr John (Whitehaven)

      Lewis, Ron (Carlisle)

      Tinn, James

      Dalyell, Tam

      Lyon, Alexander (York)

      Varley, Rt Hon Eric G.

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

      Lyons, Edward (Bradford West)

      Wainwright, Richard (Colne Valley)

      Deakins Eric

      Mabon, Rt Hon Dr J. Dickson

      Walker, Rt Hon Harold (Doncaster)

      Dean, Joseph (Leeds West)

      McDonald, Dr Oonagh

      Welsh, Michael

      Dixon, Donald

      McKay, Allen (Penistone)

      Whitlock, William

      Dobson, Frank

      McKelvey, William

      Williams, Rt Hon Alan (Swansea W)

      Dormand, Jack

      McNally, Thomas

      Wilson, Gordon (Dundee East)

      Douglas, Dick

      McNamara, Kevin

      Winnick, David

      Dubs, Alfred

      Maxton, John

      Woodall, Alec

      Eastham, Ken

      Maynard, Miss Joan

      Woolmer, Kenneth

      Ellis, Raymond (NE Derbyshire)

      Mikardo, Ian

      Wrigglesworth, Ian

      English, Michael

      Milian, Rt Hon Bruce

      Young, David (Bolton East)

      Ennals, Rt Hon David

      Mitchell, R. C (Soton, Itchen)

      Evans, loan (Aberdare)

      Morton, George

      TELLERS FOR THE AYES:

      Evans, John (Newton)

      Moyle, Rt Hon Roland

      Mr. Donald Coleman and

      Field, Frank

      Oakes, Rt Hon Gordon

      Mr. Hugh McCartney

      Flannery, Martin

      NOES

      Aitken, Jonathan

      Benyon, Thomas (Abingdon)

      Body, Richard

      Alexander, Richard

      Benyon, w. (Buckingham)

      Bottomley, Peter (Woolwich West)

      Aspinwall, Jack

      Berry, Hon Anthony

      Boyson, Dr Rhodes

      Banks, Robert

      Best, Keith

      Braine, Sir Bernard

      Beaumont-Dark, Anthony

      Biggs-Davison, John

      Bright, Graham

      Bendall, Vivian

      Blackburn, John

      Brinton, Tim

      Brooke, Hon Peter

      Joseph, Rt Hon Sir Keith

      Powell, Rt Hon J. Enoch (S Down)

      Brown, Michael (Brigg & Sc'thorpe)

      Kaberry, Sir Donald

      Prentice, Rt Hon Reg

      Browne, John (Winchester)

      Kellett-Bowman, Mrs Elaine

      Price, David (Eastleigh)

      Bryan, Sir Paul

      Kimball, Marcus

      Proctor, K. Harvey

      Bulmer, Esmond

      Kitson, Sir Timothy

      Rathbone, Tim

      Cadbury, Jocelyn

      Knight, Mrs Jill

      Rees-Davies, W. R.

      Carlisle, John (Luton West)

      Lamont, Norman

      Renton, Tim

      Carlisle, Kenneth (Lincoln)

      Lang, Ian

      Rhodes James, Robert

      Chapman, Sydney

      Lawrence, Ivan

      Rhys Williams, Sir Brandon

      Churchill, W. S.

      Lawson, Nigel

      Ridley, Hon Nicholas

      Clark, Hon Alan (Plymouth, Sutton)

      Le Marchant, Spencer

      Roberts, Wyn (Conway)

      Clarke, Kenneth (Rushcliffe)

      Lennox-Boyd, Hon Mark

      Royle, Sir Anthony

      Clegg, Sir Walter

      Lester, Jim (Beeston)

      Sainsbury, Hon Timothy

      Cockeram, Eric

      Lloyd, Peter (Fareham)

      St. John-Stevas, Rt Hon Norman

      Colvin, Michael

      Lyell, Nicholas

      Scott, Nicholas

      Cope, John

      Macfarlane, Neil

      Silvester, Fred

      Cranborne, Viscount

      MacGregor, John

      Sims, Roger

      Dean, Paul (North Somerset)

      McNair-Wilson, Michael (Newbury)

      Speed, Keith

      Dorrell, Stephen

      McNair-Wilson, Patrick (New Forest)

      Speller, Tony

      Douglas-Hamilton, Lord James

      McQuarrie, Albert

      Spicer, Michael (S Worcestershire)

      Dover, Denshore

      Major, John

      Squire, Robin

      Dunn, Robert (Dartford)

      Marlow, Tony

      Stanbrook, Ivor

      Dykes, Hugh

      Marten, Neil (Banbury)

      Stanley, John

      Eggar, Timothy

      Mates, Michael

      Stevens, Martin

      Emery, Peter

      Mather, Carol

      Stewart, Ian (Hitchin)

      Fairgrieve, Russell

      Maude, Rt Hon Angus

      Stewart, John (East Renfrewshire)

      Faith, Mrs Sheila

      Mawby, Ray

      Stradling Thomas, J.

      Fell, Anthony

      Mawhinney, Dr Brian

      Taylor, Teddy (Southend East)

      Fenner, Mrs Peggy

      Maxwell-Hyslop, Robin

      Tebbit, Norman

      Fisher, Sir Nigel

      Mellor, David

      Temple-Morris, Peter

      Fookes, Miss Janet

      Mills, lain (Meriden)

      Thorne, Nell (llford South)

      Glyn, Dr Alan

      Mills, Peter (West Devon)

      Thornton, Malcolm

      Gorst, John

      Mitchell, David (Basingstoke)

      Townend, John (Bridlington)

      Gow, Ian

      Montgomery, Fergus

      Trippier, David

      Grieve, Percy

      Moore, John

      Vaughan, Dr Gerard

      Griffiths, Peter (Portsmouth N)

      Morrison, Hon Charles (Devizes)

      Viggers, Peter

      Grylls, Michael

      Morrison, Hon Peter (City of Chester)

      Wakeham, John

      Gummer, John Selwyn

      Murphy, Christopher

      Waldegrave, Hon William

      Hamilton, Michael (Salisbury)

      Myles, David

      Walker, Bill (Perth & E Perthshire)

      Haselhurst, Alan

      Neale, Gerrard

      Wall, Patrick

      Hawkins, Paul

      Needham, Richard

      Waller, Gary

      Hawksley, Warren

      Nelson, Anthony

      Ward, John

      Heath, Rt Hon Edward

      Neubert, Michael

      Warren, Kenneth

      Heddle, John

      Newton, Tony

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

      Henderson, Barry

      Normanton, Tom

      Wheeler, John

      Higgins, Rt Hon Terence L.

      Onslow, Cranley

      Wickenden, Keith

      Hogg, Hon Douglas (Grantham)

      Page, John (Harrow, West)

      Wilkinson, John

      Holland, Philip (Carlton)

      Page, Rt Hon Sir R. Graham

      Williams, Delwyn (Montgomery)

      Hooson, Tom

      Page, Richard (SW Hertfordshire)

      Winterton, Nicholas

      Hordern, Peter

      Parris, Matthew

      Young, Sir George (Acton)

      Howell, Ralph (North Norfolk)

      Patten, Christopher (Bath)

      Hunt, David (Wirral)

      Patten, John (Oxford)

      TELLERS FOR THE NOES:

      Hunt, John (Ravensbourne)

      Pattie, Geoffrey

      Mr. Robert Boscawen and

      Jenkin, Rt Hon Patrick

      Pollock, Alexander

      Mr. David Waddington.

      Jopling, Rt Hon Michael

      Question accordingly negatived.

    New Clause 17

      LOCAL HEALTH COUNCILS
      ' In section 7 of the National Health Service (Scotland) Act 1978 at the end of subsection (3) there shall be added :
      "Provided that no scheme shall be approved by the Secretary of State under this subsection which changes the boundary of a local health council or reduces the number of local health councils in the area of a Health Board except by an order to that effect by the Secretary of State, and no such order shall be made unless a draft thereof has been laid before Parliament and approved by a resolution of each House of Parliament." '—[Mr. George Robertson.]
      Brought up, and read the First time.
      7 pm
      Mr. George Robertson: I beg to move, That the clause be read a Second Time.
      Mr. Deputy Speaker (Mr. Richard Crawshaw): With this we may discuss new clause 18—Health Board Districts.
      Mr. Robertson: This selection of new clauses gives us a welcome opportunity to discuss for the first time in this House some of the proposals put forward by the Government in the document entitled "Structure and Management of the National Health Service in Scotland". The purpose of the Opposition in tabling new clauses 17 and 18 was to put down a marker for the future conduct of the Government in the way in which they might deal with the proposals that they put forward in their document.

      101
      The main recommendation in the document "Structure and Management of the National Health Service in Scotland" was for the abolition of the districts—a level of administration below the health boards. That is an administrative possibility that could be embarked upon by the Government without coming back to Parliament, and as that is a far-reaching development of some considerable significance to the future of the Health Service in Scotland, the Opposition believe that no such decision should be made without reference to Parliament. The effect of clause 18 would be to lay a mandatory charge on Ministers to bring forward an order to the House of Commons before any change could be made.
      New clause 17 is designed to do precisely the same for the local health councils, the other area outlined by the Government for administrative change in their consultative document. New clause 17 is, indeed, the one about local health councils, but I should like to say a few words in introducing the debate on new clause 18 in so far as it relates to the districts within the existing National Health Service structure.
      When the National Health Service was last reorganised in Scotland, the district level of organisation was one that was left very much to the health boards themselves to determine. The Secretary of State retained for himself only the opportunity to veto the changes that were put forward by the health boards to his Department. At the moment, only 10 out of the 15 health boards in Scotland even use a district level.
      The consultative document, in a brief introduction to what can only be described as a very brief and rudimentary paper, starts by saying :
      "The Secretary of State considers, and the views of the Royal Commission confirm this, that no further substantial reorganisation is required in Scotland."
      I am sure that most hon. Members on both sides of the House would concur with that conclusion.
      What we can conclude from that statement is that there should be no change in the structure of the National Health Service in Scotland simply for the sake of change. That would be a conclusion that would be too easy to derive from the Government's consultative document, because it goes on to recommend, two pages
      102
      later, a major—indeed, one might say a fundamental—change in the structure of the Health Service and the way in which it is organised in Scotland. The document states that boards should now be organised so that there is to be no multidistrict structure below the area board level. Indeed, paragraph 12 states that the Secretary of State
      "therefore considers that all boards should work on the basis that the normal structure should be a single district area."
      The consultative document is poor—not to say empty—on the real rationale behind the Government's conclusion that they should eliminate the multi-district level that exists in only 10 of the Scottish health board areas. It is quite clear, from discussing this matter with people who are involved in the Health Service in Scotland—whether at health board, area or sub-health board level—that there is no clear reason in their minds why the Government should have concluded that in Scotland anyway there should be a reorganisation proposed of this type that would, at one fell swoop, eliminate a complete district that exists and works quite effectively in health boards throughout Scotland.
      Indeed, the proposal for yet another generalised reform of the Health Service appears to be in flat contradiction of the conclusions that were arrived at by the Royal Commission on the National Health Service, when it talked about a flexible structure and the need to get away from simple one-off solutions for the whole of the National Health Service.
      Paragraph 20.48 of the Royal Commission's report said :
      "The NHS is not a tidy construction and it still bears the mark of the haphazard growth of health services before 1948. Arrangements which will suit one part of the United Kingdom will be wholly unsuited to another."
      At the same time as the Royal Commission says that about the Health Service in the United Kingdom as a whole, the Government take one of the Commission's other conclusions, that relating principally to the organisation of the Health Service in England and Wales, and are about to introduce it in the National Health Service in Scotland.
      Perhaps this evening we shall have an opportunity to hear from the Under-Secretary of State for Scotland precisely why the Government at this stage are

      103
      taking one conclusion of the Royal Commission and pitting it against the overwhelming conclusion relating to the geography, the proven need and the flexibility of structure that exists within the rest of the Royal Commission's recommendations.
      There are, of course, other problems that have been thrown up by the consultative document. The Government say that there should be no further substantial reorganisation in Scotland, but I am sure that the Minister will not deny that there has been a significant impact on health board morale as a result of the proposals put forward in his consultative document.
      People in Scotland who felt that the structure was operating reasonably well, and who had no reason, through public comment, to doubt that the structure had been accepted by the bulk of the Scottish population, must have been surprised to learn that the Government were coming forward with such a far-reaching proposal for reform. There has undoubtedly been an effect on staff morale because of the uncertainty that exists, during the consultative period, about the whole organisation that will exist within health boards after the consultative document and its proposals are brought forward with a view to administrative change.
      7.15 pm
      If the Government were to go ahead with the proposal in their consultative document they would remove the districts from, principally, the large health boards in Scotland. In the largest of the health boards, in Greater Glasgow, in Lothian and in Lanarkshire, the districts are performing a function that has been sadly underestimated up to now. In my area, in Lanarkshire, the districts are responsible for populations in excess of 200,000 people. Indeed, these districts are larger than the area health boards in some parts of England. Therefore, what may be a solution to the English problem is not likely to be immediately translated into the Scottish environment.
      If the districts are, willy-nilly, to be abolished in Scotland—districts which look after such large sections of the population—there will, as a consequence, be a gap between the area health boards and the unit and sector administrations in
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      charge of the hospitals and the community facilities.
      That gap will create problems for monitoring and for controlling the activities of the unit and sector level, as well as creating major problems in terms of training and the provision of a proper career structure for staff in the Health Service. In some of the health board areas in Scotland the gap would be far too wide, and the conclusion of the Royal Commission on the National Health Service that there should not be one simple solution or one sweeping reform is easily illustrated by the Government's resort to a solution that was genuinely and initially designed for the National Health Service in England.
      The Government's proposed abolition of the district level of administration means that there is genuine concern that the hospital units will be strengthened at the expense of the community medical services. That intermediate tier has operated well and effectively in so many areas, and its demolition may concentrate power in a way that neither the Government nor the Opposition would want to see. On the basis of the consultative document it seems that the Government have given inadequate consideration to this matter. We shall be interested to hear from the Minister what is the Government's initial response.
      I should like to say a brief word about the local health councils. I say "brief" not because I consider the matter unimportant, but because I know that many of my hon. Friends will raise the issue. If I catch the eye of the Chair later, I can perhaps pick up some of the points that they make about their own areas.
      The fundamental question that must be asked about local health councils is whether they are necessary at all. That is a question which, apparently, the Government have not answered. The references to local health councils in the consultative document have left widespread uncertainty among local health councils throughout Scotland. Indeed, the weighty submission to the Secretary of State from the Association of Scottish Local Health Councils is explicit on this point. It says :
      "The consultative paper for Scotland does not propose the abolition of local health councils but it is worded in such a way as to make it clear that their future is not assured."

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      That is a widespread feeling among a large number of health councils.
      The uncertainty created by the Government's inadequate treatment of this subject in the consultative document worries them considerably. The Opposition believe, as the previous Government did when they introduced this feature into the legislation, that the consumer's voice is necessary and integral within the NHS, and that by and large local health councils throughout Scotland have done an admirable job in reflecting the views of the health service consumer as well as the community at large, in 1relation to the problems thrown up in the day-to-day administration of the NHS.
      Indeed, if there is any fault in the existing local health council structure, it is not that they are too strong, or that there are too many of them, but perhaps that they are too weak and that by statute we should have given them clearer and tougher guidelines within which to operate. I believe that they should have a statutory right to be involved in policy making at a level at which they can affect the eventual outcome of such decisions. I believe, too, that they should have access to NHS facts and figures and to the information that is necessary to make proper use of them. There is a good case to be made for allowing them to represent patients on the various tribunals and bodies to which patients can make complaints against health boards.
      If reforms are necessary in the local health structure, and if it means a reduction in the number of health councils, we must ensure that mere is a strengthening of staffing, resources and powers of the local health councils so that the bodies that administer health in Scotland faithfully reflect the views of those in the community who use the NHS.
      The NHS is not a luxury for the community, the country or for anyone, especially in Scotland with its own particular and special health problems. It is a necessity for the survival of the people. It should not be tinkered with, administratively or in any other way, simply to satisfy a lust for change which is unsubstantiated either by the facts or by experience. The NHS in Scotland deserves more than that, and we hope to hear a
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      clarion call for its future from the Minister this evening.
      Mr. William Hamilton: The document on which the legislation for Scotland is based was a consultative document. But it was quite clear that the Government had virtually made up their minds about what they wanted to do. It is quite clear from the White Paper that the Government would like to see a diminution in the size or number, or both, of the local district councils and the health councils.
      I hope that the Minister will take the opportunity to give us an extensive assessment of the negotiations. I do not know whether they have been completed, but they should have been. I hope that he will indicate which authorities are wholly or even partly in favour of the proposals contained in the consultative document. From the representations that I have received from throughout Scotland, it seems to me that the vast majority of informed opinion which knows about the Health Service, and has worked in it or for it or has engaged in some activity connected with it, is opposed in whole or in part, strongly or lukewarmly, to the Government's proposals.
      I know, and I think all other hon. Members know, that the administration and management of the Health Service need changing. There has been constant criticism from all parts of the House, mainly from the Labour Benches, that the 1974 reorganisation was a disaster, that what was created was far too heavy on the administrative side and that it contained far too little democratic content.
      As a Member of Parliament, I often have difficulty in pinpointing the area at which a complaint can be focused. Indeed, when new appointments are made at health board level, I invariably go along and say "I want to direct my complaints about the Health Service to you as the chairman of the health board". I do not know whether it is my bullying approach, but invariably it is agreed that that should be done. It is convenient for me to send letters of Health Service complaints to the chairman of the health board, because he or she can direct them to whichever part of the Health Service they apply. That is one of the problems with which any Government who are

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      concerned with the effect of administration on the Health Service must be concerned.
      Mr. Bill Walker: Does the hon. Gentleman agree that one of the problems is that ordinary members of the public do not know who runs the health boards and that those boards appear to the public to be very undemocratic? The people involved may be extremely dedicated and efficient, but because the boards appear to be undemocratic, or non-elected, the public have no idea to whom to go.
      Mr. Hamilton: I shall deal with that point when I deal specifically with the local health councils.
      There have been relatively few years in which those organisations could prove or disprove themselves, yet the Government are now virtually saying "We shall reduce their numbers or their functions, or both". But so far that has been the only effective way in which the consumer interest can be represented. It may be inadequate. I think that it is. I think that the publicity which the health councils have received has been wholly inadequate. That may be their own fault or the Government's fault in not providing the finance. Whatever the reason, they are not effective in representing the views of the consumer. If one asked the man in the street to name the members of his local council and to say what they did or were supposed to do, I believe that he would look blank and be unable to answer.
      Mr. Robert Hughes: Does my hon. Friend agree that the difficulty is that health councils are specifically debarred by statute from taking up individual complaints about the Health Service?
      7.30 pm
      Mr. Hamilton: I must continue with my speech. I shall cover most of the points that are being raised by hon. Members, and if at the end of my speech hon. Members feel that I have omitted matters of importance they can then make their points.
      I return to the question of the consultative document. It goes out of its way to state that the Royal Commission did not suggest any major changes in the Health Service because it did not feel that there was very much wrong with it, and,
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      therefore, the Government would not make any substantial change. It states that there will be "no further substantial reorganisation", but that administration needs simplifying.
      During the debate on a previous amendment, I pointed out that the English consultative document is entitled "Patients First". In the Scottish consultative document there is no mention of patients except on page 11. That page refers to "good patient care". In 11 or 12 pages of the document there is much jargon about hospital administrators, functional managers, unit administrators, sector administrators, line managers, functional hierarchies, clinical divisions and so on. But the Health Service exists for patients and no one else. Unless we keep that fact constantly in mind we shall not get the right answers to the administrative and management problems.
      The changes that are proposed are substantial. Every organisation that has written to me, and to which I have written, agrees that the changes will be substantial at area, district, sector and unit level. Staffs at all those levels will be affected. It was not clear from the Minister's first speech that he was speaking on behalf of the United Kingdom. I hope that he will make clear in his reply that there will be maximum consultation with staff at all levels in the process of considerable friction that will undoubtedly be caused as a result of the implementation of the recommendations in the consultative document.
      Paragraph 25 of the consultative document admits that there will be :
      "Considerable and wide-ranging implications for many members of staff."
      We tend to use many euphemisms for the phrase "putting people on the dole". We no longer use those words. We say that they are being made redundant, or that they are being retired prematurely. But they are out of a job. The basic purpose of this rearrangement is to save money and to cut back jobs. I am not saying that it is always necessary to retain every job, industry and social service for all time. But if there are to be redundancies, and if men and women are put out of work or if their career prospects are jeopardised, they must be fully consulted, and fully compensated, and there must be adequate machinery, in

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      agreement with staff associations and trade unions, in order to effect those changes as smoothly as possible.
      The Government say that in the reorganisation in Scotland the one statutory body that will not be affected will be the health board. Why do they say that? Do they think that the health boards are perfect and that all the other statutory bodies are deficient? The only other statutory bodies are the health councils.
      I speak from local experience in Fife, and, although they may not thank me for saying so, I have the impression that there is a degree of friction between district councils and health boards because the health boards believe that the district councils are interfering with and are trying to take over some of their functions. My hon. Friend the Member for Hamilton (Mr. Robertson) pointed out that the functions of the district councils are ill defined as to where they begin and end, and about the overlap with the health boards. My hon. Friend the Member for Aberdeen, North (Mr. Hughes) said that the local health councils are not the machinery for individual complaints. But what or who is? It is not even the Ombudsman. Maladministration in the Health Service is a different matter, and it is narrowly defined. There is no clearly defined machinery through which individual complaints can be channelled. That is one of the great deficiencies of the Health Service that no Government have been able to tackle.
      One of the health councils in my area has said that it should be able to have its own statutory panel through which individual complaints could be channelled. That is a desirable extension of the functions of the only bodies that represent the consumer within the Health Service. That would enable Members of Parliament and individual members of the community to know to whom to go to have their grievances redressed.
      The council also makes the point that the health boards—this may be exaggerated—to a large extent represent the professionals in the Health Service, the doctors and people with professional qualifications, whereas they represent the layman, the consumer and the community. It is important to strengthen one against the other, because the views of the doctors can be different from, though
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      not as closely in contact with the local community as, those of the health councils.
      Far from being substantiated to get rid of or reduce the number of health councils, the argument is to retain them, to increase their functions and to define more clearly their functions. They have a great role to play which no other body that has yet been devised can play. The Association of Scottish Local Health Councils lists the activities in which it has been engaged, many of them educational. Many of them, on the principle that prevention is better than cure, try to educate the public in their areas on how to keep out of hospital. For instance, in Fife, the Kirkcaldy council established the Fife council for alcoholism to try to educate people on the dangers of excessive use or abuse of alcohol.
      There are many examples, from the Borders to the Highlands, showing how the local health councils have tried to educate people. Where they have not been educating people, they have been making submissions to the health boards on particular problems—perhaps problems associated with the facilities for children's health, dental services or services for the elderly—and they have been able to make proposals. As a result, representations made to them and, through them, to the health board have resulted in additional facilities for individuals and sections of the community.
      If the basic purpose of the Government's exercise is to save money, and I suspect that it is, that will be a false economy. All the representations I have received have said that the local health councils should be retained and strengthened and that their functions should be more clearly defined because they are the only bodies that remotely represent the wishes, desires, hopes and problems of the people who use the health services. To get rid of them or even to diminish them would be to diminish the quality of the service that people have a right to expect.
      The same thing applies to the districts. Some of them cover a bigger area and represent bigger populations than do some of the health boards. The Government state blandly that the health boards are doing fine and that they should be left unchanged. However, they have given no convincing proof that that is the case.

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      They have said that boundaries might be altered but they do not propose to amalgamate or abolish the boards. However, they virtually say that they intend going ahead with abolishing 19 or 20 districts, and they have given no reason for that.
      The staff representations that I have received from various of these bodies indicate that they are extremely worried. The Government devote one paragraph out of 25 in the consultative document to the implications for staff. That is not good enough. The jobs and career prospects of thousands are involved. The unions will have a lot of harsh things to say about that. Unless the Government get this right, they will land themselves with a whole load of trouble.
      I am not opposed to change in the Health Service ; on the contrary, I want it. The Service is top heavy with administration, but I am not sure that the present Government are the best to handle the problem. They have a record. In court a man's record is read out after the verdict is given. The Government's record on Health Service reorganisation is pretty miserable. I say "Keep your hands off it. You do not know what you are up to." I would prefer no change to the Tory Government changes proposed here particularly when I know that the Government's basic purpose is not immediately to destroy the Health Service but to transfer the burden, as they see it, from the taxpayer to the pocket of the individual. If they can save a few hundred thousand pounds by the proposals in the consultative document, they will be able to reduce the public sector borrowing requirement.
      That is the main purpose of all these activities, whether in health, education, housing or social security. Their general theme is "We do not like publicly provided services." The consultative document and the Bill fit into the picture, and that is why we, the unions and the general public have a right to be suspicious. The Bill is concerned not only with structure but with handing round the hat as a means of financing the Health Service. There will be flag days, striptease artists, bingo and all the rest. To that extent, we deeply suspect the Government's motives. Equally, the public have a right to suspect and fear
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      what the Government will do to the Health Service in the next three or four years if they get the chance.
      7.45 pm
      Mr. Jim Craigen: I agree with my hon. Friend the Member for Fife, Central (Mr. Hamilton). I should have thought that today's Ministers would be hesitant about involving themselves in another round of reorganisation since we are here dealing with the structure of which the Conservatives were the architects. I speak in that way not so much because I regard the present set-up as perfect, but because there is a genuine feeling throughout the Health Service which says "For goodness sake, do not let us become involved in yet another reorganisation which ultimately does not benefit the patients, the staff or the general public."
      The Government's consultative document showed clearly that they were more intent on reorganising the structure in England and Wales. The Scottish consultative document was a rather shadowy document. I wonder just what will be the cost to public funds of all the consultation and time-consuming effort in the document. With my hon. Friends I have been involved in many meetings on the White Paper. I dare say that a great deal of staff time has been spent in the area health boards and even at St. Andrew's House.
      The problems of the National Health Service in Scotland are ones of resource—finance and staffing—not problems of structure. I hope, therefore, that we will not spend a great deal of time in the near future on seeking an administrative reshuffle of health provision in Scotland.
      I turn next to the local health councils. I do not know why my hon. Friends are surprised that the Government should be seeking to reduce the element of consumer voice in the Health Service. They are doing it in a variety of other areas. However, we need the health councils because the Ombudsman and individual Members of Parliament alone cannot adequately represent consumer need in dealing with constituents' cases.
      I turn now to what is happening in Glasgow. My hon. Friend the Member for Dunbartonshire, East (Mr. Hogg) and I recently met the chairman of the northern area of the Greater Glasgow area

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      health council. The council was concerned lest it should disappear. However, it was equally concerned that there should be no telescoping of the five local health councils in the Greater Glasgow area. There comes a point when, if we are seeking to reduce the number of local health councils from five to four, or even to three, as has been mooted, we might as well have only one.
      Frankly, Glasgow would be far too big an area to have only one local health council. It could not provide the intimate knowledge that is required to deal with the cases that come before a local health council. The view was pointedly expressed that area health boards should consult local health councils more than they do. Being a cynic, I know that sometimes area health boards feel that local health councils would come up with answers that they did not want. That has been the case in the recent discussion document put out by the Greater Glasgow health board regarding the future level of bed provision and other facilities for patients and staffing levels in the city. I hope that the Government will not seek to destroy the work of the local health councils. They have not had a long period in which to build up their services or to become well known to the general public. These factors have to be taken into account.
      I understand that the Greater Glasgow health board intends to recommend the retention of the five health councils within the city. That is desirable because many of the 48 health councils in Scotland are infinitely smaller than any one of the five local health councils in Glasgow.
      I turn now to the new clause dealing with the organisation of the Service. The Minister will have received a letter from me and also from the Ruchill hospital medical staff association on this matter. The association's decided view is that the Government should leave the existing district management structure within the city. That also coincides with the local health council's boundaries.
      Of greater concern than any swiftness of hand in altering the structure is the available resources in the Greater Glasgow area. Recently, the Greater Glasgow health board put out a discussion document proposing the closure of several hospitals and a reduction in the number of beds in many other hospitals in the city.
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      I accept that that was in part due to the forecast reduction in the population within the Greater Glasgow area. But as I have made clear to the chairman and secretary of the Greater Glasgow health board, population predictions can easily go awry. New pressures are building up within the Health Service in Greater Glasgow, not least deficiencies in provision for geriatrics, especially psycho-geriatrics. Moreover, the Baird Street clinic for rheumatic diseases, which is in my constituency, was at one point intended to go into the new Royal infirmary. But, as the Minister will be aware, the chairman of the health board not so long ago expressed concern that sections of this new infirmary might not be able to open because of the shortage of funds available to the Health Service.
      I understand from recent discussions that the time scale for the move of the centre for rheumatic diseases into the new Royal infirmary will be longer than had previously been thought. But it is not causing a great deal of concern, partly because of the tremendously good work that is being carried out in that clinic which serves an area much wider than the city of Glasgow.
      My hon. Friend the Member for Fife, Central talked about the begging bowl having to be sent round. Recently I received a letter from a constituent, Mrs. Anna Docherty, who is promoting the collection of funds locally for a mobile artery and vein imaging system for Stob-hill hospital. That hospital is not in my constituency, but it covers a wide catchment area which includes some of my constituents. The secretary of the Greater Glasgow health board has told me that, if the people can raise the £40,000 or £45,000 required to purchase one of these machines, the board will meet the running costs. Incidentally, this system cuts out the need for the injection of dyes into veins and subsequent X-raying of patients who are being examined for the possibility of their suffering strokes. In other words, this system would save public money and be of enormouse benefit to patients and staff. Yet the health board does not have sufficient funds to make the necessary capital outlay, although it will meet the running costs if local people raise sufficient money, through raffles, concerts and many other activities in which they are

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      now involved, to purchase such a machine.
      We cannot afford a reorganisation of the Health Service by this Government as costly as the one left to us by the previous Conservative Government. The real problems in the Health Service are essentially increasing the financial and staffing resources to meet present-day demands.
      Mr. George Foulkes: Like my hon. Friend the Member for Hamilton (Mr. Roberston), I welcome this opportunity to debate the National Health Service in Scotland. However, I regret that Scottish Conservative Members, apart from the Minister, have been able to muster only the hon. Member for Perth and East Perthshire (Mr. Walker), and even he is committed to an untypical monastic vow of silence. However, even worse than that, despite all their protestations at Rothesay, Scottish National Party Members have not deigned to turn up. Of course, the Scottish Liberals, as usual, are also absent.
      The difficulty about a debate on the National Health Service in Scotland is that the majority of the issues cross the border and span the whole of the United Kingdom. There is a danger, when we are discussing the National Health Service in Scotland, of getting down to the administrative detail of the structure—and that is what we have been forced to do in much of this debate. We are reduced to that or to the parochialism of Gerry Mackenzie on Radio Scotland, if one is an addict or aficionado, that the solution to every ill is to take one's tartan tablets. I am glad the debate has not been reduced to that level—at least until now.
      I should like to concentrate on issues within the hospital service, the general practitioner service and the caring carried out by nurses, doctors and physiotherapists—the important elements in the National Health Service.
      The title of the consultative document for England was "Patients First", a cruel irony. It was one of the most inappropriately named documents. Like my hon. Friend the Member for Fife, Central (Mr. Hamilton), I believe that the National Health Service is for patients and not for consultants. It is not for the facility and
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      convenience of consultants. I see that the hon. Member for Dundee, East (Mr. Wilson) has entered the Chamber. The word must have got around. It may be that my predecessor, Mr. Sillars, instructed the hon. Gentleman to make an appearance.
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      I was involved in the discussions on the siting of the new Royal infirmary in Edinburgh. We were told that it was vital that the infirmary should be near to the teaching hospital so that the consultants could slip in and out. No importance was attached to the convenience of the patients and its accessibility for patients.
      In the present consultative document there is little talk of patients' interests and needs. It is said that if the Government reduced the number of local health councils that would not affect the effective discharge of their functions. If that were to happen, the areas covered by the remaining councils would be increased. Surely that would make the councils less effective.
      There is a council covering an area that is described as South Ayrshire. It does not cover my constituency alone as it includes the constituency of the Secretary of State for Scotland. That is a takeover bid that I am not too keen to encourage. South Ayrshire health council covers a vast area. It covers hundreds of square miles of the county. To suggest that if its area were increased its effectiveness would not be reduced says something strange about the nature of the consultative document. Alternatively, it says something about the functions that the councils are discharging.
      Some of my hon. Friends have said that the councils have not been given sharp enough teeth and sufficiently effective functions. When I hear some of my colleagues talk about giving local health councils more teeth, I am reminded of the need to get away from the administrative structures and to return to he service that we should be providing.
      In our country we have the worst teeth of Europe. There are more people in Scotland with false teeth per head of the population than elsewhere in Europe. I should like to see much more effort put into health education and to fluoridation. I appreciate that the latter is a difficult

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      issue that might divide me from some of my colleagues.
      I am sure that what I am about to suggest will not cause any divisions. In an answer that I was given on 25 March, the Government indicated that to provide a free general dental service throughout the whole of Great Britain would cost £89 million. That small amount would vastly improve the dental health of our people, especially of our young people. That is something positive to discuss if there are to be changes and alterations in the Health Service.
      I disagree in part with my hon. Friend the Member for Fife, Central. He joined in what has become the popular knocking of the administration of the Health Service. I should be concerned if administrative costs were too large a proportion of the money that is spent on the delivery of the service. As the Minister said to me in his reply on 25 March, administrative costs represent only 4·3 per cent. of the total Health Service budget in Scotland. I challenge Sir Derek Rayner to tell us that Marks and Spencer has lower administrative costs.
      Mr. Robert Hughes: It is 8·3 per cent.
      Mr. Foulkes: I was prepared to hazard a guess that its administrative costs are much higher. I am told by my hon. Friend the Member for Aberdeen, North (Mr. Hughes), whose word I take explicitly, that Marks and Spencer's administrative costs are 83 per cent. of its budget. That proves my point. The administrators are often the whipping boys.
      I said that I partly disagreed with my hon. Friend the Member for Fife, Central. I agree with him that the real problem is the lack of democracy and accountability in the Health Service. Its slim administration does not have a democratic body to which it is accountable. That makes it distinct from local authority councils. I regret that there is nothing in the consultative document and nothing in the Bill about democracy in the Health Service.
      I give one small example of the lack of understanding, sympathy and accountability of an area health board. The Minister is aware of this example. I am glad to say that he is sympathetic. There was a district nurse in Auchinleck who was greatly revered by the local community.
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      When she died, the local people raised a great deal of money to pay for a commemorative plaque and to contribute a piece of equipment to the local health centre. The proposition was put to the area health board and it turned it down. It said that to erect a plaque in memory of the district nurse who had rendered service to the community would create "an unfortunate precedent".
      What administrative bureaucracy ! What rot! I am glad that the Minister agrees with me. The members of the area health board who were councillors and who happened to be directly elected in their other capacities voted that the plaque should be erected. However, all the doctors and the other non-elected members thought that it would create an unfortunate precedent.
      That is a small example. It may appear to be unimportant. I accept that there are vastly more important examples throughout Scotland. However, it is a typical example and it illustrates the boards' lack of sensitivity.
      I agree that what the Government are putting forward is nothing to do with the real problems in the Health Service. It is merely an example of trying desperately to save money so that Ministers may say to their great Prime Minister that they have managed to save some money.
      I can suggest some ways in which they will be able to save money in Scotland.
      Mr. James Hamilton: They could resign.
      Mr. Foulkes: That is the obvious and clear remedy.
      I have asked about the bad debts of private patients in the NHS. It amounts to tens of thousands of pounds in Scotland. In England it approached £1 million over the year. In Scotland we have only 94 private beds. People are brought in by the consultants and given private treatment. They jump the queue and default on their payments. If we tried to get the money out of them or out of the consultants who admitted them in the first place, we should be getting some money to finance the NHS.
      Private institutions providing health treatment outwith the Health Service—for example, clinics and private hospitals—are being provided with free blood by the

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      blood transfusion service. They are being subsidised by the taxpayer.
      I do not suggest that we should stop the provision of blood. I am not suggesting that the clinics and private hospitals should set up their own blood-gathering service, or their own private vampire service as in the United States where they pay over the odds for pints of blood. I am merely suggesting that they should pay the economic cost for the blood with which they are being supplied so that those who are in private clinics and hospitals—many of them are wealthy—pay for what is being provided.
      I agree with my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) that the central problem of the NHS in Scotland is one not of structure but of resources. The Minister has three reports on his desk. One relates to the changing pattern of care for the elderly, which was produced by a joint committee including members of the planning council. The Minister says that he wants people to note it. He is doing nothing about it.
      The Minister has a report of a committee chaired by Peter McEwan on mentally handicapped people in Scotland and the provision that is necessary for them. He also has a report on confused elderly people which claims that we need hundreds more places for such people. There has been no action on any of these reports.
      On one famous occasion, which will be remembered with great regret and concern in Scotland, the Minister said that he was the "no cuts" Minister. Nothing could be further from the truth. If one looks at the escalating costs in the NHS and at what the health boards are being asked to provide with the paltry increases being given to them, one sees that this Minister is as much a "cuts" Minister as any other. Also he is a "cuts" Minister in an area in which the only kind of cuts that we should have are those by the surgeons in our hospitals.
      The consultative document produced by the English Minister, entitled "Patients First", had a cruelly ironic title. I hope that we can get away from discussions of bureaucratic niceties—the local health councils and the area board set-up—and discuss the things that really need to be provided in the National Health Service
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      in England and Scotland, namely, improvements in services to patients.
      Mr. Bill Walker: I had not intended to speak at length and I will not do so, but I take this opportunity to make a few comments about local health councils and health board districts. From the point of view of practical, first-hand experience, I expect I know more about what goes on in hospitals than most people, as I spent most of last year in hospital. I took that opportunity to study at first hand the workings of hospitals, and I must at this stage compliment the staff on their dedication to duty and the way in which they tackled their jobs. That is often overlooked.
      We talk a lot about efficiency, but what we are really worried about is resources. Funds must be obtained from somewhere. Either they are borrowed or they come from taxes. There is no magic pot of gold, and we must all recognise that fact, It may be sad, but it is true and it is a fact of life. We must link that fact with what appears to be the undemocratic structure of the health boards. On this point I am at one with the hon. Members for Fife, Central (Mr. Hamilton) and for South Ayrshire (Mr. Foulkes) I should like to see more democracy within the Health Service so that the patients could have an obvious avenue in order to make their points. This is absolutely essential. I do not look to any major reconstruction of the NHS ; because no one wants another reconstruction of the kind that we had before. But we must all seriously look for revenues which give the consumer some sort of access. Sadly, very few members of the public know who the members of the health councils are. Some people know who their locally-elected councillors are, and there is probably an avenue of access there.
      We should not give the impression in Scotland that we think that our Health Service is falling apart. It is not. If a person is seriously ill in Scotland, they know how to look after him. There are resources there to look after people. The problem lies elsewhere. I stress that the Health Service in Scotland, and particularly on Tayside, is very good if one is very ill.
      8.15 pm
      Mr. Robert Hughes: It is worth while recalling the origins of the local health

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      councils. Before the last reorganisation we had the regional hospital boards and the boards of managements of particular groups of hospitals—for example, the children's hospitals, the mental hospitals and so on. There was nothing else. With the reorganisation two things happened. First, the boards of management disappeared. It is worth commenting that at that time every regional hospital board gave evidence to the Government to the effect that it did not want the boards of management to disappear. Some of us thought that the boards of management, being appointed bodies, were, to some extent, bodies of patronage. But as time has passed we have realised just how important these bodies were, not just becauses they reflect a different tier of administration, but because they were able to visit the hospitals regularly to see what was happening in the ambit of their influence.
      The second major thing that happened was that the services provided by the local authorities, which now go under the grand title of community health services, disappeared into the ambit of the area health boards, with the exception of the environmental health services. As a result, there was no democratic participation whatsoever in the running of the Health Service. Not only was the democratic element removed ; the amount of lay participation in the Service was also removed.
      I have a great deal of sympathy with the area health board members. They are appointed by the Secretary of State to do a difficult job. I have the highest respect for them, but whenever there is a clash of opinion or problems in an area, it is the health board members who suffer because they get the blame. The local health councils are in the invidious position that they have no authority to demand from the area health boards any information as to how the Service should be developed. Unless they get that information, there cannot be informed discussions.
      I do not want to open up again the whole argument that has been taking place in Aberdeen recently about open-heart surgery, except to say that there was a very good meeting organised by the local health council to which members of the public were invited. About 300 turned up. People might say that that
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      was not a particularly large attendance but, given that it was the first attempt to discuss Health Service priorities, it was a reasonable attendance. By and large, it was a good meeting and everyone had a good hearing. One of the consultants, who was arguing the case for greater resources in his specialty, said that he found it very difficult to discuss such issues at a public meeting because he was not used to arguing the case in public. I ask myself why not, because, irrespective of the main argument of the resources of the Health Service—and I believe they are too few and that they are decreasing in relation to inflation—even in times when money is easier than it is now, there will always be an argument about how the money should be shared out. We all agree that the Health Service, since its inception, has developed in an unbalanced way. The hospital service is the ivory tower of the NHS. All the major resources go to it because very emotive issues are involved, especially in acute specialties and certain surgical and medical specialties. Very little attention in the public mind has been given to the elderly or the mentally handicapped. That part of the Health Service has flagged over the years. The only way we can get this argument before the public eye is to have a public discussion, with the doctors going to the public and arguing their case openly.
      This is a job that the local health councils can do. They can provide a platform on which people of differing points of view can argue the case. There are far too many facile opinions expressed about the Health Service. People imagine that it is easy to run, but that is far from true. The local health councils could play an important role there. Clearly, they have been in operation only a short time, but there is still a certain amount of distrust there which existed when the councils were set up. They were set up to provide some sort of lay body which could look at the Health Service and discuss its development. But many health boards were a bit chary about these bodies. They felt that, having no power or authority, they would not understand the priorities in the Health Service, which would be bad for the Health Service.
      I do not believe that those fears are borne out. Local health councils have

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      done a first class job, and could do a much better one if there was closer cooperation between area health boards and local health councils.
      I have two other points. First, there is not a proper avenue for patient complaints. Even the Health Service ombudsman has no right to look at clinical matters. Such complaints can be dealt with only through disciplinary procedures handled by the General Medical Council and local medical committees, which examine such complaints in the first place. The press, God bless its heart—none of us can do without it—is interested only in complaints about the adulterous or drug-taking doctor or the illegal abortionist, who may still exist even today. Complaints about general practitioners not attending to patients or not going out when called by parents of sick children get little attention from the press. Apart from disciplinary procedures, there is no way of dealing with clinical complaints, which should be discussed properly. Treatment by or behaviour of people in the Health Service should be channelled partially through local health councils. Otherwise, we shall drift on with people losing faith in the Health Service.
      The hon. Member for Perth and East Perthshire (Mr. Walker) said that no one wants a radical reorganisation of the Health Service. I disagree. I do not blame individual administrators, who cost less than those with Marks and Spencer or ICI. However, they are not the right people to look after the interests of patients. Even if there are such people, they still do not see what is happening.
      Some years ago, as a member of what was then the north-east of Scotland regional hospital board, I visited a mental hospital. We were taken on a tour by the physicians who ran the hospital. Two of us were buttonholed by a nurse who said "Just come with me a minute, please." She took us to a ward that was not on our route. She merely wrote on the wall with her finger "This wall is filthy." The administration had not been spending its maintenance money properly, because of graver pressures on its budget.
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      We have seen a number of reports recently about maladministration by nurses in mental homes. Without outside interest there cannot be proper supervision of that section of the community who cannot itself adequately complain. If such patients complain, it is said that they are elderly, mentally ill or confused. We should return to a system akin to boards of management.
      The pressures on the Health Service are growing year by year because of shortage of funds. People are at then-wits end running the Health Service. Let us have more labour participation and a greater sense of democracy. We can then see that patients are properly cared for.
      Mr. Allen Adams: My hon. Friend the Member for South Ayrshire (Mr. Foulkes) rightly chided the Government for their lack of interest in the debate. That also applies to the Liberal Party and half the Scottish National Party.
      People do not want to know about the Health Service and nursing until they are ill. They put such matters to the back of their minds. It is our duty to try to raise the level of public consciousness about preventive medicine, and not jibber inarticulately and incoherently about structures, as the Government have been doing. My hon. Friend the Member for Fife, Central (Mr. Hamilton) put his finger on the matter when he said that patient care and the needs of the sick were phrases that the Government rarely use.
      The Government's proposals are an attempt to obscure the realities of the Health Service in Scotland, which is grossly under-financed. They merely say that the problems can be solved by administrative reform. They cannot. The Government maintain, and some health boards even back them up, that there is growth in the Health Service in Scotland. Such arithmetic would insult even primary 1. The rate of inflation is 21 per cent. In the Health Service in Scotland we need to increase expenditure by at least 25 per cent. even to stand still, and that is assuming that we are starting from a sound basis. The Health Service in many respects, particularly in the care of the elderly and mentally handicapped, is in a bad state. Even an increase in

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      expenditure of 25 per cent. would not raise such care there to an acceptable standard.
      I do not argue that structure of the Health Service is perfect. I have doubts about many areas, which may need reform from time to time. However, the Government are attempting to cover up the need for a basic injection of capital for the Health Service in Scotland and probably the rest of the United Kingdom.
      People's health should be the first priority, but the Government do not seem aware of that. Let us take a wee look at specific examples ; for example, nursing in Argyll and Clyde, which is perhaps the worst health board with regard to nursing care in Scotland. By its own admission, the number of nurses in post is 25 per cent. below the Scottish average. Instead of talking about structures, the Government should tell us how they intend to tackle that problem within the next year. It is a serious problem and people are dying as a result of it.
      In the Argyll and Clyde area we have a 20 per cent. shortfall of midwives. The Government should not be talking about structures, but should be telling us how they intend to rectify that shortfall. Five hospitals have closed in the Argyll and Clyde area in the past year. What do the Government say about that? How is that improving the health of the people of Scotland? There have also been hospital closures in Glasgow. How will the proposed structural change help that situation?
      There is also the notorious situation at the new Inverclyde general hospital, where one ward has not yet opened. Inverclyde is an area with one of the most serious health problems in Western Europe. It is one of the highest unemployment areas and has one of the highest infant mortality rates in Europe. It also has a high incidence of lung cancer and heart disease, yet one ward in the hospital has still not opened. What do the Government say about that? How will their administrative change improve the health of the people of Greenock? What will it do tomorrow? What will it do next week?
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      Some of my hon. Friends have pointed out that there is an undeniable need for a massive increase in expenditure on geriatric care. Estimates vary, but it is
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      agreed that in the next decade the number of those aged over 65 will increase by 10 to 15 per cent. It is an acute problem which will be solved not by administrative tampering, but by more money for psychogeriatric units and home helps.
      The national scandal of the decade, on which perhaps all parties stand indicted, is the lack of input for the mentally and physically handicapped. It is not difficult to predict what percentage of children born in the next year will be mentally or physically handicapped. We can easily calculate what provision we shall have to make in about 15 years' time when those children are at an age when they can be trained or can go to work.
      At present, many parents have children of 16 who are mentally or physically handicapped and who have to sit in the house with nowhere to go, no training facilities and no prospects. That is an area where much more money needs to be spent.
      Circumstances in Glasgow and the West of Scotland clearly indicate that the NHS has been disgracefully neglected. For example, is there not a good case for massive sums to be spent on research on the drug Interferon? It has been known about since 1956, but little has been spent on that sort of research.
      The Southern general hospital in Glasgow has one of the most advanced neurosurgical units in Europe, but half of it cannot open because the money has not been spent to train the staff to man the unit. That is another example of where hard cash rather than administrative tampering will solve the problem.
      I could refer also to the problems with kidney machines and many other difficulties. It is clear that the Government are trying to draw red herrings across our path. The simple solution for the NHS in Scotland and in Britain is more cash, and not administrative tampering.
      Mr. Ernie Ross: New clause 18 draws attention to the fact that the Government's consultative document causes grave concern to the trade union movement in the NHS. One has only to think back to the problems during the winter of discontent to realise that if any future changes in the Health Service are to succeed they must take account of the trade union members in the NHS.

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      I agree with my hon. Friends who have said that the Government's plans to remodel the Health Service will make the provision of health care inefficient and remote. If the Government remove the district tier, inevitably they will cause industrial relations problems as well as administrative muddles.
      The Dundee district is a major teaching hospital district, which includes the Nine wells hospital, the Dundee Royal infirmary, the Royal Dundee Liff hospital, Strathmartine hospital, Dundee dental hospital, Ashludie hospital, King's Cross hospital, Royal Victoria hospital, Sidlaw hospital and the Dundee limbfitting centre, with a total of nearly 3,000 beds. There are 20 clinics, including community clinics, and four health centres. The annual budget is about £39 million. The number of staff employed is nearly 7,500, including full-time and part-time employees.
      The responsibility for managing the district lies with the district executive group that consists of the district administrator, the district medical officer, the district nursing officer and the district finance officer. There are sector and unit executive groups for individual hospitals or groups of hospitals and for community services.
      Although the consultative document suggests that management responsibilities at sector and unit level should be strengthened, it is obvious that if the district executive group is eliminated, there will be no management team with similar powers to the district executive group between the area executive group at board headquarters and the sector executive groups in Dundee. It is recognised in the Dundee district that the district level is the important level for industrial relations with the trade unions for many reasons. It is apparent that the district level is the real management level for the district and that the sectors and units continually look to the district for guidance on industrial relations problems.
      If the district executive group did not exist, there would be great difficulty in dealing with industrial relations problems and the problems that arise because of management failures at unit management level. It is difficult to see how board headquarters could deal expeditiously
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      with such matters as personnel and pay given the fact that it has not had to deal with such matters and assuming that it is busy with present board functions.
      I would contend that failure to deal promptly with problems affecting trade union members in the Health Service would be certain to give rise to difficulties, no matter how much union members may wish to avoid such difficulties. These problems should be resolved promptly if patients are not to suffer.
      The consultative document for Scotland is out of accord with the declared objectives of the Government. The consultative document for England sets out the main criteria for the establishment or continuation of the district in England. It says that an ideal district is a locality that is natural in terms of social geography and health care, large enough to justiy the range of specialities normally found in a district general hospital but not so large as to make members of the authority remote from the services for which they are responsible and from the staff who provide them. It says that a district should have a population of 200,000 or more, although a few might have fewer than 150,000. There should be a geographical identity for links with local government, and there should be appropriate links with any medical school within the district.
      On the basis of these criteria, Dundee ought clearly to be a district, and there can be no reason for eliminating district management. The population served by the health services in Dundee is about 210,000. I have already referred to the hospitals in the district. Apart from Dundee's natural suitability for local administration, the size and importance of the health services in Dundee are more than enough to justify the continuation of a district with district management.
      These views are held not only by the local unions but also by the local health council which has made similar points. The abolition of the Dundee district board would be a step backwards in the running of the Health Service in the Dundee district. It would be as disastrous for Dundee as the complete abolition of Dundee district council and its absorption into the Tayside region that would govern Dundee by remote control.

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      It would distance the people who make the decisions in the Health Service from the people who work in it and use it.
      If we are not to have a re-run of the problems experienced during the winter of discontent, the views of those who serve the Health Service and work in it are crucial. Union members in the Dundee district would oppose any effort by the Government to do away with the district health boards.
      The Under-Secretary of Slate for Scotland (Mr. Russell Fairgrieve): We have had a fairly lengthy but interesting debate. It is the first time during the course of the Bill that Scottish Members have had a chance to talk widely about the Health Service in Scotland. The hon. Member for Hamilton (Mr. Robertson) rightly said that the debate gives Members the chance to talk about the consultative document. One of the main threads of speeches has been the question of districts and councils to which I shall refer briefly later.
      There was also quite a lot of contradiction among hon. Members. One minute, the consultative document was short and rudimentary. Then it was not full enough. Then it was too full, and it was said that we did not need one. We have to make up our minds whether we want major change or no change in the Health Service in Scotland, or something in between. There was the feeling throughout the debate that some hon. Members did not know whether they wanted no change, a lot of change, or just a little change.
      We are fortunate in Scotland. We have not got the problems that face the Health Service south of the border. The same applies to the Health Service in Wales, which is on similar lines to that in Scotland. We do not have the extra tiers. We are not taking legislation in Scotland to remove a tier of administration.
      I might tell the hon. Members for Hamilton and for Fife, Central (Mr. Hamilton) that I am in the course of meeting every health board in Scotland. I have worked my way through about three-quarters of them The consultative document is one of the items that come up for discussion. I am not continually being told about low morale in the Health Service in Scotland.
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      The hon. Member for Hamilton suggested that the Scottish approach was inflexible. Possibly he overlooks paragraph 5 of the consultative document, which invites contrary views. Where such views have been submitted, they are being considered.
      The hon. Member for Fife, Central began by talking about the consultative document. He suggested that the Government had made up their minds. I do not think that a Government of any party describe a publication as a consultative document if they have made up their minds. We shall be very interested in the views which come up from the many bodies and individuals, and I have no doubt that the hon. Member for Fife, Central, as an individual, has submitted his own recommendations to the Secretary of State.
      The hon. Gentleman asked what was the state of play and which authorities had said what. I know that the hon. Gentleman is a far more experienced parliamentarian than I am, but he also knows that even I, having been here only six years, will not fall for that one. All the views had to be in by 30 April. Some have come in a little later, but we shall not rule them out. The hon. Gentleman will be surprised when he gets some of the views. I can assure him, without giving any names, that there are certain boards which have looked quite seriously at whether, for example, they should have a district structure. This will come out when we get all the submissions together.
      The hon. Gentleman said that the structure needed changing. The same comment was made by other hon. Members. The general view of Opposition Members seemed to be that the 1974 reorganisation was a disaster. This is being said continually. It is not for me to comment on it, but again I remand Scottish Members, without saying that it was a disaster south of the border, that in Scotland, in my opinion, it has not been anything of a disaster.
      I might in passing say to the hon. Member for Fife Central that no one on the Government Benches could ever accuse him of using a bullying approach. We absolve him of that.
      I doubt whether the changes will be substantial. There will of course be the

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      maximum consultation with the staff. In a previous debate, the hon. Member for Fife, Central tried to get me on my feet. It is not my normal practice to speak for long or to intervene more than is necessary in debates in this House. As I said, the closing date for comments in Scotland was 30 April and I repeat that some of them were late coming in. The large volume of evidence sent to the Secretary of State is being considered, and he intends to make an announcement as soon as he can.
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      Hon. Members must wait until my right hon. Friend can do that. There is nothing inconsistent in this with Scottish participation in the Whitley council machinery in dealing with jobs and redundancies. Hon. Members know that in Committee I gave a guarantee that a start would be made on this subject in Scotland. I should have thought that if as a result of our deliberations in Scotland there were cases of possible redundancy they could be achieved by natural wastage. At the very worst people who wished to do so could take early retirement. I do not see a great number of redundancies occurring in Scotland.
      If individuals have complaints against GPs they are dealt with by the statutory service committee procedure and boards advise patients on how to make complaints. If the complaint is against a hospital, it is dealt with, first by the health board, but the complaint may also be put to the Health Service Ombudsman, though he is debarred from dealing with clinical matters.
      I turn to the remarks of the hon. Member for Glasgow, Maryhill (Mr. Craigen), who mentioned another reorganisation. I have said, and I shall keep on repeating it, that this is a consultative document. Labour Members may not always agree with what is done by a Conservative Government, but when we send out a consultative document we do take into account the views we expect to get back. The hon. Gentleman also spoke of a resource problem. Of course it is a resource problem. As I have said to health boards, it would have been pleasant to have been a health minister for Western Germany or France which can spend more per head on health and social work
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      and on behalf of the disadvantaged in society than we can.
      It is interesting to recall that 15 years ago that was the position we were in. We were about the wealthiest nation in Western Europe with almost the highest standard of living. Today we are at the other end of the scale. We are about the poorest nation in Western Europe with almost the lowest standard of living.
      Mr. Andrew F. Bennett: Is the hon. Gentleman aware that during the whole of that time we have had to spend more on defence than the countries to which he has referred? Would it not be a good idea for us to spend the same amount on defence as they do in relation to our gross national product?
      Mr. Fairgrieve: All I say about that is that the last 15 years were mainly under a Labour Government, and the 15 years previous to that period were mainly under a Conservative Government. Hon. Members can, therefore, draw their own conclusions.
      Mr. Craigen: Perhaps the Minister will answer the point that I have raised. How much money is being spent on the consultative process?
      Mr. Fairgrieve: I cannot give the hon. Gentleman the figure off the top of my head, but I will find out how much money is being spent on the consultative process and let him know. However, I do not think that it is all that large.
      I accept that Glasgow has problems. In the consultative document we did not say that districts should be abolished. The hon. Gentleman is correct in saying that there are many districts in Glasgow that are bigger than some health board areas. We have said that if possible the norm should be a one-district authority but that if a health board says that a situation is ridiculous in Glasgow it will be allowed to do as it thinks fit. In many cases a district structure will, of course, be allowed to remain.
      Population predictions are always difficult in relation to working out the number of beds that eventually will be required to deal with the great geriatric problem that faces us. The hon. Gentleman spoke, shall I say, of the spectre of raising money. We say, after all, that friends of hospitals have raised money in the past and that we see nothing wrong

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      in making statutory provisions in that respect.
      The hon. Member for South Ayrshire (Mr. Foulkes) spoke about the absence of Scottish Conservative Members. Let me remind him that in the last Parliament—though he was not a Member of it—the situation was the same. There was a continual absence of Scottish Labour Members when, for six years, the previous Government were putting Bills through the House.
      The hon. Member said that there was little talk of the needs of patients in the document. Everything in the document is directed towards achieving better patient care. I shall come later to whether the health councils should have more teeth I agree with the hon. Member about the great problems of Scotland's health and the need for a better education programme in Scotland.
      Mr. Foulkes: I am grateful for the Minister's agreement, but how will the Government achieve that better health education?
      Mr. Fairgrieve: If the hon. Member will contain himself, I think that my right hon. Friend the Secretary of State will have something to say later in the year about health education.
      Preventive medicine is easier and more pleasant and might even cost less than curative medicine. We have kept administrative costs in the Health Service in Scotland down to 5 per cent. I must check about the Auchinleck nurse to which the hon. Member referred. He will not expect me to be diverted to speak about the vampire service because that involves the question of blood donors and whether they should specify to whom their blood should go.
      I accept that there is a resource problem. We have made that clear in documents on the elderly and the mentally handicapped. The hon. Member for South Ayrshire knows that we have not made any cuts in the Health Service in Scotland and that we have restored the squeeze. This year there is a 2·5 per cent. real increase in spending on the Health Service in Scotland.
      I was pleased about the tribute paid by my hon. Friend the Member for Perth and East Perthshire (Mr. Walker) to hos-
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      pital staffs in Scotland. I am sure that we all agree with him. He mentioned money resources and said that money does not grow on trees. For the last 20 years the country has believed that money has no particular value and that it is either borrowed or printed. Perhaps that is why we are in our present difficulties. He mentioned the undemocratic structure of health boards. Health councils and boards are not elected. Both bodies are appointed.
      The hon. Member for Aberdeen, North (Mr. Hughes), in his interesting contribution, mentioned reorganisations with which he was closely connected. I am sorry that he is not in his place, but he has attended the entire debate. The NHS in Scotland remained substantially unchanged for 25 years. It had five regional hospital boards for planning hospital services, 65 boards to deal with day-to-day management and 25 executive councils for pharmaceutical, general medical, dental and ophthalmic services. In addition—and this is interesting—it had 56 local health authoriies which provided services for mothers, young children and the elderly.
      The hon. Member expressed sympathy with health board members. Apart from an honorarium to the chairman, the work is done voluntarily, and all of us in this House must thank those people in Scotland who are members of health boards for the amount of time they put into this work.
      The hon. Member for Paisley (Mr. Adams) mentioned preventive medicine. He spoke about the Health Service being grossly under-financed. I suppose we can say that everything in this world in grossly under-financed if we can get the chance to double the expenditure. He also mentioned that in Argyll and Clyde patients were dying because of the shortage of nurses. I should be most grateful if he would write to me giving me chapter and verse so that I can look into the matter.
      The hon. Member also talked of the closure of five hospitals in Inverclyde. He knows that that is not unconnected with the opening of Inverclyde district general hospital. One ward was not closed ; it was never opened. [Interruption.] Nevertheless, Argyll and Clyde still have a higher bed ratio than the rest of

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      Scotland, and I think that the hon. Member knows that full well.
      The hon. Member for Dundee, West (Mr. Ross), with his knowledge of and interest in the trade union movement, was able to give us his views on the trade union set-up in Dundee, particularly at the district level. He felt that this is where industrial relations should best be sorted out. He emphasised the necessity, in his opinion, for the district level.
      We have listened with great interest to all the points made by hon. Members. These will be carefully noted in our full consideration of the response to the consultative document "Structure and Management of the National Health Service in Scotland". I cannot at this stage say precisely when the Secretary of State will be in a position to make his decision known about the various issues in the consultative document. We are aware of the need, for the well-being of the Health Service, to reach our decision with all reasonable speed. At the same time, we need to give proper consideration to all relevant matters, including those concerning staff terms and conditions, which I spoke about earlier in the day. Work is proceeding on the terms and conditions of staff.
      Our consultative document gave assurance on these issues, and I repeat that we shall be as fair as possible to all staff involved in such changes as we propose. We shall be discussing with staff interests in due course the arrangements for filling posts and protecting the interests of those who may be adversely affected by our proposals. I expect, however, that by means of natural wastage in the Service, as I said earlier in the debate, it should be possible to keep to a minimum the extent to whch NHS officers will be seriously affected by the changes that we implement.
      Some hon. Members seem to have been suggesting that the Health Service in Scotland should remain unchanged, and stay in its present form. I am well aware that six years, since the reorganisation of 1974, is not a long time for a large organisation such as the Health Service to adjust fully, but it is also important that the Health Service should not stand still. While we do not consider that the Health Service in Scotland requires the same
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      radical change as is envisaged in England, it is right and proper for us to take this close look at the present structure and management of our Health Service. It is important that such a large employer and spender of public money should be as efficient as possible, and that decision making should be simplified and kept on as local a level as possible.
      Although I have not yet had the opportunity to consider in detail all the comments submitted, I know that, with different emphasis on the practical problems, the broad aims which underlie our consultative document are shared by the vast majority of those who have commented.
      I turn now to the new clauses. New clause 17 seeks to make variations in schemes for local health councils subject to parliamentary scrutiny. In our consultative document we asked for views on the value of work done by these councils, and whether their number could reasonably be reduced. These questions needed to be asked, since local health councils in Scotland cost about £½ million each year, and this is money which could be spent on direct health care. We have received a large body of comment on this issue from local health councils, from voluntary and community groups, and from the health professions and health boards.
      It is clear that the local health councils have found friends among the voluntary and community groups. But the impression that I have gained so far is that there is a more mixed response from other health interests. We are giving this question very careful consideration. We are not so rich that we can afford to sustain bodies which do not contribute to better health care nor, in view of our wish for a local voice in the Health Service, would we sweep away these councils if we are convinced of a real local need and desire for bodies of that sort.
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      At this point, one must also realise that for 27 years prior to 1974, somehow and in someway we managed to exist in Scotland without health councils. That is a point which must be considered.
      New clause 18 deals with control of the numbers of boundaries of districts within health board areas. Again I

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      ought to mention that in Scotland we are fortunate that our health board areas are contiguous with local government regions, which is not the case everywhere south of the border. We start off with that advantage, and we go along the regional boundaries, except for Strathclyde which was broken up into four board areas.
      The question of what district arrangements there should be in Scotland below the level of area health board is one to which we are giving particular attention in the context of the consultations. However, we are not yet in a position to make a statement about it. What must be said however, is that, given the clear support for their to be greater decision-making at the local level, it is most important that we get the balance right at the levels of administration and area. Therefore, the question of districts in Scotland is one which cannot be debated in splended isolation but must be considered in the context of the overall planning and the operational task which a health board must perform.
      As I have already said, we have consulted widely in Scotland about what should be done. We are now considering carefully the views that we have received. I welcome the debate as an opportunity for hon. Members to make their views known—and that they have done—before decisions are taken. Having taken views, the matter is one to be settled between the Secretary of State and the health boards, as has always been the position under various Governments. The new clauses would add an unnecessary complication to that position, and I ask the House to reject them.
      Mr. George Robertson: At the beginning of this debate I asked for a simple assurance from the Government that if major changes were to be made in the structure of the NHS in Scotland or in the number, size or scope of the local health councils, Parliament should have an opportunity to debate the matter. That is all that the new clauses say, and that was the only assurance that we sought this evening.
      It took the Minister almost 20 minutes of a waffling smokescreen, which included the breath-taking sight of him reading verbatim from a Scottish Office fact sheet, finally to arrive at the point at which he said that ultimately it would be a matter
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      for the Secretary of State for Scotland and the health boards—not Parliament—to decide on the way in which the NHS would be run north of the border. That is not good enough, nor is it in line with practically everything that has been said in this fortuitous debate on this important issue.
      It is remarkable that the debate has been characterised by the fact that only one Conservative Member of Parliament from Scotland has bothered to take the time to come along and participate in it. If Conservative Members were to show any interest in the subject and in the future of the Health Service in Scotland we might, perhaps erroneously, have some confidence in the Secretary of State's ability to look at the outcome of the consultations and to arrive at a proper conclusion. But we are not so satisfied, and we shall seek to divide the House on this matter.
      It is inappropriate that decisions on the future of the structure of the Health Service in Scotland, and on the future of consultations with consumers in the community as well as patients in the Health Service, should take place behind closed doors rather than in front of the people in Scotland in their elected Parliament.
      The Minister, in the usual bland style that we expect from the Under-Secretary of State for Health and Social Security, carefully went over a number of the points that were raised. He proclaimed that he was a Minister of no cuts, yet he is supervising a regime of cash limits that is cutting into the real resources that the Health Service has to spend on the Scottish population. The hon. Gentleman defended every dot and comma of the existing health board structure—a system of quangos, to use the pejorative expression that his leader uses continually. It is remarkable that the spectre of the Prime Minister is not hanging over him tonight while he is defending this almost totally unaccountable level of administration in the Health Service.
      When hon. Members suggested genuine and reasonable ways in which that system could and should be made more accountable, he said that there was no evidence to suggest a need for that. He used evidence from the health boards for that assertion. The real question in the Health Service is not of structure, but of resources—the priorities that would be

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      given to the Health Service by any Government who cared about the problems afflicting the Scottish population today.
      The consultative document deals with the structures. Its conclusions are put forward irrespective of the recommendations made by the Royal Commission on the National Health Service. When hon. Members asked moderately and reasonably for assurances that they would be consulted before the final decisions were
      taken, they were told arrogantly by the Government that the final decision would be made more appropriately by the Secretary of State for Scotland and the health boards. That is totally unacceptable to the House. We shall divide the House on this important issue.
      Question put, That the clause be read a Second time :—
      The House divided : Ayes 112, Noes 167.
      Question accordingly negatived.

    Clause 1

      POWER TO MAKE CHANGES IN THE LOCAL ADMINISTRATION OF THE HEALTH SERVICE IN ENGLAND AND WALES
      Sir George Young: I beg to move amendment No. 38, in page 3, line 3, after 'enactment', insert 'or instrument'.
      Mr. Deputy Speaker (Mr. Bernard Weatherill): With this it will be convenient to take Government amendment No. 39.
      Sir G. Young: These are two technical amendments to simplify the administrative process of substituting "districts" for "areas" in statutory instruments.
      Amendment agreed to.
      Amendment made: No. 39, in page 3, line 4, leave out 'in consequence of' and insert 'having regard to'.—[Sir George Young.]
      9.15 pm
      Mr. Moyle: I beg to move amendment No. 3 in page 3, line 6, at end insert
      ' and in particular he shall refrain from making any order relating to district health authority boundaries in London until such time as a proposal for a Regional Health Authority for an area co-terminous with the area governed by the Greater London Council has been the
      142
      subject of independent inquiry and report to him.'.
      The Royal Commission recommended an inquiry into the London Health Service. We had hoped when we were in government that the Royal Commission would give us advice on how the London Health Service which has more than its normal share of problems, should be reorganised. It did not do that. It recommended a special inquiry into the London Health Service. That was the first substantial change in the London situation after the Labour Administration left office. One of the subjects for any inquiry such as that would be whether London required four regional health authorities meeting in the centre.
      The second change which has taken place since we left office and which affects London is that growth in the Health Service in London has gone. The announcement made by the Secretary of State for Social Services was that the London regions would have 0·3 per cent. extra resources in real terms in this financial year compared with last year.
      That is totally inadequate. There has to be 1 per cent. real growth to cope with the increased number of elderly and to meet new medical techniques. In these circumstances there is considerable doubt whether the four cake-shaped slices of the four London regional health authorities that are designed to move resources out

      143
      of London to the Home Counties can continue to function as projected by the right hon. Member for Leeds, North-East (Sir K. Joseph), who is now Secretary of State for Industry.
      The consultative document rejects an inquiry. Paragraph 41 states :
      "Much of the work necessary for taking decisions about the health services in London is already in hand."
      The trouble is that the work is fragmented. First, we have the Flowers report, from which the Government do their best to stand off on the ground that it is nothing to do with them. However, it is a vital document for the future development of acute hospital services in London. Secondly, we have the London Health Planning Consortium report which is related to the Flowers report. Thirdly, the Government have set up a committee under Professor Acheson to consider general practitioner services in London. Lastly, there was an announcement in the past few months of a London advisory group to consider other aspects of the London Health Service.
      As these multifarious inquiries are fragmented and not comprehensive, we sought in Committee to establish the need for inquiry into the London Health Service. That attempt was rejected. If a policy for the future of the London Health Service is to succeed, it must be evolved by the people of London. They must be involved in its development and the whole policy must be sold to them. No machinery exists for either operation to take place.
      We are returning to the fray because since the Bill left Committee there has been an important development. The Conservative-controlled Greater London Council has called for the institution of a regional health service for the Greater London area. It may hurt me to say so, but I find myself in agreement with the Conservative-controlled GLC to the extent that its proposal should not be rejected until there has been the most thorough inquiry into it.
      The Conservatives argue that local authority views can be more easily put to the National Health Service if that form of organisation is evolved. Secondly, they argue that it would allow the cheaper administration of the service. I note that the GLC is calling for Lewis-
      144
      ham to have a district health authority of its own. I entirely support that suggestion. Any desire that the Government may have to attach Guy's hospital to the Lewisham district will be fiercely rejected locally.
      Mr. David Mellor: Will the right hon. Gentleman be as forthcoming as he has been on the GLC proposals on the two other matters that he has mentioned? Many of my hon. Friends are deeply concerned about the Flowers report and the consortium report. What is the view of the official Opposition on those reports, especially as they affect Westminster hospital?
      Mr. Moyle: Yes, we are deeply concerned about the two reports and our official view is that there should be no action on either Flowers or the consortium report until there has been a thorough inquiry into the London Health Service.
      The London Health Planning Consortium said :
      "Our objective has been firstly to identify a framework of major hoscpitals around which acute services should be provided in the future in a way that is responsive to population change-Secondly, the framework is intended to provide a firm base upon which the medical schools can with confidence reshape and redevelop their education and research roles."
      There are many people in London who would argue that that is trying to settle the issue between local and teaching hospitals before the battle has been opened. Many would argue that the real health care is given in the ordinary surburban district hospitals scattered throughout the capital. To try to make them fall in with what would be suitable for the teaching hospitals without any attempt at discussion or debate is putting the cart before the horse and missing a great opportunity.
      At last we have the opportunity to question Ministers about the actions of the London advisory group. I have given notice on a number of questions that I wish to put. First, will the Flowers report, the London Health Planning Consortium report and the Acheson report be laid before the London advisory group as evidence? Secondly, will the London advisory group consider the GLC's proposal for a regional health authority for London, and will it comment on this? Will the group hear evidence from the public and invite public bodies interested in the National Health Service to give evidence?

      145
      Will the London advisory group consider the post-graduate hospitals? When we were in government we put forward proposals for the interim future of the post-graduate hospitals. If the Government want second thoughts on that, I would not regard it as a matter on which I would be prepared to go to the stake. Will the London advisory group consider the relationship of the teaching hospitals to local hospitals in London, even if it means upsetting the basic principle on which the planning consortium works?
      Will the London advisory group consider the desirability of the Resource Allocation Working Party policy still being applied to the movement of resources out of London to the Home Counties? We now have an admission from the Secretary of State that the real resources for the National Health Service this year will decline for the first time for many years.
      Will the London advisory group also consider the use of London hospitals by the Home Counties? There is always the argument that Home Counties hospitals are not as well provided for as London hospitals, and that is perfectly true to a large extent. Many people in the Home Counties find that it is easier to use London hospitals than local ones. For example, a major teaching hospital in London is much easier to reach for some one living in Brighton that a major teaching hospital in Canterbury because the journey across the grain of the country would be very difficult. It would be much easier for people to get on a train to London Bridge, Waterloo or Charing Cross in order to attend Guy's or St. Thomas's.
      Will the London advisory group compare London social services provision with that of the Home Counties? The burden on hospitals depends substantially on the burden which the social services in any locality can undertake. It is generally believed in London that the Home Counties do not make provision out of their resources for social services in their counties on the same scale as the London boroughs because they wish to protect their ratepayers from anything other than minimal rises. This criticism must be answered if London support is to be obtained for any policy that the Government have in mind.
      What will be the impact of the transfer of mental illness and mental handicap
      146
      treatment from the Home Counties to inner London? Will the group be comparing London general practitioner services with those of the Home Counties? Rules of thumb are not possible here. It is possible that London general practitioners are technically thicker on the ground than general practitioners in the Home Counties. However, in most of the Home Counties general practitioner services are provided mostly by people who are in the prime of their working lives. In balanced groups in large sections of inner London, doctors restrict themselves to the minimum National Health Service lists in order to leave the maximum room for private practice. I know to my cost that a number of them occupy surgeries in premises that are an indictment of the medical profession. It is not easy to compare like with like. It is a job for the London advisory group.
      9.30 pm
      Then there is the discontent in the London ambulance service. Many assert that it is unable to compete in the labour market, that it has never been given its rightful status as an emergency service and that its structure prevents efficient running by providing no accountability or responsibility. It is said that consensus management, of which the London ambulance service is an example, militates against efficiency. Again, a reduction in resources will make the situation worse.
      Is it feasible to transfer resources from the acute sector to community services? In much of London the practice is for people to resort to the teaching hospitals instead of seeing their general practitioner. Many inner London social services are under great pressure because of housing and social conditions, ethnic minorities and so on. All the community services need to be strengthened. One source for that may be the existing acute services, where beds appear to be in large numbers.
      Finally, and perhaps most crucially, will Government action on the reorganisation of the London Health Service be delayed until the London advisory group has considered all those points and produced a report and recommendations for public debate and discussion? That is what we want. The reorganisation will doubtless be centred around the idea that

      147
      there should be a regional health authority for London. We want full consideration and public debate of all the problems before the Government take action. Londoners must be carried by any policy propounded for London's health services. At present that is not so. They are worried. They see hospitals being closed and do not know why.
      People say that other parts of the country are not as well off as London, yet Londoners know that in many cases their general practitioner services are inadequate and their social services are under considerable pressure. They will want all that taken care of.
      Finally, turning briefly to the Westminster, King's and Royal Free hospitals, we especially say that no action should be taken on the future of those famous hospitals until the inquiry report is available. That answers the point raised by the hon. Member for Putney (Mr. Mellor).
      Those are the official views of the Opposition. We look forward to hearing what the Minister has to say about the questions that we have posed.
      Mr. Ennals: I warmly support the proposal for an independent London inquiry and agree with all the arguments advanced by my right hon. Friend the Member for Lewisham, East (Mr. Moyle).
      I wish to develop only one argument. Many hon. Members are deeply concerned about the danger of possibly damaging proposals for the reorganisation of medical education in London, and in particular the future of the Westminster medical school. Why should any responsible group plan its closure? It cannot be on grounds of costs. It costs less to educate a medical student at King's College and Westminster than anywhere else in London. The total cost of training a doctor over five years at Westminster medical school is £14,000, and at St. George's hospital medical school it is almost £30,000. The average cost for all the London schools is about £22,000.
      The proposal cannot be justified on the ground of performance. It is generally accepted that Westminster is, in every sense, a centre of excellence. Its academic record certainly proves that.
      148
      The vice-chancellor wrote to the dean of the medical school at Westminster :
      "If one takes the final medical degree examinations at first attempt, Westminster Medical School is top of the list with an average of 88·5 per cent. passes over the 10 year period 1970–79."
      Subsequent figures were published in The Lancet on 10 May. The final MB results of Cambridge university students trained at the London Medical schools showed Westminster high among the distinguished students at 6·2 per cent., compared with 1·4 per cent. from St. George's, 1·7 per cent. from the London, 2·6 per cent. from Guy's and 41 per cent from Bart's ; second highest among those who passed and with by far the lowest figure of failures at 51 per cent., compared with 24·3 per cent. for St. George's, 21·6 per cent. for Bart's and double figure failure rates from Guy's, King's, the Middlesex, St. Mary's and UCH. I am not running down any of the others ; I am simply trying to find out why anyone should propose that the Westminster medical school should close.
      One reason why the Westminster medical school is so good is that it is small. Relations between the academic and student bodies are close and it is an endorsement of the view that small is beautiful—a thesis that runs contrary to the recommendations of the Flowers report.
      It would be unthinkable and academic vandalism to close the most successful of the London medical schools for the sake of administrative tidiness or for any other reason put forward in the Flowers report. I was glad to have an assurance from my hon. Friend the Member for Lewisham, East that the Opposition Front Bench believe that no such decision should be taken until there has been a further inquiry into all the problems of the services in London. Certainly at the Westminster we have a school which produces not only doctors, but research work of a high standard.
      We have to ask why the proposal has been made. The vice-chancellor of the university said in the hearing of a number of hon. Members from both sides who are in the Chamber that proposals to close the school would have been contemplated only if it were known that there would be a substantial reduction in the number of acute beds at the Westminster.

      149
      The assumption was that the recommendations of the London Health Planning Consortium would be carried through, that 410 beds would go and that the Westminister would be left with 100 beds and no basis for a medical school.
      The Secretary of State has made it clear that no decision has been taken on the recommendations of the consortium. The Kensington, Chelsea and Westminster area health authority (teaching) has concluded that for service planning reasons—not educational reasons—the Westminster hospital should not be reduced to 100 beds as recommended, but that 350 acute beds should be retained, and that the remaining capacity might be used for a small postgraduate institute. Obviously that problem is an essential task for an inquiry.
      Another argument takes the matter beyond the Westminster to the broader scope of the Flowers report. It concerns the size of units. I have grave doubts about the arguments used in the Flowers report to justify medical schools under a single management structure. The success of the Westminster medical school provides impressive evidence of my view.
      The proposals would result in the creation of large medical schools, at least two of which would be larger than any other in the United Kingdom. Many academics, including some from large provincial schools, have serious misgivings about medical schools of such a size. The deans of the provincial medical schools have said :
      "It has been the common experience of expanding Medical Schools that the quality of medical education has suffered significantly and progressively as the annual intake has risen above the figure of 100·120 which we consider to be a far more satisfactory size of entry. We were interested to learn that in the United States the average figure is 133."
      The Royal College of Physicians takes a similar view of large medical schools. It says :
      "Small group and even individual teaching is to be encouraged, and this may be achieved by the use of associated hospitals, and by secondment of students for part of their course to peripheral hospitals where they can be given more personal responsibility. We see considerable virtue in allowing individual teaching hospitals to retain their identities ; but equally we recommend co-operation, or even federation between them, so that the entire range of clinical academic disciplines may be covered without expensive reduplication. This possibility has not so far been adequately
      150
      tested in London, and this should be done before large-scale mergers are imposed."
      This is only one argument for a thorough inquiry into medical education within the context of all the provisions of health, medical and educational services in London. I hope that the Minister will confirm the point made by the Secretary of State on other occasions, namely, that no decision has been taken about what will happen in terms of cutting the number of beds. It would be madness for the university to proceed to a decision on the whole pattern of medical education in London that affects some of the finest medical schools, not just in London, but in the world. For any such decision to be taken before there has been a proper inquiry would be almost criminal.
      Mr. Mellor: I am glad to have the opportunity to contribute to a debate on London health services raised by this interesting amendment. Throughout my brief time in this place, the problems of the London health services have been an almost constant preoccupation, not because I have so wished but because of circumstances that have arisen both in my constituency and through my other interests as a special trustee of Westminster hospital. I should make clear, so that my observations are not misunderstood, that nothing that I shall say is intended to be critical of the Minister, who, on many occasions, which both he and I know about, on constituency matters relating to hospitals in my constituency, has been most supportive and helpful. I pay tribute to his assistance and to his clear dedication to the London health services.
      It is equally right that what I say should be regarded not as a criticism but as an exhortation to yet greater effort to see, as clearly as I see, through my contacts with the Westminster hospital, and in other ways, the areas of concern that have built up and the need for positive further action by the Government.
      I should like to take up the speech of the right hon. Member for Norwich, North (Mr. Ennals) about Westminster hospital, although that represents only one part of the remarks I wish to make. I do not wish to repeat what I said in an Adjournment debate that I raised on this subject some months ago. I prefer

      151
      to move on. It is disappointing that on many occasions—not just in that debate but as recently as Question Time last Tuesday, when my hon. Friend the Member for Peterborough (Dr. Mawhinney), the right hon. Member for Norwich, North and I expressed in categoric terms what we know to be the position of London university on the Flowers report—there has not been a greater explanation of the Government's position than that given by my hon. Friend the Member for Ealing, Acton (Sir G. Young) that the Government did not wish to be associated with the consortium report in relation to Westminster hospital. They were, nevertheless, taking refuge behind the suggestion that this was a matter for an advisory group. I cannot pretend to find compelling a situation whereby a consortium report of an advisory nature is put out to yet another advisory group to give advice that, in the fulness of time, will be assessed by the Government.
      That might seem all right on the whole if the main concern was to avoid a decision being taken. But the tragedy is that there is this failure on the part of the university to address its mind to the central issue. I appreciate that my hon. Friend inherited the consortium report. He is not responsible for it. He did not commission it. It has landed on his table. I sympathise with him, and I do not want anyone to think that he is to blame for the consortium or its report. However, I do not believe that it is a tenable position for the Government to say that they will await the result of the advisory group's comment on this other advisory report at a time when it is on the record and has been said in this House so often that it has become almost tedious to repeat it that London university will make its decision in July on the basis that the consortium report is likely to prove compelling to the Government and likely to be accepted.
      9.45 pm
      Taking it from that standpoint one can hardly blame the vice-chancellor of London university for asking what is the point of continuing to propose that medical education be continued at the Westminster when, for all it knows, within 12 months a hospital within which
      152
      those people can be taught may not continue to exist in any meaningful sense.
      Mr. Ennals: I agree with all that the hon. Gentleman has said so far, but does not he agree that in a sense the problem is worse confounded by the thought that we cannot have a debate in this House, other than on an amendment to a Bill, until the university has taken its decision? That may be a matter to which the hon. Gentleman will be coming, but it seems that Parliament ought to express its view.
      Mr. Mellor: I agree with the right hon. Gentleman that there is a sense of impotence about this matter which I find most disturbing.
      I ought to say to my hon. Friend that some of us would find it very hard to forgive, putting it as neutrally as I can, if, as a result of the Government not making their position clear, London university went ahead and ratified the Flowers report and destroyed its teaching hospital, and the Government then said that it was none of their doing because they had not led the university to take the view that it did.
      I am sorry to say that, although there were some parts of what my hon. Friend the Under-Secretary of State said in answer to questions last Tuesday which were encouraging, they were hedged around with these qualifications. What he was really saying was that it could not become Government policy until what the advisory group had to say had been considered. That was not a disavowal in the terms that I want to see and, before it is too late, I urge the Government to say something which will make it clear to London university that if it is to act on Flowers and commit an act of intellectual Luddism of a kind which is not paralleled in any other case that has come to my notice, it should do so for reasons other than hiding behind the fact that it believes that the Government will rely on the consortium report.
      I serve notice that it will be very difficult for many of us in this House to feel that the Government will not bear responsibility for Flowers. They cannot simply say that it is a matter for London university if the opportunity to disabuse it of the great delusion under which it labours is not taken before it makes its decision.

      153
      I move on to the consortium report. I regret bitterly the policy followed by the previous Administration of moving resources out of London not because I have any reason to think that everything should be centred in London, even though I am a London Member, but because I do not believe that the destruction of institutions in London which inevitably will follow from such a policy will result in the creation of more facilities elsewhere. I associate myself with the argument advanced by the Opposition. In any event, the London teaching hospitals serve an area far wider than London. They go out as far as the country stretches.
      I should like to repeat to the House one very moving example of that which came to my notice this afternoon. It arose purely fortuitously on a visit to Westminster hospital today by the special trustees. The visit was not arranged because of this debate. We spent the afternoon touring the hospital and looking at different parts of the building that were in need of the additional finance that we have at our disposal to allocate.
      One of our visits was to the new Barrier nursing project at the hospital. That project, designed to cure leukaemia involves the destruction of all the cells in the marrow and their replacement with new cells. That treatment has so far had a 50 per cent. success rate.
      We had the opportunity of seeing the treatment in operation and of considering whether we could make extra funds available to enable the resources devoted to this major and crucial work—important not just in this country but throughout the world—to be carried on. May I ask, in parentheses what would happen to that work if Westminster hospital were to become merely an annex of St. Thomas's hospital?
      There was a patient who had just been given a transplant and who was in isolation for four weeks in an infection-free environment while the treatment took effect. While the doctor was expatiating upon this wonderful new process I asked him where the patient came from, and he said that the patient came from Cardiff. The next person to move into that bed when the current patient leaves comes, ironically, from Reading—an area well known to my hon. Friend the Minis-
      154
      ter. That example, establishes beyond peradventure that this centre of excellence is not just an asset belonging to London or to that particular depopulated part of London. It is an asset that hon. Members make use of from time to time, but it is also a national asset.
      However one tries to dress it up in the fancy language of the consortium about the need to equalise services up and down the country, no one can tell me that, suddenly, as a result of closing Westminster hospital a unit will spring up in Cardiff that will give hope to that young girl of 18 who is otherwise suffering from terminal leukaemia. That will not be the case and I hope that my hon. Friend will find it within his compass tonight to disabuse that report at least so far as it applies to Westminster hospital.
      I am not in favour of a lot of further inquiries but I recognise that this may be a convenient device for us to discuss the problems of London. I cannot pretend to be persuaded that another inquiry on the subject of London health treatment will be effective. I take the view that the London health services need to be recognised for what they are, for the problems that they face and for the contribution that they make to medicine not just nationally but internationally as well.
      I do not wish to go on at inordinate length, but I wish to say a word or two about reorganisation. The central aim of the clause is to allow the dissolution of the area health authorities. I would welcome that since it is clear that the three-tier system has not worked well. I urge my hon. Friend, when he considers what to do in London, to ensure that the minimum amount of further disruption is caused particularly at district level. There are a number of health districts in London that fall below the population recommended in the consultative paper "Patients First".
      I have been encouraged by conversations with my hon. Friend about Roe-hampton health district which, with a population of 110,000, is much smaller. But I ask him to say that, where there is a district with an efficient and effective district general hospital and where that hospital works well for its catchment area even if that situation does not fit in with the new jargon word "co-terminosity"—which I cannot pretend to

      155
      like or fully to understand—that health district should be permitted to survive. I am grateful for my hon. Friend's sympathy in other places on that point.
      I make one point about the future of regional health authorities in London. My argument about minimum disruption may go against what I now say but I also cannot pretend to be persuaded that it was ever a good idea for us to slice London up into four segments in the way that was done. I cannot pretend that I believe that it has worked well. On the whole I think that there is much in what is proposed by the GLC. This may not be something which should be rushed, but I hope that it will be given the most serious consideration. I cannot pretend to be happy about the way in which the present regional health authority has worked in London. A structure that allows London to be considered as a whole might be better.
      Mr. Dubs: The logic of what the hon. Member for Putney (Mr. Mellor) said suggests that he should support the amendment. If we do not manage to achieve a sensible organisation for the Health Service in London now, it will be many years before we have another opportunity. If the Government go ahead and set up the new district health authorities on the basis of the existing pattern of the National Health Service organisation in London, it might be a decade or more before we can think about a different pattern. I support the call for an inquiry.
      I am conscious that London faces many difficult problems. There is much uncertainty among the people who work for the Health Service in London. Reasons for the uncertainty include RAWP, introduced by the last Labour Government, cuts in spending and closures. It was made worse by cuts consequent on the increase of VAT. Uncertainty was also injected into the provision of hospital services in London by the Flowers and consortium reports.
      There is a doubt about which teaching hospitals will survive. There are doubts about the relationship between undergraduate teaching hospitals and postgraduate teaching hospitals. There are doubts about whether post-graduate
      156
      teaching hospitals are to become part of the new pattern of district health services or whether they are to remain separate.
      A recent consultation paper, "The Future Pattern of Hospital Provision in England", suggests that we should move towards smaller hospitals. Paragraph 28 of that document refers to retaining
      "in a variety of useful supporting patterns, more of the other hospitals than had previously been expected."
      That adds a further element of uncertainty to the pattern of hospital provision in London.
      The Health Service in London has the unparalleled difficulty of a large commuter population which is dependent on the inner London hospitals and a large number of visitors to the capital who require Health Service facilities. In the inner part of London there is a declining population, but it has an increasing elderly element which puts a different demand on primary care services and hospital facilities in the capital.
      There are four regional health authorities which take cake-like slices of the capital's resources and extend into the leafy suburbs and beyond. Each regional health authority faces the problems of deprived inner city areas and the problems of the green belts. The regional health authorities must decide how to allocate resources when faced with the conflicting demands of inner city deprivation and of expanding suburban and almost country populations and their needs for increased health provision. It has proved difficult—virtually impossible—for the regional health authorities to resolve this very difficult problem of resource allocation, given the conflicting pressures.
      It is also true to say that the Health Service in London suffers from greater problems of relationships with local authorities than is the case elsewhere—not because there is an unwillingness to co-operate but because the boundaries make such co-operation much more difficult to achieve effectively and harmoniously. That causes problems, not only in joint financing, where many of the committees set up to deal with the bids have to—
      It being Ten o'clock, the debate stood adjourned.

      BUSINESS OF THE HOUSE
      Motion made, and Question put,
      That, at this day's Sitting, the Health Services Bill may be proceeded with, though opposed, until any hour.—[Mr. Brooke.]
      The House divided : Ayes 166, Noes 89.

      Division No. 343]

      AYES

      [9.06 pm

      Adams, Allen

      Flannery, Martin

      Orme, Rt Hon Stanley

      Allaun, Frank

      Foster, Derek

      Palmer, Arthur

      Ashton, Joe

      Foulkes, George

      Pavitt, Laurie

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

      George, Bruce

      Penhaligon, David

      Barnett, Guy (Greenwich)

      Gilbert, Rt Hon Dr John

      Powell, Raymond (Ogmore)

      Beith, A. J.

      Ginsburg, David

      Prescott, John

      Benn, Rt Hon Anthony Wedgwood

      Graham, Ted

      Race, Reg

      Bennett, Andrew (Stockport N)

      Hamilton, James (Bothwell)

      Roberts, Ernest (Hackney North)

      Booth, Rt Hon Albert

      Hamilton, W. W. (Central Fife)

      Robertson, George

      Bray, Dr Jeremy

      Harrison, Rt Hon Walter

      Rooker, J. W.

      Buchan, Norman

      Haynes, Frank

      Ross, Ernest (Dundee West)

      Callaghan, Jim (Middleton & P)

      Heffer, Eric S.

      Rowlands, Ted

      Campbell-Savours, Dale

      Hogg, Norman (E Dunbartonshire)

      Sever, John

      Carter-Jones, Lewis

      Holland, Stuart (L'beth, Vauxhall)

      Short, Mrs Renée

      Clark, Dr David (South Shields)

      Home Robertson, John

      Silverman, Julius

      Cocks, Rt Hon Michael (Bristol S)

      Homewood, William

      Skinner, Dennis

      Cohen, Stanley

      Hooley, Frank

      Snape, Peter

      Coleman, Donald

      Howells, Geraint

      Soley, Clive

      Cowans, Harry

      Hughes, Robert (Aberdeen North)

      Spearing, Nigel

      Cox, Tom (Wandsworth, Tooting)

      John, Brynmor

      Spriggs, Leslie

      Craigen, J. M. (Glasgow, Maryhill)

      Johnson, James (Hull West)

      Stewart, Rt Hon Donald (W Isles)

      Crowther, J. S.

      Jones, Rt Hon Alec (Rhondda)

      Stott, Roger

      Cryer, Bob

      Kilfedder, James A.

      Thomas, Dr Roger (Carmarthen)

      Cunliffe, Lawrence

      Lamborn, Harry

      Thorne, Stan (Preston South)

      Cunningham, Dr John (Whitehaven)

      Lamond, James

      Wainwright, Richard (Colne Valley)

      Dalyell, Tam

      Lewis, Ron (Carlisle)

      Walker, Rt Hon Harold (Doncaster)

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

      Mabon, Rt Hon Dr J. Dickson

      Welsh, Michael

      Deakins, Eric

      McCartney, Hugh

      White, Frank R. (Bury & Radcliffe)

      Dixon, Donald

      McKay, Allen (Penistone)

      Whitlock, William

      Dobson, Frank

      McKelvey, William

      Wilson, Gordon (Dundee East)

      Dormand, Jack

      McNally, Thomas

      Winnick, David

      Douglas, Dick

      McNamara, Kevin

      Woolmer, Kenneth

      Dubs, Alfred

      Mason, Rt Hon Roy

      Wrigglesworth, Ian

      Eastham, Ken

      Maxton, John

      Young, David (Bolton East)

      Ellis, Raymond (NE Derbyshire)

      Maynard, Miss Joan

      Ennals, Rt Hon David

      Millan, Rt Hon Bruce

      TELLERS FOR THE AYES:

      Evans, loan (Aberdare)

      Mitchell, R. C. (Soton, Itchen)

      Mr. George Marton and

      Evans, John (Newton)

      Moyle, Rt Hon Roland

      Mr. James Tinn.

      Field, Frank

      Oakes, Rt Hon Gordon

      NOES

      Alexander, Richard

      Cadbury, Jocelyn

      Fisher, Sir Nigel

      Ancram, Michael

      Carlisle, John (Luton West)

      Fletcher-Cooke, Charles

      Aspinwall, Jack

      Carlisle, Kenneth (Lincoln)

      Fookes, Miss Janet

      Banks, Robert

      Chapman, Sydney

      Garel-Jones, Tristan

      Beaumont-Dark, Anthony

      Churchill, W. S.

      Glyn, Dr Alan

      Bendall, Vivian

      Clark, Hon Alan (Plymouth, Sutton)

      Gorst, John

      Benyon, Thomas (Abingdon)

      Clarke, Kenneth (Rushcliffe)

      Gow, Ian

      Benyon, W. (Buckingham)

      Cockeram, Eric

      Greenway, Harry

      Berry, Hon Anthony

      Colvin, Michael

      Grieve, Percy

      Best, Keith

      Cormack, Patrick

      Griffiths, Peter (Portsmouth N)

      Biggs-Davison, John

      Cranborne, Viscount

      Grylls, Michael

      Blackburn, John

      Dean, Paul (North Somerset)

      Gummer, John Selwyn

      Body, Richard

      Dorrell, Stephen

      Hamilton, Michael (Salisbury)

      Boscawen, Hon Robert

      Douglas-Hamilton, Lord James

      Hannam, John

      Bottomley, Peter (Woolwich West)

      Dover, Denshore

      Haselhurst, Alan

      Boyson, Dr Rhodes

      Dunn, Robert (Dartford)

      Hawkins, Paul

      Braine, Sir Bernard

      Dykes, Hugh

      Hawksley, Warren

      Bright, Graham

      Eggar, Timothy

      Heath, Rt Hon Edward

      Brinton, Tim

      Emery, Peter

      Heddle, John

      Brooke, Hon Peter

      Fairgrieve, Russell

      Henderson, Barry

      Brown, Mi ael (Brigg & Sc'thorpe)

      Faith, Mrs Sheila

      Hogg, Hon Douglas (Grantham)

      Bulmer, Eond

      Fenner, Mrs Peggy

      Holland, Philip (Carlton)

      Hooson, Tom

      Moore, John

      Speed, Kelth

      Howell, Ralph (North Norfolk)

      Morrison, Hon Charles (Devizes)

      Speller, Tony

      Hunt, David (Wirral)

      Morrison, Hon Peter (City of Chester)

      Spicer, Michael (S Worcestershire)

      Hunt, John (Ravenabourne)

      Murphy, Christopher

      Squire, Robin

      Jenkin, Rt Hon Patrick

      Myles, David

      Stanbrook, Ivor

      Jopling, Rt Hon Michael

      Neale, Gerrard

      Stanley, John

      Kellett-Bowman, Mrs Elaine

      Needham, Richard

      Stevens, Martin

      Kershaw, Anthony

      Nelson, Anthony

      Stewart, John (East Renfrewshire)

      Kimball, Marcus

      Neubert, Michael

      Stradling Thomas, J.

      Kitson, Sir Timothy

      Newton, Tony

      Taylor, Teddy (Southend East)

      Knight, Mrs Jill

      Normanton, Tom

      Tebbit, Norman

      Lamont, Norman

      Onslow, Cranley

      Temple-Morris, Peter

      Lang, Ian

      Page, John (Harrow, West)

      Thorne, Neil (llford South)

      Lawrence, Ivan

      Page, Rt Hon Sir R. Graham

      Thornton, Malcolm

      Le Marchant, Spencer

      Page, Richard (SW Hertfordshire)

      Townend, John (Bridlington)

      Lennox-Boyd, Hon Mark

      Parris, Matthew

      Trippier, David

      Lester, Jim (Beeston)

      Patten, Christopher (Bath)

      Vaughan, Dr Gerard

      Lloyd, Peter (Fareham)

      Patten, John (Oxford)

      Viggers, Peter

      Lyell, Nicholas

      Pattie, Geoffrey

      Waddington, David

      McNair-Wilson, Michael (Newbury)

      Pollock, Alexander

      Wakeham, John

      McQuarrie, Albert

      Powell, Rt Hon J. Enoch (S Down)

      Walker, Bill (Perth & E Perthshire)

      Major, John

      Prentice, Rt Hon Reg

      Wall, Patrick

      Marlow, Tony

      Price, David (Eastleigh)

      Waller, Gary

      Marten, Neil (Banbury)

      Proctor, K. Harvey

      Ward, John

      Mather, Carol

      Rathbone, Tim

      Warren, Kenneth

      Maude, Rt Hon Angus

      Rees-Davies, W. R.

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

      Mawby, Ray

      Renton, Tim

      Wheeler, John

      Mawhinney, Dr Brian

      Rhodes James, Robert

      Wickenden, Keith

      Maxwell-Hyslop, Robin

      Rhys Williams, Sir Brandon

      Wilkinson, John

      Mellor, David

      Ridley, Hon Nicholas

      Winterton, Nicholas

      Meyer, Sir Anthony

      Roberts, Michael (Cardiff NW)

      Young, Sir George (Acton)

      Mills, lain (Meriden)

      Roberts, Wyn (Conway)

      Mills, Peter (West Devon)

      Sainsbury, Hon Timothy

      TELLERS FOR THE NOES:

      Miscampbell, Norman

      Silvester, Fred

      Mr. John Cope and

      Montgomery, Fergus

      Sims, Roger

      Mr. John MacGregor,

      Division No. 344]

      AYES

      [10.00 p.m.

      Alexander, Richard

      Hamilton, Michael (Salisbury)

      Page, Rt Hon Sir R. Graham

      Ancram, Michael

      Hannam, John

      Page, Richard (SW Hertfordshire)

      Aspinwall, Jack

      Haselhurst, Alan

      Parris, Matthew

      Banks, Robert

      Hawkins, Paul

      Patten, Christopher (Bath)

      Beaumont-Dark, Anthony

      Hawksley, Warren

      Patten, John (Oxford)

      Bendall, Vivian

      Heath, Rt Hon Edward

      Pattie, Geoffrey

      Benyon, Thomas (Abingdon)

      Heddle, John

      Pollock, Alexander

      Benyon, W (Buckingham)

      Henderson, Barry

      Prentice, Rt Hon Reg

      Berry, Hon Anthony

      Hogg, Hon Douglas (Grantham)

      Price, David (Eastleigh)

      Best, Keith

      Holland, Philip (Carlton)

      Proctor, K. Harvey

      Biggs-Davison, John

      Hooson, Tom

      Rathbone, Tim

      Blackburn, John

      Howell, Ralph (North Norfolk)

      Rees-Davies, W. R.

      Body, Richard

      Hunt, David (Wirral)

      Renton, Tim

      Boscawen, Hon Robert

      Hunt, John (Ravensbourne)

      Rhodes James, Robert

      Bottomley, Peter (Woolwich West)

      Jenkin, Rt Hon Patrick

      Rhys Williams, Sir Brandon

      Boyson, Dr Rhodes

      Jopling, Rt Hon Michael

      Ridley, Hon Nicholas

      Braine, Sir Bernard

      Kellett-Bowman, Mrs Elaine

      Roberts, Michael (Cardiff NW)

      Bright, Graham

      Kershaw, Anthony

      Sainsbury, Hon Timothy

      Brinton, Tim

      Kimball, Marcus

      St. John-Stevas, Rt Hon Norman

      Brooke, Hon Peter

      Kitson, Sir Timothy

      Silvester, Fred

      Brown, Michael (Brigg & Sc'thorpe)

      Knight, Mrs Jill

      Sims, Roger

      Browne, John (Winchester)

      Lamont, Norman

      Speed, Keith

      Bulmer, Esmond

      Lang, Ian

      Speller, Tony

      Cadbury, Jocelyn

      Lawrence, Ivan

      Spicer, Michael (S Worcestershire)

      Carlisle, John (Luton West)

      Le Marchant, Spencer

      Squire, Robin

      Carlisle, Kenneth (Lincoln)

      Lennox-Boyd, Hon Mark

      Stanbrook, Ivor

      Chapman, Sydney

      Lester, Jim (Beeston)

      Stanley, John

      Churchill, W. S.

      Lloyd, Peter (Fareham)

      Stevens, Martin

      Clarke, Kenneth (Rushclifle)

      Lyell, Nicholas

      Stewart, John (East Renfrewshire)

      Cockeram, Eric

      MacGregor, John

      Stradling Thomas, J.

      Colvin, Michael

      McNair-Wilson, Michael (Newbury)

      Taylor, Teddy (Southend East)

      Cope, John

      McQuarrie, Albert

      Tebbit, Norman

      Cormack, Patrick

      Major John

      Temple-Morris, Peter

      Cranborne, Viscount

      Marlow, Tony

      Thompson, Donald

      Dean, Paul (North Somerset)

      Marten, Nell (Banbury)

      Thorne, Nell (llford South)

      Dorrell, Stephen

      Maude, Rt Hon Angus

      Townend, John (Bridlington)

      Douglas-Hamilton, Lord James

      Mawby, Ray

      Trippier, David

      Dover, Denshore

      Mawhinney, Dr Brian

      Vaughan, Dr Gerard

      Dunn, Robert (Dartford)

      Maxwell-Hyslop, Robin

      Viggers, Peter

      Dykes, Hugh

      Mellor, David

      Waddington, David

      Eggar, Timothy

      Meyer, Sir Anthony

      Wakeham, John

      Emery, Peter

      Mills, lain (Meriden)

      Walker, Bill (Perth & E Perthshire)

      Fairgrieve, Russell

      Miscampbell, Norman

      Wall, Patrick

      Faith, Mrs Sheila

      Mitchell, David (Basingstoke)

      Waller, Gary

      Fenner, Mrs Peggy

      Montgomery, Fergus

      Walters, Dennis

      Fisher, Sir Nigel

      Moore, John

      Warren, Kenneth

      Fletcher-Cooke, Charles

      Morrison, Hon Charles (Devizes)

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

      Fookes, Miss Janet

      Morrison, Hon Peter (City of Chester)

      Wheeler, John

      Garel-Jones, Tristan

      Murphy, Christopher

      Wickenden, Keith

      Glyn, Dr Alan

      Myles, David

      Wilkinson, John

      Gorst, John

      Neale, Gerrard

      Winterton, Nicholas

      Gower, Sir Raymond

      Needham, Richard

      Young, Sir George (Acton)

      Greenway, Harry

      Nelson, Anthony

      Grieve, Percy

      Neubert, Michael

      TELLERS FOR THE AYES:

      Griffiths, Peter (Portsmouth N)

      Normanton, Tom

      Mr Carol Mather and

      Grylls, Michael

      Onslow, Cranley

      Mr. Tony Newton.

      Gummer, John Selwyn

      Page, John (Harrow, West)

      NOES

      Allaun, Frank

      Campbell-Savours, Dale

      Dalyell, Tam

      Ashton, Joe

      Carter-Jones, Lewis

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

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

      Clark, Dr David (South Shields)

      Deakins Eric

      Barnett, Guy (Greenwich)

      Cohen, Stanley

      Dixon, Donald

      Beith, A. J.

      Cowans, Harry

      Dobson, Frank

      Benn, Rt Hon Anthony Wedgwood

      Cox, Tom (Wandsworth, Tooting)

      Douglas, Dick

      Booth, Rt Hon Albert

      Craigen, J. M. (Glasgow, Maryhill)

      Dubs, Alfred

      Brown, Ronald W. (Hackney S)

      Crowther, J. S.

      Eastham, Kan

      Callaghan, Jim (Middleton & P)

      Cunliffe, Lawrence

      Ennals, Rt Hon David

      158

      159

      Evans, loan (Aberdare)

      Mabon, Rt Hon Dr J. Dickson

      Skinner, Dennis

      Evans, John (Newton)

      McKay, Allen (Penistone)

      Snape, Peter

      Field, Frank

      McKelvey, William

      Soley, Clive

      Flannery, Martin

      McNally, Thomas

      Spearing, Nigel

      Foster, Derek

      McNamara, Kevin

      Spriggs, Leslie

      Freeson, Rt Hon Reginald

      Maxton, John

      Steel, Rt Hon David

      George, Bruce

      Maynard, Miss Joan

      Stewart, Rt Hon Donald (W Isles)

      Ginsburg, David

      Mikardo, Ian

      Thomas, Dr Roger (Carmarthen)

      Hamilton, W. W. (Central Fife)

      Mitchell, R. C. (Soton, Itchen)

      Wainwright, Richard (Colne Valley)

      Haynes, Frank

      Oakes, Rt Hon Gordon

      Walker, Rt Hon Harold (Doncaster)

      Heffer, Eric S.

      Pavitt, Laurie

      Welsh, Michael

      Holland, Stuart (L'beth, Vauxhall)

      Penhaligon, David

      White, Frank R. (Bury & Radcliffe)

      Hooley, Frank

      Powell, Raymond (Ogmore)

      Whitlock, William

      Howells, Geraint

      Race, Reg

      Wilson, Gordon (Dundee East)

      Hughes, Robert (Aberdeen North)

      Roberts, Ernest (Hackney North)

      Winnick, David

      John, Brynmor

      Robertson, George

      Woolmer, Kenneth

      Johnson, James (Hull West)

      Rooker, J. W.

      Wrigglesworth, Ian

      Jones, Barry (East Flint)

      Ross, Ernest (Dundee West)

      Young, David (Bolton East)

      Kilfedder, James A.

      Ross, Stephen (Isle of Wight)

      Lamborn, Harry

      Rowlands, Ted

      TELLERS FOR THE NOES:

      Lamond, James

      Sever, John

      Mr. Bob Cryer and

      Lewis, Ron (Carlisle)

      Short, Mrs Renée

      Mr. Andrew F. Bennett.

      Question accordingly agreed to.

HEALTH SERVICES BILL
Question again proposed, That the amendment be made.
Mr. Dubs: As I was saying, the lack of conterminosity between local authority boundaries and health services boundaries is more acute in the London area than in other parts of the country. That makes joint planning between health authorities and local authorities more difficult than in most other parts of the United Kingdom. Therefore, in London there are particular difficulties in organising the National Health Service, and there are doubts about whether it is organised to the best advantage of the people of London.
There is much reason to think that a change in the organisational structure of the Health Service would be advantageous to Londoners. I fully accept the view that the present time is never a good time to reorganise ; some other time is always better. But we will be missing an opportunity if we do not take advantage of the Bill and of the consultation process in "Patients First" that will enable us to think again about how the Health Service should operate in London. Paragraph 45 of "Patients First" states :
"In the light of the major changes in the structure and possibly in the health services in London which it foresees, and of the consequent need for a stable basis on which these changes can be introduced".
The consultative document states further that the Government do not contemplate any major changes in the boundaries in the next few years. That is the wrong conclusion if a stable basis for the Health
160
Service is the desired aim. If there is dissatisfaction with the present structure of the Health Service in London, that can hardly be a basis for the further reorganisation of the Health Service. The Royal Commission understood that clearly when it recommended that there should be an inquiry into the organisation of the Health Service in London.
Surely it is implicit that each new district health authority that is envisaged should achieve some balance in the services to be provided within its boundaries. That means a balance between hospital services and primary care services. With the future of the teaching hospitals now in doubt because of the conclusions of the Flowers report and the report of the London Health Planning Consortium, there could be a district health authority in one part of London with no teaching hospital and no district general hospital as a basis for its services, while another district could have one or more teaching hospital within its boundaries.
It is surely clear from those people who have served on the present area health authorities that one powerful teaching hospital can unbalance the pattern of provision even in the present area. That might be more the case in the new districts which presumably will be much smaller than the current area health authorities. It is essential to have a clear idea of the future pattern of teaching hospital provision in London before deciding where to draw the boundaries of the new districts.
10.15 pm
I turn now to primary care services. It is a matter of regret that the family practitioner services will not be brought into the new arrangements

161
However, there are ways in which one can ensure a sensible integration of the other services with the hospital service. That can be better done in the context of a service which is better organised than the existing service in London. The Royal Commission report refers to this in paragraph 7.63, which reads :
"The London RHAs must make additional provision in distributing funds for primary care services to inner city AHAs to ensure that the improvement to services which we recommend is not impeded by lack of finance."
There might be the new problem, however, that if the boundaries are not sensibly planned the provision of those primary care services might be made even more difficult.
The structure of the Health Service in London can affect the delivery of services in at least three ways. The first concerns administration, the second resource allocation and the third the nature of the co-operation that is desired between the Health Service and local authorities. I think that it is agreed that the closer the co-operation between them the better, not only for the day-to-day relationships but because the time has come to look at new experiments in health provision and local authority social services provision and the links between the two. Such experiments can work much better if there is at least a semblance of coterminosity because then joint planning methods can work much more smoothly.
The hon. Member for Putney referred to the Westminster hospital. Many of my constituents have contacted me about the future of the hospital which serves people in the part of Wandsworth that I represent. The plight of the Westminster hospital typifies the uncertainty which bedevils the Health Service in London. It is a first-class teaching hospital with a great record of research and service to the local community, but it is now under threat. This threat will surely in itself be damaging to the hospital. The loss of such a hospital would greatly damage the pattern of hospital provision in many parts of inner London.
The uncertainty which affects the Health Service in London covers virtually all the London constituencies. The uncertainty in my constituency affects St. Benedict's hospital, which is now under threat of closure. The workers are
162
staging a sit-in there in protest against the threat posed to the hospital by the area health authority.
Two other hospitals in my constituency are affected by this trouble. The Boling-broke is having to undergo a change of use to take in patients from St. Benedict's. St. James's hospital must have doubts about its long-term future depending on whether it will be absorbed by St. George's, or whether, inview of the Minister's latest consultation document, which favours smaller hospitals, it might have a more secure life.
Then Henderson hospital is threatened with closure. Although it is not located in my constituency, it provides a major part of the health services in my constituency.
If these doubts and uncertainties about hospital provision are typical of the whole of London, the uncertainty affecting Health Service workers, doctors, nurses and others in hospitals throughout the capital must be damaging the quality of the service being provided. The Minister has taken one or two steps towards meeting the demands for an inquiry by saying that he will establish a London advisory group. That is not a happy alternative, and it is not good enough. It is not an open inquiry and we are not sure how it will operate. Indeed, we are not sure what the status of its conclusions will be.
In Committee, the Minister said that so much is known about the Health Service already that there is no need for more information. The snag is that many of the reports about the Health Service in London cover only bits of the service. In particular, there has been a heavy emphasis on teaching and acute services. To my knowledge, there has been no recent report covering other services in London, particularly primary care services. Above all, the relationship between the various services and which pattern of organisation will be best for London has not been covered by any of these reports.
The fact that a great deal may be known already would suggest that an inquiry would not take a long time. Therefore, the Minister's other argument—that he does not want to delay the reorganisation of the Health Service

163
nationally because the London situation would take time to resolve—carries less weight. We are saying not that an inquiry should be lengthy but that an inquiry is necessary and that it ought not to take too long. The Minister cannot have it both ways. He cannot say that there is enough information already and at the same time that an inquiry would take too long to be feasible. I think that a fairly quick inquiry is possible—an inquiry which would encompass the whole range of health services in
164
London, not just the acute and teaching hospital services, but the geriatric and primary care services in the community.
Such an inquiry would help to set the pattern of the Health Service for many years. This is the time to get it right. We failed to get it right at the time to the previous reorganisation. We have an opportunity to get it right this time. I submit that it is absolutely essential for the future of the National Health Service in London that we get the best possible reorganisation in London and that to achieve that aim an inquiry is urgent.
Mr. Rees-Davies: No further inquiry of any kind is needed. The main trouble is that there have already been too many inquiries. That goes for the Flowers report and the Royal Commission. If the Minister has an advisory group which he can select with those who advise him, that is the best way to inquire into the National Health Service. There has been too long a delay on the necessary reorganisation to which the Conservative Party was committed at least 18 months ago.
The right hon. Member for Norwich, North (Mr. Ennals) and my hon. Friend the Member for Putney (Mr. Mellor) delivered premature speeches. The right hon. Gentleman's speech was premature because it assumed, first, that the Government were responsible for setting up the Flowers committee—they were not ; it was the right hon. Gentleman himself—and for setting up the consortium, and they were not responsible for that either. Secondly, it assumed that those who were reporting independently outside the House and who had not discussed the matter with us were putting forward ideas that the Government would automatically accept. That is nonsense. There is not an iota of evidence that the Government will accept any of the ideas put forward by either Flowers or anyone else.
Mr. Mellor: Will my hon. and learned Friend give way?
Mr. Rees-Davies: Not at the moment.
Therefore, it is essential that we should try to get right one or two of the facts.
Mr. Orme: The hon. and learned Gentleman has got the facts wrong.
Mr. Rees-Davies: It may be. I shall give way later.
So far as the facts are concerned, there is no indication that the Government intend to adopt any part of those reports. We know, because we have met Annan and his advisers, that we should await a reasonable opportunity for the Government to consider these matters and to give us their concluded view. That period has not yet elapsed.
I speak with a great interest in the preservation of Westminster hospital. I have been treated there more than once. I understand those at the hospital and I
166
know the hospital extremely well. The Westminster medical school is the finest medical school in the London area. That is not disputed. The facts that the right hon. Member for Lewisham, East (Mr. Moyle) presented are undisputable. It is a first class hospital and it is badly needed. It has a first class medical school. It is unthinkable that the Westminster hospital should close.
That is only the beginning of the case. There is a children's hospital that may have to be telescoped into the Westminster hospital. There is an extremely good annexe that may similarly have to be telescoped. There is an assumption that all the beds will remain ordinary NHS beds. That requires investigation. It is true that people from Putney, Kent, Wandsworth and throughout London need the services of the Westminster hospital. It is well known that it services our colleagues in the House.
Any Minister—certainly any Tory Minister—will use the greatest care when considering how the hospital may be saved. It is only right that when a distinguished committee such as Lord Annan's committee makes a report it should receive careful consideration. That committee is trying to put together the medical schools, trying to save and trying to improve. Irrespective of whether one agrees with the committee's report, it deserves careful consideration. The committee was called on to present a report by the previous Labour Government and not by my hon. Friend the Minister for Health. He did not ask it to do it.
The hospital has about 400 beds. That capacity can be reduced by taking in the children's hospital. We are left with 300 beds that we want to keep. At least half of those beds can be maintained for local use. Why should we not recognise that there is a gigantic international demand for the opportunity to come to Britain and to receive—[Interruption.] I ask the hon. Member for Battersea, South (Mr. Dubs) not to laugh. There was the ridiculous notion that we should get rid of pay beds. It was a preposterous monstrosity to seek to destroy them.
Labour Members may not realise this, but Britain has the opportunity to be the greatest international consortium for medicine throughout the world. We must

167
consider the opportunity to provide services in London for not only British people but those from overseas. That means that we need beds, and good beds. We need top specialists.
There has been talk of leukaemia, cardiology and orthopaedics. All of those departments are first class in the Westminster hospital. As I have said, the medical school is first class. We must give the Government a chance to consider all the facts and the way in which the hospital can be saved. I suggest that that can be done by providing for those in London, for those outside London and for those outside Britain.
It is only right that no Government spokesman has expressed a view on Westminster hospital. The Government are giving the issue careful consideration. It is no good trying to jump them. Labour Members have urged the Minister to say tonight what he will do. That is absolutely ridiculous. Why should he say tonight what he wants to do? It does not matter whether that argument comes from Putney or Norwich, North. I am satisfied that we must wait and see what the Government want to do.
It is high time that the House gave up the idea of looking for independent inquiries. What is meant by "independent"? The right hon. Member for Lewisham, East opened the debate in his customary attractive and moderate way. His speech sounded very good. However, what does "an independent inquiry" mean? Does it mean another Annan report? Who are "independent" people?
10.30 pm
It is the job of Government to govern. They are not short of advisers, and if they want any more they can have them. I assure the House that, if the Government want more advice, we have advisers on the Select Committee. If we so wish we can look at this matter in the Select Committee. In fact, the right hon. Gentleman suggested that, but I opposed it because it was premature. We are quite happy, in the Select Committee, to look at a problem of this sort if we think that that is right. But it is not right. When my right hon. Friend is ready to tell the House the Government's con-
168
clusions about the future of the Westminster hospital, he will do so.
I am sure that if my right hon. Friend had not been held down by those advising him, he would have told us long ago about the future of the reorganisation, not only in London. We have been held up now for at least nine months in Kent. We know that the whole of the Kent area authority is a complete waste of time. We want district councils. I believe that most Londoners probably want district hospitals. It is not for me to express a view on what London wants, but I believe that there is far too much delay with many inquiries, holding up the work of the Department of Health. Let it get on with its work. Let us wait to hear what it has to say on the matter. But do not let us criticise the Ministry for views expressed exclusively by outsiders who are not even appointed by it and are not asked for any expressions of views.
Mr. Frank Dobson: I begin by trying to explain the extent to which boundaries, particularly NHS boundaries in London, are quite inexplicable to ordinary people.
When a member of the Camden and Islington area health authority spoke to me about some rather backward ideas that the authority had at the time for amalgamating as a teaching hospital the University College hospital in Gower Street, and the Whittington hospital in the north of Islington, I suggested that a more logical joint medical school might be an amalgamation of University College hospital and the Middlesex hospital, which was but 200 yards away. The person in question was quite aghast at this thought and pointed out that the Middlesex hospital and UCH were in separate area health authority areas. Then he paused for a second before delivering the crunching blow to my argument, that the two were in different regions as well.
I am convinced that very few people in my constituency, even many of those working in the two hospitals which are close together, are aware that they are in different AHA areas, and, above all, in different Health Service regions. That illustrates the problems which face the

169
Government if we have changes of boundaries within the London area without thorough consideration of and consultation about all the problems and ramifications.
I support the proposal that there should be an independent inquiry into the boundaries in the London area and into the question of whether there should be a regional health authority for the Greater London area as a whole rather than parts of the capital being represented in four separate health authorities which also include large rural areas outside.
I also believe that any inquiry should contemplate the idea of abolishing regional health authorities altogether, because a very good case can be argued that these authorities simply represent another tier of people who are reporting upwards to the DHSS, and acting downwards towards the area health authorities, and whose functions are to liaise and monitor the relationship between the two. The fewer tiers in any form of government the better. Whatever primary division is finally devised for managing hospitals and health services locally, it would be preferable if there was no intervention between that body and the DHSS centrally. The other tiers simply multiply the amount of paper, with no great advantage. An appointed regional health authority has nothing more to contribute to the allocation of regional resources than a group of appointees or civil servants at the DHSS.
I regret bitterly the RAWP policy that started shifting resources from London. It was introduced by my right hon. Friend the Member for Norwich, North (Mr. Ennals), who has disappeared from the Chamber after his strenuous defence of the Westminster hospital, whose future was prejudiced by the policy that he helped to promote. We all welcome those who have seen the light on the road to Damascus, but we were practically within the city walls before my right hon. Friend recognised the error of his ways.
RAWP has damaged, and, if it continues, will in future damage, health provision in the London area. However, I doubt whether other areas are benefiting as a consequence. The money that the London area appears to be saving never shows up in Trent, Wessex or elsewhere. I am told that, if it does, it tends to
170
appear about three weeks before the end of the financial year, when it is virtually impossible to spend it. RAWP is damaging the Health Service in the London area, and providing precious little resources for improving it outside.
Mr. Orme: My hon. Friend has caused several Conservative Members to laugh and agree with him. Perhaps he would address himself to the fact that it is not RAWP that is damaging the London health service but this Government's policies, not least VAT increases, which have seriously affected Lambeth, Lewisham and Southwark.
Mr. Dobson: It seems that I shall fall out with my Front Bench tonight. I accept the truth of what my right hon. Friend says about the effects of this Government's policies, but those effects are superimposed on the damage that RAWP was wreaking on the Health Service in London. That is undeniable.
Mr. Andrew F. Bennett: My hon. Friend claims that RAWP is causing damage, but can he justify a system where some parts of London were having twice as much spent on them as some regions, although the health profile of the people in some of those regions was twice as bad? Whatever my hon. Friend says about the outcome of RAWP, surely he agrees that the idea was good. Our concern should be that it has not been carried out effectively, and in some regions, such as the North-West, we have not seen the benefits.
Mr. Dobson: Anyone with a sense of social justice welcomes the concept of equalising health provision throughout the country. Areas outside London are desperately short of Health Service resources because they have been grotesquely neglected by the nation over the years. However, I discern a levelling down rather than a levelling up as a result of RAWP. It has started to damage the Health Service in the London area, with no discernible benefit outside.
We need to improve the standard of the Health Service in London. If any hon. Member believes that the London hospitals or the provision of GPs in London are satisfactory, they should ask the people of London. They think that they are unsatisfactory, and so do I. We need to

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improve the provision, both in London and outside.
There is a mini RAWP—in effect, a regional RAWP. Its concept is to move the big units of hospital provision out of central London to the periphery of London or outside the capital. I agree with my right hon. Friend the Member for Lewisham, East (Mr. Moyle) that for most people in the South-East, and especially those who depend on public transport, the best place for hospitals is central London. It is much easier to get to central London from anywhere in the South-East than to get from one part of outer London to another 20 miles away. Anyone who fails to recognise that is barmy. Into that category comes the North-East Thames regional health authority, which goes along with that policy, and anyone who has been involved with RAWP.
The shifting of hospitals occurred before RAWP came into being. The move of the Charing Cross hospital to Fulham and of the Royal Free from Gray's Inn Road to Hampstead were products not of RAWP, but of the same line of thought. It could be argued that there have been gains from the building of a new Royal Free in Hampstead. There would also be gains if something were done with the old Royal Free site and the buildings on it, but it is salutary to bear in mind that if we are to close hospitals and build new ones elsewhere the NHS needs to be much better in dealing with the buildings and resources left behind than it has been with the Royal Free.
Mr. Mellor: I agree with everything that the hon. Gentleman said about London. Does he agree that another unfortunate effect is that we have a major investment in a hospital that has been transplanted, such as St. George's at Tooting, and the bizarre situation that at the same time as £16 million is to be spent on phase two of St. George's, long-established hospitals in the neighbourhood are having to be closed and the provision of many aspects of health care for hospitals further out is threatened by the cuckoo in the nest?
Mr. Dobson: I accept that point, but it is separate from the one that I was trying to make.
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The buildings of the old Royal Free are old by any standards. The frontage was built as a cavalry barracks, so the Royal Free was not born with a silver spoon in its mouth. Next to those old buildings, and formerly incorporated in the Royal Free, is the Eastman dental hospital, which has a world-wide reputation and is one of the premier bodies for research, advancement and improvement in dental provision in this country.
The region, the area or the DHSS is refusing to allow the dental hospital, which is desperately short of space and does not meet some of the provisions of health and safety at work legislation, to make even temporary use of empty space in the old Royal Free buildings. I understand that part of the reason is that the area or the region would like to use the premises as offices. They would be better used by the dental hospital than by the burgeoning administration of the NHS.
10.45 pm
The Flowers report has some merit, besides having a pale pink, Roy Jenkins-coloured cover. It is easy to read. Also, possibly like Roy Jenkins, it has no arguments in favour of the conclusions that it suggests. It is based on the concept that big is beautiful, that tidiness is all and that symmetry is wonderful. It is geared to establishing large unit medical schools and to dragging into these major medical establishments anything that is out of the way, novel or different. The object is to coalesce them and bring them under further control.
I cannot believe that any of the distinguished people who were involved in preparing the Flowers report have noticed what happened throughout England, Wales and Scotland as a result of the gar-gantuanism that was the object of local government reorganisation, the Josephite reorganisation of the Health Service—from which the Bill is an attempted recovery measure—and the reorganisation and increased size of water authorities.
The London Health Planning Consortium document—the green document—has demerits. It is not easy to read. Its arguments, if they exist, are difficult to follow because of the amazing prolixity in which everything is described and the complication of the arguments. It is a manifestation of regional RAWP. It is

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committed to the shifting of resources from the centre and concentrating matters so that everything that is not symmetrical, usual and standard is eliminated as quickly as possible.
Boundaries are a problem, especially in cities. They are probably a bigger problem in London than anywhere else. The size of London demands that the Greater London area should be broken up if it is to be controlled and administered. Most other cities can be administered as a unit, but such a situation does not apply in London. The NHS boundaries are artificial. I should like to demonstrate the effects of the proposals of Flowers and the London Health Planning Consortium on the boundaries that impinge on the area that I represent, which includes University College hospital.
The Flowers proposals, ignoring hospitals such as Great Ormond Street and others, would mean an amalgamation of the medical schools of the Middlesex hospital, University College hospital and the Royal Free hospital. The Middlesex hospital is in the City of Westminster. It is within the Kensington, Chelsea and Westminster area health authority. It is also covered by the Kensington, Chelsea and Westminster family practitioner committee. It is located in the Soho and Marylebone district of that area. It is also in the North-West Thames regional health authority area.
University College hospital, on the other hand, is in the London borough of Camden. It is in the Camden and Islington area health authority, the Camden and Islington FPC area and the South Camden district. The Royal Free hospital is in Camden, within the Camden and Islington area health authority and the North Camden district. Both those teaching hospitals are in the North-East Thames regional health authority area.
The London Health Planning Consortium proposals are to unite the Middlesex and University College hospitals—I shall not bore hon. Members out of their minds by repeating the authorities that are involved—and to unite and bring about a close link of the united Middlesex and University College hospitals with the Whittington hospital, which is situated in the borough of Islington, the Camden
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and Islington area health authority area and the Islington district of that area.
If there is to be that unification and the Government persist in the idea that districts in London should be formed round district hospitals, where on earth is a sensible boundary? Will it include part of Westminster, part of Camden and part of Islington? I do not believe that a sensible boundary can be formulated by the people at the DHSS, particularly when we consider the boundaries that were formed last time. Anybody who saw that horse fall at the first hurdle will not put any money on it in future.
We need a thorough inquiry into the London area and its NHS boundaries. We must also have thorough consultation with the people who work in the hospital services and the people who hope to benefit from them.
Mr. Rees-Davies: If there is an inquiry, the hon. Gentleman will not agree with it and he will make the same speech again. Perhaps he should trust the Minister to set the boundaries rather than the DHSS.
Mr. Dobson: Certainly not. I was returned to Parliament not to trust any Minister.
We are not talking about a National Health Service boundary. If the system is to work properly, there must be links with the social services provided by the local social services provided by the local authorities. The links between the social services and the hospitals and doctors are poor enough. If we disturb the boundaries and involve district authority staff in dealing with two local authorities and local authority staff in dealing with two hospitals in the same area, there will be increasing complexity. Many of the NHS staff in the South Camden district do not relish dealing with the Camden social services department—which is well funded, although it has its shortcomings—and with the Westminster social services department, which is organised in a different way and relatively poorly funded. I cannot believe that such matters will be taken into account by the Minister and his distinguished advisers.
Unlike many of my right hon. and hon. Friends, I believe that the London teaching hospitals should be taken out of the district area system in London. I say that not because I want to give them

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greater privileges but for historic reasons and because they provide both a national and regional service. They so dominate the Health Service areas in which they are located—and will dominate them more if the areas are smaller—that they are better taken out of the system.
It was altogether daft and rather idealistic, if I may attach that word to the right hon. Member for Leeds, North-East (Sir K. Joseph), ever to consider that these major teaching hospitals, with their power, influence and reputation would not dominate the areas in which they were located. I would say, therefore, that we should take them out of the districts. They should, once more, be dealt with directly by the DHSS. The areas and districts would then deal with the rest.
There will be many dissenters from that view among my right hon. and hon. Friends, but I say to them that if they do not agree with my views I do not want to hear them complaining in future that these major hospitals are distorting the provision of service in the areas they represent. That is the argument all along. If those teaching institutions are distorting the service, the answer is to get them right out of it.
Mr. Percy Grieve: I have listened with great attention to what the hon. Gentleman has said and I am in complete agreement with the view that the right treatment for the great teaching hospitals is that they should have a special place in the Health Service and be taken out of their districts. One other reason why that should be done is that each of them has, in its way, developed its own specialties which are of national importance.
Mr. Dobson: To some extent I agree with the hon. and learned Member for Solihull (Mr. Grieve). I believe that the teaching hospitals have a special position in the Health Service and that the problem has been that we have failed to recognise that special position. I believe that those hospitals would be better controlled and would be more likely to receive a proper share of resources if they were dealt with by the DHSS, which should be big enough to deal with them in the sense of keeping them in order in a way that the area health authorities can-
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not do. District authorities will be even less capable of dealing with the teaching hospitals.
Mr. Dubs: Would not my hon. Friend agree that before the teaching hospitals were the responsibility of area health authorities—before the last reorganisation—they were not being kept in order by the DHSS or the Ministry of Health? Will my hon. Friend comment on this problem? If the teaching hospitals are kept apart from the main Health Service how can services be planned in areas where teaching hospitals exist and how can those hospitals be made responsive to the needs of local communities?
Mr. Dobson: I agree with my hon. Friend generally, but I do not agree with him in this case, because I find it difficult to discern that there has been an improvement in the responsiveness of the teaching hospitals to the needs of the people in their localities since the previous reorganisation. I also believe that if the area or district authorities were to continue in existence and dealt with the DHSS and with the major teaching hospitals through a separate process of indicating what was needed for their areas, it would be a clearer process for ensuring that those hospitals dealt with the problems of the areas. The system is wholly confused at present and I think that the teaching hospitals dominate the proceedings of the areas that they serve.
I guess that I am not exactly carrying many of my hon. Friends with me in this argument.
Mr. Haynes: Does my hon. Friend also agree that the teaching units pull a fair amount of resources from their areas? That means that the other districts in those areas suffer financially as a result. May I go on to say something else to my hon. Friend? When he was talking about special privilege from the DHSS, I hope he did not mean special privileges in the financial way, for that would mean pulling finance away from the districts, which so desperately need it.
11 pm
Mr. Dobson: I agree with the latter point made by my hon. Friend.
I also believe very strongly that the funds going into those areas which have a major teaching hospital—or even two major teaching hospitals—do not reflect

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the national and regional contribution which those hospitals are making. Consequently, because the national and regional contribution is something that the hospital will not reduce, the people who suffer are those who are dependent on the hospital providing a service in the immediate locality. If we were to take the amount of direct funding which it could get from the DHSS if it were responsible for them, together with the funding of the area without them, we would find that the total would be greater than it is under the present sloppy and confused system.
In my constituency there is a hospital with what is called—it is a term of art—a preserved board of governors. I refer to the Great Ormond Street hospital for sick children. To a limited extent, it provides a service in the locality, but it provides much more than that ; it provides a regional and a national service. It is the place of last referral for desperately sick children.
It was decided—I think wisely—that the hospital for sick children should have a preserved board of governors, should be directly funded by the DHSS, and should not be run by the area health authority nor place any demands on the funds of the area health authority. Both the area and the hospital have benefited from that arrangement. If we consider the effectiveness of that hospital in its hospital provision and in its great specialisation, we have to recognise that the major teaching hospitals have similar important nationwide specialisations. Those specialisations should, therefore, be directly funded by the DHSS. Those hospitals would in consequence, be best taken out of the system.
The right hon. Member for Leeds, North-East has a great deal to answer for in regard to the state that the Service has got into since his benighted reorganisation of it. We need change in London. The present system in London is not acceptable and change needs to be brought about. One of the problems of this change, and the demand for it, is that for years to come it will divert effort from providing a proper health service in London, because the attention of administrators, doctors, nurses, trade unions, people on community health councils, and so on, will be concentrated on the fairly unproductive question of how we establish a hospital and NHS structure in London
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to put right the wrongs that the right hon. Member did to the London area when he was Secretary of State.
That is sad, because there are enough problems in London already. There is a gross lack of resources in the London area, although some of my colleagues may not agree. There is the low pay, winch has a particular impact in the London area, where the comparative pay of nurses and ancillary staff is worse than it is in other areas because the London weighting does not to any extent compensate for the excess cost of being in London. Consequently, there is a considerable shortage of satisfactory staff at many London hospitals.
An additional reason—I am sure that this will not commend the rest of my speech to those Conservative Members who have seemed to like some of it up to now—why there are problems in the Health Service in the London area is the enhanced and growing and wholly harmful impact of the development of private medical services in the London area. The Wellington hospital and others—which if the Minister has his way will spread—are like leeches on the provision of health services in the London area. They take doctors, nurses and ancillary staff, who have been trained in the public Health Service, away from that Service in the London area. Now we have an amazing outfit called "Medicover", which has moved into the GP sphere. While I agreed with every word he said, I noted the irony of the attack on "Medicover" by a representative of the BMA. Apparently, if someone starts providing a service at GP or house visiting level, which is basically equivalent to the Wellington hospital, it is to be denounced. I am glad that the BMA takes that view about "Medicover", and I hope that it and the Minister will go out of their way to get rid of it.
Any change in the structure—and structural change needs to be brought about—must bring about clear and sensible boundaries, involve large numbers of people in consultation and produce a considerable improvement in both the democratic control of the Health Service in London, because there is none at present other than that exercised through the Minister, and worker participation in the Health Service decisionmaking processes. Possibly I do not

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agree with my hon. Friend the Member for Wood Green (Mr. Race), who would like workers' control of the hospital service. I believe that the hospital service would be better off if it were controlled by some sort of agreed structure between patients and potential patients and those working in the industry.
Mr. Race: My hon. Friend has just denounced the view which he thinks I hold. He may be interested to learn that, along with my union, I favour democratic control of health authorities through direct elections from members of the public—in the same way as we encourage them to vote in local elections—and a measure of worker control through the election of representatives through their trade unions.
Mr. Dobson: I can happily say that my hon. Friend and I are at one on this issue.
Apart from the question of the change in organisation, we cannot get away from the fact that the Health Service in London is not in a good state. It is in a bad state. To discover that, one only has to look around the hospitals in inner London and to see the decayed state of many of the buildings, the loss of morale among staff and all the problems which the hospital service faces.
We must ensure that we provide sufficient financial resources and a decent structure which will properly release the skill and dedication of all the staff in the hospital medical services so that they can devote themselves to looking after patients—some of them preventing people from becoming patients—and so that we get a better Health Service. The only way in which we can do so is to ensure that those involved are committed and have the resources to do the job which they have decided to take on. We have let them down for far too long. It is up to the Minister to make sure that they get the resources, but I doubt whether he will, and it is up to us to ensure that they get the right structure.
Dr. Vaughan: In view of the long and thoughtful speech of the hon. Member for Holbom and St. Paneras, South (Mr. Dobson), this is clearly an important part of our debate on the Bill.
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The right hon. Member for Norwich, North (Mr. Ennals)—I am sorry not to see him here at present—and my hon. Friend the Member for Putney (Mr. Mellor) spoke eloquently about the Westminster hospital and the medical school. Other hon. Members also touched on that subject. I am glad that my hon. Friend the Member for the City of London and Westminster, South (Mr. Brooke) is present in the Chamber—he has been present throughout the debate as a Government Whip—because I know of his deep concern for Westminster hospital.
I do not believe that there should be confusion about the future of Westminster hospital at this stage. The Flowers report emanates from a University of London working party, and the report of the London Health Planning Consortium is also the report of a working party. Both are working parties, and their views are not in any way the Government's views. I must make that clear. My hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) was right to have said that. We expect proper consultations to take place before any of the recommendations of those working parties are put into effect.
I must also make clear that no decisions have been taken on the future of Westminster hospital, or on any of the other recommendations of those working parties. I care very deeply for the Westminster hospital, and I would not wish the hospital to cease to be a centre of excellence, as my hon. and learned Friend suggested it might. I do not wish it to be damaged by uncertainty, and that is why we must decide urgently what is to happen. We consider that it is important to have a proper advisory group to advise the Government on the various changes that are needed in London.
The Royal Commission recommended yet another inquiry on London. We thought about that carefully, and we reached the conclusion that there had already been a number of inquiries and that yet another would not serve any useful purpose.
Mr. Moyle: Will the Minister give way?
Dr. Vaughan: No, not at the moment. The right hon. Gentleman asked a number of questions which I shall try to answer.

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We believe that a body is needed that will pull together the various reports that are available. The only area in which there is a lack of information is that of primary care, and that is why we set up the Acheson inquiry. For the general future of London we have set up a London advisory group under the chairmanship of Sir John Habakkuk, and I have asked him to give priority to advising the Government on the restructuring of the Health Service for London, and the pattern of acute and specialist hospital services in the light of the report of the London Health Planning Consortium and the other reports that are available.
It is not expected that the group will collect any further evidence, but it can do so if it wishes. We feel that enough evidence is already available to enable it to reach proper conclusions. It is important that the group should concentrate on these issues urgently if the restructuring in London is to keep pace with the rest of the country. It would be a tragedy if the rest of the country moved ahead and London was left behind.
I had a meeting last week with the chairman of the London advisory group. The group has already met twice, and it expects to meet again on 23 June, 7 July and to have an all-day meeting on 4 August to consider the University of London proposals based on the Flowers working party—which should then be available. It then proposes to meet weekly throughout September and October. It is doing this in order to be able to advise the Government as quickly as possible.
I have also discussed the functions of the group carefully with the chairman, and I shall answer the questions put to me by the right hon. Member for Lewisham, East (Mr. Moyle) as briefly as possible.
11.15 pm
The right hon. Gentleman asked whether the Flowers report, the London Health Planning Consortium report and Professor Acheson's report would be available to the advisory group. The answer is "Yes", although the Acheson report will not be ready before the end of the year. He then asked whether the group would be able to give full consideration to the GLC proposal that there should be a single health authority for London. The answer is "No, not at first."
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We do not think that that is within the immediate remit of the advisory group. But it would be open to it to do that, if necessary, early next year. It has no plans to do so at the moment, however.
The right hon. Gentleman asked whether it would hear evidence from members of the public and invite bodies concerned in the Health Service to give evidence. The answer is "No." The group thinks, as we think, that the information is already available in the various reports. But it will be making its report public so that when it gives its advice to the Government it will be published.
The right hon. Gentleman asked whether it would be free to consider the future of the postgraduate institutes. The management of these postgraduate centres is a matter for the Government. The linking of the post-graduate centres with the other services in London is very much a matter for the London advisory group. The two will go together so that both that question and that about whether it will be free to look at the teaching hospitals in London receive a slightly guarded answer. If the university puts forward, as we think it may, a number of alternative recommendations in one or two parts of London, the London advisory group will take the various alternatives on board and will come to the Government with clear advice. We think that to be a sensible way of setting about it.
The right hon. Gentleman asked whether it would be possible for the group to consider RAWP. The answer is "No" in the general sense. That does not come within its remit. But the financial implications of regional RAWP might well enter its consideration because that might well apply to individual hospitals which it is examining.
The right hon. Gentleman asked whether all these matters would be considered and recommendations made by the group before there was action on them in general terms. The answer is that the recommendations from the group and the reasons for them will be given as advice to my right hon. Friend the Secretary of State. They will be published so that they can be discussed publicly, if necessary, before the Government take action on them. The right hon. Gentleman asked in a footnote whether the

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group would consider the future of the London ambulance service. The answer is "No". That is not within the group's remit.
I have gone through those questions rather rapidly because it is late and there are many other aspects which I know hon. Members wish to discuss on other parts of the Bill.
Mr. Race: For me the night is young, Mr. Deputy Speaker.
My points on the amendment are related to what the Minister has just said. It is extraordinary that the group will look at some aspects of the Health Service in London but not at others, and will have removed from its consideration any method of approach which would create one regional health authority group for London. It is impossible to fix the level of resources to be pumped into London without knowing in advance how many regional health authorities, district health authorities and district general hospitals there will be within that area.
To have the advisory group not look at the prospect of having one regional health authority for London is extraordinary. To have the advisory group not look at the London ambulance service is also extraordinary. The London ambulance service has a severe crisis on its hands. First, it cannot recruit manpower in competition with the other emergency services—the police and fire services—because its pay levels are far below those two services and, secondly, it cannot get to a high proportion of its emergency calls within the limits which have been set by the DHSS. Therefore, for the Minister to reject the view that the advisory group or an inquiry should look at the London ambulance service again seems extraordinary.
London is the only part of the country which has this sectoral approach. It is the only major city in the country which has four regional health authorities operating within it. My hon. Friend the Member for Holborn and St. Paneras, South (Mr. Dobson) made this point clearly, and I shall not go over it at any length. However, it is absurd to have four regional health authorities with disparate internal distributions of population and social composition trying to administer and deliver health care within that region,
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especially when there is no machinery for looking at the problems of London as a whole other than through the London Health Planning Consortium.
I found it amusing when the hon. and learned Member for Thanet, West (Mr. Rees-Davies) suggested that the. London Health Planning Consortium was not connected with the Government. Of course it is connected with the Government. It has a direct link with the Government. It was by direct Government encouragement that the consortium was set up. No one is complaining about that. But to suggest that the Government are not committed to the concepts which have been discussed by the consortium is absurd.
I refer the Minister to the report on acute hospital services in London which was published last autumn. It points up the problems in London. In the consortium's conclusions at pages 30 and 31 there is a clear analysis of the problems facing the London Health Service. It makes clear that all the talk about internal RAWP, the development of RAWP on a national basis and the distribution of Health Service resources in London as a whole is an acceptable front for the determination of health care policy on the basis of available financial resources. It is important to get this on the record. The report states :
"As well as the pressure of population movements, the pressure of resources makes change essential. Even if the rate of growth of resources to the NHS increases substantially in the future, moves to level up resource provision throughout the country and to provide equality of access to services will mean that growth within the Thames Regions is less. If the NHS is to improve the services which, particularly in London, are poorly provided—services in the community and for the elderly, the mentally ill and the mentally handicapped—it will have to look to a relative decline in expenditure on acute services."
That is why the consortium proposes that between 1977 and 1988 about 6,100 acute hospital beds will disappear from the regional health authority areas in London, primarily to enable other aspects of the NHS in London, which it is accepted are under-funded, to have the opportunity of obtaining additional finance. No one has suggested in the report that the patients that fill the acute beds will require operations any the less in 1988 than in 1977. Indeed, the reverse is true. The morbidity prospects for some

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sections of the population in 1988 will be worse than they were in 1977. If the Government's public expenditure cuts continue rolling until 1988, it is clear that many will face urgent need for acute medical services. The need will arise because of the cuts that have been imposed by local authorities and other sections of the Service.
The consortium makes it even clearer. It states :
"The combined effects of increasing throughput"—
that is on beds—
"and the inexorable advance of medical technology and techniques will tend to increase the average cost of using each acute bed ; but if the numbers of beds are not sufficiently reduced, it will be impossible both to pay for improved standards of care outside the acute sector and to allow room for medical development within the acute services."
That says it in a nutshell. If doctors are to provide high-technology medical cover, the number of patients in acute beds has to be reduced so that the NHS can provide facilities that are not now available for geriatrics, psycho-geriatrics and others.
The consortium documents explain to Londoners "We are prepared to provide a certain level of maximum care for a certain number of your population. We accept that there will be others who will be in pain and suffering and in need of operations. We are sorry but those operations cannot be carried out because there is not the money to make them available to you." It is absurd for any hon. Member to suggest that there is a measure of equalisation.
I support the view that there should be a levelling up of health care resources in the NHS. No one in his right mind would question that. As a London Member, I must defend the interests of those who go into hospital for operations and who will not have the opportunity of getting those operations after 1988 if the consortium's proposals are implemented. For that reason alone, there is justification for a wide-ranging public inquiry into the problems of the NHS in London.
There are other reasons for advancing this proposal. There are disputes taking place about the provision of accident and emergency facilities in the capital. The Minister will be relieved to know that I shall not refer to the Prince of Wales hospital. However, the hon. Gentleman
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visited the Royal Northern hospital recently and inspected the accident and emergency facilities. He is aware of the arguments that are advanced by Members and community health councils in London. There is a genuinely held view about the sort of accident and emergency facilities that are required throughout the capital. It would be monstrous if the structural changes that may be proposed as a consequence of the advisory group's reports did not take into account the views of the community on accident and emergency facilities.
Another major justification for the provision of a public inquiry and the publication of its findings is the increasing shortage of nurses in London. At the Whipps Cross hospital, just across the boundary of my constituency and in Walthamstow, 90 beds have ceased to be available because of the failure to recruit adequate numbers of nursing staff.
11.30 pm
There were stories in the Daily Mirror and other papers today about the scandalous way in which the Government were treating student and other nurses at the bottom of the pay scale. If the 14 per cent. rate of pay is imposed by the Government on nurses and midwives in the capital, it will mean that fewer nurses will be recruited to train in the London teaching hospitals, and in the other hospitals in London, and inevitably the pressure on acute and non-acute beds will increase, because the numbers of nurses available to man those beds will be reduced quite dramatically.
The problem of bringing nursing staff into the NHS in London is one that the Government ought to consider very carefully. We have had crises of this kind before in the London NHS. We had a manpower crisis in 1973–74, which was resolved only by the imposition of the Halsbury findings for nurses and mid-wives, and by the imposition of increases linked to the cost of living for ancillary staff and other groups in the Service. It is therefore absurd for the Minister to say that these questions should not be dealt with by the advisory group.
There is one other important reason that one can advance for saying why that inquiry should be established, and that is that in the inner London area, certainly in my constituency, the number of extended families is relatively small. The

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family support that exists for people who have to go into hospital, or who might otherwise be treated in the community, is diminishing all the time. Therefore, the importance of NHS beds in London is such that we ought to have a large number of such beds to take account of the fact that the provision of family support for patients is perhaps lower than it is in rural or suburban areas. That is another reason for special consideration being given to the problems of the London area.
The last major point that I want to make on this question is one that was made in the Royal Commission's research paper No. 3 by Klein and Buxton, because this goes to the heart of the problem of the London NHS. One of the arguments that has been used by Ministers—both in this Government and in the previous one—is that the London Service had to be kept back so that the Service in other parts of the country could be advanced and money could be increased for that purpose.
The argument that was put forward by Ministers at that time was that RAWP would do that, but—and Klein and Buxton make this clear—the
"Main thrust of public policy has been to devise a rationing system without making any assumptions as to whether or not the resulting allocations would provide an adequate standard or quantity of service."
That attempt is now being made in London, and what the Government are really saying is that a rationing system will operate and that Londoners will have to put up with it. I do not believe that Londoners will put up with it. The number of acute beds will drop substantially, the number of accident departments will fall dramatically, the number of nursing staff recruited to the Service will fall dramatically, industrial disputes will be magnified, the community health councils and the other representative organisations in London will not be consulted by the advisory group on reorganisation, the boundaries of the regional health authority will not be discussed by the advisory group and the London ambulance service will not be looked at by the advisory group.
For all those reasons, I believe that what we are getting from the Government is not a comprehensive look at the
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kind of Health Service that Londoners need. It is a ramshackle attempt to impose a speedy solution at a time when an in-depth inquiry is required. I therefore support the amendment, and I am sure that many of my hon. Friends will join me in doing so.
Mr. Moyle: Perhaps it would help the House if I were to intervene at this stage, because the Minister for Health has spoken. I wish to make three points in reply to the debate.
The hon. Member for Putney (Mr. Mellor) spoke about a sense of disturbing impotence in considering the problem of Westminster hospital and the London teaching hospitals generally. I believe from the way things have been arranged, that this is deliberate, because the effective decisions about acute hospital beds in London are being placed on the shoulders of London university, which is not answerable to the House, as a result of a firm lead given by the London Health Planning Consortium, which is the Government's creature. However, when the Government talk about the recommendations of the consortium they will be able to say "In any case, the decisions have all been preempted by London university." The sense of disturbing impotence which the hon. Gentleman feels has not arisen by accident. I believe that it is a deliberate plan.
The hon. and learned Member for Thanet, West (Mr. Rees-Davies) and the Minister said that there had been too many inquiries into the situation in London. I should like to know what they are. I do not believe that there has been any inquiry into the health services in London to date. When the Royal Commission report was published last summer there had certainly not been an inquiry into the health services in London, because the report of the Royal Commission recommended that there should be one. I cannot recall an inquiry into the London health services subsequently. There may have been one or two little pieces of inquiries into little corners of them.
My hon. Friend the Member for Holborn and St. Paneras, South (Mr. Dobson) expressed the view, amongst many other interesting observations, that the resource allocation working party was damaging the National Health Service in

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London without benefit to the Northwest and Trent. He should take the trouble to go and see new hospitals such as those at Nottingham, Leicester, Rotherham, Barnsley, Chesterfield and in the Trent region and also look at places such as Bassetlaw and Mansfield. He would then see that there is still a substantial need for further action. He might well go to Preston, Salford and Wigan and see the new hospitals going up in the North-West. At the same time he should call in at Oldham and Tame-side and see what else had to be done.
The Minister answered eight of the 13 questions I put to him. He did not answer some of those in the affirmative. The five questions he did not answer were all related to the relationship of the acute hospitals to the social services and community hospitals in London and the relationship of London to the Home Counties.
It is essential that we get clear in our minds what should be and can be the relationship between the London health services and the Home Counties health services and between the London acute services and particularly the social services and to some extent the community services in London. The theory is that the resources of the acute sector should be transferred from that sector in London either to the acute sector in the Home Counties or to the community and social services sectors in London itself. The social services are under considerable pressure. An inquiry must establish that this is a feasible policy, as it has been advocated for some time.
My hon. Friend the Member for Wood Green (Mr. Race) has drawn attention to some of the damage that he believes is being done to some of the acute hospitals in London as a result of these policies. The social services, and the community services in some cases, are under intense pressure in London. It seems to us that, particularly with a reduction of resources rate for London of 0·3 per cent. for this financial year, the source of finance for all these things must be looked at very carefully. There is no prospect at all of this exercise being undertaken under the London advisory group. Therefore, we shall have another piecemeal investigation of yet another
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aspect or partial aspect of the London Health Service.
I understand that even the proposal of the Conservative-controlled Greater London Council that there should be a regional health authority for the GLC area will not be considered with any degree of urgency by the London advisory group. That is very disappointing because this is a proposal for a different structure for the Health Service in London. I am afraid that what we shall get is another partial exercise in which the co-operation of Londoners will not be asked in the running of their health service.
As a result of what the Minister has said about the activities of the London advisory group and what is planned, there will be continuing considerable discontent in London about the development of the Health Service, whatever Sir John Habakkuk and his colleagues recommend, There will always be a number of people who can point to large gaps in the integrated planning of the London Health Service which has not been properly investigated by any particular body, and that will be a further ground for resisting Government policies. In the circumstances, I can only ask my right hon. and hon. Friends to vote for the amendment.
Mr. Clive Soley: I know that the hour is late, but a number of recent events in my constituency have brought home to me the importance of this amendment. It recognises the importance to London of getting the structure of the National Health Service right. As a result of visits to hospitals and meetings and discussions with various groups in the medical profession, patients and others in the Ealing, Hammersmith and Hounslow AHA, I felt that it was important enough to bring up this matter tonight.
The present management structure in London is causing severe problems. I do not wish to comment in detail on the right structure, but I wish to show the type of problem being caused and to relate it to the amendment, because if it was accepted, it would enable us to tackle the problem effectively.
First, Hammersmith hospital is a very old building. The hospital has an international reputation, particularly in heart

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surgery. It has the Royal postgraduate medical school there, which will already be fairly hard hit by the Government's proposals for overseas student fees which we debated last week. There has been piecemeal redevelopment over the years, and a planned major redevelopment was postponed in 1974–75. On a couple of occasions the environmental health officer has visited the hospital and has enforced some remedial work which has had to be carried out. That has resulted in considerable expense at a time when RAWP has meant less money in real terms.
I visited the mortuary, the X-ray department and the dining room. The mortuary is unhealthy because the air circulates over the face of the operator. This is also unpleasant. Many thousands of pounds will be needed to put that right. The X-ray department is in an appalling state, with public records being kept in the corridors. Recently the dining room floor collapsed so that there is now a large hole which has been there for some months.
If rebuilding could start in 1985, I would guess that the hospital staff would keep the hospital going. However, the North-West Thames region has already decided not to include the 1985 rebuilding scheme, which would need a minimum of £9 million at 1978 figures, in its programme. The money is to be spent on St. Mary's and St. Alban's, which is outside the London area. If the amendment was accepted, and we considered GLC coterminosity, it might be possible to get a more equitable distribution of resources.
11.45 pm
The West London obstetrics unit is famous for its high standard of emotional and physical patient care. It developed the Leboyer method of birth and antenatal care. For some time there has been uncertainty about that unit's future, and rumours of closure must be stopped. The management structure seems to inhibit clear and quick decision making, but I do not blame the managers. The structure is inadequate for an effective decision to be made. Again, it might be easier if we had GLC coterminosity. We could at the same time consider the relevant advantages and disadvantages of moving the obstetrics unit to Charing Cross or possibly to Queen Charlotte's hospital. It
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should certainly be made abundantly clear that this unit must not be closed.
There is an appalling lack of adequate psychiatric services in this area. Patients in North Hammersmith have to go to Springfield hospital, which is dealt with by the Merton, Sutton and Wandsworth area health authority, and Banstead hospital, which comes under the Kensington, Chelsea and Westminster area health authority and which is 13 miles away. It has been suggested that Hammersmith patients are to be excluded from Springfield by the end of this year. St. Bernard's hospital in Middlesex may have to take them for an interim period until Charing Cross hospital is able to do so. Psychiatrists tell me that that is clinically unworkable. If a transfer to Hammersmith hospital is suggested, even more problems would be created for that hospital.
If the amendment was accepted, the position of Henderson hospital, which is of considerable importance to London as a whole, could also be considered.
Finally, community nursing, which is most important, is greatly underfunded and is not given the priority that it should be given. If we had coterminosity, I suspect that we could do something to develop community nursing on a London basis. That is especially important when we consider health visiting and local authority social services.
For those reasons, I support the amendment.
Mr. Pavitt: This debate epitomises many of the problems with the Bill. The Government have revealed their thinking in reply to my right hon. Friend the Member for Lewisham, East (Mr. Moyle). We are asking for a comprehensive and complete inquiry into the Health Service in London before a second mess is made of reorganisation. As in 1973–74, the Government are looking to the experts. London advisory agents will be used. Last time it was the McKinsey report. The Conservative Government always want a father figure to give them good advice.
Our case is that the comprehensive nature of the Health Service demands for London, with its population of 7½ million, a broad look at the whole Service, and not only at the Flowers report, the London Health Planning Consortium report

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and primary care. My right hon. Friend asked many pertinent questions. The Government's replies reveal so many gaps in the remit to the agency advising the Government that there will be either a whitewash or a tinkering with the periphery which will not touch the basic problems.
The Minister may have faith in the experts, but it was the experts who said that the "Titanic" could not sink, that Picasso could not paint, that Somerset Maugham should not write and that the Maginot Line would never be breached. I make no reflection on the distinguished chairman of the committee and his colleagues, but the Government's approach is fundamentally wrong. The answers that they get cannot satisfy the House.
The Minister has said that the report that he receives will be published. But what sort of debate will ensue? Will we have a whole-day debate on London? Will we have before us propositions that we can amend? Will there be a statutory instrument? How will the House decide what is to happen to London?
There are a number of areas in which London is exceptional. Medical care in the capital can be distorted by the fact that in Harley Street we have the biggest magnet in the world for private practice. Certain consequences flow from that. In the London hospitals, there is a predominance of doctors in acute, surgical or other specialties, and the provision for the areas where we need them most, and where there is no extra money to be earned from private practice—in geriatrics, mental care and mental handicap—is distorted. In London, the distortion is greater than anywhere. When one has a magnet for private treatment, the students in medical schools will choose the specialties that pay most.
There is also a distortion of services in my area. The local area health authority has recently given permission for the American Medical Association to build a 99-bed hospital in the area for private patient acute cases. One of my hon. Friends has already raised the difficulties of nursing shortage in certain areas. One of the most important is the trained and qualified theatre nurse. The extension in London of private hospitals dealing with cases for which payment will be made—mainly surgical operations, orthopaedics
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and so on—results in a drain of specialised nurses who are essential to the NHS.
No mention has been made of dental care, the part of the NHS that affects more people in London than any other. Dental care has changed since 1974, when the school health service became part of the community dental service, which has a wider responsibility than ever. In London, different arrangements are made by the ILEA and by the outer London boroughs. It is difficult to secure dental care in London without going for private treatment. A comprehensive review of that area by the inquiry committee would have been of great value.
We should also consider the age range of family practitioners, particularly in the less prosperous, inner city areas. There is to be almost a new town developed in dockland, but the need for health services there does not come within the purview of the agency that is advising the Minister.
I am grateful to my right hon. Friend the Member for Lewisham, East for drawing attention to the fact that the Flowers report is the property not of the Government but of London university and it could be acted upon irrespective of the House's views.
I am concerned with the specialty of deafness. Work done by the Royal throat, nose and ear hospital in Gray's Inn Road, the Institute of Audiology and the Institute of Otology is under threat, and we should not look only at the reports of the consortium and the Flowers committee and the way in which medical students are to be brought together. One should look at the specialities. What happens about Moorfields eye hospital? There has been mention of the approach to leukaemia at Westminster hospital. The speeches of my right hon. Friend the Member for Norwich, North (Mr. Ennals) and the hon. Member for Putney (Mr. Mellor) should be placed in gold outside Westminster hospital. Both were expositions of the feelings of hon. Members about our local hospital. The same argument can be applied to all hospitals that are threatened.
The comprehensive medical services between the primary care of general practitioners, the community physicians and hospital doctors and their specialties and the developing occupational health

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services are, part of what the Royal Cora-mission had in mind in asking for a London inquiry.
The most salient point was made by my right hon. Friend the Member for Lewisham, East—and it was confirmed by my hon. Friend the Member for Battersea, South (Mr. Dubs). My right hon. Friend said that the Sherlock Holmes story of the dog that did not bark was applicable. If the Royal Commission, with all its resources, time and the facilities available to it, felt that it could not deal with this problem and that a special public inquiry was required, the case is unanswerable.
I regret that the Government intend to have a back-door committee that will advise them. I fear that the Establishment will get together. A comprehensive health service that all Londoners would like to see is unlikely to emerge from the processes upon which the Government are embarked. This will be highly unsatisfactory not only for the patients but all those working for the benefit of the National Health Service in the Greater London area.
Question put, That the amendment be made :—
The House divided : Ayes 90, Noes 149.

Division No. 345]

AYES

[12 midnight

Ashton, Joe

George, Bruce

Prescott, John

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

Gilbert, Rt Hon Dr John

Race, Reg

Benn, Rt Hon Anthony Wedgwood

Ginsburg, David

Richardson, Jo

Bennett, Andrew (Stockport N)

Graham, Ted

Roberts, Ernest (Hackney North)

Booth, Rt Hon Albert

Hamilton, W. W. (Central Fife)

Robertson, George

Bray, Dr Jeremy

Harrison, Rt Hon Walter

Rooker, J. W.

Brown, Ronald W. (Hackney S)

Haynes, Frank

Ross, Ernest (Dundee West)

Callaghan, Jim (Middleton & P)

Heffer, Eric S.

Rowlands, Ted

Campbell-Savours, Dale

Hogg, Norman (E Dunbartonshire)

Sever, John

Clark, Dr David (South Shields)

Holland, Stuart (L'belh, Vauxhall)

Silkin, Rt Hon S. C. (Dulwich)

Cocks, Rt Hon Michael (Bristol S)

Home Robertson, John

Skinner, Dennis

Cohen, Stanley

Hooley, Frank

Snape, Peter

Coleman, Donald

Hughes, Robert (Aberdeen North)

Soley, Clive

Cowans, Harry

John, Brynmor

Spearing, Nigel

Cox, Tom (Wandsworth, Tooting)

Jones, Barry (East Flint)

Spriggs, Leslie

Crowther, J. S.

Lamond, James

Stott, Roger

Cryer, Bob

Lyon, Alexander (York)

Thomas, Dr Roger (Carmarthen)

Cunningham, Dr John (Whitehaven)

McCartney, Hugh

Tinn, James

Dalyell, Tam

McKay, Allen (Penistone)

Walker, Rt Hon Harold (Doncaster)

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

McKelvey, William

Welsh, Michael

Dixon, Donald

McNally, Thomas

White, Frank R. (Bury & Radclitfe)

Dobson, Frank

Maxton, John

Wilson, Gordon (Dundee East)

Dormand, Jack

Maynard, Miss Joan

Winnick, David

Douglas, Dick

Mikardo, Ian

Woodall, Alec

Dubs, Alfred

Millan, Rt Hon Bruce

Woolmer, Kenneth

Eastham, Ken

Mitchell, R. C (Soton, lichen)

Wrigglesworth, Ian

Ennals, Rt Hon David

Moyle, Rt Hon Roland

Young, David (Bolton East)

Evans, John (Newton)

Orme, Rt Hon Stanley

Field, Frank

Palmer, Arthur

TELLERS FOR THE AYES:

Flannery, Martin

Pavitt, Laurie

Mr. George Morton and

Foster, Derek

Powell, Raymond (Ogmore)

Mr. James Hamilton

Fraser, John (Lambeth, Norwood)

NOES

Alexander, Richard

Carlisle, John (Luton West)

Garel-Jones, Tristan

Alton, David

Carlisle, Kenneth (Lincoln)

Greenway, Harry

Ancram, Michael

Chapman, Sydney

Grieve, Percy

Aspinwall, Jack

Churchill, W. S.

Griffiths, Peter (Portsmouth N)

Beaumont-Dark, Anthony

Clark, Hon Alan (Plymouth, Sutton)

Grylls, Michael

Beith, A. J.

Clarke, Kenneth (Rushcliffe)

Gummer, John Selwyn

Bendall, Vivian

Cockeram, Eric

Hannam, John

Benyon, Thomas (Abingdon)

Colvin, Michael

Haselhurst, Alan

Berry, Hon Anthony

Cope, John

Hawkins, Paul

Best, Keith

Cormack, Patrick

Hawksley, Warren

Biggs-Davison, John

Costain, A. P.

Heddle, John

Blackburn, John

Cranborne, Viscount

Henderson, Barry

Body, Richard

Dean, Paul (North Somerset)

Hogg, Hon Douglas (Grantham)

Boscawen, Hon Robert

Dorrell, Stephen

Hooson, Tom

Boyson, Dr Rhodes

Dover, Denshore

Howell, Ralph (North Norfolk)

Braine, Sir Bernard

Dunn, Robert (Dartford)

Howells, Geraint

Bright, Graham

Fairgrieve, Russell

Hunt, David (Wirral)

Brinton, Tim

Faith, Mrs Sheila

Hunt, John (Ravensbourne)

Brown, Michael (Brigg & Sc'thorpe)

Fenner, Mrs Peggy

Jenkin, Rt Hon Patrick

Browne, John (Winchester)

Fisher, Sir Nigel

Jopling, Rt Hon Michael

Bulmer, Esmond

Fletcher-Cooke, Charles

Kellett-Bowman, Mrs Elaine

Cadbury, Jocelyn

Fookes, Miss Janet

Kershaw, Anthony

Kimball, Marcus

Nelson, Anthony

Spicer, Michael (S Worcestershire)

Kitson, Sir Timothy

Neubert, Michael

Squire, Robin

Knight, Mrs Jill

Newton, Tony

Stanbrook, Ivor

Lang, Ian

Normanton, Tom

Stanley, John

Lawrence, Ivan

Onslow, Cranley

Stevens, Martin

Le Marchant, Spencer

Page, John (Harrow, West)

Stewart, John (East Renfrewshire)

Lennox-Boyd, Hon Mark

Page, Rt Hon Sir R. Graham

Stradling Thomas, J.

Lester, Jim (Beeston)

Page, Richard (SW Hertfordshire)

Taylor, Teddy (Southend East)

Lloyd, Peter (Fareham)

Parris, Matthew

Tebbit, Norman

Lyell, Nicholas

Patten, Christopher (Bath)

Temple-Morris, Peter

MacGregor, John

Patten, John (Oxford)

Thompson, Donald

McNair-Wilson, Michael (Newbury)

Penhaligon, David

Thorne, Nell (Word South)

McQuarrie, Albert

Pollock, Alexander

Townend, John (Bridlington)

Major, John

Price, David (Eastleigh)

Vaughan, Dr Gerard

Marlow, Tony

Proctor, K. Harvey

Viggers, Peter

Marten, Nell (Banbury)

Rathbone, Tim

Waddington, David

Mather, Carol

Rees-Davies, W. R.

Wakeham, John

Maude, Rt Hon Angus

Renton, Tim

Walker, Bill (Perth & E Perthshire)

Maxwell-Hyslop, Robin

Rhodes James, Robert

Waller, Gary

Mellor, David

Rhys Williams, Sir Brandon

Ward, John

Meyer, Sir Anthony

Ridley, Hon Nicholas

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

Mills, lain (Meriden)

Roberts, Michael (Cardiff NW)

Wheeler, John

Mitchell, David (Basingstoke)

Ross, Stephen (Isle of Wight)

Wickenden, Keith

Montgomery, Fergus

Sainsbury, Hon Timothy

Winterton, Nicholas

Morrison, Hon Charles (Devizes)

St. John-Stevas, Rt Hon Norman

Young, Sir George (Acton)

Morrison, Hon Peter (City of Chester)

Silvester, Fred

Myles, David

Sims, Roger

TELLERS FOR THE NOES:

Neale, Gerrard

Speed, Keith

Lord James Douglas-Hamilton and

Needham, Richard

Speller, Tony

Mr. Peter Brooke

Question accordingly negatived.
Mr. Rooker: I beg to move amendment No. 28, in page 3, line 12, at end add—
' (11) Commencing with the financial year beginning in April 1980 and for the next ensuing three financial years it shall be the duty of the Secretary of State to lay a report before Parliament within three months of the end of the financial year to which the report refers setting out the total financial savings made, the total costs incurred and the number of jobs dispensed with as a result of any action taken under this section.'.
Mr. Deputy Speaker (Mr. Richard Crawshaw): With this we may take amendment No. 40, in page 3, line 12, at end add—
'(11) Any increase in value-added tax payments by an authority made as a result of additional inter-authority trading due to changes in administration flowing from orders made under this section shall be met from additional monies from the Secretary of State.'.
Mr. Rooker: This debate need not take up as much time as the last one provided that the Minister has some answers for us. These are by way of probing amendments, though that does not mean that we shall not push them if we do not get some satisfactory answers.
We wish to give the Minister an opportunity under amendment No. 28 to see whether, two and a half months after the conclusion of the Committee stage, he can be a little more precise about the financial savings that the Government plan to make as a result of the reorganisation under clause 1 of the Bill.
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In Committee, and beforehand, we heard various estimates that ranged from £19 million, through £30 million to £50 million a year.
I remind the Minister that he made a fairly categorical statement to the Conservative Party conference last year, when he said :
"In our streamlining we shall save at least £30 million and more—I believe much more—which can then go to the care and treatment of patients."
In a fairly prolonged debate in Committee on clause 1, the Minister was unable to tell the Committee—and so far has been unable to tell anyone else—precisely how that £30 million is calculated, other than that it is 10 per cent. of the so-called managerial costs. If that is the basis we want to know how the 10 per cent. of the saving will be obtained.
It may be that, in the period since the Committee stage, the Minister has been doing some homework and can now tell the House precisely what financial savings the Government intend to obtain from the reorganisation. The country and the workers in the Health Service will not thank the Government for going through another reorganisation, with the alleged reason of saving money, if at the end of the day we do not save any money whatever.
Amendment No. 40, which is a Back-Bench amendment, is basically to explore the position touched on in Committee about the increased inter-health authority trading that will take place as a result

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of creating more authorities. In Committee the Minister, in reply to me, said that the question of the extra VAT payments that may be forthcoming was one that the DHSS was discussing with the Treasury, the implication being that there would be a way sought to avoid an extra burden of VAT payments on the NHS as a result of the reorganisation. I do not think anyone intends that as a result of the reorganisation we should be imposing the ludicrous position of the NHS paying more out of its cash-limited finance in VAT simply because of an increase in inter-authority trading.
We want to give the Minister an opportunity, of which he was not able to take advantage in Committee, of explaining to the House and the country exactly what financial savings he expects to accrue and how they are made up. Without that, nobody has a yardstick with which to measure what the Government intend to do. Unless we know how those savings are made up, there is no way that the House, the Select Committee or those who work in the Health Service can have of judging the performance, the success or otherwise, of this further reorganisation of the Health Service—a reorganisation brought about only by the desire to clear up some of the mess made by the former Secretary of State, the right hon. Member for Leeds, North-East (Sir K. Joseph), when he guided the last reorganisation Bill through the House in 1971–72.
Sir George Young: I hope that I can reply briefly and positively to the points that have just been made.
The purpose of amendment No. 28 is to lay a duty on the Secretary of State to report to Parliament annually for each of the four financial years 1980–81 to 1983–84 on the costs, savings and numbers of jobs dispensed with as a result of establishing district health authorities under clause 1. We propose to make available—although in a slightly different and, I believe, more helpful form—the information that the hon. Gentleman has asked for in his amendment.
We expect to measure savings in management costs through the statutory accounts, but these will not always be available within three months of the end of the financial year, as set out in the amendment, and it would be imprac-
200
tical to insist on that time scale. But, much more important, some—perhaps the majority—of the savings will be achieved not by structural change, under clause 1, but by the review of management arrangements, which is not founded on clause 1. In practice, it will not be easy to attribute a particular saving specifically to structural change as opposed to management arrangements.
Our intention, therefore, is to record savings as one figure per region, aggregating those attributable to both heads. I think that is logical. Part of our strategy requires legislation and part of it does not. It seems sensible to present the consequences of the strategy as one coherent whole rather than to divide it up in the way which the amendment suggests. Therefore, information on costs, savings and manpower reductions will be available, and we have just approved a review by a joint DHSS/NHS group which will enable management cost information to be collected through the annual statutory accounts.
12.15 am
So we can offer to make available the year-by-year reduction in management costs region by region, as opposed to totally, which is asked for in the amendment. But we cannot do it within three months of the end of the financial year, and we propose to do it without showing separately the reductions due to structural change as opposed to those due to simplification of management arrangements, for the reasons that I have outlined.
The £30 million, which does not arise from the amendment, represents our judgment that by reducing the present bureaucracy, with about 250 teams of officers, to between 150 and 180 teams, and by cutting out unnecessary management posts, we shall save roughly 10 per cent. of the costs of managing the Health Service.
I turn to amendment No. 40—and again I hope that I can give some positive encouragement. This matter is being discussed with the Treasury following the debate in Committee. The assumption behind the amendment is that when area health authorities become split into district health authorities there will be an increase in the amount of inter-authority trading. It goes on to assume that VAT will be levied on such transactions.

201
In fact, the amendment is unnecessary, even assuming that the increase in inter-authority transactions which will flow will attract VAT. The VAT liability of health authorities is one of many factors which are considered when allocating resources to health authorities. Separate legislation is not required to enable such factors to be reflected in the sums allotted to health authorities. However, it would be quite wrong if decisions on the best working arrangements within the new structure were to be distorted by the impact of VAT on one form of arrangements and not on another. We shall takes steps to ensure that there is no such distortion, and should it involve more compensation for increased VAT being put back into the Health Service we shall do that.
I hope that in response to those points the hon. Gentleman will feel that he can seek to withdraw the amendment.
Mr. Rooker: On the basis of what the Minister has said, which was far more forthcoming than what was said in Committee, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.

HEALTH SERVICES BILL
  Clause 6

    PROVISION OF PUBLIC MONEY FOR AND FINANCIAL DUTIES OF HEALTH AUTHORITIES, HEALTH BOARDS, ETC.
    Mr. William Hamilton: I beg to move amendment No. 7, in page 15, leave out from beginning of line 43 to end of line 3 on page 18.
    Clause 6 is probably the most important clause in the Bill, in that it deals with cash limits and puts very tight shackles on the health boards and other health authorities. It indicates that the Secretary of State will pay to the health boards.
    "sums not exceeding the amount allotted or further allotted by him for that year".
    That is in place of a clause in the previous Bill under which the Secretary of State was required to defray the expenditure incurred by the health board. The clause puts a legal duty on the health board so to perform its functions
    "as to secure that the expenditure attributable to the performance of their functions in that year does not exceed"—
    202
    and it goes on with words which I shall not quote. The sums which have not to be exceeded are the amounts allotted by the Secretary of State and any other sums available to the health board.
    The health boards have indicated to me that they are not clear what happens if any health authority incurs expenditure in excess of its allotment. If the overriding requirement is that that allocation must not be exceeded, is there any alternative but that health boards should aim for an under-expenditure—in other words, to play safe? That is inevitable.
    As the Minister must know, it is virtually impossible to hit the target exactly. In recent years that problem was resolved by carry-forward arrangements of a limited nature. Thus, if a health board was underspent by up to 1 per cent. it could claim that money in the following financial year. But if a health board was overspent by up to 1 per cent. it had to pay it back. In other words, there was some limited flexibility which prevented the end of a financial year being an arbitrary date, with the risk of boards rushing to spend money, or, alternatively, holding bills until 31 March. That argument has been put to me and to my hon. Friends by the health boards. I am not sure whether it would be legally possible for the Secretary of State to determine an allocation within an upper and lower limit with a small margin. It is certainly impossible for a health authority to spend precisely the sum allocated to it to the last penny.
    With regard to rigid cash limits, health authorities are exepected to go through a lengthy period of consultation before making substantial changes in health provision, for example, by closing or changing the function of a hospital. Health authorities do not know from year to year how much money they will receive, and if there is no flexibility of carry-over the problem will become insuperable. Those are the nuts and bolts of the complaint of the health authorities, and the basic aim of the amendment is to get rid of cash limits for Scotland. I am not concerned about whether the amendment achieves that aim, so long as we can debate the matter. That is the most important point. The Minister will then be able to speak about the purpose of cash limits.
    But I know what the Minister's arguments will be—I could almost write his

    203
    brief for him—and I shall try to show how ill-advised they are and how deeply concerned the health authorities are that the Government should seek to put this sort of straitjacket on them, with no element of flexibility.
    The debate provides us with a peg on which to put forward arguments on the quality and scope of the health services that are likely to be provided in the next few years under what I call the malevolent control of a Government who are dedicated to the principle of increasingly transferring resources from the taxpayer to the private purse of the individual customer of health services generally.
    The Under-Secretary of State for Health and Social Security said, in winding up the Second Reading debate on 19 December, that the Bill in general
    "is consistent with our philosophy of individual responsibility … we shall encourage each individual to make provision for himself privately."—[Official Report, 19 December 1979; Vol. 976, c. 765.]
    We must never lose sight, of that basic fact. This Bill seeks to transfer responsibility for the provision of the Heatlh Service to the private purse of the individual and away from that of the taxpayer in general.
    To the extent that the Government can curb and rein back expenditure on the Health Service—this clause seeks to do that—and so cause a decline in the quality of services provided, by that means they hope to "encourage"—I use the word of the Under-Secretary of State—individuals to buy their own health services. They will be able to do that only in proportion to their personal wealth. The wealthy in our community will be able to buy themselves and their families a first-class service, with no waiting for operations, major or minor. They will be able to command scarce professional, medical and nursing resources. The poor, however, will have to wait in pain and perhaps wait just for death because they simply do not have the wherewithal to buy the privileges that the wealthy are buying and will continue to buy.
    Generally the poor are less healthy than the rich. They live in poorer environments, and nowhere is that more obvious than in Scotland. Nobody knows that better than the Under-Secretary.
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    They are generally employed, if they are employed at all, in jobs which present a greater hazard to health. Their incomes are lower and they therefore have generally to endure inferior and inadequate diets, with the consequential effects on health. They are unable to take holidays as frequently as other sections of the community. All these factors penalise the poor and make them more reliant on a publicly provided Health Service than are people who can contract out and buy the private high quality service that is now springing up all over the country.
    Not even the Government will deny that the great difficulties of the Health Service are not structural but financial. It is a question of more efficient use of the resources that the Government say we can currently afford. I deny that resources are limited to the extent that the Government say. In Committee I carried around faithfully with me at every sitting the White Paper on defence. There is no suggestion there that we cannot afford another nuclear submarine or another dozen Tornado aircraft, which cost £10 million each. There is no suggestion of asking local people to volunteer money to finance the defence service. That is done only for the Health Service. People have to rattle a tin on a flag day to finance their own local hospital ; they do not have to organise a flag day to buy the next nuclear submarine. That is the difference between the Government's attitude on defence and their attitude to the health and education services.
    12.30 am
    Let me quote some of the difficulties which result from the under-financing of the Service in Scotland. I quoted this case in Committee and the Under-Secretary promised an inquiry. In the Glasgow Herald of 26 March appeared the question :
    "Would you pay £140 for an adenoid operation on your child rather than risk the child suffering ear damage during the six-month to a year's delay on the hospital waiting list?"
    The article reads :
    "A few weeks ago a young Stirlingshire couple were told that their four-year-old only son needed to have his adenoids removed as soon as possible. Their GP pointed out that there was the possibility of complications if this was not done—it could have resulted in partial deafness—and that he would be willing to do the operation in a Glasgow hospital for £140.

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    He suggested that if the money caused any financial difficulty (which it did) they could pay the fee over a number of months.
    Within three weeks the child had his adenoids removed and received every comfort and consideration in a Glasgow clinic. The parents were relieved and are quite happily paying the cost which they understandably think was well worth while."
    That situation is increasingly developing. To the extent that the Health Service will be increasingly under-financed in forthcoming years so parents will increasingly face that kind of problem—indeed, not only parents, but others with serious or painful conditions in need of urgent surgery.
    Earlier the Minister said that there were no cutbacks in financial provision. But he must know that is nonsense. Indeed, on 12 February, the Prime Minister was asked by my hon. Friend the Member for Glasgow, Queen's Park (Mr. McElhone) about finance for the Royal hospital for sick children at York-hill, Glasgow. In the parliamentary exchanges—I was present when they took place—the Prime Minister flatly denied that there was any financial cutback at that hospital at that time.
    As a direct result of those exchanges between my hon. Friend and the Prime Minister an eminent authority at that hospital wrote to him—I do not want to give the gentleman's name—saying :
    "I think you are perfectly correct in your approach and that Mrs. Thatcher is, to put it mildly, being obtuse when she denies that there is any financial cut-back. The sum of money allocated is unchanged and in view of inflation, rising VAT, numerous price increases and some wage settlements we are unable to balance the books. By March 1980 we will be about £½ million overspent and this will come off next year's budget. We estimate that we would require approximately an extra £1¼ million to break even at Yorkhill in order to provide the ordinary service for the sick children.
    We feel strongly that although we are funded like a local hospital this is inadequate as we provide a service for children from Galloway to Stornoway and Rothesay to Ross-shire with many specialised units and services. We have a number of other problems also, namely the funding of our new Renal Unit requires about £½ million capital and £150,000 a year running costs. Our new fast brain scanner is partly promised from charitable sources, but again we need a capital sum of about £¼ million and running costs of £50,000 per annum. Most of this will have to come from Central Government sources as the sums required, especially the running costs, are too much even for the generosity of the Glasgow public."
    He continues :
    "We have been flooded by offers of help, both physical and financial, by members of the public in the past few days and we have already decided to establish a Trust Fund which will deal with money raised by the public. Regrettably, this puts the clock back about 50 years, but in view of the present Government's policies this will be essential for our survival as a useful service to the Community."
    That hospital was built by private contractors and opened as recently as 1970, since when it has virtually fallen to pieces. It cost £4 million or £5 million to build and it is now costing £7½ million to rebuild. Problem after problem is being created by the Government at that hospital.
    I quote a Fife example directly from the Fife health board's staff journal of autumn 1979. It states :
    "Fife Health Board's building programme is to be firmly 'squeezed' in order to stay-within tough cash limits. Existing schemes will proceed, but all further work is being halted until the start of the next financial year in April 1980—a decision which inevitably affects developments such as the modernisation of Ward 5 at the Dunfermline and West Fife Hospital and Wards 25 and 26 at Stratheden."
    As the Minister knows, Stratheden is a mental hospital. The journal continues :
    "The 'running cost' of the health service in Fife—also faces even more rigid control, notably the need to find £300,000 in a full year merely to meet the increased cost of VAT. The sum, enough to run a small 30 or 40 bed hospital for a year, has to be met from the Board's own budget."
    I can quote examples of the way in which the Service is being increasingly run down. The quality of the Service is increasingly deteriorating. I quote further from the Glasgow Herald of 5 February, which refers to the enormous waiting lists in the various regions in Scotland. The article states :
    "There is no more glaring example of how the NHS is failing the people who pay for it than the waiting list for orthopaedic surgery in the West of Scotland. Many of those in the queue are victims of arthritis. One of the most respected names in the world of fighting that crippling disease is Professor W. Watson Buchanan, who ran Glasgow's Centre for Rheumatic Diseases (better known as the Baird Street Clinic).
    The professor is quoted as saying :
    "People use fancy phrases like 'multiple deprivation' and talk round the subject. But that is all twaddle. The reason"—

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    that is basically for arthritis and other orthopaedic diseases—
    "is poverty. If you live in bad housing in the Glasgow area you feel the symptoms earlier than someone living in a better house in the south-east of England. Poverty is reflected in all manner of illnesses because we have the worst health record in Europe."
    One of his reasons is that there is
    "insufficient financial support for arthritis and rheumatism research and treatment. 'We have 55 million people in the UK and H million of them have rheumatoid arthritis and 5 million suffer the symptoms of osteo-arthritis, which is the major crippling disease in the eldest'."
    He provides examples of enormous waiting lists for all sorts of disease, but mainly poverty-derived diseases in Scotland. These are overwhelming reasons why Scotland should be treated in this as in other areas as a special case for special treatment.
    The pay increases have to be contained within the cash limits which the Government are seeking to impose in the clause. The pay of doctors and nurses has to be contained within those cash limits imposed on the boards. Despite what the Government say about incomes policy, that is the unofficial incomes policy for the Health Service. The more the nurses get in wages, the more other staff get in wages, the greater the corresponding deterioration in the services provided. That is what cash limits mean.
    Let me say a few words about nurses' pay in this context. Whenever we get a Tory Government they hammer the nurses because they know that they are extremely reluctant to strike. I am glad that the Minister for Health is here, because I promised that I would say something about these matters when I had the opportunity to do so. It is reported in The Guardian this morning that when the Minister attended the annual conference of the Royal College of Nursing the other day he held out his hands and said "I love you all." By God, he would do that. He is just the guy who would do that, because it costs nothing whatever. Sympathy costs nothing. The cheapest commodity in the market place for the hon. Gentleman is the kind of sympathy that he expressed to the Royal College of Nursing.
    During the debate on the NHS on 15 March 1979, before the Minister got
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    power, before he became the Minister, he said that
    "there is no doubt that the nurses are a special case and should be treated as such."
    He added that they
    "came within the same category as the police, the firemen and the members of other services which look after our essential needs ".—[Official Report, 15 March 1979; Vol. 964, c. 800.]
    Let us look at the comparison. I asked a series of questions on the pay increases that each of those services had received between 1 April 1978 and 1 April 1980. I asked what were the minimum rates for the respective services. On 1 April 1978 the minimum rates for a staff nurse and a constable, an ordinary policeman, were £2,775 a year. On 1 April 1980 the staff nurse was getting £3,715— that is before the 14 per cent. increase to which they are objecting—and the constable was getting £4,086. A difference of £7 a week had developed between the two. Who is to say that a constable is worth more to our society than a staff nurse? It is arguable which is the more responsible, which is the more worthy. I come down in favour of the staff nurse, but clearly the Government come down on the side of the constable.
    Let me take a second example. On 1 April 1978 a nursing officer, grade 1, was receiving a minimum of £4,535. An inspector of police was receiving £4,563, a difference of £28—not very much. The nearest approach in terms of cash is the inspector versus nursing officer, grade I. By 1 April 1980 the nursing officer, grade I, was getting £5,351, and the inspector £7,095—a difference of £1,744 now compared with £28 in April 1978.
    12.45 am
    I come to one of the most disgraceful examples. The area nursing officers—these are the people on the highest salaries—have written to me to the effect that they have had no increase in the period. An area nursing officer was receiving a minimum of £10,721 on 1 April 1978 and £10,721 on 1 April 1980: there had been no increase whatever in that period. Meanwhile, the salary of chief constables had risen from £10,606 on 1 April 1978 to £18,840 in April 1980. The difference at 1 April 1978 was £115 a year. The difference now is £8,119. It is plain that chief constables are infinitely

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    more important to the Government than are area nursing officers.
    It is the same story or a similar one with the sister, grade II group. On 1 April 1978 a sister, grade II, was in receipt of a minimum salary of £3,454. A sergeant constable was on £3,918, £464 a year more than a sister, grade II. By 1 April 1980 the sister, grade II, was getting £4,698 and a sergeant constable was getting £6,186. The difference of £464 in 1978 became £1,488 in 1980.
    That demonstrates the Government's priorities as between the nursing service and the police service.
    I turn to the firemen, again taking minimum salary scales. A fireman joining the service at the age of 18 was paid £2,967 in April 1978. A staff nurse, not coming in green but having trained, received on becoming a staff nurse a minimum of £2,775—a difference of £192 a year. By April 1980, the fireman aged 18 received a minimum of £4,365 and the staff nurse received £3,715. The difference had risen from £192 to £650 a year.
    A station officer—again keeping to minimum salaries—received £4,799 in April 1978. A senior nursing officer, grade II, received £4,832—that is a little more than the station officer which is, on the salary scales, the nearest equivalent I could get. However, by April 1980 the station officer was getting £7,065 and the senior nursing officer, grade II, £6,446. So the difference between their salary scales had risen from £33 in 1978 to £619 in April 1980.
    I come to the highest salaries. The salaries of regional nursing officers have remained static in the two-year period between April 1978 and April 1980. The regional nursing officer was receiving £10,629 minimum in April 1978. The senior divisional fire officer was getting £6,840. But by April 1980 he was receiving £10,074, while the regional nursing officer's pay stayed precisely at £10,629.
    I put those facts and figures on the record because I think that it is important for the public to know just how the nursing profession, from the bottom to the top, is being grossly exploited and played down in terms of social importance compared with the police, the Army, and the fire service. I do not begrudge those
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    services anything that they have, but I think that by comparison the nursing profession has been treated as if we were living in the age of slavery. It simply cannot continue.
    I received a letter from a staff nurse in the Glasgow Royal infirmary the other day. The letter, dated 2 June, read :
    "I am a staff nurse working at present in Glasgow Royal Infirmary. My parents live in Dunfermline, and because of the distance involved, I find it necessary to be resident in the nurses' home. My reason for writing to you is this : should the proposed 100 per cent. increase in our rents go ahead then we nurses will find ourselves living below the bread line. Our accommodation has few amenities, virtually no privacy, and we find ourselves forced to share a canteen with our on-duty colleagues because of the lack of cooking facilities. This means that most nurses do not eat a well-balanced diet as the prices in the canteen are extortionate. What angers us most is the fact that nurses living in sub-standard accommodation will be paying the same as nurses living in modern accommodation. We cannot understand this and we refuse to tolerate it.
    A meeting was held in the nurses' home and we agreed that our dilemma should be brought to the attention of the public. Many people believe that we receive board and lodging free, and we are launching a campaign to highlight our situation. We hope to hold a rally against the rent increases in Glasgow on 14 June. It is our wish that as many people as possible should be there to support us. If you can come along, you will be made very welcome.
    Meanwhile we would be very grateful if you could raise questions in the House and give us help in any way. We are trying to contact as many MPs as possible, as only an exceptional effort can prevent the nurses being robbed again."
    I have written already to that nurse—she signed herself Joan Cameron—and told her that I will be there, and that if they want me to speak at their rally I shall do so. I invite the Minister to do the same. It is not for me to invite him, of course, but I hope that he accepts the invitation that I hope he has received to go along and talk to these young ladies.
    Mr. Moyle: I draw my hon. Friend's attention to the fact that when Ministers promised to treat the nurses on the same basis as the police and firemen the date was 15 March, 1979. That was shortly before last year's general election. Most of the discrepancies between the pay rates of nurses and firemen and police have developed since the general election of last year.
    Mr. Hamilton: My right hon. Friend knows which side I am on in these matters.

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    I suspect that a lot of the nurses might have voted Tory in the last election. If so, they have not learnt their lesson over the years. It was a Tory Government way back in the early 1960s that first imposed a 2½ per cent. wages restraint on the nurses. They were the first to suffer as a result of the policies of the late Selwyn Lloyd when he was Chancellor of the Exchequer. The nurses seem to learn the hard way.
    The Minister has previously said that he sees no evidence of declining morale in the Health Service. If he has not seen such evidence, it is because he does not want to. In the Glasgow Herald of 29 April—it is my favourite newspaper, so I quote from it again—is an article headed :
    "Morale in hospitals a casualty of health cuts."
    It reads :
    Scotland's health Minister, Russell Fairgrieve, gave his assurance that there would be no financial cuts in the Health Service this year on the same day that the Greater Glasgow Health Board announced the closure of four hospitals.
    The hon. Gentleman's timing is admirable. The article continues :
    "It is that kind of apparent doublethink (although patients and staff from the closed hospitals will be accommodated elsewhere) which underlines the gloom shared by doctors and domestics. Every grade of worker reports : 'Morale is very low.'
    The thrift imposed by a general shortage of money is beginning to bite in small but demoralising ways.
    ' Our patients are suddenly given continental breakfasts' "—
    and we all know what that means.
    " 'some of them after 50 years of traditional breakfasts,' says Angus McCorkindale, a charge nurse at Dykebar Hospital.
    He admits that it won't seem very important to most people, but to the elderly or the mentally handicapped, it is not the sort of sudden deprivation that is easily explained by a general lack of money …
    Financial stringencies are beginning to create their own backlash of problems in our hospitals. 'We like to turn long-term patients every two hours, but with staff shortages, that becomes every four hours. Leaving them for so long creates pressure sores, which makes even more work for us and means those patients have to stay longer in hospital' …
    The Clegg Commission, currently causing wrath among Scottish teachers, has left a trail of despondency in the Health Service. 'There's no point in comparing your wage with other
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    people who are low paid if you want a living wage' ".
    There is abundant evidence throughout the length ond breadth of Scotland that the Health Service is grossly underfinanced. Cash limits will impose even greater burdens on health boards. They will be unable to provide living wages for the staff in the Service at the same time as increasing the quality of service. They will not be able to do both. The limits will not take account of inflation and other rising costs. The Service must deteriorate, and patients will be increasingly driven into the private sector, which is precisely what this Government want.
    I move the amendment in the hope that we may have some flexibility from the Government, but I have no hope that they will remove the cash limits altogether to allow the degree of flexibility under previous dispensations. We wish to highlight the problems in the Health Service. We deny that there is a shortage of resources, in view of Government spending in other less worthy directions. If we can encourage flexibility and highlight the problems, the amendment will have served a useful purpose.
    1 am
    Mr. Robert Hughes: My hon. Friend the Member for Fife, Central (Mr. Hamilton) has made a devastating attack on the Government's strategy on pay policy and has revealed the disparities that have grown up between the pay of those in the NHS, particularly nurses, and other groups such as the police and the fire service.
    The Minister owes us an explanation of how the Government are calculating the money that they are to allot to the NHS under the Bill. The cash limits that the Government are imposing on health boards are based on the proposition that both inflation and wage increases will be 14 per cent. over the year.
    No one, not even the Minister, believes that we shall average 14 per cent. inflation over the year. As the hon. Gentleman has been told before, the mathematics do not stand up. We have a current inflation rate of over 21 per cent. and it is generally believed that it will be shown in the next couple of days that inflation has increased yet again. The official forecast by the Chancellor of the

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    Exchequer is that the RPI will continue to increase until about August, when it may slacken off.
    If we are to achieve an average of 14 per cent. inflation over the budget year, the rate will have to be down to below 7 per cent. by April, and no one believes that that is a possibility. Indeed, there is some evidence—I do not pretend that it is conclusive—that inflation in NHS costs, especially in the hospital service, will be higher than the level of inflation measured by the RPI. The cost of essential materials such as X-ray film, drugs and equipment appears to be increasing faster than the general level of inflation. That is serious and the Government must tell us where the health boards are to get the extra money to meet the increased costs that they are facing.
    As for the proposition that wage rates will not increase by more than 14 per cent., I do not want to be dramatic or to have a dig at the doctors, but in the current year—ignoring any catching up—the doctors' increase is about 18·6 per cent. Those in the rest of the NHS—nurses, porters and others—have been held to 14 per cent. They are rightly pressing for at least parity with the doctors and sooner or later the Government will have to give way and grant them their 18 per cent. so that they have at least the same percentage increase as the doctors, though I do not believe that that is enough. The trouble with percentages is that 1 per cent. of a nurse's salary is a damn sight less than 1 per cent. of a doctor's salary.
    If there is an increase in the salary of NHS workers, the extra cost will have to be met somehow. If the Government insist that they will not budge on cash limits, the patients will have to suffer a reduction in services. No one else can meet the bill.
    There are already severe financial stresses on the Health Service. The Grampian area health board overspent last year. The figures are not precise, and estimates vary between £¾ million and £1 million. The board has been told by the Minister that that money will have to come off this year's budget. It is £1 million down before it starts. Pressures are building up in the Health Service in the areas represented by the Minister and me that are compelling. It is no
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    use arguing that money is tight and that if essential services are to be provided the public must meet the cost other than by taxation through the Exchequer.
    My hon. Friend the Member for Fife, Central mentioned the issue of a tonsel-lectomy, or an operation for adenoids and children's hearing. I know from personal experience what can be the effect of delay in such operations. Even starker choices face some people. They face the choice between life and death depending on the amount of money made available by the Government. The newspapers are dying to have a mass campaign to raise money for heart surgery. It is obscene that the Government who claim they have compassion should face people with the choice of raising money by charity.
    The Minister, who has temporarily left the Chamber—I do not complain—should know that I view as appalling and ridiculous his suggestion that money could be found for the Health Service through a weekly lottery. There is insufficient time now to examine all the details. Every citizen of the city of Aberdeen would have to buy £1 worth of 10p tickets every week to sustain one acute bed in hospital. Yet the Minister talks about raising money through private subscription.
    This is not simply a question of ideological purity. Once one starts to raise money by private subscription, one immediately distorts the priorities within the Health Service. One can always raise money for kidney machines and for specialist heart services and for children's hospitals. As those who have worked for charities and friends of hospitals know, it is much more difficult to raise money for mentally ill people and for elderly patients in geriatric hospitals. One can raise money to some extent by playing on people's heart strings in emotional matters of life and death. One cannot raise money for the elderly, confused or mentally ill, and the forgotten parts of society.
    Ministers must stop going about the country saying that the Health Service is not suffering cuts. There are cuts. I would have much greater respect for the hon. Member for Aberdeenshire, West (Mr. Fairgrieve) and his colleagues if, like other Government Departments, they would admit, or even glory in, the fact that they are cutting public expenditure.

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    They should be consistent and admit that they are cutting the Health Service severely. They will have to answer for it sooner or later.
    I hope that the Government will come clean and explain what will happen if their forecasts of inflation and wage increases are grossly mistaken, as I believe they know, in their hearts, they are mistaken. It is impossible for health boards to carry out existing services within the cash limits provided by the Government. How will the Government find the money? It will not be through public subscription. The service will be funded by patients suffering badly. The Government will go down as one of the most shameful who have ever had office due to their treatment of the Health Service.
    Mr. George Robertson: This is a late hour to be discussing an important issue. My hon. Friends have drawn attention to one of the essential issues. The Government have a major asset on their side when discussing cash limits. No more than a tiny proportion of the population know what we are talking about when we refer to cash limits. Vague references to cash limits by the Government cloud the fact that that is how the Government are cutting back on the resources available in all sectors financed by the Exchequer.
    The claim made by Ministers that they are supervising an expansion of the real resources of the Health Service is a subterfuge. Cash limits are the insurance for public authorities which spend public money that that money will retain its value against rising inflation. If inflation runs at 20 per cent. and cash limits are fixed at 14 per cent. anybody with a basic knowledge of arithmetic will know that that means a cut in resources. For Ministers to pretend that there is a 2½ per cent. increase in the budgeted figure for the Health Service is an elaborate con. The reality is that the Government are supervising a massive reduction in the amount of money available to fund the National Health Service.
    Against an inflation cover of only 14 per cent. there has been an increase in VAT, salaries, gas, other power prices and interest rates which has overtaken the allowance that the Government have made in cash limits. As a result, hospital wards remain closed, hospital beds
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    cannot be brought into use and resources for required treatments are not available. The British public will not be conned and will not be confused by the Government's use of the sharp-practice arithmetic involved in the cash limit concept.
    Scotland's health problems are greater than those in the rest of the United Kingdom. Earlier the Minister agreed with that. We have special problems involving heart complaints, dental and optical problems and difficulties arising from alcoholism and cigarette smoking. Such problems are greater than those experienced in most of Western Europe. The Government are complacent about how their policies will affect the treatment available to the people of Scotland.
    The amendment is a means by which we can draw attention to the problems of the National Health Service in Scotland. It is not good enough for the Government to shuffle shamefully with figures, nor for them sordidly to pretend that they are protecting the NHS when they encourage increases in the cost of almost every feature of hospital and medical life. Yet they are providing only a minimal 14 per cent. cover for the increased charges.
    The reality is that the health boards have to cover the increased charges that the Government are imposing without giving them the money to do so. The consequence that will arise from that state of affairs is that the treatment that people often desperately need will not be available to them. The Government will have to cope with the consequences and take full responsibility for that state of affairs.
    1.15 am
    Mr. Fairgrieve: We have had a debate lasting almost an hour thanks to the industry and assiduity of Scottish Members. I am grateful for the various points that have been raised, though at times emotion and philosophy possibly outran the facts. I shall try to deal with the points raised to the best of my ability.
    The hon. Member for Fife, Central (Mr. Hamilton) said that clause 6 was the most important clause in the Bill. It is certainly a very important clause ; there is no doubt about that. He mentioned the difficulty that health boards find in hitting their targets exactly and spoke of the previous carry-forward

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    arrangements. I do not deny that we are now making such arrangements more strict.
    However, I could not in any way accept the hon. Gentleman's idea of getting rid of cash limits. He was on ground from which he regularly preaches to us on the issue of resources from the taxpayer to the private purse. He said that it was the ability to buy scarce resources that mattered and that that meant that the poor were disadvantaged. I remind him that people who still use the National Health Service are looking at the possibilities of supplementing the service perhaps with private health care. After all, everybody in Mr. Chapple's electricians' union is not a rich man, but the union decided it was worth looking at the question of private health care.
    I accept that Scotland has particular problems, but I think that the hon. Member for Fife, Central goes a bit too far when he suggests that diets are insufficient in Scotland because of poverty. I think that many people in Scotland eat the wrong things. If they ate the right things, they might have better health. I do not believe that diet deficiencies and excesses in Scotland are caused by poverty.
    The hon. Gentleman spoke of the under-financing of the Health Service compared with what he virtually described as the over-financing of defence. The hon. Gentleman knows well that the first duty of any Government—including Labour Governments—is the defence of the realm. If that were not so, there would be no point in talking of education and health.
    What is the biggest bill that we pay today? It is not for defence, it is not for education and it is not for health. The biggest bill is the interest that we pay on the national debt, and that doubled during the period of office of the previous Labour Government.
    The hon. Gentleman would not expect me to reply in detail now to the emotional question that was raised in Committee concerning the 14-year-old boy and the adenoid operation. We discussed that matter in Committee, but I shall certainly recheck the correspondence on the matter. I did not know about the anonymous writer who contacted the hon. Gentleman about the problems at Yorkhill, but I suggest that he asks the person concerned to write
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    also to the chairman of the Greater Glasgow health board so that he can investigate the points made by the hon. Gentleman.
    I do not think I need comment upon waiting lists again. We do not want to get involved in party and parochial matters. The hon. Gentleman knows as well as I do what happened to the waiting lists between the period of the last Conservative Government and the end of the period of his party's Government.
    It is easy to be emotional about how money might be raised and about the whole question of nurses' pay, on which the hon. Gentleman gave us a long diatribe, comparing nurses' pay with that of others in the community. It is not the case that the nursing pay bill will increase in 1980–81 by only 14 per cent., because the Government are also providing an additional 116 million this year to enable the 37½ hour week to be introduced up to a year earlier than expected, or to allow additional payments to any nurses who continue to work more than 37½ hours.
    I think that every hon. Member accepts and recognises the great job done by all nurses and their dedication. We all appreciate the fact that they so value the integrity of the profession that they have decided against any form of what is now termed industrial action. There was some mention of the wages of the police and of firemen. I believe that a chap called Clegg has recently been looking at comparability.
    With regard to pay and services, we have to remember always that in the United Kingdom the cost of each 1 per cent. rise in NHS salaries is around £45 million, and that a new district hospital of 500 beds costs around £25 million in broad terms. So each 1 per cent. on the wage bill for one year only could mean cutting out two complete new hospitals.
    Mr. Race: As the Minister is now defending his Government's record on nurses' pay, would he care to tell the House why, at the general election last year, the Conservative Party was forced to make a commitment to implement the findings of the Clegg Commission on nurses' pay and the pay of other workers in the NHS, and yet as soon as Clegg reports this year on nurses' pay and the 1 April negotiations for the

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    annual increase come along, the Government immediately say that they are not prepared to keep in real terms the value of the Clegg settlement? They have shown that they intend to undermine it, because they will be paying nurses 14 per cent. rather than the rate of inflation, which will be 20 or 22 per cent. How can the Minister possibly justify accepting the Clegg Commission's findings as a proper rate of pay for nurses and then immediately undermining that settlement by having one that is 6 or 8 per cent. less than the rate of inflation?
    Mr. Fairgrieve: I cannot accept what the hon. Gentleman has said. The Government, since coming into office, as he knows full well, have been accepting and paying out on the postdated pay cheques of the Clegg Commission. Whether we like it or not, we cannot escape the facts. If we spend more on pay, there is less left for services, and 1 per cent. on the National Health Service bill could provide for 80,000 in-patients or could build 1,000 hospital beds or buy 6,000 kidney machines. The trade-off between pay and services is evident.
    I have been going round the health boards. I have been meeting every health board in Scotland. I am now three-quarters of the way through that programme. I am not getting these stories of declining morale. When we talk about the closure of four hospitals in Glasgow, we do not mention the opening of another one. At the present time we are maintaining and even slightly increasing our 2·5 beds per thousand of population. Were we dropping below that figure, then the switch of hospitals between one closing and another opening would be relevant. But that is not the case because we are maintaining the figures accepted within the Service. I find the hon. Gentleman's picture of the Health Service somewhat different from what I find as I go around the health boards and hospitals.
    I turn briefly to the contribution of the hon. Member for Aberdeen, North (Mr. Hughes). We both represent constituencies in the same part of Scotland and know its problems. He said that our figures were based on 14 per cent. inflation and 14 per cent. wage increases. He also mentioned the difficulty of what
    220
    he called raising money by lotteries and how in the more emotional cases it was easier but that when one came to the mentally ill and the geriatric it was not so easy. But again, as we did in the last debate, we came to the question of cuts in the Health Service.
    I must again repeat to hon. Members—and the hon. Member for Aberdeen, North knows this quite well—that in the past year there was a definite squeeze on the Health Service as a result of the previous Administration not funding fully or properly their inflation and the Clegg awards and as a result of this Administration not funding the VAT increase. No one is denying that there was a squeeze on health board expenditure in the year just gone by. But in the year that we are now in, we have put back that squeeze and are allowing for a 2·5 per cent. increase in real expenditure, subject to 14 per cent. inflation in the wage increase.
    Mr. Race: Is not the Minister aware that the Chancellor of the Exchequer told the House that the shortfall on the cash limits for the whole of the public services in this financial year would be £700 million, and that in response to parliamentary questions from myself he refused to tell the House of Commons precisely the proportion of that £700 million attributable to the NHS because he wanted to protect himself against a charge from the Labour Benches that even more money would be ripped off from the NHS in this financial year?
    Mr. Fairgrieve: Perhaps the hon. Gentleman will contain his enthusiasm and allow me to finish what I was saying. He knows as well as I do that our 14 per cent. inflation is based on a year-to-year figure. Therefore, we are talking about the year commencing 1 April 1980 and ending 30 March 1981. The previous Administration as well as this one took a judgment on this matter. We had better see what the position is at this time next year. If we do not control inflation, it is not only the Health Service which will be in trouble. A lot of other organisations will also be in trouble.
    As I listened to the remarks of the hon. Member for Aberdeen, North, I wondered what happened to the speeches that I did not hear 18 months ago. One would think that the amount of money being spent on the Health Service in Scotland

    221
    had been halved. About the same is being spent—in fact, slightly more. Yet I never heard all these moans, groans and attacks on the previous Administration with regard to what they were doing to the Health Service. At present, very little different is happening. I hope that Labour Members will remember that.
    The Scottish provisions in clause 6 are, with minor variations to take account of the different structure of the Health Service in Scotland, the same as the English provisions. I cannot accept that there is a case for not applying the new provisions equally in both countries. Clause 6 is concerned with financial control and is designed—there is no secret about this, as I have said—to strengthen the Secretary of State's hand in making sure that health boards contain their expenditure within the cash limits approved by Parliament. We have a uniform financial control system in England and Scotland, and unless there are powerful arguments to the contrary it is right that changes should proceed in parallel.
    1.30 am
    It may be an objection that no Scottish health board has sought deliberately to break its cash limit and that the powers are therefore unnecessary. It may be a further objection that the new system will cause extra work for the boards, particularly in its first year, and that it is therefore undesirable. I am aware of those objections, and we took account of them before bringing these proposals before the House. I am grateful to the health boards for the way in which they have co-operated in managing expenditure within the cash limits. I have also been grateful for the responsible attitude that every health board in Scotland has taken towards this matter. I look for-
    ward to the continuation of that co-operation.
    As an earnest of the Government's determination to hold public expenditure within the limits set, and as a means of securing that, I have no doubt that the balance falls clearly on the side of keeping legislation within the same framework as that operated by our English colleagues.
    The transition to the new system may produce some awkwardness, but my officials are in consultation with health board treasurers and I do not expect the new arrangement to represent any appreciable new burden.
    It has also been said that services will suffer because the boards will now have to budget for an underspend to be sure of staying within the limit. Boards will need to budget carefully and ensure that they stay within the limits, but I do not accept that this is tantamount to a cut in services. Everyone needs to observe the discipline of a budget. We have, as our election manifesto pledged, given a large measure of protection to the Health Service when other services have had to absorb substantial cuts. I reject any notion that a proper service can be provided only by overspending.
    The new powers are not a radical departure from what has gone before. They make explicit what has been implicit—that once set, the financial limits should be observed—and the new measures give the powers necessary to achieve that. They are sensible measures, and I ask the House to reject the amendment.
    Question put, That the amendment be made :—
    The House divided : Ayes 76, Noes 129.

    Division No. 346]

    AYES

    [1.35 am

    Alton, David

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

    Howells, Geraint

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

    Dixon, Donald

    Hughes, Robert (Aberdeen North)

    Beith, A. J

    Dobson, Frank

    Lamond, James

    Benn, Rt Hon Anthony Wedgwood

    Dormand, Jack

    McKay, Allen (Penistone)

    Bennett, Andrew (Stockport N)

    Douglas, Dick

    McKelvey, William

    Booth, Rt Hon Albert

    Dubs, Alfred

    Maxton, John

    Bray, Dr Jeremy

    Eastham, Ken

    Maynard, Miss Joan

    Callaghan, Jim (Middleton & P)

    Flannery, Martin

    Mikardo, Ian

    Campbell-Savours, Dale

    Foster, Derek

    Millan, Rt Hon Bruce

    Clark, Dr. David (South Shields)

    George, Bruce

    Morton, George

    Cocks, Rt Hon Michael (Bristol S)

    Graham, Ted

    Moyle, Rt Hon Roland

    Cohen, Stanley

    Hamilton, James (Bothwell)

    Orme, Rt Hon Stanley

    Coleman, Donald

    Hamilton, W. W. (Central Fife)

    Palmer, Arthur

    Cowans, Harry

    Harrison, Rt Hon Walter

    Pavitt, Laurie

    Cox, Tom (Wandsworth, Tooting)

    Haynes, Frank

    Penhaligon, David

    Crowther, J. S.

    Hogg, Norman (E Dunbartonshire)

    Powell, Raymond (Ogmore)

    Cryer, Bob

    Home Robertson, John

    Prescott, John

    Dalyell, Tam

    Hooley, Frank

    Race, Rep

    Richardson, Jo

    Soley, Clive

    Woodall, Alec

    Roberts, Ernest (Hackney North)

    Spearing, Nigel

    Woolmer, Kenneth

    Robertson, George

    Spriggs, Leslie

    Wrigglesworlh, Ian

    Rocker, J. W.

    Thomas, Dr Roger (Carmarthen)

    Young, David (Bolton East)

    Ross, Ernest (Dundee West)

    Tinn, James

    Rowlands, Ted

    Walker, Rt Hon Harold (Doncaster)

    TELLERS FOR THE AYES:

    Sever, John

    Welsh, Michael

    Mr. Hugh McCartney and

    Silkin, Rt Hon S. C. (Dulwlch)

    Wilson, Gordon (Dundee East)

    Mr. John Evans

    Skinner, Dennis

    Winnick, David

    NOES

    Alexander, Richard

    Hawksley, Warren

    Page, Rt Hon Sir R. Graham

    Ancram, Michael

    Heddle, John

    Page, Richard (SW Hertfordshire)

    Aspinwail, Jack

    Henderson, Barry

    Parris, Matthew

    Bendall, Vivian

    Hogg, Hon Douglas (Grantham)

    Patten, Christopher (Bath)

    Benyon, Thomas (Abingdon)

    Hooson, Tom

    Patten, John (Oxford)

    Berry, Hon Anthony

    Howell, Ralph (North Norfolk)

    Pollock, Alexander

    Biggs-Davison, John

    Hunt, David (Wirral)

    Price, David (Eastleigh)

    Blackburn, John

    Hunt, John (Ravensbourne)

    Proctor, K. Harvey

    Body, Richard

    Jenkin, Rt Hon Patrick

    Rathbone, Tim

    Boscawen, Hon Robert

    Jopling, Rt Hon Michael

    Rees-Davies, W. R.

    Braine, Sir Bernard

    Kellett-Bowman, Mrs Elaine

    Renton, Tim

    Bright, Graham

    Kershaw, Anthony

    Rhodes James, Robert

    Brinton, Tim

    Kitson, Sir Timothy

    Rhys Williams, Sir Brandon

    Brown, Michael (Brigg & Sc'thorpe)

    Knight, Mrs Jill

    Ridley, Hon Nicholas

    Browne, John (Winchester)

    Lang, Ian

    Roberts, Michael (Cardiff NW)

    Bulmer, Esmond

    Lawrence, Ivan

    Sainsbury, Hon Timothy

    Cadbury, Jocelyn

    Le Marchant, Spencer

    Silvester, Fred

    Canicie, John (Luton West)

    Lennox-Boyd, Hon Mark

    Sims, Roger

    Carlisle, Kenneth (Lincoln)

    Lloyd, Peter (Fareham)

    Speller, Tony

    Chapman, Sydney

    Lyell, Nicholas

    Spicer, Michael (S Worcestershire)

    Churchill, W. S.

    MacGregor, John

    Squire, Robin

    Clark, Hon Alan (Plymouth, Sutton)

    McNair-Wilson, Michael (Newbury)

    Stanbrook, Ivor

    Clarke, Kenneth (Rushcliffe)

    McQuarrie, Albert

    Stanley, John

    Colvin, Michael

    Major, John

    Stevens, Martin

    Cope, John

    Marlow, Tony

    Stewart, John (East Renfrewshire)

    Costain, A. P.

    Marten, 'Neil (Banbury)

    Stradling Thomas, J.

    Cranborne, Viscount

    Mather, Carol

    Taylor, Teddy (Southend East)

    Dean, Paul (North Somerset)

    Maude, Rt Hon Angus

    Temple-Morris, Peter

    Dorrell, Stephen

    Maxwell-Hyslop, Robin

    Thompson, Donald

    Douglas-Kamilton, Lord James

    Meyer, Sir Anthony

    Thorne, Neil (llford South)

    Dover, Denshore

    Mills, lain (Meriden)

    Townend, John (Bridlington)

    Dunn, Robert (Dartford)

    Mitchell, David (Basingstoke)

    Vaughan, Dr Gerard

    Fairgrieve, Russell

    Montgomery, Fergus

    Waddington, David

    Faith, Mrs Sheila

    Morrison, Hon Charles (Devizes)

    Walker, Bill (Perth & E Perthshire)

    Fenner, Mrs Peggy

    Morrison, Hon Peter (City to Chester)

    Weller, Gary

    Fisher, Sir Nigel

    Myles, David

    Ward, John

    Fletcher-Cooke, Charles

    Neale, Gerrard

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

    Fookes, Miss Janet

    Needham, Richard

    Wheeler, John

    Garel-Jones, Tristan

    Nelson, Anthony

    Wickenden, Keith

    Grieve, Percy

    Neubert, Michael

    Young, Sir George (Acton)

    Griffiths, Peter (Portsmouth N)

    Newton, Tony

    Gummer, John Selwyn

    Normanton, Tom

    TELLERS FOR THE NOES:

    Hannam, John

    Onslow, Cranley

    Mr. John Wakeham and

    Haselhurst, Alan

    Page, John (Harrow, West)

    Mr. Peter Brooke

    Hawkins, Paul

    Question accordingly negatived.

  Clause 8

    REPEAL OF PROVISIONS RELATING TO WITHDRAWAL OF PAY BEDS AND DISSOLUTION OF BOARD, ETC
    Mr. Moyle: I beg to move amendment No. 36, in page 18, line 33, leave out clause 8.
    Mr. Deputy Speaker (Mr. Bernard Weatherill): With this it will be convenient to take the following amendments :
    No. 8, in page 18, line 34, leave out
    "and sections 59 to 63 of the Scottish Act of 1978".
    No. 4, in page 18, line 39, leave out "Scottish and".
    224
    No. 9, in page 19, line 21, leave out
    "and sections 65 to 68 of the Scottish Act of 1978".
    No. 37, in clause 9, page 20, line 5, at end insert—
    "(2) Section 65 of the Act of 1977 shall be amended by the insertion after the second 'and' in paragraph (a) of subsection (1) of that section the words 'in particular he shall direct a health authority to admit private resident patients to a health service only if he is satisfied that—

    (i) all potential private resident patients have been placed on the same waiting list as comparable National Health Service patients in the care of the same consultant and that the consultant concerned is ensuring that all patients selected by him for admission to such a hospital and all patients on the said waiting list are being so admitted for treatment and moved along the said

    225
    waiting list in accordance with common criteria ;

    (ii) in applying such common criteria the consultant concerned is applying social criteria where such criteria are relevant amongst others to admission to hospital and to progression along the waiting list but not to such an extent as may give either the class of private patients or the class of National Health Service patients an advantage in terms of the length of time on the waiting list over the other class of patient ;

    (iii) a potential private patients' place on the waiting list is being determined by the date upon which he was first referred to a hospital outpatients clinic or for a private consultation by the patient's general practitioner ;

    (iv) the District or Area Health Authority is ensuring that the provisions in sub-paragraphs (i), (ii) and (iii) of this section are being properly applied and that statistical monitoring has been instituted by the relevant health authority to ensure that paragraphs (i), (ii) and (iii) above are being so applied ;

    (v) sub-paragraphs (i), (ii), (iii) and (iv) above are being applied to diagnostic and other medical services ; and '.".

    No. 10, in page 20, line 6, leave out subsection (2).
    No. 11, in page 20, line 25, leave out from "above" to end of line 27.
    No. 12, in clause 10, page 21, line 6, leave out subsection (2).
    No. 13, in page 21, line 30, leave out from "above" to end of line 33.
    Mr. Moyle: The object of this amendment is to retain the Health Services Board and to continue the policy of phasing private beds out of the National Health Service. For that reason, we can have no connection with clause 8.
    The second point—continuing the policy of phasing private beds out of the National Health Service—we believe to be morally right. The basic principle of the National Health Service ought to be that treatment is without restriction by price. The Royal Commission supported that approach, and pay beds are a breach of it. They allow people to be admitted on the basis not of medical priority but of ability to pay. That principle offends many inside and outside the NHS.
    First, talking about people within the Health Service, the consultants get the fees for treating private patients, but many others in the Service have to do a great deal of the work. There is no solution—
    1.45 am
    Mr. Grieve: At many of the London teaching hospitals the consultants receive no extra fees for treating private patients. The money goes to the hospitals and they benefit therefrom, do they not?
    Mr. Moyle: That is true of those who are clinical teachers in universities, but they do not form the great bulk of the consultants who go in for private practice to make money out of it. They make money out of it while those who work for them and to them do not.
    The Secretary of State's scheme when in Opposition for making extra payments to supporting staff in the Service who work to private patients has been sunk without trace. Health Service personnel will be forced by their contracts of work to work on private beds irrespective of whether they approve of them. Junior doctors are often forced to work long hours dealing with NHS patients to allow their consultant superiors to treat private patients, for which they get money.
    When we return to office we shall want to continue to remove pay beds from the Service. The only point at issue is whether we shall do it by reinstating the Health Services Board and phasing out pay beds gradually, as we were doing before the 1979 election, or going for the short, sharp chop. We regard the Goodman compromise as dead. Doctors planning their future practice arrangements should bear that in mind.
    The Health Services Board had the function of protecting the Service from the encroachments of private practice. Clause 8 says that the board should go and that the Secretary of State should resume the function of protecting the Service. We do not trust the Secretary of State to protect the Service. He is clearly a private practice and private bed fanatic. Every argument that he deployed in 1976 for saying that it was a mistake to phase pay beds out of the Service has been proved in practice to be totally unfounded. However, he still returns to the desire for more private beds in the Service. In consequence, we do not trust him to look after the Service. For that reason, we think that the board should be retained to protect the Service from the depredations of the private service which the Government are intending to operate.

    227
    In Committee we made it clear that, however much we might disapprove of the Secretary of State's six principles for the operation of common waiting lists, we considered them to be an improvement on current form. We co-operated fully with the Government in Committee by moving amendments to incorporate the six principles into the Bill. I regret to say that when it came to the crunch Ministers had insufficient confidence in their principles to support our amendments. They opposed our offer to help them.
    In the circumstances, we have returned in our amendments to our first love, namely, to legislate to put into operation the principles adumbrated by the Health Services Board in Cmnd. 6728 of May 1977 on common waiting lists. The object of the amendment is to legislate those principles into the Bill. They are much more simple and direct principles than the Secretary of State's six principles. The fundamental assumption is that the consultant shall decide on admission and shall be in charge of the patients.
    The factors that will be taken into account are set out in page 9, paragraph 9·2, of the report. We believe that justice should be not only done but manifestly seen to be done. The great advantage of the board's common waiting list principles over the Secretary of State's is that they suggest a good way statistically to monitor waiting lists to ensure that Service patients and private patients are dealt with on an equal basis. They suggest that hospital activity analysis statistics could be used and developed to ensure that the waiting lists are operated equally favourably for NHS patients and private patients.
    I have stated our attitude to pay beds and our determination to resume phasing them out when we return to office. If at the end of this Parliament Ministers and the medical profession can convince the public that all patients, whether private or NHS, are being admitted to hospital on the basis of common principles, we may solve the pay bed problem that way. If, however, the Government start by rejecting these amendments, which are based on the report of the Health Services Board—and the Secretary of State and other Ministers have paid tribute to the excellence of the work of the board and
    228
    the way in which it has carried out its remit—I think that they will have started badly from the public's point of view, and the public will ask the Government what they have to hide and whether they are in collusion with private practice consultants in the medical profession.
    Mr. Race: I referred to this clause in Committee as the queue-jumper's charter, and that is precisely what it is. It is nothing more and nothing less than that. It is an attempt by the Government to try to undermine the whole principle of the NHS. I say that advisedly because in Committee the Minister refused to provide an important piece of information, namely, the upper limit of pay beds that he would authorise in the NHS. He refused to tell us how many pay beds would be phased into the NHS. At the moment there are just over 2,000 pay beds in NHS hospitals, and the proposal in the clause to abolish the Health Services Board will increase the ability of the Secretary of State to increase the number of pay beds in NHS hospitals. That means that a number of important priorities will be distorted in the NHS.
    The first important point about pay beds and the people who use them is that everybody who uses a pay bed is, in one way or another, jumping the queue for services. Those concerned are jumping the queue because they are paying for a service, and that means that the medical priorities on which the Service is based, namely, free and equal access at the point of use, are being distorted, because people are saying to their consultants "We want a higher priority than we would otherwise get for our operations and we are prepared to pay you and the NHS to achieve that priority". That seems to us to be wrong in principle, and that is why we are opposed to pay beds.
    It is not just Labour Members who are opposed in principle to pay beds. Numbered among those who are opposed to pay beds are the vast majority of the staff employed in the NHS, and one of the consequences of the withdrawal of the Health Services Board will, inevitably, be an increase in the use of industrial action in the Service, aimed at private patients. One of the things that the Government will have to live with over the next two or three years is that whenever there is a dispute in the Service over pay or conditions, or grading, or even

    229
    health and safety, there will be a tendency for those concerned to say "How can we attack privilege in the Service? How can we undermine the Government's policy? "and they will come up with the answer" We will attack the services for private patients because we want to concentrate our attention, our support, on NHS patients."If anybody is to suffer inside the National Health Service as a consequence of industrial action, it will be argued that private patients, who jump the queue and distort medical priorities, should be those to have their treatment changed by such industrial action. The Government should be aware that they are running the risk in the clause of increasing the kinds and scope of industrial action which is taken against private patients.
    Another aspect of the clause is the problem of the charges themselves. One aspect of the charges which have been made for private practice in the past has been that the charges, before the amendment to the 1977 Act was made, did not reflect the full economic cost of treatment or, indeed, the capital cost of the provision of beds and services. That was rectified, but one of the important problems which remains is that of bad debts which are incurred by private patients and of the failure of consultants to charge private patients for the use of National Health Service facilities.
    One of the big grouses and gripes which have always been levelled against private patient facilities inside the Service—the charge has been made by the staff and others—has been that private patients use and abuse NHS facilities. They do this consistently day after day, week after week, year after year. The laboratory services which are used by consultants for their private patients is a case in point. It is clear to me from my experience in the NHS that it is rare for a consultant to go to a laboratory and say "This slice of liver comes from a private patient." I do not know of one case in which laboratory charges have been properly made.
    There is great suspicion amongst staff in the NHS that there is fantastic abuse of the facilities of the Service for the profit of consultants and of private patients. Medical and social priorities are distorted in another way by private
    230
    patients. That is why we want to see them out of the system altogether. Those facilities are distorted because the staff have demands placed upon them by private patients which are out of all proportion to the medical importance of the cases of the private patients themselves.
    In other words, a private patient may say to an ancillary worker or to a nurse on the ward "Change the water in my rose bowl" or "Do this for me" or "Do that for me." The implication is that the member of the NHS staff must do that because that private patient expects a higher standard of service from the workers in the Service, or because he is paying for it, than if he were an ordinary patient. That is deeply resented by the staff. Nurses and ancillary workers and doctors want to concentrate their attention and their scarce resources of skill on the patients who most need their assistance, and not on those who have paid for the privilege of being in a pay bed. That is the real importance of the debate and the clause. That is why we shall oppose it and why we have tabled the amendment to delete it.
    In Committee we found the assurances given by the Minister absolutely laughable. One of the six criteria which were laid down by the Minister for dealing with the question of distortions of service by pay beds and private practice was that people inside the NHS—in other words, NHS patients—should be treated on an equal basis with private patients. In other words, private patients should not be able to obtain an advantage by paying for treatment. Of course that is absolute nonsense. The whole basis of obtaining private facilities and becoming a private patient is to gain an advantage over someone who cannot afford to pay and needs to maintain himself or herself as a NHS patient.
    2 am
    Therefore, the whole basis of the Government's approach in the six principles is absolute nonsense, and they know it. They cannot possibly deliver the position that they set out in those six principles, namely, that there should be equality of access and equality of treatment between private patients and NHS patients. That is another very important reason for our voting against this clause tonight.

    231
    I do not think that the Ministers on this Bill really understand the deep feelings of resentment and nausea about the Government's policy on this question. I believe that the policy that is put forward in this clause is the first part of a broader attack on the principle of the NHS, that services should be available free at the time of use to those people who need them most and whose medical priority is the highest.
    The Government's policy is to try to replace that kind of Health Service with one which is based on entirely different principles. This clause has the most important principles in the Bill. It tries to reopen the whole issue of private practice inside the NHS. The Government will find that over the next few months and years this principle is not worth the candle or the trouble that it will cause. This clause is part of a wider attempt to create separate facilities for private patients, inside and outside the NHS, because not only do the Government want to increase the number of beds available for private patients ; they also want the private sector as a whole to grow.
    We must see the importance of this clause in relation to other policies. The increase in the number of pay beds must be seen in the context of an increasing number of private hospitals and private hospital units where people who will be able to get their treatment outside the Health Service. That combination of factors will impinge on the services which are available for NHS patients. In an area such as central London, the impact of the Wellington hospital and all the other private hospitals which are at present being looked at by the Health Services Board will be very important. The numbers of trained staff—nurses, doctors, para-medical workers, and those who work in laboratories—who are available for work within the Health Service will drop because of the increase in private facilities.
    Clearly, the Government want people in this country to pay an increasing amount of their private income and resources for their own health care. Indeed, this clause is part of a wider principle, namely, that people should pay for the cover that they receive on an insurance basis and should not receive the Health Service treatment, free at point of use, and paid for out of
    232
    general taxation. That principle is also at stake as a result of this clause. The increase in the number of pay beds which will take place because of the authorisations must be seen in the context of the increase in private sector facilities which will automatically take place.
    Those are substantial reasons for opposing the clause. The reintroduction of private practice on the scale that the Government envisage will cause a great deal of trouble inside and outside the Health Service. They will not be able to say at a later date that we have not warned them of the consequences of their actions.
    Dr. Roger Thomas: Private medicine is a non-starter without support from almost all sections of the National Health Service. Through the private sector, a privileged few, using their own financial resources, gain speed and convenience over those on lengthy National Health Service waiting lists. The waiting time for corrective surgery or for increasingly complex investigations is considerably shortened for those who can pay. It is a system whereby a specially select, relatively small number of patients is facilitated to jump the queue, yet whether he or she at the end of the day gets better medical attention is open to doubt.
    Health care is an essential commodity which is not exactly in abundant supply. Private medicine can acquire it for a small minority. Unfortunately, to a greater or lesser degree, private medicine consequently deprives a patient or patients totally dependent on the NHS.
    The biggest private patients' organisation in Britain is much in favour of a mixed Health Service. When we realise how dependent the private sector is on NHS facilities, including trained staff, that is hardly surprising. Such organisations want the private option to be allowed to expand alongside the State-provided service. Further advance of private care can take place only if the national provision bears the heavy costs of chronic illness and long-term dependency, leaving the far more financially profitable acute sector to blossom in private hands.
    All the advantages of private care and the getting of value for money in that sector depend on the NHS remaining alongside it, as a form of safety net.

    233
    Genuine independent medical care would never survive alone. It would be far too costly to organise, its value for money would drop and ultimately its provision would be so restricted as to ensure its dwindling unpopularity.
    Private medicine offers unparalleled opportunity for profiteering, which is not quite such an offence if those being taken advantage of share a similar philosophy or can easily bear the financial strain of what is, after all, very little extra medical provision. However, it amounts to a far from limited dimension as far as extra or paramedical trimmings are concerned. Private medicine does not pretend that its organised providers can cover chronic conditions. The inclusion of, say, maternity services may well undermine the private facility altogether.
    Increasing the private sector will, without doubt, make our health provision even more divisive, and will make our caring service one that will be easily recognisable as dual standard service, a two-tiered system, which is clearly a Tory goal and an upper crust ambition. We must never forget the degree of social equality in the community that universal access to health care has brought over the past 30 years. That is one of the great advances that Tory Governments of the post-war era have accepted and have even made a fine contribution towards, yet this Administration are all out to prove that they are the exception.
    The NHS being free at the point of need and access seems to displease the present Administration, though it does not displease all their supporters. It also displeases the ultra-conservative, probably dominant, elements within the medical profession. The system of payment for a comprehensive Health Service through the resources and distribution of general taxation, raised by a democratically elected Government, still remains the fairest and easily the most desirable solution and provision for all.
    Mr. William Hamilton: We are debating nine amendments, seven of which are in the names of Scottish Members. They all seek the same objective—to get Scotland excluded from the provision of any private sector of medicine within the confines of the NHS.
    It is not a big problem in Scotland. We went over the ground in Committee.
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    The private sector is small in Scotland compared with England—as is the public school syndrome—but it is a nasty little problem. The principles on which it is based are just as objectionable as they are in England. We seek to delete the provision in clause 9 that is designed to encourage the provision of Health Service facilities for private patients.
    The amendments are in the name of my hon. Friend the Member for Glasgow, Queen's Park (Mr. McElhone), but I drafted them with his advice and guidance. My hon. Friend was for a time the Minister responsible for the NHS in Scotland and he was extremely indignant about the abuses of private practice by the consultatifs engaged in it, particularly in the NHS in West Scotland.
    If my hon. Friend had been here, he could have given us specific examples. I gave examples in Committee, in relation to England, by quoting the Expenditure Committee that dealt with these matters a few years ago under the chairmanship of my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short). That Committee heard oral evidence of the theft of NHS equipment, some of it quite expensive, by professional people, including consultants, for their private use. I think that "extended loan" was the euphemism which was used.
    There is no doubt that facilities and equipment are used and abused by the private sector for personal gain. When the Minister for Health was replying to some of those charges on Second Reading, he said that our attitude showed the worst facets of Socialism. He says that our view is based on envy of the fact that someone can buy something superior to what those whom we represent can buy and that we are motivated by malice and envy. That is not the case.
    I do not object to a private sector. It is impossible to prevent people from using their money to buy privilege, whether in health or education. As long as there are private chemist shops and the facility to buy drugs, and as long as consultants or GPs are authorised by law to engage in private practice, there is nothing to stop individuals from buying privilege and what they regard as a superior service.
    2.15 am
    Our objection is to using a public service to that end. If people want a

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    private service—the same applies, in my view, to private education—they should pay for it wholly and completely separately from the public provision. When the overlap occurs and the National Health Service, provided from the taxpayers' purse, is used for private patients, that is not only an abuse ; it also creates friction between private and public patients, between private and public staff, and between the poor and the rich. It is divisive.
    My hon. Friend the Member for Wood Green (Mr. Race) has spoken of the increasing friction that will be created by the provision of private health facilities within the Health Service. At a time when inflation is rampant, we should be doing everything possible to lessen friction and persuade people to get together to solve the problems within the Health Service.
    I am not inviting the Under-Secretary of State for Scotland to speak at this hour. I am a masochist, but not a masochist to that extent. I know what he would say in his reply. The hon. Gentleman should, however, understand that when the Labour Party is returned to office—the time will surely not be long delayed—we will destroy the wretched private enterprise system within the Health Service. There is no place for market forces in the provision of health services. It is an offence against the basic principles on which the original Health Service was launched.
    I suspect that a determination to undermine those principles lies behind the Bill. It bears repeating that the Government are determined to lessen the area in which the State operates, whether in health education, housing or anything else. They dislike public services. They like the profit motive. If people cannot afford the health services that they need for medical reasons, they have to go without. That is the basis on which the Government argue their case. It is the American system, now to be copied in this country, that if one cannot pay, one dies. It is not necessary for the Under-Secretary of State to say that he rejects the amendment. We know he rejects it. The hon. Gentleman had therefore better keep his mouth shut.
    Mr. Haynes: I am not surprised that we have to propose this amendment to
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    challenge the Government over their proposals in the Bill. Nor am I surprised that talks took place during the years of the previous Labour Government between the British Medical Association and prominent Tories about a pay-off after the election if the Tories were returned. That is exactly what has happened. I am sorry that my hon. Friend the Member for Carmarthen (Dr. Thomas) has left the Chamber because I promised him that I would have a dig at the doctors. I have seen what goes on. The issue is raging through the nation because of what happened to the nurses and what happened to the doctors and consultants not long ago.
    The trade union movement is talking about a 30 per cent. increase for doctors. Some trade unions, including mine, are saying that that is the norm. The Government can look in that direction in respect of other workers. I tabled a question to the Secretary of State not many days ago to try to get more information. He ducked the question and passed it to the area health authority.
    The consultants and doctors received a massive increase not long ago. In addition, they have a private rake-off. The Government are giving them even more. The consultants and doctors receive payment for National Health Service work, for private work and for providing domiciliary services. That is a continual rake-off. Because of what is going on, and because more and more private beds will be provided in the National Health Service, it is no wonder that the Minister will not come clean and say what the limit is. There is no limit. Government policy is "The more, the merrier."
    I intervened when my hon. Friend the Member for Wood Green (Mr. Race) was speaking some days ago to mention my area. We have a famous football club-not Notts County—with a famous centre forward. He received an injury. Immediately he was put on a stretcher and taken to an orthopaedic hospital and was given a National Health Service bed. The following Saturday an 85-year old constituent told me that she had been waiting for a hip operation at the same unit for two years. If a person can pay, he can jump the queue. If a person can afford to pay, he can get in at the expense of

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    the poor National Health Service patient who will have to wait.
    The Minister tried in Committee to tell us that waiting lists were shrinking. That is not true. Waiting lists for National Health Service patients are becoming longer. The Government are encouraging people to pay twice to get off the waiting list, jump the queue and acquire a hospital bed.
    Mr. Race: Would my hon. Friend care to reflect on the fact that as this Government undermine British industry, and as they remove the prospects of creating profitability in certain sections of manufacturing industry, it becomes necessary for them to create profitability in areas which have traditionally been part of the State sector? Is that not exactly what is happening in this situation in what have traditionally been areas where State provision has been the norm and where profits have not been made?
    Mr. Deputy Speaker: I hope that the hon. Member for Ashfield (Mr. Haynes) will not pursue that line, which has nothing to do with the National Health Service.
    Mr. Haynes: I always respect the Chair, Mr. Deputy Speaker.
    I turn now to the issue of insurance, which is related to the pay bed system. It was said tonight by a Minister—Frank Chapple and his mob have been mentioned—that people are looking at the possibilities of private health care. If that interest grows, we shall be back to square one. We shall have long lists of people waiting to obtain service and pay beds are not the answer.
    I have been trying for ages to get an answer from the Prime Minister to the following question relating to the National Health Service : How can the Government afford to provide weapons to destroy life and not find additional money to provide the necessary equipment and hospital beds to preserve life?
    Mr. Pavitt: I always enjoy the robust comments of my hon. Friend the Member for Ashfield (Mr. Haynes) because he brings a tremendous amount of grass roots experience to these debates. I part company with him on one point only, which is that one must be careful when discussing the few doctors who exploit opportunities. It would be quite wrong to
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    label the whole medical profession as the result of the conduct of a few.
    I find clause 8 and the policy of the Government in this context incomprehensible in the light of the report of the Royal Commission. Anybody who knows anything about the National Health Service knows that whoever the administrator is or whoever the Minister is there are enough unavoidable problems to be faced in the NHS.
    The Royal Commission said that we should get the issue of pay beds into proportion. There are half a million NHS hospital beds and, as my hon. Friend the Member for Wood Green (Mr. Race) said, we are now down to about 2,000 pay beds. The Royal Commission pointed out that the controversy and the heat generated by this question were far greater than the impact of the number of pay beds. The controversy was generated by the principle of pay beds and all that flowed from it.
    In the light of that evidence and the reasoned approach of the Royal Commission, I find it incredible that the Government should embark upon a reversal of the work of the Health Services Board, once again encouraging problems in the Health Service. They could have avoided creating difficulties in this area.
    My hon. Friends have pointed out that pay beds merely buy time. They do not buy extra clinical care. The pay bed system does not buy anything extra other than time and convenience. But unless there is an unlimited supply—and there is not—the services that flow from the pay bed system into the various departments of a hospital mean that once we establish a cash basis for the selection of services we cannot have selection without rejection.
    Inevitably, therefore, the fact that the bed is occupied and has been selected by the power of the purse means that somebody who has equal clinical need—and perhaps more social reason for needing a bed—is excluded. This is a piece of social injustice that Labour Members condemn, and I very much welcome the forthright statement on it by my right hon. Friend the Member for Lewisham, East (Mr. Moyle). I hope that when we win the next general election, as inevitably we shall, we shall forget about the Goodman compromise on this question. We are

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    talking of only 2,000 beds. In the very early days of our next five years in office, let us get rid of them immediately and get on with tackling the real problems rather than continuing this everlasting debate.
    2.30 am
    My hon. Friend the Member for Wood Green put his finger on the spot when he spoke about the distortion that pay beds give to the whole of the National Health Service. There is a distortion between the doctor and his patient. Most of our doctors are able quite clearly to understand their patients. They know them and their homes and family circumstances. They can make a clinical judgment on need. But the moment the pay bed comes into it and payment for services arises there is a distortion of the relationship between the doctor and his patient. There is also a distortion between doctor and doctor.
    A friend of mine was a radiologist in one of the teaching hospitals. He was a registrar and he was intensely angry at the fact that his consultant was piling work on him relating to private patients. He received nothing for it. The consultant, of course, was being paid at the other end of the scale.
    A great deal has been made by Labour Members of the fact that the Government seem determined to abolish the basic principle of the Health Service relating to need and clinical decision. But the result of the pay bed system is that, instead of the service being free at the time of need, those who take advantage of the system pay for jumping the queue. The average weekly payment of the average taxpayer for the services he gets under the NHS is £5·70. He pays that week in and week out. People who need a hernia operation or need to have varicose veins treated, and people with gynaecological problems, may have been paying week after week for a lifetime, and yet suddenly they find they are at the end of the queue because someone is able to pay extra to jump the queue.
    This is particularly bad in the case of people with hernias and those with gynaecological problems or varicose veins. People do not usually die of these things, so apparently they can wait in acute discomfort and acute pain. The person with money is able to jump the queue if he is prepared selfishly to use
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    his money in that way. This must be to the detriment of others in the queue.
    The Government ought at least to agree to the common waiting list, as proposed in amendment No. 37. The discussions with the BMA went on far too long. The quite detailed proposals in that amendment would do much to ensure that clinical judgment and social needs were the only criteria. Queue jumping would then be very much less.
    I want to put one last point to my right hon. Friend in relation to future policy. He will recall that under the previous Labour Government the Chancellor of the Exchequer, in his wisdom, put a small tax upon BUPA and other similar bodies. When we are drafting the next manifesto, I hope he will discuss with our colleagues the question of a direct tax on the fringe benefit of the person who receives it. A large number of the group schemes, which at the moment are given as part of a fringe benefit to the professional people and the top echelons in industry and commerce, should attract a direct tax. There would then be far less willingness to join in the bonanza that BUPA provides. It would save the Health Service, the workers in the Health Service, doctors and patients a lot of problems if even at this eleventh hour—or this 2.34 am hour—the Government accepted the deletion of clause 8 from the Bill and returned to what the NHS was originally all about.
    Mr. Dubs: Earlier this evening we debated an amendment dealing with the structure of the Health Service in London. It was important, and it dealt with major issues of concern to the Health Service. But it was not nearly so important as this amendment, which goes to the heart of what the Health Service is all about. The Health Service can be threatened in a major way by a great expansion of private practice. I believe that the Government are against the Health Service and that they do not like the Health Service being as successful as it is. In fact, the Government have made two major attacks on the NHS since they were elected—first, by starving it of funds and, secondly, by encouraging the development of double standards through the expansion of the private sector.
    Last October, I had the opportunity of paying a brief visit to the United States.

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    Time and again, when discussing the NHS with ordinary Americans, and when discussing the quality and cost of their health care, I found that they were amazed at how well the Health Service, for all its faults and weaknesses, was working. They had been so bamboozled and hoodwinked by the publicity put out by the American Medical Association that they did not realise what the NHS was about, what sort of service it provided, what freedom of choice within the NHS was available both for doctors and patients and what high standards of medical care we were able to provide for all our people regardless of their ability to pay.
    Many of the Americans to whom I spoke were very impressed by that and said that they wished they had something comparable in the United States, because, despite the high living standard in North America, it is still true to say that for many Americans to fall seriously ill is equivalent to going bankrupt. That is what they said, and they have no alternative. Only those who are very rich indeed can survive a major illness, or those who are very poor indeed and have second-class health care at public expense.
    But for the broad band of people between those two extremes illness is a disaster not just because of the illness itself but also because of the financial consequences for themselves and their families. If we publicised in America and elsewhere the way in which the NHS is working, we might win more converts to the type of Health Service practice which exists in this country.
    I should like to make four specific points about private practice and the damage that it does to the basis of the Health Service. The first relates to queue jumping, which has already been referred to by several hon. Members. I fully understand that people want privacy when they are ill, and that some people do not like to be ill in front of others in a ward. They may not be aware that they get a great deal of privacy in NHS wards, particularly those which are curtained off and divided into small sections.
    Nevertheless, there is a way of providing privacy within the NHS. It is a way which is seldom publicised. I refer to the amenity bed. It is true that it is not al-
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    ways available, but at least it is there for people who want to pay a little more as NHS patients for privacy without queue jumping or in any way seeking to gain an advantage over others who are waiting for medical care.
    Secondly, I believe that private beds produce a number of important conflicts within the staff and operation of NHS hospitals. Many staff—nurses, hospital workers and others—who joined the Health Service to work for ordinary people do not like being put in the position of having to work for the privileged few private patients in a National Health Service hospital. There is another conflict for doctors and, particularly, consultants. If they are working partly for the Health Service and partly privately, there must be an intolerable conflict between the needs of the Health Service patients and their ability to earn more money if they devote more of their time to private patients. That conflict is undesirable and it must produce much strain for the average consultant. I do not know how they can come to terms with it.
    For consultants, or for doctors aspiring to become consultants, there is a conflict between going into the fashionable specialties which will then lead to lucrative private practices and going into the Cinderella services such as caring for geriatric patients or psychiatry where there are few opportunities of earning money from private patients. There is also the conflict of running the hospital in such a way that a fair attribution of the costs is borne by private patients, given that many hospital services can be operated efficiently only on the basis of common provision for all patients. X-rays and pathology are examples of services for which I doubt whether it is possible for private patients to be charged the fair cost, and where the process of having to impose an accounting system on a National Health Service hospital increases the cumbersome nature of the bureaucracy and increases the overall costs of running the hospital.
    There is also the problem of the different relationships between the private patient and the hospital and the National Health Service patient and the hospital. As my hon. Friend the Member for Wood Green (Mr. Race) said, pressures will be brought to bear by an individual who feels that he or she is paying, and is

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    therefore entitled to something extra over and above that received by National Health Service patients.
    How much private practice do the Government want? What proportion of total health care should be private? It is our contention that even the present proportion of private health care is damaging to the National Health Service. If there is a significant increase, it could be disastrous to the future of the National Health Service and to the many millions of people who do not wish to be or cannot afford to be private patients.
    Mr. Race: Will my hon. Friend reflect on the market philosophy of the Government with regard to health care? The failure to set an upper limit for the number of pay beds in National Health Service hospitals leads me to believe that the Government are simply trying to encourage market forces to generate demand for private patient facilities, both inside and outside the National Health Service. Thus, they will be able to say in three or four years that the demand for private health care is increasing dramatically, and that they were right in not placing a limit on the operation of market forces.
    2.45 am
    Mr. Dubs: I agree with my hon. Friend. There are clear dangers that the encouragement that the Government are giving to market forces and to the development of the private sector will generate an increase in that sector. Unless the Government have a clear sense of when they want to stop the process, the danger is that the private sector will go on increasing to the detriment of the National Health Service. That is why we on the Labour Benches are opposed to the expansion of the private sector. We would like to see private practice taken out of the Health Service.
    Sir George Young: It would have been amazing if, at this hour of the morning, in a 90-minute debate any new light had been shed on the age-old debate about the role of private medicine. It is no reflection on the sincerity of Labour Members' speeches that nothing new or original has been said on the subject.
    The right hon. Member for Lewisham, East (Mr. Moyle) began by quoting the Royal Commission to support his views. That is a game that both of us can play.
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    The Royal Commission did not declare itself in favour of the Health Services Board and the phasing out of pay beds. It said :
    "That the establishment of the Health Services Board led to a welcome respite from discussion of this emotional subject."
    But it went on :
    "we have no wish to enter into the 'pay beds' dispute.... Private practice could at most have a marginal and local effect on the NHS … We have reached no conclusions about the overall balance of advantage or disadvantage to the NHS of the existence of a private sector, therefore, but it is clear that whichever way it lies it is small as matters now stand."
    Finally, it said :
    "We do not consider the presence or absence of pay beds in NHS hospitals to be significant at present from the point of view of the efficient functioning of the NHS."
    The right hon. Gentleman also implied that in some way the Health Services Board was an independent body preferable to the Secretary of State. The board was not neutral on the issue of pay beds. It was set up with the specific function of phasing them out.
    The hon. Member for Wood Green (Mr. Race) raised a number of issues, including the question of laboratory services, in Committee. I ask him what evidence he has for the allegations that he made. Was he talking about inpatients or out-patients? If the former, the charge that they pay is all-inclusive, and an element for pathology tests is included in the daily charge, as I explained to him in Committee. If he is talking about out-patients, there are separate charges for pathology, and there is no evidence that this charge is not being levied. So I must ask him, if he has specific examples to produce, to let my Department have them. I repeat that this was an invitation that I extended to him in Committee to which he has not so far responded.
    Mr. Race: I should be happy to give the Minister instances of where these charges are not levied. One of the problems in this area is that if a certain degree of concealment is indulged in by a consultant it is very difficult for anyone to break through that circle of concealment. People who work in pathology laboratories have often made the point to me that, although they know that private patients are treated on a regular

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    basis in their hospitals, they never see specimens identified as having come from private patients. The system needs that. The specimen should be so identified if a charge is to be levied. That does not operate in many laboratories of which I am aware at present.
    Sir G. Young: The hon. Member has a duty to make available to my Department precise details of the allegations he has made so that we may follow them up. I hope that he will respond to the invitation this time because he did not do so the last time I asked him to make specific accusations.
    I must put this question to him. If my right hon. Friend the Secretary of State is not to be trusted, as the hon. Member implied, to look after the NHS, why has my right hon. Friend taken on board the Royal Commission's recommendations about the aggregate of small developments and tabled an amendment to the powers in the 1976 Act to designate areas where all developments are subject to the need for authorisation, thus providing an additional degree of protection to the NHS that the previous Administration did not extend to it?
    The hon. Member asked what the upper limit on pay beds will be. As we made clear in Committee, we do not know, but we would be surprised if all the pay beds phased out by the previous Administration were phased back in again. We do not know what the demand will be, nor do we know how the applications for pay beds will be dealt with by the NHS.
    The consultation letter on 31 January made it clear that pay beds will not be allowed back automatically on demand and that the local authority will have to satisfy the Secretary of State that there will be no significant prejudice to the NHS patients. This is a statutory requirement in clause 62.
    The hon. Gentleman then raised the old chestnut about private patients' debts. I do not normally read the Derby Evening Telegraph, but I saw an article in it headed :
    "Etwall campaigners probing tip-off of £¼million pay bed debts."
    It said :
    "Campaigners fighting for the reopening of Etwall Hospital are to urge Derbyshire MPs to investigate shock allegations that £¼ million
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    is owed to the Area Health Authority in bad debts by private pay bed patients."
    I pursued this matter with the Derbyshire area health authority. I have here a letter from the treasurer which makes it clear that the amount of bad debts incurred by private patients for the year in question was £217·70—not £¼ million, but 1 per cent. of that figure. Many false allegations have been made about bad debts by private patients, but, when looked into, we find that the percentage of bad debts by private patients is exceptionally low.
    Mr. Rooker: Then why not publish them?
    Sir G. Young: I have given the figures for one specific hospital. The information collected by the previous Labour Administration, as by this Government, does not enable us to identify automatically the amount of debt owed by private patients.
    Mr. Race: Then how does the hon. Gentleman know that that statement is right?
    Sir G. Young: In this instance a specific exercise was carried out by the Derbyshire health authority in response to certain allegations. I am glad that it did, because it showed how false the accusations were.
    Mr. Race: Will the hon. Gentleman give way?
    Sir G. Young: No, I am not giving way.
    Mr. Race: On that particular point.
    Sir G. Young: No.
    Mr. Race Mr. Race rose—
    Mr. Deputy Speaker: Order. The Minister is not giving way.
    Sir G. Young: I turn now to the speech made by the hon. Member for Fife, Central (Mr. Hamilton). I deplore any abuse of facilities in the National Health Service whether by consultants or, indeed, by shop stewards. The hon. Gentleman is on very weak ground if he uses that as an argument against private practice. I would not use the argument that occasionally shop stewards abuse NHS facilities as an argument against trade unions being in the Health Service, and the hon. Gentleman should not apply a similar argument to private practice.

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    The six principles provide for common waiting lists for urgent cases and the seriously ill and for specialised treatment. Otherwise, they are concerned that both paying and non-paying patients, once admitted, are treated equally.
    The second principle deals with outpatient waiting lists which Labour Members did not try to tackle when they were in government.
    The six principles are deliberately non-statutory. They have been freely negotiated with the medical profession and we expect them to be implemented. To set them in the Bill would not help. The Opposition have not realised that the sanctions of the law are not the most effective way of influencing doctors in their handling of patients. It would be impossible for administrators or politicians to say whether the same criteria for admission were being applied to patients. Only doctors can resolve that conflict.
    The proceedings on the Bill would not have been complete without an intervention by the hon. Member for Ashfield (Mr. Haynes), with his homespun philosophy. I think that he is a fully paid-up subscriber to the conspiracy theory of government. It is no use telling him that waiting lists are down from 750,00 to 700,000 because he made it clear that he would not believe them.
    Mr. Haynes: That is not true.
    Sir G. Young: These are the best estimates that the Government are able to make of the numbers on waiting lists. They are available in parliamentary answers. They show that in March last year there were about 750,000 people on the waiting lists and that in October the number was down to 700,000. The figures may be inconvenient for the Opposition, but they are the best that the Government have been able to find. They are derived on the same basis for waiting lists as was used by the previous Labour Government, and there is no reason to cast doubt on their accuracy.
    The hon. Member for Brent, South (Mr. Pavitt) accused us of attacking the principle of the NHS. Private practice has been a feature of the NHS since it was set up in 1948. Only the Labour Government's Act of 1976 and the campaign which preceded it caused conflict. Basically, we are freeing private practice and
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    returning to the pre-1976 position, but there are additional safeguards for the Health Service which we believe give added protection to it.
    Clause 8, which the Opposition seek to delete, is an introduction to clauses 9 and 10, which deal with private practice in the Health Service. It is the foundation for that which follows.
    A number of amendments deal specifically with Scotland, but no case was made out, especially by the hon. Member for Fife, Central, that Scotland should be dealt with differently from England. If the hon. Gentleman agrees, I do not propose to deal specifically with the Scottish amendments.
    The right hon. Member for Lewisham, East dealt at some length with common waiting lists. The effect of the amendment would be to apply common waiting lists to all NHS and private patients. Opposition Members always claim that their objection to pay beds is that they are unfair. Having listened to their arguments this evening, it seems that their main objection is to private medicine as such.
    Mr. Orme: Hear, hear.
    Sir G. Young: It is a variation on the theme that if the State cannot provide it no one should provide it. It is an example of Socialism at its worst. The Opposition amplified that argument many times in Committee. It is aimed at a prohibition of private medicine. It is clear that the cry "Unfair" is merely a cover for their fundamental objection to private medicine.
    Mr. Moyle: Will the hon. Gentleman comment on my observation that if the Government can convince the public by the end of the Parliament that common waiting lists are operating equally for private patients and National Health Service patients we may be on the way to solving the problem of private patients in the Service?
    Sir G. Young: We have already gone as far as we can in implementing common waiting lists for urgent cases. The principles that have been referred to go much further than Labour Members were able to go when in government. There are statutory safeguards in the Bill. Pay beds will be authorised only when that does not prejudice NHS services. No

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    new pay beds will be authorised unless the Secretary of State is satisfied that making those beds available will not prejudice services to other NHS patients. That is a statutory requirement that is set out in the Bill.
    There is a non-statutory safeguard which lies in the agreement which the Secretary of State has reached with the medical profession on the six principles for arrangements for private practice in the NHS, which have been referred to on many occasions. The agreement is an integral part of our policy.
    We are concerned that provision for private patients shall not be at the expense of the Service. We made that clear in the first letter that my right hon. Friend set out on 22 June after coming into office. That made it clear that arrangements for private practice in the Service should operate fairly and should be seen to do so. We have kept that promise through the retention of the legislative safeguard and through the new agreement with the medical profession.
    The principles make it clear that it is unacceptable that the treatment of an NHS patient who is seriously ill and in need of urgent medical care should be prejudiced because priority has been given to a private patient in less need.
    Mr. Pavitt Mr. Pavitt rose—
    Sir G. Young: No, I must make progress.
    It is equally unacceptable that a patient who has had a private consultation should be given a greater degree of priority for treatment under the NHS than would have been available to any other patient whose medical needs are the same. The principles to which I have referred outlaw that. The agreement on the principles is a notable achievement and goes far beyond what the previous Labour Administration achieved. It demonstrates what can be done through co-operation and negotiation.
    I think that many of my right hon. and hon. Friends were hoping to hear a definite exposition of the Opposition's current policy on private practice. They have a duty to tell us of their policy. Is it the policy that was administered by their two Front Bench spokesmen when they were Ministers, namely, phasing pay
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    beds out of the NHS but allowing the independent section to exist outside the Service subject to satisfactory safeguards?
    3 am
    Is that perhaps their policy? Or is it the policy put forward in Committee by the right hon. Member for Lewisham, East, which in practice would have frozen private sector provision at the current level? Or is it the position outlined by the right hon. Member for Salford, West (Mr. Orme) in a speech to the treasurers a few weeks ago, when he said :
    "I do not believe that there should be the right to private medicine within our society because the choice is based on a monetary consideration rather than a health consideration"?
    Is that their policy?
    If that is the case, how do Labour Members reconcile that with what a former Labour Secretary of State for Social Services, Barbara Castle, said :
    "I believe that it would be intolerable in a democratic society to prevent people buying private medical care if they felt it was an essential part of their personal interest"?
    What exactly is the policy of Labour Members on private practice?
    We have a wide range of choice before us, and in his speech the right hon. Member for Lewisham, East carefully avoided saying anything about the role of private medicine in our society.
    Mr. Moyle Mr. Moyle rose—
    Sir G. Young: Before the right hon. Gentleman intervenes, let me give him another option. Perhaps he prefers to follow the policy adopted by many trade unions, which is to negotiate access to private medicine for their members in response to their demands. Is that perhaps to be their policy?
    Mr. Moyle: The hon. Gentleman has asked a number of questions. He obviously did not listen to my speech. The situation is clear. Either we shall phase pay beds out of the Health Service under a Health Services Board arrangement, or we shall go for a short, sharp chop as soon as we return to power. AH that the hon. Gentleman is doing is helping to confuse doctors who have decisions to take about practice in the Health Service and how they will organise it by the smoke-screen that he is putting up. We are putting doctors in hospitals on notice about what will happen to private pay

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    beds in the Health Service when we get back to power.
    Sir G. Young: The right hon. Gentleman has ducked the issue again. The questions that I was putting to him were directed not at pay beds within the NHS but at the role of private medicine outside the Service. I asked him to say whether the Labour Party's policy is that which they adopted when in government, or the policy put forward by the right hon. Member for Salford, West a few weeks ago, when he said :
    "I do not believe that there should be the right to private medicine within our society".
    Which of these two options represents the policy of the Oppositon? I note that the right hon. Member for Lewisham, East, is not now springing to his feet to say what is the answer.
    Our party is united behind our policy, which is a policy based on partnership, not on apartheid. It is a policy based on freedom of choice, not State monopoly. It is a policy supported by the vast majority of people in this country.
    Question put, That the amendment be made :—
    The House divided : Ayes 69, Noes 124.

    Division No. 347]

    AYES

    [3.5 am

    Alton, David

    Flannery, Martin

    Richardson, Jo

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

    Foster, Derek

    Roberts, Ernest (Hackney North)

    Beith, A. J

    George, Bruce

    Robertson, George

    Benn, Rt Hon Anthony Wedgwood

    Graham, Ted

    Rooker, J. W.

    Bennett, Andrew (Stockport N)

    Hamilton, James (Bothwell)

    Ross, Ernest (Dundee West)

    Booth, Rt Hon Albert

    Hamilton, W. W. (Central File)

    Rowlands, Ted

    Bray, Or Jeremy

    Harrison, Rt Hon Walter

    Sever, John

    Callaghan, Jim (Middleton & P)

    Haynes, Frank

    Silkin, Rt Hon S. C. (Dulwich)

    Campbell-Savours, Dale

    Hooley, Frank

    Skinner, Dennis

    Clark, Dr. David (South Shields)

    Howells, Geraint

    Soley, Clive

    Cocke, Rt Hon Michael (Bristol S)

    Hughes, Robert (Aberdeen North)

    Spearing, Nigel

    Cohen, Stanley

    Lamond, James

    Spriggs, Leslie

    Coleman, Donald

    McCartney, Hugh

    Thomas, Dr Roger (Carmarthen)

    Cowans, Harry

    McKay, Allen (Penistone)

    Tinn, James

    Cox, Tom (Wandsworth, Tooting)

    McKelvey, William

    Walker, Rt Hon Harold (Doncaster)

    Crowther, J. S.

    Maynard, Miss Joan

    Welsh, Michael

    Cryer, Bob

    Millan, Rt Hon Bruce

    Winnick, David

    Dalyell, Tam

    Moyle, Rt Hon Roland

    Woodall, Alec

    Dixon, Donald

    Orme, Rt Hon Stanley

    Wrigglesworth, Ian

    Dobson, Frank

    Palmer, Arthur

    Young, David (Bolton East)

    Dormand, Jack

    Pavitt, Laurie

    Douglas, Dick

    Powell, Reymond (Ogmore)

    TELLERS FOR THE AYES:

    Dubs, Alfred

    Prescott, John

    Mr George Morton and

    Eastham, Ken

    Race, Reg

    Mr. Terry Davis.

    Evans, John (Newton)

    NOES

    Alexander, Richard

    Fairgrieve, Russell

    Lloyd, Peter (Fareham)

    Ancram, Michael

    Faith, Mrs Sheila

    Lyell, Nicholas

    Aspinwall, Jack

    Fenner, Mrs Peggy

    McNair-Wilson, Michael (Newbury)

    Benyon, Thomas (Abingdon)

    Fisher, Sir Nigel

    McQuarrie, Albert

    Berry, Hon Anthony

    Fletcher-Cooke, Charles

    Major, John

    Biggs-Davison, John

    Fookes, Miss Janet

    Marlow, Tony

    Blackburn, John

    Garel-Jones, Tristan

    Mather, Carol

    Body, Richard

    Grieve, Percy

    Maude, Rt Hon Angus

    Boscawen, Hon Robert

    Griffiths, Eldon (Bury St Edmunds)

    Maxwell-Hyslop, Robin

    Braine, Sir Bernard

    Gummer, John Selwyn

    Meyer, Sir Anthony

    Bright, Graham

    Hannam, John

    Mills, lain (Meriden)

    Brinton, Tim

    Haselhurst, Alan

    Mitchell, David (Basingstoke)

    Brooke, Hon Peter

    Hawkins, Paul

    Montgomery, Fergus

    Brown, Michael (Brigg & Sc'thorpe)

    Hawksley, Warren

    Morrison, Hon Charles (Devizes)

    Bulmer, Esmond

    Heddle, John

    Morrison, Hon Peter (City of Chester)

    Cadbury, Jocelyn

    Henderson, Barry

    Myles, David

    Carlisle, John (Luton West)

    Hogg, Hon Douglas (Grantham)

    Neale, Gerrard

    Carlisle, Kenneth (Lincoln)

    Hooson, Tom

    Needham, Richard

    Chapman, Sydney

    Howell, Ralph (North Norfolk)

    Nelson, Anthony

    Churchill, W. S.

    Hunt, David (Wirral)

    Neubert, Michael

    Clark, Hon Alan (Plymouth, Sutton)

    Hunt, John (Ravensbourne)

    Newton, Tony

    Clarke, Kenneth (Rushcliffe)

    Jenkin, Rt Hon Patrick

    Normanton, Tom

    Colvin, Michael

    Jopling, Rt Hon Michael

    Onslow, Cranley

    Cope, John

    Kellett-Bowman, Mrs Elaine

    Page, John (Harrow, West)

    Costain, A. P.

    Kershaw, Anthony

    Page, Rt Hon Sir R. Graham

    Cranborne, Viscount

    Kitson, Sir Timothy

    Page, Richard (SW Hertfordshire)

    Dean, Paul (North Somerset)

    Knight, Mrs Jill

    Parris, Matthew

    Dorrell, Stephen

    Lang, Ian

    Patten, Christopher (Bath)

    Dover, Denshore

    Lawrence, Ivan

    Patten, John (Oxford)

    Dunn, Robert (Dartford)

    Le Marchant, Spencer

    Pollock, Alexander

    Price, David (Eastleigh)

    Squire, Robin

    Wakeham, John

    Proctor, K. Harvey

    Stanbrook, Ivor

    Walker, Bill (Perth "E Perthshire)

    Rathbone, Tim

    Stanley, John

    Waller, Gary

    Rees-Davies, W. R.

    Stevena, Martin

    Ward, John

    Renton, Tim

    Stewart, John (East Renfrewshire)

    Walls, Bowen (Hert'rd A Stev'nage)

    Rhodes James, Robert

    Stradling Thomas, J.

    Wheeler, John

    Rhys Williams, Sir Brandon

    Taylor, Teddy (Southend East)

    Wickenden, Keith

    Roberts, Michael (Cardiff NW)

    Temple-Morris, Peter

    Young, Sir George (Acton)

    Sainsbury, Hon Timothy

    Thompson, Donald

    Silvester, Fred

    Townond, John (Bridlington)

    TELLERS FOR THE NOES:

    Sims, Roger

    Vaughan, Dr Gerard

    Mr. David Waddington and

    Speller, Tony

    Viggers, Peter

    Mr. John MacGregor.

    Spicer, Michael (S Worcestershire)

    Question accordingly negatived.

  Clause 23

    INTERPRETATION AND MINOR AMENDMENTS AND REPEALS
    Dr. Vaughan: I beg to move amendment No. 29, in page 27, line 16, at end insert—
    '(1A) Schedule 12 to the Act of 1977 and Schedule 11 to the Scottish Act of 1978 (Additional provisions as to regulations for the making and recovery of charges) shall be amended as provided in Parts I and II respectively of Schedule (Amendments of the Act of 1977 and the Scottish Act of 1978 relating to exemptions from charges for certain services and appliances) to this Act.'
    Mr. Deputy Speaker: With this we may take Government amendments Nos. 30, 31, 32, 24 and 33.
    Dr. Vaughan: I hope that hon. Members on both sides of the House will welcome this group of amendments, because they change some of the arrangements for exceptions from charges for dental services, optical appliances and appliances supplied to hospital outpatients.
    On dental treatment, we are impletmenting in a modified form our plans which were outlined in the latest expenditure White Paper for the removal of school leavers under 21 from the existing system of dental charges. Originally, we proposed to charge all those over 16 who were no longer at school. However, the British Dental Association put forward strong arguments that this would be particularly damaging to the dental health of 16 and 17-year-olds.
    We have therefore accepted that all young people should be exempt from dental charges until they reach the age of 18. I hope that hon. Members on both ides of the House will welcome that. The new schedule therefore provides for the exemption from dental treatment charges for all young people under 18
    254
    and also those under 19 in full-time education.
    3.15 am
    There is also the question of charges for appliances supplied to hospital outpatients and for dental and optical appliances. For some time there has been an anomaly in the way in which the schedule defines children as being those who are following a course of full-time education in a school. It is the phrase "in a school" that creates the anomaly. As hon. Members will be aware, many young people do A-level and similar courses not in schools but in colleges of further education. Unfortunately, to date, those courses have not come within the statutory definition of the term "school". As a result, students at those colleges and institutions have been denied the exemption that they would have had had they stayed on at school. We propose therefore that the definition of "children" should include all those under 19 years of age who are pursuing a course of full-time education. I feel sure that hon. Members on both sides of the House will welcome correction of what is an unfair anomaly.
    I hope, therefore, that the House will accept this group of amendments.
    Mr. Moyle: I am sorry to disappoint the Minister, but we oppose the main thrust of the amendments. These amendments are not entirely what the Minister says they are. They impose charges on young people who have hitherto been exempt.
    I do not mind admitting that I feel that our Government did not do particularly well in this area, but we now have the advice of the Royal Commission, and I hope that we shall make a new start. The Royal Commission said that, by any standards, the dental health of this nation is poor. It also said that high charges for dental treatment was one reason. About 24 per cent. of those

    255
    with no natural teeth and 6 per cent. of those with only some natural teeth said that the cost of National Health Service treatment was the main reason for not visiting the dentist. There was a recommendation from the Royal Commission that there was a firm case for the gradual but complete extinction of charges. I hope that we can use that as a basis for a new start.
    The whole language of the amendment and the words used by the hon. Gentleman are an example of "newspeak" as in George Orwell's "1984". The amendment talks of exemptions, but it is about imposing charges on young people. Apart from dishonesty of language, there is a fundamental dishonesty. The clause goes against a specific election pledge by the Prime Minister, when garnering votes in the general election last year, that the Conservatives had no plans to impose fresh charges during the current Parliament.
    This is a new charge. We have never before imposed charges on young people under the age of 21 for dental treatment. That was founded on sound common sense, as the comments of the Royal Commission show. Our dental services are, in any case, based too much on treatment and not enough on prevention. Encouraging young people to go to the dentist is the best preventative measure possible. Under this amendment, 19 and 20-year-olds will have an extra burden to discourage them from visiting the dentist.
    For all those reasons, we oppose these amendments. What I have said about dental services applies also to optical services.
    Mr. Race: If we are to have exemption for young people in full-time education at school, college or university up to the age of 19, it is likely that the vast majority of school students will be exempt, as will some, though not all, students at technical colleges and polytechnics, but a substantial proportion of students at university will not be exempt.
    It is extraordinary that the Government should have chosen a cut-off point at the age of 19 rather than 21. Why has that been done? Is it simply a cost-
    cutting exercise, as we suspect? There seems to be no reason in logic for that cut-off point. I hope that the Minister will reconsider it.
    Mr. Pavitt: I congratulate Mr. Allen and his team from the British Dental Association on getting some improvement on the original proposal, but, as my right hon. Friend the Member for Lewisham, East (Mr. Moyle) said, the Royal Commission's evidence shows that the imposition of charges is a barrier to the prevention of dental caries and oral diseases by periodontology.
    Within 20 years we could eliminate dental and oral diseases. The charges are a direct barrier to the progressive action that needs to be taken and to which the Royal Commission has so clearly pointed the way.
    Mr. William Hamilton: I wish to add my protest about the way that the amendments will affect Scotland. I received this morning 50 or 60 letters, mainly from youngsters in Fife, protesting at the proposed charges. The Minister knows that there is a large volume of literature about bad dental health in Scotland, particularly among youngsters. It is deplorable. Even below the age of 10 they are having dental treatment and extractions and they need false teeth at an early age.
    The amendment will do nothing to encourage preservative treatment. It is a false economy. In the long run it will lead to worse ill health and grossly extravagant further expenditure on the provision of dental services. It is an ill-conceived economy. I believe that the Government will live to regret it, and I hope that the next Labour Government will take early steps to retrieve the situation.
    Dr. Vaughan: We do not accept the Opposition's criticisms. The hon. Member for Wood Green (Mr. Race) asked about the age limit. That was the advice that we were given by the BDA. I hope that the House will accept the amendments.
    Question put, That the amendment be made :—
    The House divided : Ayes 124, Noes 67.

    Division No. 348]

    AYES

    [3.25 am

    Alexander, Richard

    Benyon, Thomas (Abingdon)

    Blackburn, John

    Ancram, Michael

    Berry, Hon Anthony

    Body, Richard

    Aspinwall, Jack

    Biggs-Davison, John

    Braine, Sir Bernard

    Bright, Graham

    Hunt, John (Ravensbourne)

    Pollock, Alexander

    Brinton, Tim

    Jenkin, Rt Hon Patrick

    Price, David (Eastleigh)

    Brooke, Hon Paler

    Jopling, Rt Hon Michael

    Proctor, K. Harvey

    Brown, Michael (Brigg & Sc'thorpa)

    Kellett-Bowman, Mrs Elaine

    Rathbone, Tim

    Bulmer, Esmond

    Kershaw, Anthony

    Rees-Davies, W. R.

    Cadbury, Jocelyn

    Kitson, Sir Timothy

    Renton, Tim

    Carlisle, John (Luton West)

    Knight, Mrs Jill

    Rhodes James, Robert

    Carlisle, Kenneth (Lincoln)

    Lang, Ian

    Rhys Williams, Sir Brandon

    Chapman, Sydney

    Lawrence, Ivan

    Roberts, Michael (Cardiff NW)

    Churchill, W. S.

    Le Marchant, Spencer

    Sainsbury, Hon Timothy

    Clark, Hon Alan (Plymouth, Sutton)

    Lennox-Boyd, Hon Mark

    Silvester, Fred

    Clarke, Kenneth (Rushcliffe)

    Lloyd, Peter (Fareham)

    Sims, Roger

    Colvin, Michael

    Lyell, Nicholas

    Speller, Tony

    Cope, John

    MacGregor, John

    Spicer, Michael (S Worcestershire)

    Costain, A. p.

    McNair-Wilson, Michael (Newbury)

    Squire, Robin

    Cranborne, Viscount

    McQuarrle, Albert

    Stanbrook, Ivor

    Dean, Paul (North Somerset)

    Major, John

    Stanley, John

    Dorrell, Stephen

    Marlow, Tony

    Stevens, Martin

    Dover, Denshore

    Maude, Rt Hon Angus

    Stewart, John (East Renfrewshire)

    Dunn, Robert (Dartford)

    Maxwell-Hyslop, Robin

    Stradling Thomas, J.

    Fairgrieve, Russell

    Meyer, Sir Anthony

    Taylor, Teddy (Southend East)

    Faith, Mrs Sheila

    Mills, lain (Meriden)

    Temple-Morris, Peter

    Fenner, Mrs Peggy

    Mitchell, David (Basingstoke)

    Thompson, Donald

    Fisher, Sir Nigel

    Montgomery, Fergus

    Townend, John (Bridlington)

    Fletcher-Cooke, Charles

    Morrison, Hon Charles (Devizes)

    Vaughan, Dr Gerard

    Fookes, Miss Janet

    Morrison, Hon Peter (City of Chester)

    Viggers, Peter

    Garel-Jones, Tristan

    Myles, David

    Waddington, David

    Grieve, Percy

    Neale, Gerrard

    Wakeham, John

    Griffiths, Peter (Portsmouth N)

    Needham, Richard

    Walker, Bill (Perth & E Perthshire)

    Gummer, John Selwyn

    Nelson, Anthony

    Waller, Gary

    Hannam, John

    Neubert, Michael

    Ward, John

    Haselhurst, Alan

    Newton, Tony

    Wells, Bowen (Hert'rd a Sfev'nage)

    Hawkins, Paul

    Normanton, Tom

    Wheeler, John

    Hawksley, Warren

    Onslow, Cranley

    Wickenden, Keith

    Heddle, John

    Page, John (Harrow, West)

    Young, Sir George (Acton)

    Henderson, Barry

    Page, Rt Hon Sir R. Graham

    Hogg, Hon Douglas (Grantham)

    Page, Richard (SW Hertfordshire)

    TELLERS FOR THE AYES:

    Hooson, Tom

    Parris, Matthew

    Mr. Carol Mather and

    Howell, Ralph (North Norfolk)

    Patten, Christopher (Bath)

    Mr. Robert Boscawen.

    Hunt, David (Wirral)

    Patten, John (Oxford)

    NOES

    Alton, David

    Flannery, Martin

    Roberts, Ernest (Hackney North)

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

    Foster, Derek

    Robertson, George

    Beith, A. J

    George, Bruce

    Rooker, J. W.

    Benn, Rt Hon Anthony Wedgwood

    Graham, Ted

    Ross, Ernest (Dundee West)

    Bennett, Andrew (Stockport N)

    Hamilton, James (Bothwell)

    Rowlands, Ted

    Booth, Rt Hon Albert

    Hamilton, W. W. (Central Fife)

    Sever, John

    Bray, Dr Jeremy

    Harrison, Rt Hon Walter

    Silkin, Rt Hon S. C. (Dulwlch)

    Callaghan, Jim (Middleton & P)

    Haynes, Frank

    Skinner, Dennis

    Campbell-Savours, Dale

    Hooley, Frank

    Soley, Clive

    Clark, Dr David (South Shields)

    Howells, Geraint

    Spearing, Nigel

    Cocks, Rt Hon Michael (Bristol S)

    Hughes, Robert (Aberdeen North)

    Spriggs, Leslie

    Cohen, Stanley

    Lamond, James

    Thomas, Dr Roger (Carmarthen)

    Coleman, Donald

    McKay, Alten (Penlstone)

    Tinn, James

    Crowther, J. S.

    McKelvey, William

    Walker, Rt Hon Harold (Doncaster)

    Cryer, Bob

    Maynard, Miss Joan

    Welsh, Michael

    Dalyell, Tam

    Millan, Rt Hon Bruce

    Winnick, David

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

    Moyle, Rt Hon Roland

    Woodall, Alec

    Dixon, Donald

    Orme, Rt Hon Stanley

    Wrigglesworth, Ian

    Dobson, Frank

    Palmer, Arthur

    Young, David (Bolton East)

    Dormand, Jack

    Pavitt, Laurie

    Douglas, Dick

    Powell, Raymond (Ogmore)

    TELLERS FOR THE NOES:

    Dubs, Alfred

    Prescott, John

    Mr. George Morton and

    Eastham, Ken

    Race, Reg

    Mr. Hugh McCartney.

    Evans, John (Newton)

    Richardson, Jo

    Question accordingly agreed to.

  Clause 24

    SHORT TITLE, COMMENCEMENT AND EXTENT
    Amendment made : No. 30, in page 27, line 28 leave out 'and' and insert—
    '(cc) section 23(1A) and Schedule (Amendments of the Act of 1977 and the Scottish Act of 1978 relating to exemptions from charges for certaiin services and appliances) ; and '—[Dr. Vaughan.]

  New Schedule
    AMENDMENTS OF THE ACT OF 1977 AND THE SCOTTISH ACT OF 1978 RELATING TO EXEMPTIONS FROM CHARGES FOR CERTAIN SERVICES AND APPLIANCES

      PART I
      AMENDMENTS OF THE ACT OF 1977
      Exemption from charges for appliances
      1. In paragraph 1(1)(c) of Schedule 12 to the Act of 1977, for the words "or is undergoing full-time education in a school, or".

      259
      there shall be substituted the words "or is under 19 years of age and receiving qualifying full-time education, or".
      Exemption from charges for denial or optical appliances
      2.—(1) Paragraph 2 of the said Schedule 12 shall be amended as provided in this paragraph.
      (2) In sub-paragraph (1), under the heading "Glasses other than children's glasses", the sub-heading in the first column beginning "The lenses" shall be numbered "(i)" and the word "Frames" shall become a sub-heading numbered "(ii)" and in the definition of "children's glasses", for the words after "person", there shall be substituted the words "who, at the time of the testing of sight leading to the supply of the glasses or of the first such testing, was under 16 years of age or was under 19 years of age and receiving qualifying full-time education ; and".
      (3) For sub-paragraph (4)(a), there shall be substituted—
      "(a) was under 16 years of age or was under 19 years of age and receiving qualifying full-time education ; or".
      (4) For sub-paragraph (5)(a), there shall be substituted—
      "(a) the person for whom the glasses are supplied was at the relevant time of the age of 10 years or more and either under 16 years of are or under 19 years of age and receiving qualifying full-time education ; and".
      (5) In sub-paragraph (8), after the word "replacement, where it first occurs, there shall be inserted the words" and, in the case of dentures, to their being relined, or adjusted or having additions made to them,".
      Exemptions from charges for dental treatment
      3.—(1) Paragraph 3 of the said Schedule 12 shall be amended as provided in this paragraph.
      (2) In sub-paragraph (4), for the words from "(a) was under 21 years" to "in a school," there shall be substituted—
      "(a) was under 18 years of age or was under 19 years of age and receiving qualifying full-time education, or" ;
      and the words from "if" to the end shall be omitted.
      (3) In sub-paragraph (5), for the words from "under section 79(1) "to" to a denture" there shall be substituted the words "made with respect to any exemption under sub-paragraph (4) above".
      Interpretation
      4. For paragraph 7 of the said Schedule 12, there shall be substituted the following paragraph—
      "7. References in this Schedule to qualifying full-time education mean full-time instruction at a recognised educational establishment or by other means accepted as comparable by the Secretary of State, and for the purposes of such references—
      260
      (a) "recognised educational establishment" means an establishment recognised by the Secretary of State as being, or as comparable to, a school, college or university ; and
      (b) regulations may prescribe the circumstances in which a person is or is not to be treated as receiving full-time instruction.

      PART II
      AMENDMENTS OF THE SCOTTISH ACT OF 1978
      Exemption from charges for appliances
      5. In paragraph 1(1)(c) of Schedule 11 to the Scottish Act of 1978, for the words "or is undergoing full-time education in a school, or "there shall be substituted the words "or is under 19 years of age and receiving qualifying full-time education, or".
      Exemption from charges for dental or optical appliances
      6.—(1) Paragraph 2 of the said Schedule 11 shall be amended as provided in this paragraph.
      (2) In sub-paragraph (1), in the definition of "children's glasses", for the words after "person" there shall be substituted the words "who, at the time of the testing of sight leading to the supply of the glasses or of the first such testing, was under 16 years of age or was under 19 years of age and receiving qualifying full-time education ; and".
      (3) For sub-paragraph (4)(a), there shall be substituted—
      "(a) was under 16 years of age or was under 19 years of age and receiving qualifying full-time education ; or"
      (4) For sub-paragraph (5)(a), there shall be substituted—
      "(a) the person for whom the glasses are supplied was at the relevant time of the age of 10 years or more and either under 16 years of age or under 19 years of age and receiving qualifying full-time education ; and".
      (5) In sub-paragraph (8), after the word "replacement", where it first occurs, there shall be inserted the words "and, in the case of dentures, to their being relined or adjusted or having additions made to them,".
      Exemption from charges for dental treatment
      7.—(1) Paragraph 3 of the said Schedule 11 shall be amended as provided in this paragraph.
      (2) In sub-paragraph (4), for the words from "(a) was under 21 years" to "in a school" there shall be substituted—
      "(a) was under 18 years of age or was under 19 years of age and receiving qualifying full-time education, or" ;
      and the words from "if" to the end shall be omitted.
      (3) In sub-paragraph (5), for the words from "under section 71(1)" to "to a denture" there shall be substituted the words "made with respect to any exemption under sub-paragraph (4)."
      Interpretation
      8. After paragraph 6 of the said Schedule 11 there shall be inserted the following paragraph—

      "7. References in this Schedule to qualifying full-time education mean full-time instruction at a recognised educational establishment or by other means accepted as comparable by the Secretary of State, and for the purposes of such references—

      (a) "recognised educational establishment" means an establishment recognised by the Secretary of State as being, or as comparable to, a school, college or university ; and

      (b) regulations may prescribe the circumstances in which a person is or is not to be treated as receiving full-time instruction.".'.—[Dr. Vaughan.]

      Brought up, read the First and Second Time, and added to the Bill.
      Mr. Deputy Speaker (Mr. Richard Crawshaw): Will it be for the convenience of the House if I put together the Questions on the remaining Government amendments?
      Hon. Members: Yes.

  Schedule 1

    AMENDMENTS CONSEQUENTIAL ON CHANGES IN THE LOCAL ADMINISTRATION OF THE HEALTH SERVICE.
    Amendment made : No. 19, in page 41, line 9, leave out from 'in' to end of line 11 and insert
    ' paragraph 46(c), for the words "(a)(xvii) add" (xviii) ", there shall be substituted the words "(a)(xviii) add" (xix) "and in paragraph 47(c), for the words" (b)(xviii) add "(xix)", there shall be substituted the words "(b)(xix) add" (xx)".'.—[Dr. Vaughan.]

  Schedule 5

    OTHER MINOR AMENDMENTS
    Amendment made : No. 21, in page 54, line 3, at end insert—
    '(3A) In section 25(3) of that Act (remuneration of dentists providing general dental services) the words "except in special circumstances" shall be omitted and at the end there shall be inserted—"unless either—

    (a) the remuneration is paid in pursuance of arrangements made under section 33, or

    (b) the services are provided in prescribed circumstances and the practitioner consents,

    and it shall be the Secretary of State's duty, before he prescribes any circumstances for the purposes of paragraph (6), to consult such organisations as appear to him to be representative of the dental profession." '.—[Dr. Vaughan.]

  Schedule 6

    ENACTMENTS REPEALED
    Amendments made : No. 32, in page 58, line 19, column 3, at end insert—
    'In Schedule 12, in paragraph 3(4), the words from "if" to the end.'.
    No. 23, in page 58, line 26, at end insert
    ' In section 25(3), the words ", except in special circumstances.".'.
    No. 24, in page 58, line 55, [Schedule 6.], after 'of', insert ' "full-time education in a school".'
    No. 33, in page 59, line 9, column 3, at end insert—
    ' In Schedule 11, in paragraph 3(4), the words from "if" to the end.'.—[Dr. Vaughan.]
    Motion made, and Question put, That the Bill be now read the Third time :—
    The House divided : Ayes 127, Noes 64.

    Division No. 349]

    AYES

    [3.40 am

    Alexander, Richard

    Clark, Hon Alan (Plymouth, Sulton)

    Hannam, John

    Alton, David

    Clarke, Kenneth (Rushcliffe)

    Haselhurat, Alan

    Ancram, Michael

    Colvin, Michael

    Hawkins, Paul

    Aapinwall, Jack

    Cope, John

    Hawksley, Warren

    Beith, A. J

    Costain, A. P.

    Heddle, John

    Benyon, Thomas (Abingdon)

    Cranborne, Viscount

    Henderson, Barry

    Barry, Hon Anthony

    Dean, Paul (North Somerset)

    Hogg, Hon Douglas (Grantham)

    Biggs-Davison, John

    Dorrell, Stephen

    Hooson, Tom

    Blackburn, John

    Dover, Denshore

    Howell, Ralph (North Norfolk)

    Body, Richard

    Dunn, Robert (Dartford)

    Howells, Geraint

    Bright, Graham

    Fairgrieve, Russell

    Hunt, David (Wirral)

    Brinton, Tim

    Faith, Mrs Sheila

    Hunt, John (Ravensbourne)

    Brooke, Hon Petar

    Fenner, Mrs Peggy

    Jenkin, fit Hon Patrick

    Brown, Michael (Brigg & Sc'thorp")

    Fisher, Sir Nigel

    Jopling, Rt Hon Michael

    Bulmer, Esmond

    Fletcher-Cooke, Charles

    Kellett-Bowman, Mrs Elaine

    Cadbury, Jocelyn

    Fookes, Miss Janet

    Kershaw, Anthony

    Carlisle, John (Luton West)

    Garel-Jones, Tristan

    Kitson, Sir Timothy

    Carlisle, Kenneth (Lincoln)

    Grieve, Percy

    Knight, Mrs Jill

    Chapman, Sydney

    Griffiths, Peter (Portsmouth N)

    Lang, Ian

    Churchill, W. S.

    Gummer, John Selwyn

    Lawrence, Ivan

    Le Marchant, Spencer

    Onslow, Cranley

    Stanley, John

    Lennox-Boyd, Hon Mark

    Page, John (Harrow, West)

    Stevens, Martin

    Lloyd, Peter (Fareham)

    Page, Rt Hon Sir R. Graham

    Stewart, John (East Renfrewshire)

    Lyell, Nicholas

    Page, Richard (SW Hertfordshire)

    Stradling Thomas, J.

    MacGregor, John

    Parris, Matthew

    Taylor, Teddy (Southend East)

    McNair-Wilson, Michael (Newbury)

    Patten, Christopher (Bath)

    Temple-Morris, Peter

    McQuarrle, Albert

    Patten, John (Oxford)

    Thompson, Donald

    Major, John

    Pollock, Alexander

    Townend, John (Bridlington)

    Marlow, Tony

    Price, David (Eastleigh)

    Vaughan, Dr Gerard

    Maude, Rt Hon Angus

    Proctor, K. Harvey

    Viggers, Peter

    Maxwell-Hyslop, Robin

    Rathbone, Tim

    Waddington, David

    Meyer, Sir Anthony

    Rees-Davies, W. R.

    Wakeham, John

    Mills, lain (Meriden)

    Renton, Tim

    Walker, Bill (Perth & E Perthshire)

    Mitchell, David (Basingstoke)

    Rhodes James, Robert

    Waller, Gary

    Montgomery, Fergus

    Rhys Williams, Sir Brandon

    Ward, John

    Morrison, Hon Charles (Devizes)

    Ridley, Hon Nicholas

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

    Morrison, Hon Peter (City of Chester)

    Roberts, Michael (Cardiff NW)

    Wheeler, John

    Myles, David

    Sainsbury, Hon Timothy

    Wickenden, Keith

    Neale, Gerrard

    Silvester, Fred

    Young, Sir George (Acton)

    Needham, Richard

    Sims, Roger

    Nelson, Anthony

    Speller, Tony

    TELLERS FOR THE AYES:

    Neubert, Michael

    Spicer, Michael (S Worcestershire)

    Mr. Carol Mather and

    Newton, Tony

    Squire, Robin

    Mr. Robert Boscawen.

    Normanton, Tom

    Stanbrook, Ivor

    NOES

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

    Foster, Derek

    Roberts, Ernest (Hackney North)

    Benn, Rt Hon Anthony Wedgwood

    George, Bruce

    Robertson, George

    Bennett, Andrew (Stockport N)

    Graham, Ted

    Rooker, J. W.

    Booth, Rt Hon Albert

    Hamilton, James (Sothwell)

    Ross, Ernest (Dundee West)

    Bray, Dr Jeremy

    Hamilton, W. W. (Central Fife)

    Rowlands, Ted

    Callaghan, Jim (Middleton & P)

    Harrison, Rt Hon Walter

    Sever, John

    Campbell-Savours, Dale

    Haynes, Frank

    Silkin, Rt Hon S. C. (Dulwich)

    Clark, Dr David (South Shields)

    Hooley, Frank

    Skinner, Dennis

    Cocks, Rt Hon Michael (Bristol S)

    Hughes, Robert (Aberdeen North)

    Soley, Clive

    Cohen, Stanley

    Lamond, James

    Spearing, Nigel

    Coleman, Donald

    McKay, Allen (Penistone)

    Spriggs, Leslie

    Crowther, J. S.

    McKelvey, William

    Thomas, Dr Roger (Carmarthen)

    Cryer, Bob

    Maynard, Miss Joan

    Walker, Rt Hon Harold (Doncaster)

    Dalyell, Tam

    Millan, Rt Hon Bruce

    Welsh, Michael

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

    Morton, George

    Winnick, David

    Dixon, Donald

    Moyle, Rt Hon Roland

    Wocdall, Alec

    Dobson, Frank

    Orme, Rt Hon Stanley

    Wriggiesworth, tan

    Dormand, Jack

    Palmer, Arthur

    Young, David (Bolton East)

    Douglas, Dick

    Pavitt, Laurie

    Dubs, Alfred

    Powell, Raymond (Ogmore)

    TELLERS FOR THE NOES:

    Eastham, Ken

    Prescolt, John

    Mr. Hugh McCartney and

    Evans, John (Newton)

    Race, Reg

    Mr. James Tinn.

    Flannery, Martin

    Richardson, Jo

    Question accordingly agreed to.
    Bill read the Third time and passed.

INDUSTRIAL DEAFNESS
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Le Marchant.]
3.47 am
Mr. Martin Flannery: It is perhaps fitting that I should raise the question of industrial deafness following a serious debate on the NHS. Indeed, so little is known about industrial deafness, and so little legislation has been passed on the subject, that most people are totally unaware of its existence. Tonight—I should now say last night—by sheer coincidence, and quite independent of the fact that this Adjournment debate is being initiated by me, a Sheffield Member of Parliament, a public
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meeting has been held in Sheffield on the question of industrial deafness. I shall be interested to read in tomorrow's press precisely what was said, and I am sure that those who attended will want to know what I am saying.
I come from a steel area. I well remember that although I knew nothing about industrial deafness, I knew a great deal, even as a child, about noise in factories. On Saturday mornings I used to call for one of my older brothers who worked in a cutlery factory. In general, people worked on Saturday mornings in those days. After I met my brother, we used to go on to a football match. I used to wait outside the factory because I was horrified at the noise of the machinery inside. There are very few cutlery factories left in Sheffield now, but there is a great steel industry.
I became very much aware of industrial deafness when I became a Member

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of Parliament and held my first surgeries. Some of the industrially deaf came to see me. It was a sad sight. I remember the first man who came in. He sat in front of me, and I did not know that he was deaf until something in his appearance made me realise that something was wrong. He had with him the inevitable friend who spoke for him, because he could not lip read, could not tell what I was saying and was not confident enough to speak to me. He had been deaf for some years. They had come to me to try to find out about compensation, about which I knew very little.
In the line of duty I had to go around the great engineering and steel factories. I heard the big guns on occasion during the war and was horrified by them, but at least they were intermittent. The noise of the great factories is something that anyone who has never worked in a big factory would need to hear to apreciate. It is so dreadful and appalling, consistent and insistent, that one wants to get out. I remember trying not to look scared. The men were getting on with their work, but we were only visiting for a short time. There was noise everywhere, and it impinged on one to a terrible extent.
Having experienced noise, and having met some of those poor people, I began to make inquiries. I was appalled to learn of the position of the industrially deaf. I learnt that it is the largest sector of industrial disability in the community. Most people do not know that, and I did not know it. The first representations about industrial deafness were made in 1888. My hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) mentioned that point in an Adjournment debate before the recess. But despite all that has been said, it still remains the largest industrial hazard in our country. Despite the growth of cancer and carcinogens and so on, this is still the greatest hazard area. About 2 million workers are at risk from industrial deafness, and upwards of 1 million are in the 90 decibel and above area of noise.
The TUC is aiming, and has been for a long time, to reduce the level to 84 decibels. Most people think that if one decibel is added the noise is just a little worse. That is untrue. A noise level of 96 decibels is six times as great as a
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noise level of 90 decibels, and 90 decibels is the level at which most industries aim. Therefore, those poor people are exposed to that level of noise.
Industrial deafness causes acute embarrassment, because it is a gradual process. It is not like blindness. It is not sudden or dramatic. It creeps on gradually, and it exposes people who are or who have become deaf to increased danger. It lowers their ability to work. It limits their speech and imposes on them a great and sustained silence. It makes them lonely because they are so divorced from what is going on around them. They tend to stay at home because of embarrassment. They do not hear their fellow workers warning them, and they are therefore exposed to further dangers.
Industrial deafness cannot be helped by hearing aids because the sound is scattered in such a way that the roughness of the sound is merely amplified. That point was discussed yesterday at the ASTMS conference. I am a member of the TUC and of ASTMS, and I am sponsored by ASTMS as a Member of Parliament. Delegates were staggered when they were told that a hearing aid is of no benefit to the industrially deaf. They live in silence, and we cannot do anything for them.
Because of the lack of proper legislation the industrially deaf have to sue their employers, and to do so puts the pressure on the plaintiff. One Sheffield newspaper reported the case of a man who received £5,750, which was a Godsend to him and his wife. He said :
"I have worked for 40 years in the fettling shop and my deafness has grown over that time. It has made life embarrassing sometimes.
Because I cannot hear people properly, I give wrong answers to questions and it makes me look a bit stupid.
It gives me other problems, too. I may find it a bit difficult to get another job after I finish at the foundry because deaf people can be a danger to others.
This compensation will help enormously."
The newspaper then reported the comments of his wife after he received the compensation.
A great deal of what I am trying to say is linked to the inability of these people to get compensation. The foreword to the 1975 Health and Safety

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Executive report called "Framing Noise Legislation" said :
"There is in Britain almost no legislation dealing specifically with occupation noise ; only the Factories Act regulations on woodworking machines set precise limits on the noise to which workers may be exposed and these cover only a fraction of the workers in potential danger ".
The then Under-Secretary of State for Employment in 1973, the hon. Member for Warwick and Leamington (Mr. Smith) said :
"I regard the reduction of industrial noise as a matter of great importance. I am asking the Noise Sub-Committee of the Industrial Health Advisory Committee to study and report on the problems involved in framing practical and effective noise legislation.—Official Report, 10 July 1973 ; Vol. 859, c. 1246.]
The Government did that, but where are we in 1980? We are very little further on. That has happened under successive Governments, not just the Tories, although a certain amount of effort has been made based on what the Labour Government enacted.
The Health and Safety at Work etc. Act 1974 opened the way for legislation, but we have only voluntary codes and schemes and no real legislation. What are the problems involved in legislating? First, because nothing, or very little, was done in the past there is sheer ignorance throughout the community, except among the poor people who are suffering and their immediate relatives, of the real size and scope of the problem—the biggest problem presented by industrial health hazards at places of work. There should be no restriction on qualification for disablement benefit for occupational deafness other than that the person should be regarded as being deaf by an accepted definition of deafness and that that deafness shall have resulted from his or her occupational exposure to noise. Those should be the criteria. There must be a definition. If people are deaf they should be allowed compensation and that should be enshrined in legislation. At the moment it is not. Surely that is plain common sense.
There are reasons why successive Governments have done nothing about the problem. It is violently expensive to do so. Since 1975, when the initial scheme based on a voluntary code of practice—
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a scheme which is totally ignored for the most part—was introduced, fewer than 20,000 of all those who are partially and industrially deaf have been eligible for industrial injury disability benefit for noise—induced deafness. The DHSS ignored the fact that 2 million workers were at risk and drew up a scheme that was so tightly worded, and deliberately so, I believe, that benefits were restricted to those who had worked for at least 20 years as a fettler or grinder on castings, in drop forgings, or in rivetting in shipbuilding and repairing. That provision is separate from that applying in respect of woodworking machinery, which is more or less covered by legislation.
Even worse was to come, however. Not only was the scheme restricted so that no one applied for it—people did not know that they could apply for it, since it had never been publicised in a proper manner—but in July 1978 the DHSS published proposals to tighten the scheme even more. It admitted that so successful had the restrictions been that the demand for the benefit was only a third of the amount anticipated. In the first three years there were only 3,280 beneficiaries. Clearly, most workers did not even know of the scheme.
What a disgraceful situation exists in this important area of industrial relations in regard to compensation for people whom we have driven deaf and for whom there is no hope because nothing can be done for them with hearing aids! The failure of successive Governments to introduce adequate legislation means that most industrially deaf workers get no compensation. We have imposed that deafness, but we do nothing to help them. The problem is vast. Successive Governments have looked at its size, have realised how expensive it would be to grapple with it and have fled from the harsh reality that confronted them. In the meantime, the armaments bill goes up and up, and the money for the Health Service gets cut down and down.
I ask that, in common humanity, more money should be spent not only on occupational deafness, but on preventing occupational deafness so that people are not bound to go deaf in certain trades. This means major legislation or an addition to the Health and Safety at Work etc. Act. We must look at the relevant

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sections and introduce something that will be major in its impact.
One reason why Governments will do so little about this matter is that it means bringing noise levels down from 90 decibels and above, where the danger limits are, towards the safe 80 decibels or, as the TUC has been fighting for for many years, 84 decibels, which it thinks would be acceptable. But, as I have said, people must realise that 96 decibels is six times as loud as 90 decibels. It is not just the addition of an extra six decibels as most people think.
The central point is the number of consultants required to test regularly, through audiometry, workers who are exposed to noise. Yesterday the safety officer of ASTMS pointed out that the central theme of the whole business—apart from legislation—is to have massive audiometry tests and services to increase the numbers of examinations of those who are at risk. That means a steady lowering of the infamous 20-year rule. We want that rule abolished. It provides that unless a person has worked consistently for 20 years at a prescribed job with no interval—there is a 12-month rule as well—he cannot have, and is not eligible for, compensation. Imagine upwards of 2 million people having to work at particular jobs for 20 years, no matter how deaf they become, before they can apply for and obtain compensation. That vicious rule has been introduced to prevent that vast number of workers from getting the necessary compensation. We want that rule abolished and the provision for which I am asking enshrined in legislation.
Perhaps I might illustrate how it works. A person exposed to a large number of decibels—more than 90—will go deaf within three or four years, or less, but because he has not worked in a prescribed job for 20 years he will get nothing and will be deaf for the rest of his life.
If two men work side by side, one having worked for 20 years and not being totally deaf, the other having worked for 10 years and being totally deaf, the man who has worked for 10 years and is totally deaf will get nothing, whereas the man who has worked for 20 years and is not totally deaf will be able to get compensation. It is a stupid rule. It is wrong and it should be remedied. Such cases can be multiplied many times.
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I know that the Minister is a humane person. I want to press him for an assurance that proper legislation will at least be considered. Large numbers of people are interested in this small debate. Sheffield as a city is aware that I am raising this issue because there is a great deal of industrial deafness there. All the necessary evidence is available—we could go on collating more—to show the terrible plight of the industrial deaf. Compassion is not enough. Concrete, major help is needed. That means legislation, and the implementation and carrying into effect of such legislation requires money. Therefore, I ask the Minister to say that he wants to bring about something of the nature for which I am asking.
4.10 am
The Under-Secretary of State for Employment (Mr. Patrick Mayhew): I congratulate the hon. Member for Sheffield, Hillsborough (Mr. Flannery) on securing the selection of this important topic for an Adjournment debate. I commiserate with him—I am sure convincingly—on the hour at which he has had to bring it forward. The hon. Gentleman has trespassed into my speech and I shall not be able to make my reply as full as I had wished bearing in mind the seriousness that the topic deserves.
As a nation we live in, and have to live by, an industrial society. It is important that our industry should be efficient, but a factor in industrial efficiency is the safeguarding of the health and welfare of those who work in industry. That consideration must not be allowed to become obsessive. If it did, we should get our judgment out of balance, and a great deal of employment derived from conscientious, sensible and practical industrial enterprise would be lost. Like most other matters, it is a question of balance.
I agree with what the hon. Gentleman has said about the severe effects of deafness, whether it is caused by industry or by other means. We should not underestimate it merely because it is not immediately apparent. Deafness represents a great handicap for those who suffer from it. We must consider carefully the ways in which the handicap can be lessened.
We must hold, in the main, to the well-tried standards of common sense and the reasonably practicable. We should always

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be alert for new evidence that existing practices may be causing injury or disease in industry in ways hitherto unsuspected. I share to the full the hon. Gentleman's concern for those who are at risk of contracting deafness by reason of exposure to noise at work. That vulnerability is an example of a risk that we in Britain were late in coming to appreciate.
I am a great admirer of the flexibility of the common law. The great Lord Atkin said that
"the categories of negligence are never closed".
I find it rather surprising that the first common law case in which the duty of care for the safety of workpeople was found to have been broken in the context of noise was as late as 1972. However, I think that the hon. Gentleman was mistaken when he said that because of the 20-year rule it was necessary for an individual to work for 20 years, no matter how deaf he became, if he was to obtain any compensation. That is not so. It is well established in common law that if an employer exposes his workpeople to levels of noise that he knows, or ought reasonably to know, are dangerous, and exposes them to a foreseeable risk of becoming deaf, he is liable to compensate them in sums often much more substantial than industrial injury benefit could yield. There is not only one avenue towards compensation. Trades unions are helpful to their members in bringing cases. Legal aid is available for those who are not members of trades unions. Common law is available to provide a means to obtain compensation.
The duty to take reasonable care with exposure to noise levels is firmly established at common law. We can take some comfort from the fact that the development has been assisted by the code of practice that the Department of Employment published in 1972. It is a voluntary code for reducing the exposure of employed persons to noise. It was prepared by a committee on which the CBI and the TUC were represented, together with specialists in noise control.
The code recommends that noise should be reduced to the lowest level reasonably practicable, and that where this does not reduce exposure to below a level of 90 decibels for eight hours,
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or an equivalent exposure, workers should use ear protectors. I agree with the hon. Gentleman that we must give a great deal of attention to prevention. That is the way to limit the numbers who in future suffer industrial deafness. I agree that we, must do all that we reasonably can to alert industry to these dangers and to provide reasonable and practical legislation to back up the voluntary code of practice. I shall say a little in a moment about the legislation that is being proposed.
The limits in the code depend on both the noise level and the length of time that workers spend in noisy places—in fact on what is called the "noise dose". It is made clear that the possibility of restricting the time that people need to remain in noisy places is one of the measures for restricting noise dose that ought to be considered.
The code was followed by a report, to which the hon. Gentleman referred, entitled "Framing Noise Legislation", prepared by the industrial health advisory sub-committee. This broadly recommended that statutory backing should be given to the code of practice. Comment on this report was referred to the Health and Safety Commission, which, as the hon. Gentleman knows, is an independent body answerable to my right hon. Friend the Secretary of State and which advises the Government and the public on matters of industrial safety, amongst other safety matters. It is considering proposals for legislation within the framework set up under the Health and Safety at Work etc. Act 1974.
The Act imposes general duties on employers and employees, and they apply just as much to injury from noise as to any other injury. The 1970 code of practice gives good guidance on what can reasonably be done to comply with the requirements as far as they relate to noise. The 90 decibel limit is specifically included in the Woodworking Machines Regulations 1974, but apart from tractor cabs and a couple of regulations that bear upon North Sea oil operations, they are, to the best of my knowledge, the only statutory regulations or provisions that impose a decibel limit.
Inspectors of health and safety use their powers to require action when it is necessary. There are eight inspectors who are full-time specialists in noise control, and

273
a further three are under training. They are based on the Health and Safety Executive's seven field consultancy groups, each in a different part of the country. While they prefer to make progress on a voluntary basis, they do take enforcement action. Between 1975 and 1978 a total of 112 improvement notices were issued concerning noise. Of those. 27 required improvements to comply with the general duties of the 1974 Act and 85 were under the woodworking regulations.
The most effective way of reducing risk is to lower the noise level. The 1972 code of practice gives precedence to the control of noise by engineering means and recommends that noise should be reduced to the lowest level reasonably practicable. Noisy machines and workrooms can be acoustically treated and quieter processes can be used. However it is not always practicable to reduce noise at source, and it is then necessary to use other protective means.
Ear plugs or ear muffs might be an essential safety measure where people have to work in a noisy environment. I know that the hon. Gentleman's constituency contains many—he has reminded us of some—industrial activities that are inherently and inevitably noisy. The Health and Safety Executive takes the view that ear muffs or ear plugs are usually less effective than engineering control because it is difficult to ensure that they are worn all the time that they are needed, and because it is more difficult to be certain that they are providing adequate protection under industrial conditions. Nevertheless, it is important that they are provided, and above all used, where people must work in high noise levels.
Restriction of time spent in noisy environments is another way of limiting noise dose that is covered in the code of practice. This, too, is difficult to control in industry. It is necessary to halve the time that a person spends in a noisy environment to obtain the same effect as a 3-decibel reduction in noise level, and this can be very difficult to achieve. It is a measure that should be considered. It is a matter of taking each case on its merits and deciding what is reasonable and effective.
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The Government wholly understand the need for niose control. The Health and Saftey Commission is framing proposals for new legislation which I look forward to receiving. The hon. Member will, however, appreciate that I do not yet know and cannot know what decibel limit it will recommend. The commission and the executive have extensive arrangements for consulting industry and trade unions on the preparation and implementation of legislation, and I look to these to ensure that proposals are reasonable and that progress is made as rapidly as is economically possible.
The hon. Member's concern and the Government's is shared by our European partners. The Commission of the European Communities has asked its advisory committee on safety, hygiene and health protection at work to discuss the basis for a draft directive on the protection of workers from the hazards associated with harmful exposure to noise at work, and limit values will clearly be an important consideration. A preliminary discussion is to take place on 18 and 19 June at a tripartite working party of this committee comprising experts from government, employers' and workers' organisations. This is clearly an important new initiative, and there will be consultation with interested parties as the European Commission develops its proposals.
Any future action must take into account the cost for industry as well as the benefit of reduced risk of hearing damage. If we were totally to remove any possible risk of industrial deafness, we would do away with perhaps, hundreds of thousands of jobs. That must be avoided. We must make our living as an industrial society and we must ensure that a reasonable balance is maintained between costs and benefits.
I am, therefore, grateful to the hon. Member for ventilating this serious issue today. There are one or two points I should like to write to him about which time prevents me from filling in now. I am optimistic that we shall find the right balance. I am sure that we shall be assisted by this morning's short debate.
Question put and agreed to.
Adjourned accordingly at sixteen minutes past Four o'clock am.

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  Al (Hatfield)
  Al (Hatfield)
  A6 (Market Harborough Bypass)
  A6 (Market Harborough Bypass)
  Road Construction Sub-Units
  Road Construction Sub-Units
INDUSTRY
  Industrial Investment
  Industrial Investment
  Coal Emulsion Plant (Sunderland)
  Coal Emulsion Plant (Sunderland)
  British Steel Corporation
  British Steel Corporation
  Fibreglass Industry
  Fibreglass Industry
  Shipbuilding Industry
  Shipbuilding Industry
  Houghton-le-Spring and Northern Region
  Houghton-le-Spring and Northern Region
  Biotechnology
  Biotechnology
  National Enterprise Board
  National Enterprise Board
  ASR Sevronton
  ASR Sevronton
  Scotland (Central Region)
  Scotland (Central Region)
  Shipping and Shipbuilding Industries (Assistance)
  Shipping and Shipbuilding Industries (Assistance)
  Steel Industry
  Steel Industry
  Nationalised Industries
  Nationalised Industries
DEFENCE
  North Atlantic Treaty Organisation
  North Atlantic Treaty Organisation
  Europe (United States Forces)
  Europe (United States Forces)
  British Shipbuilders (Orders)
  British Shipbuilders (Orders)
  Ordnance Premises (Woolwich and Kidbrooke)
  Ordnance Premises (Woolwich and Kidbrooke)
  Fitness and Flab Study
  Fitness and Flab Study
SOCIAL SERVICES
  Westminster Hospital and Medical School
  Westminster Hospital and Medical School
  Family Income Supplement
  Family Income Supplement
  Cannabis and Heroin Prescriptions
  Cannabis and Heroin Prescriptions
  Petrol (Lead Content)
  Petrol (Lead Content)
  Ukranian Exiles
  Ukranian Exiles
  Trent Region
  Trent Region
  Dental Fees
  Dental Fees
  Psychogeriatric Services (Derbyshire)
  Psychogeriatric Services (Derbyshire)
  Prescription Charges
  Prescription Charges
  Chronic Sick
  Chronic Sick
  Death Grant
  Death Grant
  Franks Report
  Franks Report
  Homoeopathic Medicine
  Homoeopathic Medicine
  Medical Supplies
  Medical Supplies
  Consultant Posts
  Consultant Posts
  Broadmoor Hospital
  Broadmoor Hospital
  Old People's Homes
  Old People's Homes
  Social Security (No. 2) Bill
  Social Security (No. 2) Bill
  General Practice
  General Practice
  Widows
  Widows
  "Health Trends"
  "Health Trends"
  Hospital Waiting Lists (Walsall)
  Hospital Waiting Lists (Walsall)
  National Health Service
  National Health Service
  Hospital Facilities (Walsall)
  Hospital Facilities (Walsall)
  Hospital Accommodation
  Hospital Accommodation
  Hospital Building and Maintenance
  Hospital Building and Maintenance
  Hospital (Facilities for Children)
  Hospital (Facilities for Children)
  International Year of Disabled People
  International Year of Disabled People
  National Health Service Staff
  National Health Service Staff
  Deaths (Ethnic Origin)
  Deaths (Ethnic Origin)
  COMMON AGRICULTURAL POLICY
  COMMON AGRICULTURAL POLICY
  SOUTH AFRICA (LABOUR ATTACHE)
  SOUTH AFRICA (LABOUR ATTACHE)
  EUROPEAN COMMUNITY (COUNCIL OF MINISTERS)
  EUROPEAN COMMUNITY (COUNCIL OF MINISTERS)
  Quangos
  Quangos
AGRICULTURE, FISHERIES AND FOOD
  Sheep Scab
  Sheep Scab
  Farm Price Increases
  Farm Price Increases
  European Community (Sheepmeat Regime)
  European Community (Sheepmeat Regime)
  Sugar
  Sugar
  Strawberries
  Strawberries
  Maleic Hydrazide
  Maleic Hydrazide

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

RUBELLA VACCINATION
Baroness VICKERS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action is being taken to bring to the notice of all parents that female children should be vaccinated with rubella vaccine in order to prevent children being born handicapped.
Lord CULLEN of ASHBOURNE: My Lords, measures are taken by area health authorities to see that vaccination is arranged for schoolgirls between their 11th and 14th birthdays and parents are, of course, contacted to inform them and to obtain their consent. The Department
2
of Health and Social Security launched a campaign to increase the uptake of rubella vaccination in June 1979 and health authorities were encouraged to intensify their rubella vaccination programmes.
Baroness VICKERS: My Lords, I thank the noble Lord for that reply. May I ask whether doctors are required to put up notices in their surgeries, and whether health visitors take round leaflets when they visit, as it is a very important exercise to have this vaccine to prevent children being born handicapped in the future?
Lord CULLEN of ASHBOURNE: My Lords, I cannot answer directly whether these notices have to be put up in general practitioners' surgeries. The whole vaccination programme is for the area health authorities to monitor and to guide.
Lord ROBERTSON of OAKRIDGE: My Lords, would the Minister agree that an additional way to deal with the rubella problem would be to ensure that all women undergoing fertility treatment are tested for rubella immunity before undergoing such treatment? Can the Minister state whether this is standard practice in National Health Service clinics at least?
Lord CULLEN of ASHBOURNE: My Lords, in the circular sent by the department to health authorities announcing the publicity campaign for rubella vaccination, it is urged that all women of child-bearing age who have not already received vaccine at school or elsewhere should be tested and vaccinated, where appropriate. Health authorities appreciate the particular importance of ensuring that a non-immune woman attending a fertility clinic is protected, and make arrangements for such patients to be screened and vaccinated before embarking on active treatment for their infertility.
The case that I think the noble Lord has in mind, as he kindly wrote to me about this matter, must be a particularly rare case, and is the more surprising since the woman to whom he referred is a teacher, and the DHSS has made a point of ensuring that the Department of Education and Science include advice on this subject for teachers on recruitment.
Baroness FISHER of REDNAL: My Lords, can the noble Lord give the House some information regarding the uptake of the vaccine among school-girls? I know that the department was hoping for a 90 per cent. to 95 per cent. uptake. Are we anywhere near those targets?
Lord CULLEN of ASHBOURNE: My Lords, I understand that the uptake was recently 70 per cent. and has now reached somewhere around 80 per cent.
Lord AUCKLAND: My Lords, can my noble friend say first whether there are adequate supplies of this vaccine, particularly in rural areas? Secondly, are tests on this vaccine being tightened up, in view of the very few but tragic accidents which have happened as a result of these vaccinations?
Lord CULLEN of ASHBOURNE: Yes, my Lords, I understand that there are ample supplies of vaccine and that all efforts are made to see that the vaccine is in perfect condition.

THE FORT WILLIAM PULP MILL
2.40 p.m.
Lord GLENKINGLAS: My Lords, on behalf of my noble friend Lady Elliot of Harwood and at her request, I beg leave to ask the Question which stands in her name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware of the very bad effect the imminent closure of the Scottish Pulp and Paper Mills at Fort William is having on forestry in Scotland.
The MINISTER of STATE, SCOTTISH OFFICE (The Earl of Mansfield): My Lords, the Government are extremely sorry that the pulp mill at Fort William is to close, and are very much aware of the concern of the forestry industry in Scotland. The object remains to encourage the establishment of a wood-based industry at Fort William and the possibilities are being urgently re-examined. Meanwhile, strenuous efforts are being made to develop alternative outlets for the wood, partly by a redistribution to existing British industry, and partly by export as a short term measure. There are good prospects of maintaining employment in forest harvesting and wood haulage on that basis.
Lord GLENKINGLAS: My Lords, I should like to thank my noble friend for that reply. Is he aware that the pulp mill at Fort William was the first big manufacturing industry in the Highlands for 75 years? While I welcome everything he says about trying to develop another one, or some alternative, I do not believe that shifting the timber elsewhere, and particularly exporting it, would be of very much value to the Highlands. Secondly, may I ask my noble friend whether the strengthening of the forestry industry, which is a very long-term industry, is not the perfect use for some of the oil revenues which are, by nature, rather short term? Lastly, will my noble friend agree that it is remarkable that my noble friend Lady Elliot should have asked not about sheep but about timber?
The Earl of MANSFIELD: My Lords, I appreciate what my noble friend says. Unfortunately, the fact remains that this plant has never been viable and, in any event, was coming to the end of its useful life so far as the machinery is concerned. In those circumstances, the firm of Wiggins Teape gave notice that they could no longer continue in production. So far as my noble friend's second point is concerned, I want to emphasise that the export of wood as a raw material in these circumstances is of course, if I may say so, repugnant, but it will in fact save not only the private forestry sector but also the jobs of many employees of the Forestry Commission, and it is a short-term measure to keep the forestry industry going.
So far as my noble friend's third question is concerned, I am happy to say that we now have, by virtue of what my right honourable and honourable friends have achieved in Brussels, a sheepmeat regime which will bring much-needed relief to Scottish sheep farmers and at the same time a steady supply of sheepmeat to the consumer at no extra cost.
Lord IRVING of DARTFORD: My Lords, is the Minister aware that this has caused the greatest disappointment to the workers and company alike because of the failure to bring this project to a successful conclusion? Will he bear in mind that there is a contradiction in our closing one of the outlets for forest products when he, as I know well, is working very hard to bring about an effective forestry policy? Will he accept that the two go together: that the paper industry and the pulp mill help the whole of the forestry policy by taking the thinning trees and thereby enabling greater profitability and more effective working of mature forests? Will he therefore keep this scheme in mind and under constant review?
The Earl of MANSFIELD: Yes, my Lords, I am aware of the keen disappointment of the workforce about this closure; indeed I met a section of them only last week, and if I had any doubts they certainly removed them. The difficulty of the matter is that although, as my right honourable friend announced in another place, the Government had assistance available under Section 7 of the Industry
6
Act 1972, and that by volume was comparable to other projects of comparable size and importance, and furthermore we should have been in a position to pay regional development grants up to the statutory provisions, and bearing in mind the fact that the Forestry Commission were prepared to offer the raw material at an extremely keen price, in spite of all those inducements, if I may so call them, the other company which was going to come in with Wiggins Teape felt that the return on their capital would not be sufficient for the project to go forward. It is in those circumstances that Wiggins Teape announced the closure of the plant and it is in those circumstances that the Government, as a matter of extreme urgency, are looking at a number of alternatives, one of which we hope might provide a solution, but I would not want to he over-optimistic at this stage.
Lord STRABOLGI: My Lords, may I ask the noble Earl to confirm that the Government will do all they can to encourage the home-grown timber industry in the United Kingdom so that we do not have to rely quite so heavily on imports from Finland and the Soviet Union?
The Earl of MANSFIELD: Yes, my Lords.
Lord SANDFORD: My Lords, while agreeing with my noble friend that probably the best thing in the circumstances has been done in this case, may I ask whether he would agree that it enormously reinforces the importance of getting a satisfactory strategic forestry policy for this country formulated and implemented?
The Earl of MANSFIELD: My Lords, my noble friend may be aware, and certainly some Members of your Lordships' House will know, that Ministers responsible for forestry are currently reviewing aspects of forestry policy, and we hope to be in a position to make an announcement soon.
Lord UNDERHILL: My Lords, may I ask the noble Earl to say what is the view of the Scottish Development Agency and the Highlands Development Board, and is this not a case where, if private industry cannot solve what is really a social necessity of the area, there is possibly a case for public industry?
The Earl of MANSFIELD: My Lords, I hoped I had already covered what the noble Lord is asking. The State agencies were ready, willing and, if I may say so, filled with necessary funds to come to the aid of the particular firm in this instance who were going to take over from Wiggins Teape and produce a new wood processing industry at Fort William. As I said, we were, as a Government, available to offer advice and encouragement and, perhaps more important, the necessary cash—I would emphasise, on a grant basis and not on a basis of loan—which we hoped would be sufficient to continue the employment of those who are currently engaged in the Wiggins Teape operation at Fort William. But, as I said, unfortunately the Canadian firm in question came to the conclusion at the end of the day that the whole operation would not be sufficiently profitable so far as they were concerned, in the sense that it would not give them the return on their money to which they felt they were entitled; and in those circumstances they withdrew.

UGANDA: PROPOSED ELECTION OBSERVERS
2.48 p.m.
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are prepared to nominate an observer, as part of a Commonwealth team, to enable an election to be held in Uganda on the pattern of the recent election in Zimbabwe.
Lord TREFGARNE: My Lords, if the Commonwealth Secretariat were to circulate such a request we would certainly consider it carefully. It would of course be for the Ugandan Government to approach the Secretary-General first.
Lord BROCKWAY: My Lords, while appreciating that Answer, may I ask whether there has not been remarkably comprehensive support for this proposal, first by ex-President Binaissa, secondly by President Nyerere of Tanzania, and thirdly by the fact that the new Government are giving consideration to it? In view of the unfortunate differences
8
revealed this weekend between Kenya, Tanzania and Sudan, may I ask the noble Lord to say that the British Government will do everything they can, through the Commonwealth Secretariat, to obtain a harmonious solution to this problem and a democratic election?
Lord TREFGARNE: My Lords, as I said earlier, in the first instance this is really a matter for the Ugandan Government, and I should not want to be pressed to give a Government view before we knew precisely what the Ugandan Government had in mind. However, as I also said earlier, we shall certainly consider the matter very carefully in due course, if called upon to do so. I can say that a representative of the Secretary-General visited Kampala just before the latest events to discuss a possible Common-wealth role in the elections with the then President, President Binaissa, and we have also been in touch with the Secretariat.
Lord GORONWY-ROBERTS: My Lords, I entirely agree with my noble friend Lord Brockway about the need to do everything possible to promote political stability based on democracy in Uganda, and I welcome very much the reference that the Minister has made to the Commonwealth Secretariat. May I ask the noble Lord—without having given him previous notice—whether we may expect an early Statement perhaps in this House and in another place about the situation in Uganda arising from the quite horrifying effects of the widespread famine in that country in the last two or three months? If an initiative were taken in regard to putting down a Private Notice Question, would the noble Lord convey to his noble friend the fact that the whole House would appreciate an opportunity to hear what the Government think can be done with others to alleviate the situation in Uganda?
Lord TREFGARNE: Certainly, my Lords; I should be very glad to answer Questions put down for me, but of course Private Notice Questions are a matter for my noble friend the Leader of the House.
Lord GLADWYN: My Lords, is it not true that a state of anarchy now prevails in Uganda? If that is true, is it

9
not quite impossible to hold elections as long as that state of anarchy prevails?
Lord TREFGARNE: My Lords, the security situation in Uganda is far from satisfactory, but I do not think that I should go so far as to say that a state of anarchy prevails.
Lord SHINWELL: My Lords, may I ask the Minister whether the Government are aware that the previous President, General Amin, has already declared that he is ready to return to Uganda and prevent the country falling into ruin, or whatever is likely to happen to it? Should not the Government be careful not to get their fingers burned by entering into this affair unduly?
Lord TREFGARNE: My Lords, I did not see the broadcast to which the noble Lord refers, but I understand that what the noble Lord mentions was one of the things that Mr. Amin said. With regard to British participation in this matter, I consider that we need to be careful not to draw too many parallels between this case and the case of Zimbabwe, which was referred to in the original Question. The two situations are very different indeed, and solutions found to be appropriate in one case may not necessarily be appropriate in another.
Lord SEGAL: My Lords, will Her Majesty's Government take a more active part in approaching the voluntary agencies and persuading them to increase their aid to Uganda, as well as in ensuring that this aid reaches the quarter where it is most needed?
Lord TREFGARNE: My Lords, in my experience the voluntary agencies need no persuading by the Government in these matters.
Lord GRIDLEY: My Lords, may I ask my noble friend Lord Trefgarne whether it is really reasonable to expect us to wait before anything is done, in order for approaches to be made by the Ugandan Government? Is it not a fact that the most frightful conditions are applying in Uganda at the present moment? Can this business really wait, bearing in mind the possibility of more deaths and events of that nature? Should we not initiate some action in this respect?
Lord TREFGARNE: My Lords, I think that we would be transgressing the proper procedures in this matter if we were to interfere in the internal affairs of Uganda. In any event, it is quite clearly for them in the first instance to invite the United Nations to supervise their elections.
Lord BROCKWAY: My Lords, will the noble Lord at least draw the attention of the Commonwealth Secretariat to this exchange in this House?
Lord TREFGARNE: My Lords, I am quite certain that the Commonwealth Secretariat is already aware of these matters.

IMMIGRATION STATISTICS
2.54 p.m.
Lord BARNBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper, and with your Lordships' indulgence, to add that it was of course put down before the publication last week of the figures for the first quarter of the year.
The Question was as follows:
To ask Her Majesty's Government how many people, during the last quarter for which figures are available, were admitted for residence in the United Kingdom and what proportion were non-white; how many people were apprehended for overstaying (students, et cetera) and how many for illegal entry, and of such figures how many in each category were expelled.
The PARLIAMENTARY UNDER-SECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, statistics of people admitted for settlement are compiled by nationality, not by colour or ethnic origin. Figures for the quarter ending 31st March 1980, including illegal entrants, are contained in the Home Office Statistical Bulletin published on 4th June, a copy of which is in the Library.
During the quarter the total number accepted for settlement on arrival was 7,900 of whom 4,350 (55 per cent.) were

11
citizens of new Commonwealth countries and Pakistan; 486 illegal entrants were detected by the Immigration Service; and 227 illegal entrants were removed from the country.
Comprehensive figures relating to overstayers are not available, since some are dealt with by the Home Office and others independently by the police. During the quarter, however, 655 overstayers were recorded as having been traced as a result of inquiries involving the overstayers tracing section of the Home Office.
Records of deportation orders do not distinguish between those made in respect of overstayers and others. During the quarter 210 deportation orders were enforced, a substantial number of which would have related to overstayers.
Lord BARNBY: My Lords, I thank the Minister for that reply. May I ask whether, allowing for the understatement of the overstayers and the illegal entrants, it would appear from the figures that he has quoted that the total inflow has apparently been at the rate of nearly 90,000 per annum? Is the Minister aware that in terms of immigration this figure is very distasteful to a very large part of the community, and is not in accord with the intentions of the Government announced earlier in the year? Will the Minister ask his right honourable friend whether he will consider a review of the question of provision of larger funds for voluntary repatriation, particularly in view of both the present state of unemployment and the incidents at Bristol?
Lord BELSTEAD: My Lords, with regard to the figure which my noble friend gave in the first part of the supplementary question, the figure last year for settlement in this country was in the order of 70,000. With regard to the overall Government view of this general figure, for which my noble friend asked, of course the Government take a very serious view of those who attempt to circumvent the immigration control and who come here not lawfully; in other words, who do not fall within the figure given.
I should like to say to my noble friend that except where in individual cases there are powerful arguments against
12
such action, we do not hesitate to make full use of the considerable powers available to remove offenders from this country. With regard to the third part of my noble friend's supplementary question, the answer is, No.
Lord AVEBURY: My Lords, does not the Minister agree that we should bear in mind not only the figures for the number of people coming here for settlement, but also the figures for the number of people leaving this country for settlement overseas? Will he take every opportunity to emphasise that ever since the figures were first recorded the number of people leaving this country each year has exceeded the number of those arriving?
With regard to the figures that the noble Lord has given, extracted from the quarterly statistics of overstayers and illegal entrants, does not this quite tiny number of persons who were found guilty of overstaying or illegal entry indicate that very few people are either entering or remaining in this country in breach of the immigration laws? Will the noble Lord and his right honourable friend the Home Secretary lose no opportunity of dispelling the myths that surround this matter and which unfortunately are being given currency in this House?
Lord BELSTEAD: My Lords, the Question asked by my noble friend Lord Barnby is about the number of people coming into this country, not the number of people going out, and both my noble friend and I have confined our questions and our answers to that aspect of the case. If the noble Lord wishes to ask me about other aspects of the case, then if he cares to put down a Question I shall of course be at his service to answer it. So far as overstayers are concerned, perhaps it would be to the convenience of the House if I said this. During the whole of last year there were about 1,800 overstayers recorded, over 500 during the final quarter. I understand that the increase in the first quarter of this year—because that is what the figures show—was due in part to the improved methods of detection, and was also due to the fact that it was only during the course of the last year that the overstayers' section of the Home Office became fully established. Before that, the numbers detected would not have been recorded in such a systematic way. I

13
thought the noble Lord might like that information in reply to the last part of his question.
Lord HATCH of LUSBY: My Lords, will the noble Lord the Minister take this opportunity to disassociate his Government from the categorisation of people in this country, whether they be immigrants or any others, into white and non-white? If he does so, I am certain he will have the support of all parties on this side. In doing so, will he make it plain to his noble friend behind him that we in this country find it offensive to differentiate people according to the colour of their skin?
Lord BELSTEAD: My Lords, I think the Answer which I gave originally speaks for itself.
Lord AVEBURY: My Lords, does the noble Lord not agree, in relation to the figures which he gave of the number of overstayers, that the vast majority of these people are people who have no intention of settling permanently in the United Kingdom, but are, for example, students who have omitted to renew their leave to remain in the United Kingdom while they are continuing to pursue a course of studies, and that this is no reason to assume, just because they have not complied exactly with the Home Office formalities, that they will ultimately seek to remain here permanently?
Lord BELSTEAD: No, my Lords, I do not agree with what the noble Lord is saying.
Lord BARNBY: My Lords, does my noble friend not agree that dilution of the British race by too large an inflow of non-whites is not in accordance with the feeling of the majority of British subjects in this country?
Lord BELSTEAD: My Lords, the figures which Governments collect—and this Government are no exception to this —refer to settlements on arrival here, acceptances on arrival of citizens from the New Commonwealth and Pakistan, and settlements on removal of the time limit, as it is called. I think it is absolutely right that the figures should be collected in this way, but, beyond that, I repeat that the Answer which I gave originally speaks for itself.

USA NUCLEAR ALERT
3.3 p.m.
Lord PEART: My Lords, I beg leave to ask Her Majesty's Government a Question of which I have given Private Notice. The Question is as follows:
"To ask Her Majesty's Government what representations they have made to the United States Government following the second military and nuclear alert within four days".
Lord DENHAM: My Lords, with the leave of the House, at a convenient moment after 3.30 my noble friend Lord Ferrers will be answering this Question in the form of a Statement.

BUSINESS
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, with the permission of the House, may I ask the noble Lord the Chief Whip a question about to-day's business? In view of the length of the list of speakers to-day on the Housing Bill, is it still the Government's intention to take the Iran trading sanctions orders at such a late hour tonight? I think the House had hoped that, since these orders do not lapse until 28 days after they have been laid, and since there has been such widespread interest in the House about them, the Government might have found another time for them.
Lord DENHAM: My Lords, I appreciate that, in view of the length of the list of speakers for the Second Reading of the Housing Bill this afternoon, it may well mean that the House might consider the two Iran sanctions orders at a rather later hour than would be desirable; but Her Majesty's Government are most anxious that Parliament should have an opportunity to consider these orders as soon as possible after they are laid. They have in fact already been considered in another place—they were considered last Wednesday—and I think your Lordships may feel that, in view of that, too, it would possibly be undesirable that it was left too long before they were considered in this House.
Having said that, of course we have a rather full programme of legislation at the moment, and it is very difficult to know which day to choose so as to be least inconvenient to your Lordships. Last

15
Thursday and Friday, for instance, we were very much taken up with the Transport Bill. They, of course, could have been possible days on which to take them; but I took the view that possibly that might have been even more inconvenient to your Lordships than choosing today. I hope the House will agree that at this late stage it would be wrong to postpone consideration of these two orders, important though they are. I regret very much the inconvenience to those noble Lords who are intending to take part in the debate on them, but if I may express the hope that the debate on the Second Reading of the Housing Bill, important though that Bill is, will not be too prolonged, then we may reach these two important orders at not quite so late an hour.
Lord BYERS: My Lords, may I ask the noble Lord when he thinks the debate on the Iran sanctions orders is going to come on tonight? If it is going to be any time after 8 o'clock, it will be quite wrong, in our view, to take them at such a late hour.
Lord DENHAM: My Lords, it is very difficult to work out from a list of speakers exactly when an item of business will be reached. I hope it will not be nearly as late as the hour which the noble Lord, Lord Byers, indicates. I am hoping we may start taking these orders well before 9 o'clock.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, the noble Lord is always courteous and always mindful of the convenience of the House, but has he not dug a pit and fallen into it himself? Has he not provided for the House a totally indigestible programme of legislation—so much so that, if this side of the House were sitting on the Government side, the protests from the Conservative Benches about the amount of important business which was being pushed through at a totally unreasonable hour would have been legion?
Lord DENHAM: My Lords, I am quite certain that, if it is possible to dig a pit and fall into it oneself, I will have done so. But I would say to the noble Baroness that this is a difficult Session —the pit that I have dug—but previous
16
Governments have dug equally deep pits, and the inconvenience to your Lordships has been possibly as great on those occasions.
Lord SHINWELL: My Lords, on another aspect of the important submission made by my noble friend on the Front Bench, the Opposition Chief Whip, may I ask the noble Lord whether it is correct, as reported in the Official Report of another place, that it is the intention of the Government, after your Lordships' House has dealt with this subject, that it shall be dealt with in another place, not by normal procedure but by the guillotine; and, if that is so, is that not going a bit too far with an important measure of this character?
Lord DENHAM: My Lords, my understanding is that these orders have already been approved by another place.
The Earl of HALSBURY: My Lords, does the noble Lord agree that if speakers on the Second Reading of the Housing Bill were to do what they are asked to do, which is to confine their speeches to 10 minutes, with an extra 10 minutes for the three Front Benches speakers, then the whole debate would be through in four hours and, as it is now three o'clock, we would be through by seven?
Lord DENHAM: My Lords, I think that is probably true. I also think that if that desirable scheme of things were to take place, the debate on the Housing Bill would be very much better for it.
Lord BROCKWAY: My Lords, while appreciating the difficulties of the noble Lord, may I ask him this question: In view of the fact that since we discussed this matter in this House further modifications have been made in the proposals for sanctions, ought we not to have a much greater opportunity than late tonight to discuss this order, the lateness of which will make it impossible for some of us who are very concerned about the matter to attend?
Lord DENHAM: My Lords, I understand that, although there may have been changes since the parent Act went through, there have not been any changes since the orders were laid. That is my understanding.
Lord FOOT: My Lords, may I ask the noble Lord whether there is the slightest prospect of speakers on the Housing Bill confining themselves to 10 minutes; and if they did would not this be wholly unprecendented in the history of this House?
Lord DENHAM: My Lords, it would be none the less desirable.

FALMOUTH CONTAINER TERMINAL BILL
The DEPUTY CHAIRMAN of COMMITTEES (The Earl of Listowel): My Lords, on behalf of my noble friend the Lord Chairman of Committees I beg to move that Bill be now read a second time.
Moved, That the Bill be now read 2a.— (The Earl of Listowel.)
On Question, Bill read 2a and committed to a Select Committee.

BRITISH RAILWAYS (CASTLEFIELD) BILL
Read 3a with the amendments, and passed and returned to the Commons.

HOUSING BILL
3.13 p.m.
The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin): My Lords, I beg to move that this Bill be now read a second time. I do so with great pleasure, and, I may add, with somewhat less trepidation than when I moved the Second Reading of the Transport Bill. That was my first Bill, and a subject with which I started by being somewhat less acquainted than I am with housing. My personal experience in local government, with one of the local authorities most active in the sale of council houses, makes me particularly proud to present this measure to the House, in that one of the benefits will be to extend to public sector tenants generally the opportunities we were able to offer in Leeds.
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The right for public sector tenants to buy their own homes is indeed one of the principal measures, but it is only one of the many important provisions in the Bill, which is a wide-ranging piece of legislation, covering the whole field of housing, including the private rented sector and housing associations, as well as local authorities and new towns. Chapter I of the Bill gives the right to buy their homes to tenants of local authorities, new towns, and housing associations. In providing this right to buy, we are giving many public sector tenants what they have wanted for years—the opportunity to have a stake in their own homes. They will be able to put their resources into an appreciating capital asset, thereby giving them the chance to accumulate wealth and to pass it on to their children. This desire is shared by tenants, whatever their political complexion, as the opinion poll taken by the Observer before the election demonstrated; it found that the proportion of Labour votes supporting the right to buy was not less than 75 per cent. The popularity of the policy has had many other such endorsements.
My Lords, let me say at once that in the past the provision of rented housing in the public sector has helped to improve the quality of life for very many people. It will continue to play a vital role for those in the greatest need, and the Bill contains important provisions to enhance the rights and status of public sector tenants. I will describe these in detail later, but public sector tenants should also be able to go on and become homeowners; and the right to buy will enable them to do so, wherever they live.
Clause 1 of the Bill gives the secure tenant of a public sector dwelling an unequivocal right to acquire the freehold of his house or the leasehold of his flat, provided that he has been a secure tenant for at least three years. The limited exceptions to the right to buy, notably groups of dwellings which are specially adapted for the use of elderly and disabled people, are set out in Clause 2 and Schedule 1. Clauses 6, 7 and 8 are concerned with the purchase price. The market value of a dwelling will be determined by the local authority valuer, or the district valuer if the tenant so chooses. The purchase price will be

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based on market value, less a discount of between 33 and 50 per cent., depending on the purchaser's length of tenancy. If a dwelling is resold within five years, the original purchaser must repay a part or the whole of the discount.
My Lords, these are fair proposals. They recognise that the dwelling, although valued as if with vacant possession, is in fact occupied by a sitting tenant. They also recognise the length of time tenants have been paying out rent, and have been unable to accumulate wealth, as have homeowners. These discounts will bring home ownership within the reach of many for whom it would otherwise be impossible.
Tenants exercising the right to buy their house, will be looking for mortgages and Clause 1 of the Bill gives those exercising the right to buy the right also to a mortgage. Many of those who buy already finance their purchases other than through their local authority. The Government wish to encourage the private financing of sales, and the building societies and other lending institutions will, of course, play their part, commensurate with their other lending priorities. Clause 15 provides for tenants to receive a two-year option to purchase their homes, at the original valuation, if, for financial reasons, they are unable to do so immediately. For this they will make a returnable deposit of £100. It will enable them to save for the purchase of their homes, in the firm knowledge of an established price. This fulfils one of the promises in our election manifesto.
Tenants wishing to become owners will expect the Government to ensure that they have a right to buy, which cannot be circumvented or ignored. We believe that all local authorities whose properties are subject to the right to buy, will carry out their duties responsibly and speedily. If it appears, however, that a local authority is not taking adequate steps to facilitate a sale under the Bill, my right honourable friend will he able to take over the transaction. Clause 22 gives the powers and discretion necessary to do this effectively, although we regard this as a reserve power. We trust that it will be necessary to use it rarely, if at all.
One aspect of our proposals will be of particular interest to your Lordships; it is the safeguards for rural areas in
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Clause 18. As our manifesto recognised, special factors apply to these areas. However, we believe it would be wrong to deprive those in the countryside of the opportunity to buy their homes. As noble Lords may have noticed, the safeguards originally included have been considerably strengthened by amendments made in another place. The clause enables a landlord selling a dwelling in a national park, or in an area of outstanding natural beauty, or in other rural areas to be designated by my right honourable friend, to require that any resale could only be to a person who has lived or worked for the previous three years in a surrounding area, to be prescribed by my right honourable friend. Alternatively, they may, with the Secretary of State's consent, reserve a right of pre-emption, enabling them to buy the dwelling back at market value, if it is to be re-sold within 10 years. These safeguards do not take away the tenants' right to buy, but they protect the interests of the local communities in these areas: we believe that we have struck a sensible balance.
My Lords, I turn next to Chapter II of Part I, and Part III of the Bill, which contain the charter of rights for public sector tenants, to which I have already referred briefly. The tenants' charter is the second major plank in the Bill. I see it as a vital complement to the right to buy, and as no less of a social advance. There will always be some tenants who do not wish to, or cannot buy their homes, and for them Chapter II of Part I, and Part III of the Bill, will bring important new freedoms and responsibilities. They will he able to exercise their own personal preferences as never before—by making their own improvements, by (if you like) choosing the colour of their own front door, by taking in lodgers, or by subletting part of the dwelling. They will have a new, statutory, framework of rights, and will be informed about them, and about their rights and duties under the particular conditions of their tenancy. This new relationship is the basis for the freedom to which the Government are committed.
Yet we are not removing the local authority's freedom to manage the stock as they think best. For example, we are not imposing a rigid pattern of consulta-

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tion, with a uniform system of tenants' committees, as the previous Government intended. We are allowing them to adopt the method which they feel appropriate for their local area, within the context of a clear duty to consult tenants on matters of housing management. Indeed, much of what is in this section of the Bill is based on what is the practice of many good landlords at the moment. I think we have a tenants' charter which gives tenants a great deal of freedom, but which neither undermines local government's proper responsibility, nor is excessively bureaucratic. I acknowledge that there is a good deal of common ground here between the major political parties.
Clause 27 conveys security of tenure to tenants and licensees of local authorities, housing associations and new towns, who are occupying the dwellings as their only or principal homes. The only exceptions are clearly listed in Clause 48 and Schedule 3. Clauses 29 to 33 give a right to one succession to a secure tenancy, and lay down the procedure for possession. A court may not make an order for possession unless one or more of the grounds for possession in Schedule 4 is satisfied.
Clauses 34 to 36 convey the new rights of secure tenants to take in lodgers, or to sublet part of the dwelling, with the landlord's consent, not to be unreasonably withheld. This can help make better use of the housing stock and will be an aid to mobility. Clauses 76 to 82 give tenants the right to carry out improvements: Clause 37 gives a discretionary power for public sector landlords to reimburse tenants for improvements, and Clause 38 prohibits rent increases on account of a tenant's own or his spouse's improvements.
Clauses 39 to 43 specify how the terms of a tenancy may be varied, and lay new duties on landlord authorities to make essential information available to tenants in as simple language as possible, including the local terms of secure tenancies, statutory rights under the tenants' charter and the rules for allocations, transfers and exchanges. At the same time, landlords will be obliged to consult their secure tenants on a wide range of management issues before taking a decision on them.
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Clause 45 provides that the Secretary of State may contribute to the costs of housing transfers and exchanges. The local authority associations, with the encouragement of my honourable friend the Minister for Housing and Construction, have made substantial progress towards a voluntary national mobility scheme, which will make it easier for public sector tenants to move, whether for employment or urgent social reasons. The provisions of Clause 45 would allow the Government to make a contribution to the central costs of the scheme.
I referred earlier to the contribution which progressive local authorities have already made to the formulation of the tenants' charter. I think there is now a tremendous challenge for them, in implementing this charter. When one is legislating on a matter like housing, which is essentially concerned with the well-being and the problems of individuals, legislation alone is not enough; it is the spirit in which its intentions are put into practice which makes the difference. I am confident that local government and housing management can meet this challenge, and I hope that elected members of all complexions will concern themselves with how the charter is implemented. It is a landmark for both landlords and tenants in the public sector.
The Bill next goes on to propose important changes in the private rented sector. Part H of the Bill deals with the private rented sector, which has now been in decline for 60 years. There has, however, been no shortage of legislation or governmental inquiries—I myself was one of those privileged to serve on the Francis Committee on the Rent Acts, which reported in 1971, and, I believe, made many valuable recommendations.
As noble Lords will be aware, the last Government announced their intention to review the Rent Acts in 1975; but by the time of the general election, four years later, they had still announced no final conclusions. Any solutions they may have had must remain shrouded in mystery.
This Government have acted more quickly. We are determined to try to stem the unabated decline of the private rented sector. We believe landlords must be encouraged to go on letting and to

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make more accommodation available. The unsatisfied demand for rented property is there for all to see, in every large town and city. The young, mobile workers and single people look particularly to private renting to meet their needs, and we must do more to satisfy them.
This Bill proposes constructive measures to help meet that need. We are not proposing a radical upheaval. It would not be right to upset existing arrangements, on which tenants have come to rely. There is therefore nothing in the Bill that will remove security from existing protected or statutory tenants, nor will the Bill remove the protection of fair rents.
There are three new initiatives in the Bill designed to encourage new letting. The first of these is shorthold, which is introduced in Clauses 50 to 54. Under the shorthold provisions of the Bill, landlords will be able to grant new tenancies of between one and five years with the certainty of being able to regain possession at the end of the final period. By enabling landlords to let without the risk of taking on a sitting tenant for life, the Government are removing a major disincentive to letting and re-letting. Shorthold was promised in our election manifesto, and I believe that it has an important role to play in helping to meet housing need, particularly for those—the young and the mobile—who do not really need long-term security, and have been having such difficulty in finding decent rented accommodation—especially, as I have said, in our cities.
However, our shorthold proposals in-corporate important safeguards for tenants. In view of the unfortunate and destructive attitude to shorthold that has been taken toy the Opposition in another place, I should like to spell out what these safeguards are. First, the Bill makes it impossible for an existing protected or statutory tenant to lose his existing security of tenure by taking a shorthold of the same dwelling. Second, the Bill provides that shortholds will be subject to compulsory rent registration—unlike any previous rent legislation. Third, by a Government amendment added at Report stage in another place, any tenant who is still in occupation at the
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end of the first shorthold term will be guaranteed a further year's security under shorthold provided his landlord has not exercised his right to recover possession at the end of the original shorthold term. Fourth, all shorthold tenants will have the same benefits of Rent Act protection as other protected and statutory tenants. Altogether, we have demonstrated our readiness to take every possible reasonable step to provide satisfactory and practical safeguards for shorthold tenants.
The second initiative to encourage new lettings concerns lettings by resident landlords. The Government believe that owner-occupiers and tenants with room to spare should be encouraged to let out spare accommodation in their homes. At the moment, it can take a resident landlord up to a year—or even more—to recover possession of a part of his own home that he may have let. It is hardly surprising that people are not letting tenants in. That is why, for new lettings, Clause 67 ends the role of rent tribunals in suspending notices to quit, though they will retain their rent-fixing functions. Resident landlords will still have to apply to the county court for a possession order, but the court will only be able to give tenants a maximum of three months' extra security.
The third new initiative involves what are to be known as "assured tenancies"; these are introduced in Clauses 55 to 57. Landlords approved by the Secretary of State will be able to build for rent outside the Rent Act. Rents will be agreed at market levels, but tenants will have the right to renewal of their leases under an adapted version of the business tenancy regime in Part II of the Landlord and Tenant Act 1954. This is a controlled experiment which, in the first place, would be applied to bodies such as building societies, pension funds and insurance companies.
The Bill does not change the basis on which fair rents are fixed independently by rent officers, according to the criteria set out in Section 70 of the Rent Act. But Clauses 58 to 62 do seek to make the fair rent system, introduced in 1965, more responsive to present circumstances. Most importantly, we are changing the minimum period between registration, from three to two years. The three-year period was fixed in 1965, when inflation was running at 4 per cent. and thus, at the

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point of review, a fair rent would have been worth some 12 per cent. less than when it was fixed. Today, after three years, a so-called fair rent may be worth 50 per cent. less than when it was fixed. An adjustment to two years is, in our view, entirely reasonable, with the number of phasing instalments reduced accordingly from three to two. This will produce greater equity between tenant and landlord and help reduce the present disincentive to relet.
Inflation has made an even greater nonsense of controlled tenancies, whose rents, astonishingly, are still fixed on the basis of 1956 rateable values, with average weekly rents of £1 to £1·50. Two hundred thousand of such still remain, and we are providing, in Clause 63, for the immediate conversion of these to regulated tenancies on fair rents.
The Bill also makes a number of other changes to the Acts, designed to tidy up and clarify. All in all, these changes add up to a coherent and comprehensive package, aimed at reviving private renting. They should help preserve our housing stock and increase the choice of those looking for accommodation.
Part VI of the Bill proposes a new housing subsidy system from 1st April 1981, for local authorities, new towns and the Development Board for Rural Wales. At present, housing subsidy depends almost entirely on housing costs. As a result, subsidy is not paid according to whether it is needed locally. This will be corrected under the new system, where subsidy will depend not only on housing costs but also on the local resources available to meet them. Instead of the somewhat indiscriminate present arrangement, subsidy will in future be directed to the areas which require it.
The operation of the new system will be as follows. Subsidy in any year will comprise the previous year's subsidy entitlement, adjusted for two factors. The first is the change in expenditure which is reckonable for subsidy, in accordance with the Secretary of State's determination. The second is the annual change in local contributions towards that expenditure, which is to be determined by the Secretary of State after consultation with local authorities.
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I might also mention in this connection that we are proposing, in Part IX of the Bill, the repeal of Section 1(3) of the Housing Rents and Subsidies Act 1975 —the so-called "No Profit Rule". This will enable local authorities to provide for such credit balance as they see fit on their housing revenue account. It will also enable a credit balance to be transferred, in whole or in part, to the general rate fund if an authority wishes. Equally, they may apply credit balances to housing purposes, if they so choose.
Part VII of the Bill contains provisions relating to repairs and improvements, mortgages and home ownership, and rent allowances and rebates. I shall refer now to the repairs and improvements provisions but leave any comment on the others until the end of the debate. The improvement and repair of the existing housing stock is an important element in the Government's overall housing strategy. Although we have made a good deal of progress over the last 30 years, there are still far too many families who are living in houses which simply do not measure up to today's conditions. We also have to recognise that our housing stock, which is a great national asset, is inevitably ageing, and much of it needs attention if it is not to fall into decay and eventual dereliction.
Most of the housing which is at risk is privately owned; much of it by people of relatively limited means. We are, therefore, proposing significant changes to the system of grants for the improvement and repair of privately-owned dwellings, in order to increase the effectiveness and flexibility of the system and to direct resources where the need is greatest. The main provisions, contained in Clauses 101 and 102 and in Schedule 11 to the Bill, will extend the availability of grants for repairs, allow secure tenants to apply for grants, relax over-rigid conditions, and enable the Secretary of State to set grant rates and grant limits which reflect priority needs.
In addition to these changes, Clauses 103 and 123 provide for a new system of Exchequer contribution towards schemes of improvement and sale of older housing by both local authorities and housing associations. Taken together, these provisions form a package of measures which we hope will revitalise the improvement programme, help preserve the national

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housing stock and make a real contribution to the overall objective of a decent home for every family.
Part VIII of the Bill opens a new chapter for the housing associations movement by enabling them to meet the demand for homes for sale, as well as for rent, as many associations want to do. They will be able to sell their stock and to improve property for sale, in each case either outright or into shared ownership. The Bill also introduces a number of changes to improve the accountability of associations, recognising the very large sums of public money flowing to them, and to extend the Housing Corporation's powers of supervision and control over associations. It increases the Housing Corporation's borrowing limit to reflect a change in the method of funding housing association schemes and to allow for continued investment. Finally, it introduces a new system of grant-in-aid to meet the corporation's administrative expenses, and, on a contingency basis, provides a new system of control for housing association projects.
Part IX of the Bill includes provisions relating to service charges, a matter of increasing concern in recent years, and various changes to the Leasehold Reform Act 1967 designed to improve the operation of that Act and to assist long leaseholders of houses to purchase the freehold of their homes more quickly and more easily.
My Lords, I have already spoken long enough. The Bill includes such a wide variety of important provisions that I have not been able in the time available to mention them all, but at the conclusion I will try to deal with any points which may come up in the course of the debate. At this stage, all that remains is for me to commend the Bill to your Lordships as a significant contribution to the Government's policy of reducing public sector involvement and reducing the role of the bureaucracy. Through the tenants' charter, we shall give public sector tenants greater protection in the enjoyment of their homes and greater influence over their living conditions. In the private rented sector we are firmly grasping the nettle and doing something to help, instead of passively accepting its decline. Most importantly, through the right to buy,
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we are making home ownership a reality for a great section of our people to whom it has hitherto been denied. My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a—(Lord Bellwin.)

USA NUCLEAR ALERT
3.38 p.m.
Earl FERRERS: My Lords, with your Lordships' permission, I will now repeat a Statement which is being made in another place by my right honourable friend the Secretary of State for Defence in answer to a Private Notice Question. If I might do so, I should like to apologise to noble Lords on the Opposition and Liberal Benches for the fact that they did not get copies of this Statement earlier than they did. The Statement is as follows:
"On Tuesday 3rd June and Friday 6th June a technical problem in a computer which is part of the North American Air Defence Command caused a false strategic alert. In both instances the error was detected very rapidly by the normal exhaustive checking and verification procedures. The United States authorities are investigating these incidents; and we are in consultation with them.">
Lord PEART: My Lords, I am grateful to the noble Earl, Lord Ferrers, for giving me a copy of this Statement. It is a short one. Perhaps the Liberal Party will forgive me if I say that I do not think they have missed much, because this has all been in the Press. It has created considerable disquiet. A heading in one paper said: "A Second Computer War Alert" It went on: "Faulty Computer Again Puts United States at War" I should like to ask, first, what liaison we have with the United States in relation to the use of nuclear weapons. Is there a special arrangement? It would be a tragedy if a mistake were ever made. In fact, we have very nearly had a mistake here which would have caused repercussions right throughout the world, and a disaster. This is very important.
In the field of nuclear power—civil power—in our own country we have what is called a free system where two systems must be working at any time and

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they must get two answers. This is the computer arrangement which we have for peaceful use of atomic power at power stations. I hope that Her Majesty's Government will be able to make strong representations to the United States Government following the second military and nuclear alert within four days. I believe that people throughout the world will be very worried. This will, I hope, help to damp down some of the war hysteria we have seen developing elsewhere. I have always argued that now is the time for us to think in terms of SALT II and SALT III. Now is the time to open up peaceful negotiations instead of the warfare that has been going on at a verbal level. This is a serious matter and I hope we can get a serious answer.
Lord GLADWYN: My Lords, if I may, I should like to ask the noble Earl three questions. First, have the United States given us any valid explanation of why this computer failed on two occasions? Was it perhaps because faulty information was fed into it? Secondly, while deploring the highly dangerous failure which might well, as the noble Lord, Lord Peart, said, have had appalling consequences, can we not derive some mild satisfaction from the fact that at least what I suppose might be called the "fail-safe" mechanism installed in the computer functioned within a few minutes, thus revealing the error? Thirdly, supposing the computer had persisted in its error, must we assume that the President would have been obliged to take such retaliatory action as seemed to him desirable—including, if necessary, ordering the use of American nuclear forces against selected targets? If so, is there not a strong case for installing a second computer which at least could be checked against the other?
Earl FERRERS: My Lords, I am grateful to noble Lords for the way they have received this Statement, which I can well understand causes them and others concern because of what might have happened. Perhaps I can put your Lordships' anxieties at rest by saying that when the noble Lord, Lord Peart, says there is great disquiet over this sort of thing it is absolutely understandable; but in fact this was caused by a malfunction of the computer. The noble Lord, Lord Gladwyn, asked whether the wrong information was put into the computer. The answer
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to that is, as I understand it—and of course we are asking the United States authorities about it and they are making a thorough investigation—that it was the computer itself which malfunctioned and not the input to it. One of the encouraging things about the matter is that there was no input from the ballistic missiles early warning systems at all into the computer. Indeed, it did not even register at Fyling-dales, which is one of the cross-checks there would be.
The noble Lord, Lord Peart, asked whether there were arrangements for discussing these matters with the United States, and I can tell him that there are very long-standing arrangements allowing for consultation over them. An immediate confidence check was carried out when the computer concerned indicated an alert and, as a result of that confidence check, it was concluded that there was no cause for anxiety.
May I also put your Lordships' anxieties at rest on one other matter: that is that the result of the alert is to show the effectiveness of the system, because in fact when an alert is first shown action is taken immediately to ensure that the appropriate movements are carried out. But it does not mean that any culminating action will be taken. That will be the result of discussions and a personal decision. All I would say to your Lordships is that what happened on this occasion was a mistake in the original alert, and it was found immediately that the alert was false.
The noble Lord, Lord Gladwyn, asked whether the United States would be asked to give an explanation of this fault. I can tell him that in fact there is going to be an investigation. We shall be consulted about it but, if I may, I would only repeat that this is merely a case of a fault in a machine, which fault was immediately discovered. It would not have led to the dire consequences of which people are naturally fearful.
Lord ELWYN-JONES: My Lords, has the noble Earl read the somewhat laconic account of this matter in The Times today, which says that on both occasions the mistake was spotted before any armed bombers or missiles had been launched into the air and a pronouncement made?— as though that was a matter for enormous

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rejoicing. Are we to assume that, if the mistake had not been spotted, armed bombers or missiles would have been launched into the air? What is the nature of the intermediate steps that need to be taken? The noble Earl made a reference: was it directly to the need for presidential intervention before the fateful step would be taken?
Earl FERRERS: My Lords, I can assure the noble and learned Lord that there are in fact a number of steps which would verify the cause of any such decision. In fact, when an alert comes about certain automatic measures are taken, which may include aeroplanes going into the air. That does not mean they will be despatched to their targets. Any action of that nature will be taken only as a result of a final decision; but the immediate result of an alert like this is that immediate actions are taken, some of which may include aeroplanes being put into the air. However, that is a normal defensive action: it is not an offensive action.
Lord SHINWELL: My Lords, may I ask the noble Earl one or two questions about this talk of "disquiet"? Are we to assume that there could be an outbreak of war—and not merely conventional war but a nuclear war—simply because of some defect in a computer? Surely the decision must be taken, if I may say so, at a much higher level than a computer. Are we not making rather heavy weather over this?
I agree that computers must be effective. They must be accurate, and we must ensure they make no mistakes of any kind. But to assume that bombers would immediately fly into the air, that missiles would be hurled by the United States of America and that we would merely have to follow because of a computer error is surely indulging in a bit of fantasy. I must confess, having some interest in matters of defence, that I had not the slightest feeling of disquiet about it. Indeed, I would say this. At the present time I think that international tension is much less than it has been for some considerable time.
Earl FERRERS: My Lords, I am very grateful to the noble Lord, Lord Shinwell,
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for possibly putting better than I have the views which he has expressed. Clearly any thing, any person or any machine is capable of making a mistake. This applies to computers as much as it does to human beings, and I think that where a computer, in a situation like this, makes a mistake it is a matter for concern. Indeed, it is the concern of the United States as well that matters should be so organised that mistakes do not occur. But where such things do happen the noble Lord is quite correct in saying that it would not involve vast quantitites of missiles, and so forth, being directed against various targets simply because of a computer. The computer in this case gives the initial reaction, which thereafter is verified not only by other computers but also by human beings, and such action as he referred to would not be taken as a result of the computer but as the result of a human being. Therefore, the idea of a major nuclear war starting up as a result of a computer making a mistake is highly unlikely.

HOUSING BILL
3.50 p.m.
Second Reading debate resumed.
Baroness BIRK: My Lords, this complex and highly indigestible measure, on which we were engaged before the Statement intervened, was carefully explored by the Minister in his outline of the Government's housing plans and their philosophy. The context in which it is set, and in which it has to be looked at, is Britain's critical housing crisis. I shall not pretend that it is all the fault of the present Government; nevertheless, the picture is dark and dense.
First, the steep price rises throughout the last decade have made it increasingly difficult for potential first-time buyers to find a house at a price to suit their pockets. The Government's economic strategy has escalated interest rates to such unsurpassed heights, with mortgage rates of 15 per cent., that this has worsened the situation. Secondly, the private house industry is in decline and building industry spokesmen have widely articulated their concern. I should be very surprised if there are not a number of

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building firms among the expected bankruptcies that we have heard about today.
Housing starts and council house building, which had been falling, are now at the lowest level since the war. These have been deliberately reduced by the Government's harsh attack on finance for capital investment. The Government are to cut spending on council houses from £5,372 million in 1979–80 to £2,390 million by 1983–84. This is a massive cut of 48 per cent. which will put an end to new building for those most in housing need. Among all the cuts that have been made by the Government in social services and kindred fields, housing has turned out to be the worst victim. At the same time, the waiting lists now contain the names of over 1 million people and homelessness is at a record high level.
The private rented sector continues its grim decline, as it has since the First World War—not, as is simplistically alleged, as a result of the Rent Acts; in fact, the decline actually accelerated between 1957 and 1964, when tenant security was reduced by the then Conservative Government—and the poorest people arc, as we know, disproportionately housed in the private sector. The test of the Government's legislation is the extent to which they will remedy this critical condition in housing.
It would be churlish not to welcome some of the proposals. I can only say how delighted I am that the Government have included the tenants' charter, which was enshrined in Labour's 1979 Bill, from which many of the proposals have been taken. The Bill does not, however, go as far as Labour's measure; for example, the extension of eligibility for council housing is significantly missing; there is no change in the mediaeval distraint orders and tenants' participation is not as wide as we had sketched it out. Nevertheless, it is still to be welcomed, as also is the extension of repair and improvement grants. The real test, however, is how far the Government's overall strategy will achieve a higher rate of improvement, since legislation is insufficient without the necessary resources to back it up. It is against this bleak background that the Government's policy must be judged.
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Labour's policy was to sell council houses, but not irrespective of the needs of the area and not without discretion to relate policies to local circumstances. It is not only Labour authorities that are concerned about the compulsory sales which are enshrined in this Bill; a number of Conservative authorities have also shown their deep concern. One sees this all over the country: in the North-West, in the West Midlands, in the South-East, in places such as mid-Bedfordshire, Chelmsford, Southend and East Hertfordshire, and in the South-West, in places such as Christchurch and Wiltshire. I could go on for quite a bit longer, but to do so would take up too much time.
The arrangements for the rural areas —and I notice that the Minister took considerable pride in these—are certainly on the trivial side and do not go anything like far enough. In rural areas, the amount of rented housing is small. A local authority can buy back a property, but after 10 years other people will have moved out, particularly if it is a village, and the authority will have to buy back at the existing market value, which will no doubt be far higher than what it was sold for, with the 50 per cent. discount.
If there is a way of trying to denude rural areas and take people out of them this seems to be one, because if young people cannot get houses locally they will move, communities will be diminished and the whole area will be depleted of people. Some of these arguments were used when we debated the school transport clause in the Education Bill. The argument then was that if anything would adversely affect the rural areas, then that was very unfortunate and ought not to be allowed to go through.
The question here is: should there be an absolute right to buy? The Government will say that they have a clear mandate, but they do not necessarily have to follow it to extremes, and to an extreme of which many people did not understand some of the consequences. Apart from the economics of the proposal, which are dubious, the right of every person in this country to a respectable roof over his head is surely not a right to improverish other people. That cannot be correct. In England and Wales, 44 per cent. of council tenants are dependent upon supplementary benefits and rate rebates. Will they ever

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be in a position to buy? How can families transfer from tower blocks or less desirable property to more attractive homes? There will not be the property available.
How can young single people hope for accommodation in tower blocks, if the families are unable to move? At one time Wandsworth was carrying out a successful experiment in that area, but with the cuts and with a Conservative-controlled council that has now stopped. All the evidence shows that the best housing in the most attractive districts is sold, leaving the worst, inner city tenements which no one wants to buy. What social spread is this? A great deal was made, certainly in another place, about the social spread. The Minister took pride in the sales of council houses in the GLC area and in Leeds; but one can see there, and in other examples as well, that it is in the outer suburbs and not in the dismal inner areas that the sales have taken place.
Then there is the question of the elderly. I shall just touch on that aspect, as I am sure there are many other speakers who want to enlarge on it. True, the Government have exempted sheltered housing, but the amount of other housing for the elderly is not so great that we can afford to lose it. Since this accommodation is for the elderly, the turnover is larger than in other housing, which means that a great many houses which are adaptable and proper for the elderly will go out of a council's control. So many elderly people will have neither a chance of having a home that they deserve, nor be able to move somewhere else when they are getting older and more infirm. They will not be able to get sheltered housing, because none will be available.
The Government really must look at this. Coupled with the drastic cut in council house building, it is a deliberate policy to erode the public sector. It will mean relegating council housing to welfare housing, with all the social stigma attached to that. We know that housing in a had environment encourages neglect, vandalism, delinquency and despair. I was very well aware of this when I was Minister in the noble Lord's department. But is this good social policy? Is it moral to exacerbate this
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situation, or to create such a situation where it does not exist at the moment? The stress on sales will be akin to door-to-door high pressure salesmanship.
Under the Bill, people are being incited to take on more than they can afford. Is this really what a Government should be promoting? The £100 option is rank financial profligacy, heavily criticised by many people—among others, by the AMA. People are being encouraged to overstretch their finances and their future. Mortgage default accounted for 6 per cent. of the homeless accepted by local authorities in the first half of 1978. This Government, which appear to be ideologically opposed to a healthy public sector, for they are trying to demolish it, are negating Britain's exceptional achievements, compared with most other European countries, in breaking the connection between poverty and bad housing. That is what the Bill is going to do.
So far as subsidies, which is a long and very technical subject, are concerned, these must be seen in relation to the Government's drastic expenditure cuts. Extensive powers have been given to the Secretary of State to decide what expenditure by local authorities shall be taken into account for subsidy purposes. This is a further attack on the autonomy of local authorities, though I seem to remember very clearly that when they were in Opposition the present Government were always commenting on this, and stressing and supporting it. The mechanism for imposing heavy cuts on local authorities and sharp increases in council rents will be that of subsidies. This year council rents are up 28 per cent. The sale of council houses will not generate more money for new houses because money will go into the housing revenue account fund and will also help to pay off the mortgage debt. Therefore the sale of council houses, it seems to me and to my noble friends on this side of the House, will bring about a great deal of hardship because of the way the Government are reorganising it, and certainly there will be nothing like the social spread which we were promised.
I turn now to the private sector. The Government are involved in a head-on collision with private tenants. I attended a meeting the other day at which there were over 200 people, most of whom

37
acknowledged that they had been supporters of the Conservative Party at the last election. I can only tell your Lordships that they attacked the Government in terms which I might hesitate to employ. It was the first time that at a meeting composed almost totally of members, or perhaps by now erstwhile members, of the Conservative Party I received a round of applause when the chairman insisted on pointing me out as leading the opposition to this Bill from the Opposition Front Bench. The Minister's right honourable friend in another place referred to this Bill as "a social revolution". It may be that they should rethink it and see it in terms of a Conservative revolution against a Conservative Government, because this is what they are forcing.
The thinking behind the shorthold, which the noble Lord, the Minister, made sound so very attractive an item on the Government's menu, seems to me not to be borne out by any real fact or evidence. First, the majority of tenants want long-term protected lettings. It is true, as the Minister said, that some young people want shorter lettings, and this will continue to be so. As the Minister also pointed out, the letting by resident landlords will still continue. It is fair to say that no enthusiasm for this has been shown by landlords, who would much prefer to sell with vacant possession. I am wondering how many people will take up the idea—which the noble Lord floated as a very good, bright, new idea—of building to rent when they will be far better off today building for sale? Anyhow, we shall see.
Clauses 50 and 51 define shorthold tenancies. It is true that they cannot be granted to protected or statutory tenants. In theory, this disposes of the criticism that existing tenants will lose security of tenure. In practice, however, it will still be possible for the rascally landlord to tempt the tenant to move to a shorthold tenancy in another house or flat. It is not too hard to take advantage of those who are innocent of property law knowledge and who are open to pressing persuasion and exploitation. When people are nervous of losing their home and also are being offered, temptingly, something which sounds better at the same rent, it will be no surprise if some of them fall for that particular ploy.
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As present protected tenants move or die, long-term security of tenure will disappear altogether. I think there can be no doubt about that. This has been commented upon not just by members of my own party. What incentive will there be if a landlord can let for a year? Even with the very minor amendment which has been made and which the Minister made a great deal of, that if notice is not given after a year then the tenant can take on another year, this is still going to result in very much of a hand-to-mouth security position for the tenant.
I thought that the Minister dealt very lightly with the safeguards. He should have heard what was said at the meeting that I attended the other day. No doubt he has received letters similar to those I have received, right across the board, from people in all income groups all over the country. Even the safeguards which Sir Brandon Rhys Williams included in his Private Member's Bill and which were endorsed by the present Government when in Opposition have been omitted. This resulted in a sharp rebuke to the Government from The Times, in a recent editorial. As was stated in another place, our view is that we shall repeal this section when we are returned to office. Nevertheless, I would say to the noble Lord the Minister that we do not have closed minds. If the Government were to come forward in this House with pretty substantial amendments, we should consider the experiment and see how it went. Unless, however, something more is offered than the safeguards, or non-safeguards, that the Minister mentioned in his speech, it seems to me that the next Labour Government will have no other choice than to repeal this section.
I turn now to rents. It is true that there will be a fair rent. Either this will be already registered or the landlord must apply within 28 days. However, it appears from what the noble Lord said, or did not say, that so far the Government have found no way of speeding up applications being dealt with by rent officers, thus leaving a gap for abuse at the beginning of the rental. As we are all aware, if the fair rent is established at a lower rent than that agreed originally between the landlord and the potential tenant, the tenant does not get any retrospective repayment; he receives a reduction only from the time that the rent is registered.

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There is power in Clause 51(4) for the Secretary of State to take some or all of such properties out of rent regulation. I noticed that the noble Lord did not draw our attention to that subsection. The result must be a considerable shrinkage in the scope for security of tenure under the Rent Acts—also in the number of properties covered by the rent regulations. The Government's plans include, in Clause 59, steep increases in rents through the rent reviews which are to take place every two instead of every three years. This is a most inflationary measure. Not only will there be that phasing; also, phasing for the payment of rent will mean a great deal of hardship for a great many tenants who are absolutely—this is no exaggeration—frightened to death about these provisions. Phasing itself can be cut out altogether by a simple decision of the Secretary of State under Clause 59(6) which would mean that there would be no phasing over years at all. We could in fact say that that was finished and the rent must be paid immediately. For housing association tenants rents will increase much faster because the 75p limit on annual increase disappears and they will be subject to the same phasing procedure as private tenants.
One of the burning issues for private tenants in this Bill, to which I noticed the Minister did not refer at all, is the question of service charges. There is nothing in the Bill which provides adequate protection for tenants being charged exorbitant and often phoney service charges. In brief, the Government have claimed that their proposals will lead to a revival of private lettings and that short-holds will encourage landlords back into the market. There is no evidence whatever to support that view. What the Government are doing is exposing many existing and potential future private tenants to the risk of exploitation and the return of Rachmanism, which followed the 1957 Rent Act.
Some of the poorest and worst housed of our people are unfortunately the single homeless in hostels. This was raised in another place and the Minister agreed to bring forward amendments to the present unsatisfactory legislation on fire precaution and overcrowding. I hope the non-mention of this today does not mean
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that it will not be brought forward. The grave concern felt there and, I am sure, in this House, will not be deflated unless substantial amendments are brought forward and accepted at Committee stage.
In conclusion, there is a great deal of the Bill which I have not covered because there is a long list of speakers and I should be speaking the whole afternoon and evening. There is leasehold reform, which some of my noble friends are very concerned about, the national parks and a whole range of other parts of the Bill which badly need some very substantial amendment. The Minister also skated very easily over the no-profits rule where it will affect other ratepayers and, if the rents go up, the tenants as well. Again that is a retrograde step for those in the public sector.
I would say that the few positive benefits in this Bill are outweighed by the damaging and painful elements in it. It will hurt the elderly, it will hurt the tenants in the 200,000 controlled tenancies which are to be decontrolled. They really are a handful of people living in dilapidated property and their rents will rise. It will hurt those on the housing waiting lists whose expectations will sink right down again; it will hurt those who will not now get on the list; it will hurt families in tower blocks and poor properties whose hope of transfer will disappear. This is a recipe for housing ghettos. It will hurt young single men and women, who will stand very little chance of getting any housing under this Bill unless they are able to pay fairly high rents, and those renting from private landlords will be hurt through the service charges and the phasing of rents and through the lack of all the other safeguards which the Government have not thought fit to introduce. We know the terrible effect that homelessness, bad housing, fear of rising rents, fear of eviction and housing insecurity have on family life, on marriage and on the single-parent family. Unless there are substantial changes made in this House, this Housing Bill will become an ugly monument to social and moral irresponsibility.
4.15 p.m.
Lord EVANS of CLAUGHTON: My Lords, I should like warmly to commend the noble Lord, Lord Bellwin, on the way

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in which he introduced the Second Reading of this Bill. His political upbringing, like my own, was in local government and I cannot think of a better one for discussing this kind of complex but extremely important social measure. There are parts of this Bill, as the noble Baroness, Lady Birk, has said, which are perfectly acceptable to all parties. Many facets of the tenants' charter are welcome to those of us on these Benches, and repeat with very little change the previous Labour Government's draft proposals which disappeared at the general election.
On these Benches we support in principle the concept of people owning their own houses, whether those houses were built in the public or in the private sector. I think it is widely agreed that the gravamen of this Bill is the introduction of legislation which seeks to compel local authorities to sell their stock of houses to secure tenants in furtherance of the Government's manifesto commitment (as they call it), based in my view on the constitutionally doubtful and certainly crude argument of the mandate. I believe that the maximum number of people should have the right to own their own home, but, as a Liberal, I also believe firmly and very strongly in the independence of local government, which this Government seem hell bent on under-mining in this Bill and in the Local Government, Planning and Land Bill, soon to come before your Lordships' House. It is a curious paradox that on the one hand the Government should seek to underpin local autonomy in education, as we have recently seen in the Education Act, while on the other hand seeking to emasculate local judgment by the sale of council housing and the control of council housing stock by local authorities.
As I think we all know, except perhaps the Secretary of State, conditions in this country vary from urban to rural areas, within urban areas and within rural areas, and one cannot have a broad brush approach to the question of whether it is appropriate to sell the stock of council houses throughout the country because the conditions vary so much from town to town and from district to district. We must not forget that on the same day—on the 1st May, 1979—when this Government were getting their famous
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mandate, many local councillors in the Labour and Liberal Parties were elected with an equally valid but entirely different mandate in the areas which they represented on that same day and with the same electorate.
I should like to assure your Lordships that I have no time at all for the local council which, for purely dogmatic political reasons, refuses on principle to sell any part of its housing stock, regardless of local need. I understand this to be the argument used by the Secretary of State in putting forward the proposal for blanket compulsion. I have no time for the latter-day Clay Crosses and councils of that nature who, purely for dogmatic reasons, oppose the sale of council houses. I am thinking rather of those councils with a huge waiting list—7,000 or 8,000 in some areas—with a large proportion of their population who cannot afford and are never likely to he able to afford to buy a house, because of low wages, high unemployment or other similar conditions. I am thinking of the rural council with only a tiny housing stock which, if sold, might change the balance of the community or get into the hands of the growing number of second home owners. I am afraid I do not think that Clause 18, as worded at present, goes far enough to deal effectively with this particular problem.
This part of the Bill would be far more acceptable if there were some provision for local councils to have the right to produce schemes for opting out, in part or whole, from the sale of council houses, which could be implemented only after approval by the Secretary of State. I should have thought that the resources available to Her Majesty's Government might have enabled the Government to produce that kind of proposal because, as the noble Baroness has said, Conservative-controlled councils, Conservative Members and the AMA with its Conservative control have considerable reservations about the wholesale sale of council houses. I should have hoped that the Government could have introduced an element of selection and choice in this particular field.
I am also concerned that certain categories of housing are included in the right to buy and, as has already been mentioned by the noble Baroness, Lady Birk, I

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should like to see pensioners' bungalows excluded. I think it is entirely wrong that pensioners' bungalows should be subject to the right to sell, because the probability is that when the time comes for sale they will not be sold to pensioners but are more likely to be sold to younger couples. From all the evidence I have, from what I have read and from my experience as a lawyer, I doubt whether the scheme for flat sales will work out satisfactorily.
The Secretary of State has said that the right to buy a council house is a basic human liberty which enriches and enhances the life of the former tenant. But in other ways the Bill does not go far enough in enhancing and enriching the lives of former tenants, or indeed existing tenants. Though I am aware that half the total stock of all houses in the United Kingdom is owner-occupied, a higher proportion than in West Germany, France, Holland or Denmark, it seems to me grossly unfair that if the council tenant is entitled to enhance his life in the way the Secretary of State mentioned, the tenants in the private sector, though receiving better terms, admittedly, under the housing charter, do not have the opportunity in any form of buying their own houses. Indeed, as we all know, private landlords, understandably, when the time comes for an opportunity to sell with vacant possession wait for that vacant possession to come round. So the opportunity of a sitting tenant of a private landlord to buy, unless he or she is willing to pay what is virtually a vacant possession price, is very slight.
Though I concede that just under 14 per cent. of the population of this country is in privately tenanted houses, in parts of the country, for instance in Merseyside, over 30 per cent. of the houses are privately tenanted properties, and a very high proportion of those tenants are extremely anxious to own their own houses, if for no other reason than to be able to obtain the grants to install basic amenities like a bathroom or an indoor lavatory, which the landlords have either refused or cannot afford.
I hope that during the Committee stage the Government will be persuaded to increase the limit for improvement grants and assist former tenants to prevent many thousands of previously
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privately let houses from becoming slums. I should have thought it would be one of the keynotes of this Government's policy to assist the private tenant to buy his own house and to improve it, by the aid of grants and by encouraging self-help.
The Bill certainly does not go far enough in protecting lessees on long leases. This Bill was, in my opinion, an excellent opportunity, which the Government have missed, to make thorough-going amendments to the Leasehold Reform Act 1967, to ensure that every lessee has the unconditional right to buy his freehold at a fair price on a fixed formula with variables. Though the concessions made in the Bill are to be welcomed, they do not go nearly far enough, as I think your Lordships will know, to overcome the very severe difficulties many of the leaseholders in the West Midlands, in the North East and in South Wales are suffering from.
There are many thousands of these householders on long leases. I think we have all seen and read heartrending cases of elderly people who thought they had a house of their own for the rest of their lives, and that they could pass it on to their family, who find that in fact the long lease under which they hold their house is coming to an end, and the prospects of affording to renew it, or the opportunity of doing so, particularly of the lease being renewed, are very slight indeed. I hope that means can be found to close what is really a very serious gap in our housing policy, which is based on a totally out-dated feudal attitude to house tenure. If the Government are really seeking a social revolution—that is what the Secretary of State said, so we should not be complaining too much if we spend quite some time on Second Reading discussing what is, after all, a social revolution—they should give some real hope to the many thousands of private tenants and lessees who want to be owner-occupiers and to improve their property.
In my opinion, they should have done far more in this Bill to encourage the pioneering work done by some local authorities, such as Swindon, Liverpool and elsewhere, to encourage a partnership between local government and private enterprise to build houses for sale on local authority land in inner urban areas

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of our great cities, with genuine incentives, such as guaranteed mortgages and assistance for removal expenses and solicitors' charges, with priority given to certain categories of buyer such as existing council tenants.
Every time a council tenant moved into one of the newly built houses a council house would be released for a family on a very long waiting list, as the noble Baroness, Lady Birk, mentioned. It must not be forgotten that there are still very long waiting lists for council houses, since there is still a very large number of people in this country who cannot afford to buy, either because of low wages or unemployment, or who have chosen—and they have a free choice—not to buy, or who have the kind of job which prevents their putting down permanent roots.
The encouragement of the private sector is, in my view, particularly important at present. At a time when the public house-building programme is crippled by extremely high interest rates and cash limits, the building industry is at a very low ebb of confidence. As the National House Builders Registration Council has pointed out, the level of new starts in the private sector is likely to be at its lowest ebb this year for over 50 years. It would be a useful reform if the Government were willing to grant private builders the same rate of stock depreciation against investment as trading companies are granted. I hope the Minister will consider that as a useful reform to the private building sector.
The Secretary of State has said:
"For the vast majority of people there is a desire to own their own home, their own property. The Conservative Party has long recognised and encouraged this desire, because it leads to the most economic provision of housing".
This is very commendable, but the level of performance under the present Government is not living up to the flights of oratorical good intentions of the Secretary of State. From January to April 1979 building societies advanced 246,000 home loans, while in the same period this year only 203,000 loans were made, a drop of 17 per cent.
In spite of the Secretary of State's declared wish, which I think we all share, to help young first-time buyers, the facts from the Building Societies Association are that, in 1971, 51 per cent. of loans went
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to first-time buyers while by 1979 only 45 per cent. were taken up by first time buyers and the percentage is still dropping. Anyone who is in the business of dealing with house purchase for young couples, or indeed most age groups, as I am, will bear witness to the vast numbers of potential first-time and indeed subsequent house owners who cannot now afford the level of repayments which interest rates have imposed on house buyers.
At the same time as these people cannot afford the rates of interest, cannot afford the monthly repayments, over £1,000 million is given away every year in mortgage interest relief to those in the top income brackets, so that the richest buyers are encouraged to borrow and spend as much as they can, thereby forcing up house prices unnaturally and making it even more difficult for those on lower incomes to buy.
It is curious that, while house owners get their subsidy, mortgage interest relief, from the Inland Revenue, this Bill, while quite correctly reducing local authority liability for rent rebate, still requires the local authority, in the case of the private rented sector, to provide 10 per cent. of rent rebates. Why this distinction? Why did not this Government abolish the provision for local authorities, very hard pressed local authorities, to provide 10 per cent. of rent rebates while the private owner gets his 100 per cent. from Government sources? With mortgage rate at 15 per cent. and minimum lending rate at 17 per cent. there is not much hope, I fear, for a social revolution in the field of house purchase.
Against that background I can see no serious hope for the majority of people who are not houseowners being able to afford the costs of getting on to the first rung and buying their own house, until the Government change their disastrous policy of high interest rates. When the rates are reduced—as we all hope and pray, and as the Prime Minister said that she hopes, will happen soon—the real concern for those of us in this business is that there will be such an explosion of demand for the pitifully small supply of houses now being built, that prices will shoot up again, as they did 10 years ago, and again become out of reach and cause the inflationary spiral.

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The concept of selling council houses wholesale may have an immediate and meretricious attraction, but it hardly scrapes the surface of the real housing crisis in this country. The method that the Government have chosen to enforce the legislation on recalcitrant authorities by injunction is, in my view, extremely clumsy, as enforcement of an injunction is by committal to prison. One can imagine the opportunity that the provision will give to some latter day Clay Cross rebel to make a public martyr of himself. It would be far better to use the system of "specific performance" to ensure compliance by recalcitrant local authorities. Again I hope that the Government might be willing to consider that as a less swingeing way of achieving the same result.
Year in and year out we witness local authorities running out of mortgage loan money early in the local government year. There was much about it in the newspapers today and we learnt about the Greater London Council running out of mortgage monies. That is why I want to see it a mandatory duty on central Government to supply sufficient funds to local authorities to meet all demands of tenants and others qualified to receive local authority mortgages—a provision which the Bill does not contain.
There is much in the Bill that we welcome, quite apart from the "right to buy" provisions. While the Bill does something for improving the status of tenants, as we have already heard, it does not, in my opinion, go nearly far enough. Tenants should be given far more control over the way in which their estate is managed. Successive Governments have failed to encourage tenants to become involved in the day-to-day running of their properties. It is absurd that tenants should be encouraged, and indeed advised, to call in the local authority works department for the most trivial and minor repair, such as the repairing of a lock or the changing of a tap washer. Quite apart from the fact that such a visit averages out at £7 or £8 a time, the tenant has no encouragement to have pride in, or concern for, his property, with the result, as we all know, of a contribution to the neglect, the vandalism and the decay of so many of our council estates.
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Tenants should, in my view, have a right, and be encouraged by rent reductions where appropriate, to establish co-operatives if they wish, and to establish co-ownership schemes particularly in blocks of council, or formerly council, flats. In my opinion, we would witness an enormous change in the quality of maintenance and the appearance of council estates if people were encouraged, advised and assisted to take control of the management of their own estates. Where that has happened, particularly in the area of housing associations, the change has been dramatic. It is a keystone of my party's philosophy that the maximum power and responsibility should be devolved to the lowest level and to the smallest unit.
I am very much personally involved in the housing association movement and I would say that the proposals in the Bill appear sensible and worthwhile. I am particularly interested in the proposals for permitting housing associations, which are registered charities, to sell their houses if they wish, which is a considerable reform. I shall be interested to know from the Minister whether the Government intend that Clause 116 should over-reach the present requirement that charities must obtain the best possible price for their houses.
I share many of the reservations expressed in the other place about the performance of the Housing Corporation. One only hopes that the new chairman will be able to reassure housing associations about the Corporation's policies and attitudes. I hope that the Government will reconsider the level of grant available under Section 123 of the Bill; but generally, as amended, the Bill will not meet with much opposition from housing associations, except in the anomalous case, which I have been asked to draw to your Lordships' attention, of some housing co-operatives who assure me that if the Bill goes through in its present form, their members will become, under the terms of the Bill, secure tenants, which will prevent them raising money from building societies. I believe that that is an unintended result of the Bill and I wonder whether the Government would be willing to examine it, as I am sure that that is not their intended outcome.

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I turn briefly to the private rented sector. I well understand the Government's wish to increase the stock of private rented property, but I have considerable reservations about the way in which they intend to go about it in the Bill. The proposal for a new form of land tenure called "shorthold", which we have discussed already, seems to give the Government the impression that it will bring a lot of empty property on to the market, because the Government believe that the reason for the shortage of rented property is the level of protection enjoyed by private tenants. I think that the more important reason is that when properties become vacant, landlords tend to sell them.
Whether the Government view is correct or incorrect, I agree that the present position is very unsatisfactory and grim, as the noble Baroness has said, but the level of protection and limit on rents is not the only cause. I would have wished that the Government could have so changed their policies that we might have all-party agreement for experiments on the basis of the Bill introduced in the other place by Sir Brandon Rhys Williams, which was a genuine attempt to solve the problem with reasonable protection for the tenant, which protection has now been thrown away in the Bill. I only hope that the Government will introduce amendments to grant these protections, because their absence prevented many Conservatives from voting for the Third Reading in another place.
We intend to move amendments ourselves to give some protection to shorthold tenants against the worst dangers of potential Rachmanism. It is only, as we all know, a tiny minority of landlords who are bad; the overwhelming majority are perfectly good, fair and concerned, and probably own only one, two or three houses. However, it is the small minority of potential Rachmans whom we have to legislate against. I also hope that if such amendments are accepted, the previously wrecking opposition of the main Opposition party will be withdrawn. The point was well made in the other place by Mr. Nicholas Scott at column 779 of volume 985 of the Official Report, where he said:
"I regret the fact "—
and this is a Conservative Member of the other place—
"that in introducing the concept of shortholds, my right honourable and honourable friends on
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the Front Bench have not built into their system the sort of protections"—
Lord DENHAM: My Lords, forgive me for interrupting, but the noble Lord must paraphrase a Back-Bench Member of another place. He must not quote him.
Lord EVANS of CLOUGHTON: I beg your Lordships' pardon. Mr. Nicholas Scott expressed the view that the concept of protection for shortholds that was proposed in Sir Brandon Rhys Williams' Bill had not been built into the system. I think that the belief held by many Members in another place was that if there were sufficient protection for the tenants empty properties would be brought back onto the market. That is a view with which I personally do not entirely agree. Nevertheless, it is a view held—and I think that noble Lords opposite will no doubt pay attention to this—and held very strongly and sincerely by many Members of their own party. Similarly, I very much hope that the Government will find a satisfactory amendment to protect tenants in mansion blocks, particularly in the Inner London area, from the danger of exorbitant and uncontrolled service charges. There ought to be statutory opportunities for tenants to challenge the landlord's assessment.
As for Clauses 55 and 57 of the Bill, dealing with the concept of assured tenancies, it is an interesting innovation which is worth a trial, and I hope that my noble friends will support the idea in the hope that a minority of landlords may possibly take advantage of this new opportunity. I should like to see the Bill, as has already been said, do more for those who stay in hostels, but we must wait to see what the Government announce.
I believe in the field of housing the Government had a wonderful opportunity to propose legislation which could have secured all-party backing. In fact many clauses already have that backing. With their obsession, however, for the sale of council houses they have distracted attention from many useful reforms and have further emasculated—and this is my greatest fear—and are likely further very much to emasculate, local autonomy. In their unwillingness to accept perfectly reasonable amendments to protect private sector tenants, they have alienated much

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support not only from the Opposition but from their own moderate supporters.
It also concerns me that a vast set of regulations and rules are being enacted which would be difficult enough for lawyers to understand; and I am very concerned that they will not be couched in terms sufficiently simple for tenants, who are often innocent as regards the problems and the wording of statutes, also to understand. I believe that because of necessity in another place for limiting the Committee stage of the Bill, your Lordships' House will be able to perform that function for which—indeed, it need hardly be said—it is so important: we in this Chamber can look at the Bill on a basis of review and revision. I believe that that is the vitally important function which your Lordships will perform at the Committee stage. I trust that the Government will make some amendments to a Bill which is partly good but which contains many faults and errors. I hope that at the end of the day we can produce a much better Bill for return to another House.
4.41 p.m.
The Lord Bishop of NEWCASTLE: My Lords, a few weeks ago I was reading the memoirs of the man who was once vicar of the parish of St. Lawrence, Byker, from about 1927 to 1943. Some of your Lordships will know that Byker is a river-side district in the East of Newcastle. It has achieved some recent fame because of the imaginative and unusual housing redevelopment which has taken place there, including the so-called "Byker Wall". However, 50 years ago the picture was very different. The memoirs show that it was not unusual for a dwelling of four rooms intended for one family, to contain four families, and for upwards of 40 people to share the use of one outside we and one outside tap, both of which could and did freeze up in winter.
There are still about 3,500 houses or dwellings in the City of Newcastle with an outside toilet, and a good many more in other parts of Tyneside. But we have come a long way since the 1920s and 1930s. I think that it is right to start with this tiny backcloth of historical perspective to this debate, because despite all the difficulties and the present short-comings, which are still very real for those
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directly affected by them, in the last half century we have come a long way forward, thanks to the determination of many in central and local government and in the voluntary agencies.
Your Lordships will know that over the years one of the dominant problems in the North-East has been a level of unemployment well above the average, due mainly to the decline of heavy industries, the closure of pits and the mechanisation of agriculture. Connected with this has been the existence of a huge stock of Victorian and Edwardian terraced housing, often of low standard and in increasingly poor repair. Rented accommodation has been the norm for manual workers over this period, and they are a larger proportion of the population than elsewhere in the country.
Therefore, it comes as no surprise to find that the replacement of these houses has largely been carried out by the local authorities. Council housing in the City of Newcastle, for instance, accounts for some 46 per cent. of the total stock, while in Sunderland I believe that it is around 60 per cent. As a curate in Sunderland during the early 1950s, I can well remember the sense that one had of the whole town being quietly encircled by successive rings of rather gaunt and uniform estates springing out of the intense drive to build new homes as fast as possible. Nor is it surprising to discover that an average of nearly 50 per cent. of the tenants in both urban and rural areas in the North-East are either on supplementary benefit or enjoying some measure of rent rebate.
Many Northerners have to seek work in the Midlands or the South, which may account for the fact that homelessness as such seems to be more of a problem among the single homeless—and it is a very real problem—than it is among families. In passing, may I underline the tragic consequences of a situation in which more and more jobs seem to be located in the South-East of England, with the result that the housing shortage in the South is exacerbated, councils operate tight residence qualifications (and one can understand why they do so), and men and women who want to work and who have skills and experience to offer either have to work and live away from home, like a serviceman, or give up their jobs after a few months—and many North-Eastern

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people have done just that recently—because they and their families cannot cope with the expense and the strain.
Against that background, what are some of the likely consequences of this Bill in the North-East? In the last few days I have tried to assess this as objectively as possible, as I hope befits a maiden speech, and also to identify some particular areas of concern, while acknowledging as well some very positive and constructive proposals within the Bill. What I have to say now may, I think, illustrate in specific ways some of the points that have already been made by the two previous speakers.
On the overall right to buy, my impression is that, despite the amendments made in another place, the rural authorities are still much more anxious than the urban authorities. Only about 2,000 out of over 40,000 houses in Newcastle were sold in the period 1971–1973, when economic conditions were better than they are now. The small number of inquiries so far received would suggest that the number will be even smaller this time, though, as elsewhere, when most sales take place—if they do—they will be of houses which the authority will be sorry to lose, and a certain further polarisation between one estate and another will undoubtedly occur.
However, the sale of council houses in rural areas presents particular problems which the Bill certainly recognises in Clause 18, as amended, and as explained in the introductory speech by the noble Lord, Lord Bellwin. Many parts of Northumberland are within a national park or in areas of outstanding natural beauty. But what of the rest of the county, for instance, where there are often just a handful of council houses in a small village? Clause 18(1) says that the Minister has power to designate certain rural areas as coming within the protection afforded by that clause. But what are the criteria for such a designation? It may be that as a newcomer I have failed to read the Bill with sufficient care, but no one with whom I have spoken could answer that question. There are many borderline areas where such protection is also very much needed; and I believe that to be true, in fact, for many rural authorities in other parts of the country and not just in my own.
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I should be very grateful if the noble Lord, Lord Bellwin, could also answer one particular question which has arisen. If the answer is already in the Bill I hope that he will forgive me, because it is a large and complex document. What is the position if someone living in an elderly person's bungalow in a village—a bungalow which has no social service or special facilities, as described in Schedule 1, paragraph 4; that is, it is not strictly sheltered accommodation—exercises the right to buy and then leaves the house to relatives in his or her will? Is that a right that would be possible? I know of an instance where an elderly person has received financial help from younger relatives who later hope to inherit, and possibly use that accommodation as a second home. In communities where there is relatively little special accommodation of this kind anyway, and a high proportion of pensioners needing such accommodation, is this the intention of the Bill?
To sum up may I express two basic concerns which have come through to me in many ways, both of which may have an ethical dimension? First, there is the argument between those who believe that all tenants should have a right to buy, and those who believe that such a right may seriously infringe the right of others to an adequate home. This is fairly evenly divided, and in a maiden speech it is not for me to comment. But what has emerged in my conversations is that much depends on where you live and the particular needs of that locality.
What this Bill seems to do, as has been pointed out, is to give local authorities less control over their housing policy than over, say, education. Is this going to lead to further difficulties for the most disadvantaged, urban or rural?—for if it does it seems a serious indictment of the underlying thrust of the whole measure. It has been put to me that where council housing in a particular locality forms less, say, than 25 per cent. of the total stock, there at least the authority should have the absolute right of decision as to whether to dispose.
The second concern is similar, and relates to finance. When I first read about this measure, I assumed that part of its intention was in fact to save Government or local government expenditure, thereby

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hopefully releasing money for new building or rehabilitation of existing properties. But I understand that Department of the Environment figures suggest that this is not so. Can the noble Lord indicate whether this is the position? Is this concern that finance will in fact be less and not more well founded or not? In our part of the world we are still struggling to meet a great human need, and it will not help that struggle, nor indeed be just to those most in need, if, as a result of this Bill as it stands, authorities actually end up with less housing where it is really needed and with less money than they have now.
4.53 p.m.
The Lord Bishop of LONDON: My Lords, it had been expected that at this point the noble Earl, Lord Longford, would have been addressing your Lordships. It would have been particularly appropriate that a Lord Temporal should have been the first to express the felicitations of the House to the right reverend Prelate who has just delivered his maiden speech. However, he cannot be here, and so the happy priviliege falls to me to congratulate my right reverend brother on such an admirable maiden speech. If I may say so without condescension it was very well informed, very well marshalled, and very clearly delivered.
It is one of the characteristics of the episcopal office that a Bishop is a regional creature, for we are placed in certain territorial areas and we seek, as best we can, to identify ourselves with that territory over which we have a jurisdiction. It is one of the most valuable contributions that we can make to your Lordships' House and discussions, in that we can bring a regional element into a national discussion. As I proceed with my speech you will notice that I am orientated by the experiences that I have had here in London. It is most valuable for us to have had a first-hand impression of the effect of this Bill on the North-East of England, and we are grateful to the right reverend Prelate for giving us so clear a picture. Our appetite has been whetted as we look forward to many further contributions from him in the days to come.
I should also like to thank the noble Lord, Lord Bellwin, for the clarity with
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which he has presented so complicated a Bill, for it is a Bill of great complexity, and it is very difficult for those of us who are not versed in the language of the rights of landlords and tenants, and the vast amount of legislation and regulation involved, to get our minds round the verbiage contained in its 167 pages or to comprehend exactly what it all involves. Yet we must try to do so, and we must look to those who are well versed in these matters to help us. For if we dig below and try to sift all the complications and technicalities with which this Bill deals, what we find is people and their homes. This is one of the most vital and important of all issues which ever confronts Parliament, for, if we fail to deal with it adequately and justly, we shall lay up for our nation dangers of quite incalculable magnitude.
The right to a decent home is a basic human right. It is one of the foundations of human dignity. It is one of the main sources of human happiness. If we tolerate a state of affairs where there are numerous homeless people, or encourage a situation in which those who have homes go in fear that, for one reason or another, they may be forced out, then we create within society a large body of people who are unsatisfied, unhappy and frightened, and therein lie the seeds of every kind of social evil and unrest.
It was because of our concern about the situation developing in this country over housing that a month ago Cardinal Hume and I called a press conference to draw attention to the public apathy in general towards the problems of housing. With the support of many other Christian leaders we issued a pastoral letter to our congregations. In those statements we drew attention to the assumption that there is no housing problem in this country, since many people appear to be under the impression that everyone has access to reasonable accommodation at a price he or she can afford. We stated the fact that, as the noble Baroness has just reminded us, more than one million families are registered on council waiting lists. We reminded our hearers of the 1,000 people who take shelter very night in London in Government sponsored reception centres, to say nothing of the many more who are given a roof over their heads and some security for the night in voluntary hostels, or of those who sleep rough or in derelict buildings.

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We expressed a special concern for the single homeless, for whom society seems to have the message, "No chance, no choice, no home". We repeated Article 25 of the Declaration of Human Rights in its assertion that,
"everyone has the right to a standard of living adequate for the health and well-being of himself and his family, including food, clothing, housing".
In our statements the Cardinal and I attacked no one, for we know how complex and difficult are the issues. Nor did we in any way impugn the integrity of those whose responsibility it is to formulate legislation, for we believe that they are acting from the desire to put right many of the wrongs which are so obvious.
So it was all the more regrettable that a great newspaper like the Daily Telegraph could publish an article which misrepresented our intentions, which accused us of a party bias which we do not have and which attributed to us a naiveté of which I hope we are innocent. Our sole concern was to ensure that the problems of housing and homelessness are not forgotten or swept under the carpet. We sought, as is our duty, to stir and enlighten the consciences of Christian people, and of all others who are prepared to listen, as regards the presence of a far-reaching problem in our midst. We stressed that a civilised society must be built on the principle that service to one another is a duty laid upon us by God, and we expressed the opinion that the presentation of this Bill in Parliament provided an excellent opportunity to focus the attention of the public and of arousing their sympathetic interest.
Whether or not we were successful or not is not for me to say, but there can be no doubt that the Bill has aroused very wide interest and concern. Of all the matters which have come before this House in which I have expressed some interest, none has produced so widespread a reaction in my post bag as this Bill. It is not only organisations and societies which have produced material. Nor is it only cranks who have written to me. It is ordinary people who are very scared about the future. One writes:
"I am approaching my 80th year and am in poor health and I know that if this Bill goes through, as it undoubtedly will, I shall have to look for somewhere else to live".
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The writer is a retired civil servant who has lived 27 years in his flat. A lady writes:
"We are pensioners living on a fixed income, not index linked, and are afraid that we shall soon be priced out of our flat and, with the housing situation in London making it impossible to find other accommodation, we are deeply distressed".
I do not know if these fears are well founded; I have no opportunity of going into all the facts, and I hope they are not well founded. I hope the Minister will be able to reiterate what he said in his opening speech and give assurances that these fears are not well founded. But they indicate the setting in which we shall be discussing the Bill, and I hope we shall not get so immersed in the technicalities that we forget the people and the human situations which form its background.
The Bill will take us into many complex areas, but there are three issues which stand out as requiring our special consideration: the condition of the single homeless, the sale of council housing, and the contribution to be made by the housing associations. I will comment briefly on each of them. The state of the single homeless is a matter of deep concern, especially here in London. It is difficult to assess how many there are, but the possibility is that every night some 50,000 single people are homeless, some sleeping rough, some going to Government reception centres and some going to commercial lodging houses. Many of them are young people, who, despite warnings and pleas, come to London and discover that the money, work and accommodation that they expected do not exist.
Valiant efforts are being made by voluntary associations to meet the need. The one I know best is Centrepoint in St. Anne's House, in Soho, but there are many others. And some at vital points have closed or are closing. The short-stay accommodation provided by the YMCA in Endell Street off Cambridge Circus has closed. I understand that the St. Mungo Community will soon have to leave the old Charing Cross Hospital. The decision to close the Camberwell hostel alone will require the provision of a further 600 beds by 1985. What is to replace these centres?
In many of the hostels the conditions are seriously substandard, both hygieni-

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cally and from the safety aspect, and it was to remedy this state of affairs that Mr. Dean moved his amendments to the Bill in another place. I fully appreciate the problems which are created by a demand for better standards. If the health and safety standards have to be improved, many institutions will have to close because they cannot afford to introduce new measures. If nothing is done, we run the risk of another Kilburn tragedy, when last year in the home run by the devoted care of Mother Teresa's Sisters, 10 people lost their lives in a fire. I fully recognise the action of the Government in taking steps immediately to raise the figure of maximum allowable costs for fire precautions to £5,000; but since owners may claim only 75 per cent. Of allowable costs, which would mean a maximum of £3,750, I hope the ceiling will be raised to £6,750, so that hostel owners will benefit to the full £5,000.
I trust that in the course of consideration of the Bill the Government will give further thought to tighter controls on overcrowding in hostels, will strengthen the duty of local authorities to ensure proper fire precautions, and will consider sympathetically further clauses to protect those who cannot fend for themselves when they are rendered homeless through the closing of unfit accommodation. I understand that amendments will be moved to deal with these issues, and I hope they will attract the sympathetic reaction of the Government.
I come to the right to buy. I believe in the principle of a home-owning democracy and I applaud all measures taken to help people to buy their own houses. But we shall need to ask ourselves if the provisions of the Bill will operate justly and equitably. I am no expert in this area, but I have heard it stated that the beneficiaries under the Bill are likely to be council tenants who have incomes above average and are already living in the best houses. Nor, so I understand, will the 53 per cent. of council tenants who are on supplementary benefits or rent rebates be able to profit from the Bill. As well, we need to ask how these provisions will react on the fate of those who are homeless or on waiting lists. Is it going to advance or hinder their cause? What is going to happen if and when the housing stock of a
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local authority has been eroded to such an extent that there is no accommodation left to help those who are really in need? And what will be done with the funds that accrue from the sale of council housing? Can we be given an assurance that they will be ploughed back to be used for further house-building and so to provide a continuing stock of houses available for those who, in these very expensive days, cannot hope to be able to provide for themselves out of their own resources?
I come, finally, to the place of housing associations in this pattern of housing, and I want to take this opportunity of congratulating them on their work and thanking them for the great contribution they make to the solution of our housing problems. My own belief is that since the Bill quite properly recognises that the problems cannot be solved only by resources drawn from the public sector, it is right to make use of private money, and in this process the housing associations will have an increasingly important part to play. I believe this is especially an area in which the Church can profitably co-operate in providing further housing. Moreover, the housing associations will have a special part to play in meeting the needs of those who will require help by way of subsidy because they cannot afford to buy, and will need care and support over and above the management services normally associated with housing.
I am told that in 1978, 85 per cent. of all new tenants in housing associations earned less than the national average wage. It is these people who are being helped by the housing associations. I also applaud the encouragement given by the Government to housing associations to provide more small hostels as an alternative for those who are now in institutional accommodation. If this encouragement and these policies are to succeed, it is essential that the housing associations should be encouraged, strengthened and properly financed; and, in the case of hostels, that the planning and building regulations should be sorted out so that the goodwill and energy available should not be frustrated by the administrative jungle through which so many people have to fight their way to get anything done.

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My Lords, I fear that I have spoken too long and yet have not touched on many of the issues which involve the intimate concerns of ordinary people. These problems are especially acute in London where big money plays so important a part, where foreigners are enabled to buy so much housing accommodation which is then not fully and regularly occupied, and where ordinary middle class people, upon whom so much of the life of London depends, are squeezed out and will either become homeless or go and live elsewhere. It is essential that we should achieve a balanced housing policy; otherwise there will no longer be in London and other great cities a cross-section of workers, students, and the middle classes, as well as the wealthy. The cities will become a desert of business houses and extremely expensive housing accommodation for the weekday use of business people. That would mean the death of our great cities as we have known them and as we love them.
I am grateful for the opportunity of being able to speak early in this debate, since I have an inescapable commitment in St. Paul's Cathedral later this evening. If the debate continues for long enough, I shall return for its final stages. If it does not, I ask the indulgence of the House and the Minister.
As his chaplain some 40 years ago, I was influenced by that great man Cyril Garbett, Archbishop of York. When he was Bishop of Southwark he was so horrified by the appalling slums of his diocese that he made himself an expert in housing and vigorously campaigned for its improvement. Things have changed drastically for the good since his clay, and much of the language he used is strangely out of date. But the heart of the problem remains and his words translated into the terms of our own problems are relevant, and should be kept in mind as we examine this Bill. He wrote:
"Overcrowded and insanitary buildings are a great evil … They are centres of disease and poverty. They injure character. They are a standing reproach to our civilisation. They are a fierce challenge to those who believe in the justice and the love of God!"
I hope that the outcome of this Bill will be to reduce the lack of housing and reduce the bad conditions and the fear of unfair pressures which are the lot of so many of our fellow citizens.
5.13 p.m.
Baroness FAITHFULL: My Lords, I should like to add my congratulations to those already extended by the right reverend Prelate the Bishop of London to the right reverend Prelate the Bishop of Newcastle. It is certainly right and proper that we should hear of the problems of the North, bearing in mind that so many of us live in the South, and we are most grateful to the right reverend Prelate. I propose to follow his methods and make my speech a series of questions, so as to shorten it.
First, I welcome the Bill for two reasons. On the one hand it provides independence and assumption of personal responsibility for those wishing to purchase their council homes under the chapter dealing with the right to buy. I should like to say to the noble Baroness, Lady Birk, that obviously she and I have attended quite different meetings. At a meeting which I attended a number of the other people present had, when they were children, been in care, and it was their one desire to work for and purchase their own homes. On the other hand, the Bill takes into account the most vulnerable in our society. On occasions it has been said that we on this side of the House are not always full of compassion for, and understanding of, those who are in trouble and in need. However, I believe that we are mindful of the vulnerable and that the Bill is a balanced Bill and meets the needs of all sectors of society.
The right reverend Prelate the Bishop of Newcastle asked the Minister why the provision about the right to buy was included in the Bill, and he asked whether there was a financial aspect to this. I must leave the Minister to answer that question, but I can point out that in all sectors of society in this country there are many people whose passion and desire is to own their own homes.
I have torn up the speech that I had prepared, in an effort to shorten my contribution to the debate and because we are yet to hear many outstanding speakers, although we have already heard a number. I ask the indulgence of your Lordship if I do not appear to be very clear, since I do not propose to deliver my prepared speech, but rather to ask a series of questions. The first question concerns the elderly. We welcome the

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fact that there is to be greater flexibility in the whole area of grants, repairs and improvements. I believe that this is right, bearing in mind that 48 per cent. of elderly householders are owner-occupiers. Some houses need modest adaptations and repairs so as to enable the elderly to continue to live in them In some cases there is a lack of amenities.
May I ask the Minister whether it can be borne in mind—and the right reverend Prelate the Bishop of London made this point very clear—that the elderly do not know what to do or where to go in regard to housing matters. The situation is very complicated and difficult. I would, with great diffidence, suggest to the right reverend Prelate that there are answers to the questions of the old people who went to him, and if they knew exactly what was the situation they would not be worried. Therefore I hope that under the Bill voluntary organisations and social services departments will be able to set up advice bureaux in housing departments or elsewhere in cities or other areas, to help the elderly.
My second question to the Minister also concerns grants, repairs and improvements. As your Lordships know, I support the Bill, but there is one matter that I am worried about; namely, that concerning sub-standard empty property in our country. Throughout the country—and last week I walked through various streets of Camberwell and Brixton—there are boarded up empty properties. In the area in which I used to be responsible for the homeless, the housing officer and I (as director of social services) made a list of every sub-standard property. We looked at all the properties and some of them were fairly murky; yet with small grants such properties could be made habitable. Often people prefer to live in a sub-standard property rather than to be sent to hotels or boarding houses, or to be faced with nowhere to sleep, as the right reverend Prelate mentioned. It is very worrying that in this country property remains empty while awaiting development by either local authorities or private developers. I ask the Minister whether provision could be made in the Bill to tackle this situation, or whether, alternatively, guidelines could be sent to local authorities pointing out that they should
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no longer allow properties to remain empty.
My Lords, I think that if sub-standard property had a minimum amount of money spent on it, as I would wish were the case, many of our homeless would no longer be homeless. Perhaps your Lordships will not he surprised to hear that, as a local government officer, I ran out of money, and so we invited a number of students to work for us (the housing officer agreed) putting sub-standard property into some sort of order so that people could have a temporary home, at any rate. I may add that those people were not tenants; they were given the property to live in as licensees, which is a quite different situation, from a legal point of view, from their being tenants.
Here again, I, too, would talk about the young people. Many of us are deeply concerned with the young people—and, of course, we must deal with the here and now. But need many of our homeless young people in fact be homeless? I know that many come to London against the wishes of their parents and against the wishes of their relatives, and have nowhere to go; but I believe that we should have better education and more help given to parents, so that no young person should come to London without somewhere to go. May I also say that, sadly, many of those who are homeless have been children in care, having no homes, and we should have dealt with that situation at an easier stage.
I would also ask the Minister, as the right reverend Prelate has done, about hostels and grants for fire precautions. Fire precautions are extraordinarily difficult matters, because what is required seems to change with each change of fire officer. I would submit that £5,000 is not an adequate figure for hostels for the homeless and for others. As to the Chronically Sick and Disabled Persons Act 1970, which is dealt with in Schedule 23, up to date it has been necessary for local authorities to notify the department of those properties which they have adapted for the disabled. I know that we should leave responsibilities with local authorities, but, as I understand Schedule 23, if local authorities are not going to have to notify the Government of those properties which they have adapted, we shall not know how the chronically

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sick and disabled are being treated, and we shall not be able to monitor. I would ask the Minister whether he would not agree that we should leave in that provision.
My Lords, the Bill does not in any way cover gypsies and those living on houseboats, but I will not go into that at the moment. I, too, should like to pay tribute to the housing associations and trusts which give so much in this country. But also, I would pay tribute to the housing departments, who work so hard in partnership with the housing trusts and associations.
5.24 p.m.
Lord JANNER: My Lords, may I, too, take this opportunity to compliment, on behalf of everybody in the House, the right reverend Prelate the Bishop of Newcastle, who made a very remarkable speech and one which I am sure will lead people to hope that he will talk to us frequently and give us the benefit of his great experience and advice. Let me also turn for one moment to the right reverend Prelate the Bishop of London. I hope he will realise that very much of what he has said is in the hearts and minds, not only of those who are supporting the Bill but of those who, like myself, consider the Bill to be quite unuseful from the point of view of helping the position. After all, we are dealing with a subject which is of the utmost importance, not only from the point of view of the regular, technical side of it but from the point of view of the fact that the house is the home, and the home itself should be playing the highest part in providing a proper background to the family, which is dwindling very much today from what it was years ago—that family spirit which was so very useful in giving strength to people who were apt to drift, so preventing them from drifting into crime and all the rest. Therefore, we are dealing with a tremendously important subject.
Let me say at once that I thought the noble Lord who introduced the Bill presented his case in very interesting and (shall I say?) clear terms, because, after all, it is a very complicated Bill; but in spite of all that I am bound to tell him that my view is different from his and from the Government's—and it is based on a very long experience, which com-
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menced very many years ago, of leasehold reform. At that time Lloyd George, who I knew well and to whose party I belonged in those days, introduced measures to prevent what was then happening in the way of the taking over of houses at the end of long leases, with a consequent reduction in the protection of tenants—and we are coming to that again in the course of our present experience. At that time there were long leaseholds being taken over and people being deprived of their homes and having to buy, and the whole purpose of the Leasehold Reform Act was to cure that. We are having a similar thing happen today—we shall have the opportunity to speak on this when we debate certain amendments—although it is being exercised in a somewhat different way; but speculators are moving in and they are dealing with a situation which is very similar to the situation which was created at the time of the Industrial Revolution, and which ultimately resulted in vast numbers of people being deprived of their homes, having believed that they could not be turned out.
Perhaps I may turn for a moment or two to my criticisms of what has happened in regard to this Bill. Let me take some of the points that are made by the Government, and let me take, first, the right to buy for public tenants. It sounds good. It is good for the few who can afford to buy; those who can take advantage of large discounts. This is a policy for better-off tenants at the expense of their neighbours. Their neighbours must pay increasing rents; and who will pay for the subsidised mortgages? But what about the one million people on housing waiting lists? Will the local authority now be able to house them? It seems to me that they will not. As the noble Baroness (with whose opening address I certainly agree) pointed out, the Government are to cut spending on council houses from £5,372 million in 1978–80 to £2,319 million by 1983–84. This is a drastic cut of 48 per cent. which will put an end to new building for those most in need of houses of their own.
Then let us take the security of tenure and improved rights for public sector tenants. Of course, tenants should not be treated like second-class citizens; of course, they should enjoy the same freedom in their homes that other occupiers enjoy.

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But none of these rights mean much if rent levels force people to live in fear and force them out of their homes; and this, I think, will be the result of this Bill as it now stands and if there is not very full amendment of it at later stages.
What is the position? The Bill plans to do the opposite of protecting. There is the £100 returnable option to purchase, giving tenants a couple of years to see how the market is going. "If it looks profitable, exercise your option. If not, get your money back. Wait months and then you can have another little flutter". What has long been regarded as social housing is now in my opinion turning into a tame game of Monopoly.
Then we have this much-hailed innovation, the shorthold. This we are told—and we heard it today—is the answer. Let the landlords' offer shortholds (a euphemism for shortlets) and, virtually overnight, we can expect all empty properties to be put on the market for letting. But will this happen and is it what is needed? The answer to both questions in my opinion is an emphatic, No. The greatest need is for decent, long-term rented accommodation especially in London and in other cities. The majority of private tenants are not temporary residents and those who are temporary residents will leave of their own accord. At what price will these new forms of short-lets be available? It is no good offering those of our people who live and work here permanently—often single people and childless couples, not generally eligible for council housing—shortlets at prices that they cannot afford. Many are unable to raise mortgages. How will they pay the market rents and find the two months' deposit (plus the expenses of moving, often a sum of at least £500), only to find that 12 months later they are forced to move and to find a new shortlet? This is madness, and it is a madness not only reserved for those in immediate housing need.
This Bill is a great deal more insidious than that. This Bill will have the effect of eroding the limited security of tenure afforded by the Rent Acts; so that as people move (and most tenants have to move from time to time if only because they cannot afford to stay) they will find only shorthold available to them. The Govern-
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ment have made much play of the fact that the Bill does not remove security from existing regulated tenants. This is only technically true. The real truth is that with rents rocketing up as fast as, and faster than, inflation and with rent reviews every two years—not three years—tenants will be under tremendous financial pressure and will be forced to move. This is to say nothing about the incentive for landlords to offer tenants alternative shorthold accommodation in order to get them out, and to say nothing about the lack of any incentive for landlords to fulfil obligations. The Secretary of State is to give himself powers to do away altogether with so-called "fair" rents and rent registration and he is introducing "assured" tenancies where market rents will prevail. The noble Baroness said that she was at a meeting. I wish that she would attend some of the meetings of the tenants' associations; she would then find that the story is a very different one from what she apparently heard at the meeting she attended.
Thousands and thousands of tenants are appalled at what is happening—with no attempt being made to put the situation right. We hope that in the course of our debates amendments will be introduced to give those tenants some kind of security, some kind of hope for the future, which does not appear at the present time. At a stroke, over 200,000 controlled tenancies are to be "fair rented" without any obligation on landlords to provide minimum standards of decent habitation. What is to become of the Rent Acts and of the protection which up till now—although not altogether as satisfactory as I would have it—the Rent Acts gave? Shall we not be killing the Rent Acts completely if we accept the proposals contained in this Bill?
What does all this add up to? Just this: higher and higher rents, less security, lower standards—all measures which w ill exacerbate the many problems that already exist in the private rented sector. And even where shorthold would produce some results, the Bill as drafted has many difficulties built into it. The Bill does nothing to stop widespread evasion of the Rent Acts such as holiday lets and licences. These will continue and will remain more attractive than shortholds to many operators. These evaders of the law will not

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change their ways. Surely all genuine holiday lets should be registered with the local authorities and be subject to planning consents as an extension of the hotel industry.
The hypocrisy in this Bill is the presumption that "shorthold" is the only way to revive lettings. The truth is that the Government do not have a policy for the private sector and the Government do not have a policy which will provide secure housing. Shorthold is not a policy; it is an expedient to help landlords make more money in the hope that they will then be more willing to invest. What kind of policy is that? It is an expedient which has infuriated tens of thousands of the Government's supporters. And I think that the Government know it very well. I suggest that the noble Lord who introduced the Bill perhaps might take the advice of some of the tenants' associations with which he is personally acquainted.
I should like to recommend a policy to the Government. It is not new; it has been well tried. It is called temporary municipalisation. If the private landlord w ill not let, then the local authority should be able to extend its buying powers—and I know that in Central London this idea has appealed to many Tory-controlled boroughs. The council could then sell to tenants or let at its discretion. I recommend, if I may, this policy to the Government to assist tenants to stay in their homes; and I believe that several Members of the other place sitting on Government Benches support this policy. They and we on this side recommend it because it will work, which is more than can be said for shorthold.
Another point which is worrying the 6 million private tenants is rent levels and the nonsense by which charges can be made from services without any proper accountability. Tenants are being faced with rent levels fixed by rent officers and rent assessment committees which are by no means fair and, in spite of the provisions of the Rent Acts, reflect the scarcity of accommodations being let by landords. Tenants are being "ripped-off" (I believe the expression is) over their service charges with landlords.
Are the Government prepared to do something to halt this? Far from it.
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The landlords are to have their scope for charging increased with provision to charge for "future" works to be undertaken, and for all but long-lease holders no adequate safeguards against fraud, and no reasonable steps taken to ensure consultation with all tenants before expenditure is incurred. The local authority will no longer be able to prosecute for non-provision of information. Does the Minister really believe that the system that prevails at present for the middle-class person is satisfactory? Ask the Conservative members of the tenants' associations what they think about this. Does he believe that charges of the kind being made at present, without any right by any body of tenants to consider the proposals, are satisfactory?
Take, for example, this situation—and I can speak from personal knowledge. I personally had to leave premises because the rent assessment was in my view impossible to meet after going through the tribunals. Talk about scarcity value being taken into consideration—what is scarcity value? Is scarcity value the fact that there are not other places to let? That is what I understand scarcity value to mean. Is it that in an area scarcity was created by those who were profiteering in property and consequently were not letting their premises but driving tenants out? There was a scarcity of rented property. Will the noble Lord explain what he is proposing to do regarding that matter in which Government action should be taken in order to clear the position?
The situation that exists for many private tenants is extremely unhealthy: anonymous landlords, often registered in Lichtenstein or some offshore island with tax advantages, buy and sell blocks of flats and properties over the heads of tenants, refuse to do repairs, ignore environmental health orders and attempts by local authorities to protect tenants, harass tenants by non-provision of essential services, ignore planning regulations, and so on.
However, can the local authority step in and buy or do anything constructive? No. This Bill does nothing to improve that situation. Can tenants withhold their rents and service charges? Yes, but few dare for fear of eviction. Can rent officers refuse to raise rents and service

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charges because essential services and work are not carried out? No, because the onus of proof often remains with the tenant, and rents can be charged even on accommodation classed as unfit for human habitation.
If the Government honestly want to see increased home ownership, why are we not seeing an extension of the Leasehold Reform Act to enable millions of private tenants to buy their homes at realistic prices? Instead, we have the spectre of leaseholders whose families may have lived in houses for generations, often on full repairing leases, being forced to leave or being forced to pay ludicrous sums of money for their homes. This is the kind of shameful nonsense I referred to earlier in my speech; and yet the Government press ahead with this legislation. They press ahead even though they have set up a Select Committee to look into the private sector. That is rather like writing a thesis before completing your research. The private tenants have correctly asked for Part II of this Bill to be withdrawn pending proper consideration.
My Lords, there is much more one could say but I am afraid I have already used more time than I was entitled to do. I sincerely hope that the Government will do something to deal with the situation as I have presented it.
5.46 p.m.
Lord SANDFORD: My Lords, both the people that I wanted to make my remarks to first are absent from the Chamber. The right reverend Prelate the Bishop of Newcastle explained to me that his Archbishop wanted to have a word with him, so we can understand why he is not in his place. Nevertheless, I should like to congratulate him in his absence and to confirm, also in his absence, what the right reverend Prelate the Bishop of London was saying: namely, how valuable it is to have Bishops in this House able to convey to us the special flavour of their regional scene.
I should also like to be able to speak directly to my noble friend the Minister and give him some words of comfort and support, because nine years ago I was occupying his position and battling with
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the Housing Finance Bill. The whole exercise is still vivid in my memory. We worked for many long hours throughout the night battling with the noble Lord, Lord Diamond. I should like to congratulate my noble friend on presenting this Bill, and I think that noble Lords will agree that he did it with great clarity and skill.
I should also like to congratulate him because it is a good, comprehensive and imaginative Bill and it will be effective. Also, it fulfils in all fundamental respects what successive Conservative Party conferences have been very carefully considering for several years. I am sure that noble Lords will not delude themselves into thinking that Conservative Party Conferences are made up entirely of plutocrats. They contain council house tenants and a wide range of people from all walks of life.
This Bill fulfils in all fundamentals what was clearly put from the Conservative Party Conference into the Conservative manifesto at the general election last year and which gained us a great deal of popularity. It is that manifesto mandate which this Bill now enacts—and pretty closely.
As my noble friend has said, the Bill starts with the main election promise in the housing field; the council tenant's right to buy. This will be enacted by the Bill in substantially the form it was in in the election manifesto. Despite what the noble Baroness, Lady Birk, said when she was in her place, it is true that the sale of council houses is now generally supported by the Association of District Councils. I can say that because I am one of their vice-presidents. That is an association which contains within it 330 or so of the non-metropolitan housing authorities, the great majority of the housing authorities in the country.
There are a number of disputed details, and we shall need to look carefully at them at the Committee stage. Clause 18 has already been mentioned. That deals with the important exceptions that have had to be made in the rural areas. If we have not got those quite right yet, they can still be improved. But my belief is that they are about as good as they can be. We have to look carefully at the exceptions being made for sheltered accommodation

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and for other accommodation for the elderly, but, as the right reverend Prelate, the Bishop of London, was saying, it is tremendously important to strike a proper balance here and not overdo provisions of the Bill one way or the other. We shall need to look, too, at the arrangements in Part VIII of the Bill relating to housing associations. I was glad to hear the noble Lord, Lord Evans of Claughton, when he was here, say that on the whole he likes that Part of the Bill.
The second part of the Bill fufils the rest of the Conservative manifesto on housing. These were the Conservative proposals for reviving the private rented sector. We have heard a good deal about that—as to whether the balance is right or not—already in this debate, and we shall have to return to it. What it will undoubtedly do is help to bring back into useful service the 300,000 or 400,000 units of private rented accommodation which have been withdrawn from the market, as the noble Baroness, Lady Faithfull, was explaining. As your Lordships will remember, this loss occurred in 1974.
In 1969 the Labour Party, I think very wisely, set up a balanced, non-party, expert committee—the Francis Committee. Noble Lords can judge that it was both expert and non-party by the fact that my noble friend, Lord Bellwin, was serving on it. This committee, which, as I say, was established by the Labour Government in 1969, reported in 1971 and from then on, for the rest of the Conservative Administration, we followed their advice, which was not to extend too widely the security for the tenant in the private rented sector because, as they said, if one did so it would take a whole lot of private rented stock off the market. Unfortunately in 1974 the Labour Party, which had set up that committee, disregarded that advice, and exactly what the Francis Committee said would happen, did happen, and we have lost all that housing stock.
In times like these it is essential to make the most of all the housing stock that we have got. Time and again speakers have talked about the high cost of building new houses and have said, "For heaven's sake, let us use the houses that we have got and, if we can, afford proper protection to private tenants as well". I put it to your Lordships
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that it is intolerable to have excessive housing under-used or used only for holiday lets or for foreign visitors, as the right reverend Prelate, the Bishop of London, said, when it could be providing roofs over the heads of families that are in real need.
I very much welcome the call which was first made—I hope it will be made again—by the noble Lord, Lord Evans of Claughton, that we should try to move (this is the House which could do this) towards a more bipartisan position on housing policy. I was sorry when the noble Baroness, Lady Birk, seemed to me to exaggerate unnecessarily such differences as do still show upon the face of this Bill. In so far as I have any influence in matters—and I do have some through the Association of District Councils, which is the association for the greatest number of housing authorities—I hope the area of bipartisan agreement can be increased at every stage, and not least during the passage of this Bill in the House.
5.54 p.m.
Baroness DENINGTON: My Lords, I wish to commence my speech by expressing my thanks to the noble Lord, Lord Bellwin, for the clear exposition he gave of this Bill, which is a very complicated one. He was very helpful to us. I also want to add my congratulations on his maiden speech to those already expressed to the right reverend Prelate, the Bishop of Newcastle, though he is now absent. I thought it was a very moving, deeply felt and wise speech and I am sure we all look forward to hearing him again many times.
Those of us who have ever been involved in endeavouring to deal with the housing needs of our people will know that we seem to be beset with endless problems, and it is easy to feel that the situation never gets any better at all. Many of us can remember the early days after the war, particularly in our great urban areas—and that is largely where the pressing problems remain—when families with several children were living in one room, sharing a lavatory with four or five other families in the same house; a cooker on the landing, shared; no bath; rain coming through the ill-mended roof after the bombing, and so on. Indeed, I am echoing the thoughts

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expressed by the right reverend Prelate, the Bishop of Newcastle, who mentioned such things. The queues at our political surgeries in those days were just endless.
It is not so today. We have made progress. Tremendous efforts have been made. Some developments are not liked, but at least the people who live in the tower blocks have good separate dwellings and modern amenities. A growing number of people have second homes. There are more separate households than ever before as the young go off on their own, and ageing parents are now expected to live in separate accommodation, too. But very severe problems remain. Homelessness is one. Would that people would realise that accommodation in London is not only very expensive but is exceedingly scarce. The right reverend Prelate, the Bishop of London, reminded us very forcibly of the problems of homelessness in London. The nation still has far too many old and dilapidated houses remaining to be dealt with. There are formidable numbers of people on local authority waiting and transfer lists. Young married couples and wanting-to-be-married couples are pressing for their own separate homes, and some can afford to buy starter homes, although there are not many of those yet. But many must rent.
As rents rise more and more, people are seized with the advantages of home ownership and are queueing for mortgages and feeling desperate as prices rise against them while they try to save for the down payment. The judgment on a new Housing Bill must surely rest on the measure to which it is likely to enable the various housing agencies, both public and private, to meet the problems and satisfy the desires of our people. I consider the Bill in the light of those criteria. Today I can select only a few aspects for comment. The first is the right to buy. Recognising that a person who is and has been a local authority tenant has been lucky, in that he has had a responsible and caring landlord and usually has had a very reasonable rent and security of tenure, unless his conduct has really been quite unacceptable, nevertheless I do not in general quarrel with the right to buy. If people like their home and wish to secure this valuable asset and fashion it in so
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far as structure and planning regulations will allow, then let them. Let them have their home. Let them make it their own and let them enjoy it.
But in satisfying the desire of individuals who wish to buy, Parliament must surely safeguard the ability of the responsible authorities to meet the needs of others. Their housing stock has been built with certain categories in mind—so many large houses for big families, so many two- and three-bedroom houses, so many one-bedroom flats and bedsitters for people of any age, and a quota of bungalows always intended for the elderly and clearly marked on plans as OPDs—old persons' dwellings. There is a wide concern at the Secretary of State's refusal to allow this particular stock of homes suitable for old people to be safeguarded.
He has recognised the need to preserve for re-letting a house which —and here I should like to quote from Schedule 1 on page 95—
"… has features which are substantially different from those of ordinary dwelling-houses and which are designed to make it suitable for occupation by physically disabled persons".
How necessary, how wise and how proper! Then the next paragraph, No. 4, goes on to deal further with safeguards, if—
"the dwelling-house is one of a group of dwelling-houses which it is the practice of the landlord to let for occupation by persons of pensionable age and …"—
and it is the "and" and what follows that is the rub—
"… and a social service or special facilities are provided in close proximity to the group of dwelling-houses for the only or main purpose of assisting those persons".
That is fine: those are exempted from sale, but the concern arises from those provisos stipulated in paragraph 4 following the word "and".
The requirement for special and social service facilities will exclude thousands of dwellings vital to the housing of our ageing population—dwellings that have been purposely built for them: the OPD's marked on the plans when they were approved by the Ministry. If they are sold, the old people now waiting for a vacancy will be left with little hope. It is incomprehensible to me that the Secretary of State has refused so far to agree to all the representations made to him on this subject.

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In order to meet his views as far as possible, a final amendment was moved in the other place on Report Stage asking for the local authorities to have the right of pre-emption in perpetuity but allowing the tenant to receive, on surrender of the tenancy, the full current market value of the house. Was that not fair? I thought it was. The Secretary of State refused to accept the amendment. I find it just impossible to see why. Would he accept if a term of years were set instead of there being a perpetual right of pre-emption? The rights and advantages of the individual would be fully protected but the needs of other elderly people needing the accommodation would be safeguarded.
I have just stated that the rights of existing tenants would be fully safeguarded, but that is not quite correct. They would not have the right to leave their purpose-built bungalow or flat to anyone of their choice—who would of course be a son or daughter—after death, nor could they sell to anyone on the open market who might pay them a high price for a desirable pied-à-terre in an urban area, or a second home in the country, because all these dwellings are usually very attractively designed and landscaped: indeed they are highly desirable dwellings.
The local authorities are responsible for doing their utmost to see that they meet the housing needs of our people. Housing associations in receipt of public funds have a similar duty. Why does the Secretary of State insist on ignoring the strong representations that have been made to him on this subject? Why does he refuse to recognise the needs of our older citizens? The fundamental question, surely, is whether a person who has been housed in an old person's dwelling as suitable to his needs owing to his age but one not provided with special warden and similar facilities—those excluded by paragraph 4 following the word "and"—is to be permitted to allow that dwelling to pass out of the control of the authority who let it to him, and so prevent other old people still looking to the authority for that kind of accommodation from being suitably housed.
I have had many distressing cases to deal with over the years in connection with the accommodation of elderly people who have become prisoners in their flats because they could not go up and down
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stairs and the older blocks of flats still have no lifts. The only hope of helping them was when a vacancy arose on the ground floor. Do not the Government care about such cases? Let us try in your Lordships' House to move them on this matter. Amendments will be moved, because this is a matter of general concern, being just as vital everywhere as in some special rural areas.
I have some hope of acceptance of the general case when the Secretary of State recognised similar representations with regard to the need for more pre-emption, not only in the national parks and areas of outstanding national beauty but (at the Report stage, as he has just told us) the added approved rural areas. Let him unbend a little further. The point is not a political one: it is purely a practical and humanitarian one—one asking to ensure that elderly people everywhere have their chance of a suitable home preserved for them.
The management problems of local authority housing departments are very great these days, especially in stress areas. They do their best, but if two of their most precious assets are taken from them—the re-lets of purpose-built accommodation for the aged in addition to the houses for families in great need of them—the distressed tenants will be penalised and the problems will be intensified. I really do beg the Government to think again.
Some of my friends may have been surprised and even a little pained to hear me say that I am not against the right to buy; I seek only safeguards. The reason is that I agree not only that we should endeavour to meet people's wishes, but that it is socially undesirable to drive out all the would-be, and all those who are financially able to be, owner-occupiers from local authority estates. Out of my experience on a new town development corporation, where we have sold many houses, I have seen the problems arising from different tenures side by side to be minimal, and the benefits of letting people put down roots and gain a valuable and enjoyable asset are great. I have a firm conviction that near-monopoly landlordism is not a good thing. We want variety. We must preserve enough rented housing to meet the need.

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I would talk about shortholds, but I do not wish to speak for too long. The main point on shortholds is that if they would make more private accommodation available at reasonable rents and charges, with cast-iron safeguards against exploitation and abuse, they could be welcomed. But as I read the Bill at present, the safeguards are quite inadequate. What we need is a variety of landlords, and this is where the housing associations have an important role to play. I think the Bill is intended to help housing associations, and this I welcome. A great deal of responsibility is placed on the Housing Corporation and I hope it will be able to move speedily enough to satisfy its customers. Certainly the output of housing associations has grown considerably of late years, and our thanks—this is a matter that has already been referred to in the House this afternoon—are due to the great number who give voluntary service in this field.
I should like to refer to one special aspect of housing association work; that is, the formation of co-operatives of various kinds—management co-operatives, community leaseholds and co-ownerships. I was very interested to hear the words of the noble Lord, Lord Evans of Claughton, on this same point. This is a field that should receive the utmost encouragement from the Government. I know that they support it, because I am a member of the Greater London Secondary Housing Association, which was set up originally at the instance of the Housing Corporation and the GLC, with the support of the DoE. We had distinguished members of the present Government on the board, until they had to resign on taking office. We also have a bishop, Members of both main parties from the other place, and other good people who believe in encouraging ventures in which people will take far greater responsibility for the management of their own affairs.
Community leaseholds and co-ownership are another state-aided step to ownership. Management co-ops are co-operatives of tenants whose landlord has agreed to enter into an arrangement approved by the DoE, for some or all of the management responsibilities to be transferred to the co-operative, and for a payment to be made to the co-operative for such services as they undertake.
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At present, among other interesting activities, this organisation to which I belong is trying to establish four cooperatives, being groupings of dwellings on a large GLC estate. If this succeeds, as I trust it will, we shall perhaps have shown that council tenants on large estates can be allowed and helped to do the day-to-day management of their homes themselves to their own desires and standards, and being relieved of a large area of what I believe is now commonly called "aggro". Such an approach could surely be spread to every large tower and slab block. It needs two things to get it going. The first is the willing co-operation of the local authority, and the second is some extra finance.
People who have no experience of working together, of committee procedures and duties, of meeting the regulations under which they must work and so on must be tutored. It is no good just selling them an idea and expecting them to cope. They must have a short course of education and guidance, and someone to hold their hand until they are established. This can best be done through a housing association. A housing association must run the course of guidance for them and provide a worker who will be their friend and adviser in the early days.
The embryo co-ops—and this applies equally to community leasehold and co-ownership co-ops—will have no money at that stage to pay for this help, and so the supportive housing association must fund it. What is needed is money for setting up grants. I think that Clause 115 of this Bill will cover this kind of grant. Will the Minister confirm this, and also indicate the Government's support for this movement? Those of us who are trying to get it going would be delighted if he would give positive encouragement to the Housing Corporation and the local authorities to be forthcoming with grants for this purpose.
The only other problem that I have time to deal with today is the position of the family whose breadwinner loses his job in an area of high unemployment, where there are already many with his particular skill on the unemployment register. Because he is a person with initiative and is not satisfied to try to exist on the dole, he gets himself another job in a different area which involves moving home. Unless

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he has a house to sell and can buy another in the new district—this is very difficult if he is moving from North to South, where house prices are considerably higher—he has to rent and is in great difficulties, because of the dearth of private rented property, the level of rent demanded for it and the refusal of the local authority usually to house him, unless he goes on the waiting list and is prepared to wait for maybe two or three years.
He is put in an impossible position, so he throws up the job and goes back home and lives on the dole. It is an absurd and wicked situation. There is great need to help the mobility of labour and it is a point of national importance. It is economically harmful to the nation to have unfilled vacancies in manufacturing industry in one area, with employers crying out for labour, and would-be workers living on the dole in another area because they cannot be housed where the work is. I know that the CBI have pressed this point on the Government.
This Bill makes a feeble attempt to ameliorate the matter—I cannot say to deal with it, because what is proposed is quite inadequate. If your Lordships will turn to Clause 45 on page 33, you will read that the Secretary of State may, with the consent of the Treasury, make grants or loans towards such moves as I have outlined, or towards the organisation of mutual transfers between a tenant in one area and a tenant in another. This is quite inadequate. I hope that the Minister will give further consideration to this matter. He will surely be aware how valuable an attraction to industry it is to have its workers housed, as was found in the new and expanding towns. Here is a Government which insists that industry must be made efficient and competitive, setting up enterprise zones, but taking no firm steps to ensure the mobility of labour. Industry must be enabled to recruit its key workers and some definite understanding with local authorities on this matter ought to be sought.
There is much in this Bill, and if the Government will listen to the amendments that I can tell are going to be put to them from all sides of this House, and will be a little flexible, this could change from being a party Bill to being a great Bill. The opportunity is there. On behalf of all your Lordships, let me beg the Minister to
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listen to the amendments when they are moved.
6.18 p.m.
Lord HYLTON: My Lords, this Bill has been subject to timetables and to the guillotine in another place. It is quite clear that it is very much in need of revision, and that is one of the chief functions of your Lordships' House. May I welcome Chapter II of the Bill, and go on to make two rather specialised points? I want to reinforce everything that has been said so far in this debate about hostels and common lodging houses. It is a very sad fact that, in the last two and a half years, there have been over 30 deaths from fires in such premises.
My honourable friend the Minister for Housing in the other place said, at a late stage, that he would consider certain amendments that had been moved but not pressed. Those dealt with fire precautions and overcrowding in hostels and lodging houses. Can my noble friend Lord Bellwin give us an assurance that the Government will be bringing in amendments in this House to meet some of those points? May I go on to ask him, what is to happen to the occupants of unfit hostels and lodging houses when they are closed by a local authority? Will there, in future, be a duty to rehouse such people or, at the very least, will a local authority have an obligation to arrange alternative accommodation for the people whose hostel is closed?
My second specialised point concerns housing associations. I know that the National Federation of Housing Associations has written to the Minister for Housing on four technical matters. Can my noble friend Lord Bellwin give us an assurance that these matters will receive a sympathetic hearing? I realise that it would be possible, maybe, to deal with them by amendment, but it may also be possible to deal with them by means of regulations or other administrative measures. It would be good to hear something on that.
I come now to the substance of the Bill—and that is, in particular, the right to buy. This Bill, with very few exceptions, gives an absolute right to tenants who have occupied a local authority house or flat for a certain time. It removes virtually all discretion from local authorities and

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from a large number of housing associations. The Bill gives enormous powers to the Secretary of State. Is this right, I wonder? Many noble Lords in all parts of the House have served for a vast number of years in local government, and some are closely connected with local authority associations. I am quite sure therefore that questions will be raised from all sides as to whether it is right to bring about such a very great centralisation of power under the cloak of increasing citizens' rights.
My honourable friend Mr. Benyon, the Member for Buckingham, both spoke and voted at Second Reading against the Bill for reasons of this sort. I shall not repeat his arguments, although they were very cogent. All I will say is that it has been quite accepted now for a number of years that it can be very misleading to generalise about the national housing situation. There are so many different local situations and local problems, and local solutions arc needed. That is why the Housing Acts of 1969 and 1974 put a duty on local authorities to survey the housing needs of their areas and to produce plans that would meet these needs by the combined action of all the housing agencies.
I understand that at the moment housing investment plans are supposed to be based on a comprehensive assessment of local needs. This is what makes me question how we can expect local authorities to devise sensible and appropriate local housing strategies when their existing tenants are to have a statutory right to buy. The noble Baroness, Lady Denington, touched on the question of the balance and the composition of the housing stock, and in particular the various sizes of its units. She also made some excellent points, I thought, about mobility. I would just add that both in the towns and in the country every single vacancy and every single opportunity for tenants to transfer can be of vital importance.
This Bill is in many ways very inflexible. My honourable friend Mr. Scott, himself a former Front Bench spokesman for the Conservative Party on housing, described the Bill as "a blunt, inflexible instrument". He pleaded for greater discretion for local authorities, especially in the city centres,
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and I support him 100 per cent. In the City of Leeds, in 1979, the Liberal Party put forward proposals for limiting the number and proportion of council dwellings to be sold on any given estate. They also asked for differential discounts to encourage house purchase on the most unpopular estates.
What do we see in this Bill? We see no provision for anything of that kind. I would describe the Bill as a Procrustean bed. It is so rigid. Let us take, for example, the rule to be applied to the sale of flats on long leases. There is to be a minimum period for leases of 125 years—nothing less. I ask this question: What is to happen if those flats happen to fall down before 125 years have expired? Surely we could trust local authorities to fix the length of leases of the flats they are selling. The local authorities know when particular flats are going to come into a modernisation programme. They know, roughly speaking, when they will be needed for redevelopment. Why can we not have many differing lengths of lease? Surely this would suit the particular circumstances of the locality and also the pockets of the purchasers, who may be people of very varying means and wealth.
I come now to the exceptions to the right to buy. I should like to support everything that has been said on this point by the noble Baroness, Lady Birk, the noble Lord, Lord Evans of Claughton, and the noble Baroness, Lady Denington. Like them, I am concerned about those old people's bungalows and flatlets which are not included in group schemes with wardens. My honourable friend Mr. Mates, the Member for Petersfield, made this point with great force a propos small villages in the countryside which are too small to sustain a sheltered housing scheme with a warden. My own village in Somerset is a case in point. In that village there are four bungalows, built in the mid-1960s. The local authority changed its mind and built bungalows instead of houses at the suggestion of the man who was then the local councillor and myself.
Why cannot local authorities be allowed to make up their own minds as to the future of these old people's bungalows? Why is it that the man in Whitehall must always be presumed to know best? Like the right reverend Prelate the Bishop of

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Newcastle, whose speech I so much enjoyed, I know of a case in the district next to mine where an elderly widow is applying under the existing rules to buy her two-bedroomed bungalow. She is buying it not for herself—this has been stated openly—but for her son and daughter-in-law who are already living in a separate and adequate house not very far away. Can we not write into the Bill something which will avoid this kind of family pressure being put upon the elderly?
Clause 18 is very much to be welcomed, as has been said already, but may I ask Her Majesty's Government whether they will extend these concessions to cover such places as seaside urban areas and all the known housing stress areas in the cities? And there are perhaps a few of them also in the country. I am referring here, of course, to the buy-back and resale provisions. It might be better to allow the Secretary of State, if we are going to give him such vast powers, to extend this kind of protection to any area that needs it.
I should like to refer to the matter of discounts, Clause 7. I know that it is the practice to give such discounts to sitting tenants, both in the public and in the private sector, who purchase, but in my view the discounts in the Bill are far too large. My noble friend the Minister referred with some pride to his home city of Leeds. There, between 1967 and 1979, some 4,400 dwellings were sold, but even when the Conservatives had control of the city council the discount level was only 15 per cent. And they insisted on a 10-year pre-emption period. I applaud those thrifty Yorkshire councillors.
If we consider the discounts in the Bill, together with the two-year option period, it is clear that discounts could reach up to 50 or 80 per cent. of the current market value at the time when the purchase is completed. This will happen unless the rate of increase in house prices falls away very sharply in the next two years. I think I have said enough to indicate how strongly I feel that the discounts are too large.
This leads me to question, as has been done earlier in the debate, the purpose of the sales policy. The Secretary of State
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spoke of a profound social revolution and of the transfer of capital wealth to the people. The right reverend Prelate the Bishop of London and the noble Baroness, Lady Birk, have already asked: Who will benefit? It is certainly not the half of council tenants who are pensioners or are dependent on social security benefits or rent rebates. Instead it will be families with more than one income and couples with children grown up who will be the principal beneficiaries. Is this social justice, I wonder? Is it something which the heirs of Disraeli should be attempting to do in their efforts to build one nation? I think it may well be agreed quite widely that we do not want to see council housing becoming the tenure of last resort, nor do we want to see welfare housing, as has been experienced in North America.
I also question the timing of this all-out sales policy. Standards of living are remaining static or falling; unemployment is rising and affecting minorities, such as the blacks, school-leavers, older workers, ex-prisoners, particularly severely. The numbers in poverty, especially among the old and in one-parent families, are rising. Welfare benefits look likely to be cut in real terms. There is a reduction in public expenditure and rate support grants which one fears will lead to a decline in many public services. Is this therefore the right moment to try to sell off so many of the local authority and housing association houses?
In pressing the Government to have second thoughts on this matter I should like to draw attention to the research that has been done on the social effects of earlier sales. There were a quarter of a million local authority properties sold between 1951 and 1978. Detailed local studies have been made in many places of the effect by, for instance, the National Council for Social Services, the Centre for Urban and Regional Studies, Brunel University and the Catholic Housing Aid Society. The evidence seems to be fairly clear that a combination of sales and a lower degree of spending on new building and modernisation will lead to serious social strains in most areas. That is why I ask the Government to consider delaying the implementation of Chapter I until after the report which is to be made by the Select Committee of the other place on the whole question of selling council properties.

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I want to end on a constructive note because I am as keen as anyone in this House or elsewhere on achieving balanced communities with a good mixture of tenures and with the objective of diversifying large council estates which, whether in the town or country, can so often be dreary places. I believe that this Bill is taking the wrong approach and there is a great risk that social assets built up over generations will be signed away at a stroke. What can we do instead? Local authorities and housing associations can be encouraged to build and to sell at cost. The noble Baroness, Lady Denington, mentioned tenants' co-operatives for management, co-ownership and community leasehold. All of these are very worth while. Equity sharing was pioneered by Birmingham city. The GLC have done useful experiments on homesteading, where the worst properties can be rehabilitated on free long leases by those prepared to do so. Self-build, of course, should be encouraged. Then there is the whole concept of flexible management of housing, put forward in the report of Cullingworth in 1969. I am afraid that this Bill hardly encourages that at all.
I have tried to outline an alternative housing strategy which will secure responsible social control over community assets. I think we should try everything to prevent council housing in the future being equated with bad houses for poor people. As I said before, we must avoid council housing becoming the tenure of last resort.
6.35 p.m.
Lord HATCH of LUSBY: My Lords, this Bill is the latest in a series of measures introduced by this Government on the social and economic affairs of this country. We had the Employment Bill, which was a misnomer because its main object was to undermine the power of the trade unions. We had the Industry Bill—again a misnomer because its object was to reduce the power of the National Enterprise Board and the regional agencies. We had the Social Security Bills, whose objectives were to reduce social security, and I should like to ask the Minister who is to wind up the debate tonight, in the jargon of the Ministry of the Environment, how many new units of accommodation does he
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expect to be provided by his Housing Bill, with all its 144 clauses and 24 schedules?
Like the noble Lord, Lord Hylton, who, I must assure him, will get a great deal of support from this side of the House if he will persuade a few more of his colleagues to think in the same vein as his speech indicated, I am somewhat taken aback by the sudden shift in political emphasis by this Government. I have heard it argued many times by members of the Government and their supporters that they have a mandate for this Bill because the main provisions were in the manifesto and they were elected on that manifesto. What happens to those councillors who were elected on the opposite manifesto? What happens to those councillors who, both before and since this Government were elected, have won their seats in opposition to the sale of council houses?
As the noble Lord, Lord Hylton, has said, despite the Conservative party's long history of continually pointing the finger at the Labour party's support for state power, this Bill is giving greater state power to the Minister responsible for the environment than any other Bill has ever given to such a Minister. It is taking away the power of the local authorities, locally elected, to organise their housing schemes in the way in which their mandate points. I should like the Minister to address himself to this issue, which seems to me to be a fundamental issue arising out of this Bill. Centralism is surely not part of the philosophy on which the Conservative party was elected to power. It is not that we on this side necessarily in principle are opposed to the sale of council houses per se; what we are totally opposed to is the compulsion on local authorities to sell council houses; the compulsion from the central Government telling local authorities what they must do with the council houses that they have been elected by their localities to supervise.
My noble friend Lady Denington made an important point, again taken up by the noble Lord, Lord Hylton, on the importance of mobility and the part that housing plays in mobility in our industrial state. It seems to me, from what I have been able to glean from the figures, that for 23 years at least, since the Act of 1957, many areas of our cities have been denuded of the working class—of the workers who work in and service those cities—as a

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result of the on-going consequences of that Act. Will this Bill do anything to stop that forced migration of workers out of the cities into the suburbs? I do not believe it will. I believe that what you have to look for here is a combination of council accommodation and privately rented accommodation, but privately rented accommodation with the conditions that prevent that privately rented accommodation from following the consequences of the 1957 Act which came to be known by the term "Rachmanism". And the way to do that is by increasing the social ownership of privately rented accommodation.
Here I come to one of the central issues that I should like to ask the Minister to answer in his winding-up speech. The noble Lord, Lord Hylton, has mentioned the housing associations and the representations of the National Federation of Housing Associations. I wish he had gone a little further, because according to the National Federation only 25 per cent. of those now having rented accommodation within a housing association will be eligible to buy that accommodation. But that is only part of the story. What happens to the other part, what happens when a tenant of a housing association is able to purchase his house? How does that affect the association? In my submission, it weakens that association by reducing its revenues, although that association at the same time has to maintain the same standard of services in looking after arrears, looking after repairs and so on, and the same staff.
It is just a matter of accident as to whether the tenant within a housing association happens to live in accommodation which allows him to purchase his accommodation, or whether he happens, as in at least three-quarters of the cases, to live in accommodation which is not allowed by this Bill to be purchased. If, as the noble Lord, Lord Hylton, suggested, there is a feeling on that side of the House that the housing associations should be supported, I should like the Minister to tell us just how he is able to distinguish between the right of certain individuals who are members of housing associations to purchase their houses and those who are not. Secondly, is he open to amendments on these clauses; would he, for instance, consider exempting housing associations altogether from the
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compulsion to sell, in order to protect the revenues which they require to carry on their operations efficiently?
Secondly, I want to follow the right reverend Prelate the Bishop of Newcastle and others, including Lord Hylton, who have addressed themselves to the problems that this Bill can raise in the rural areas. In the other place it is normal for a Member to speak on behalf of his constituency. In this House we do not have constituencies, but many of us, and indeed very many Members on the other side of the House, have been brought up and still live in rural areas. There is indeed a rural lobby in this House, which was seen a few weeks ago in the vote on educational transport. I hope that the noble Lord, Lord Hylton, and his friends on that side of the House will get together to bring their pressure to bear on the Government as to the disastrous effects which could arise from the application of this Bill to the rural areas. Like them, I was brought up and lived in a rural area, and so am able to speak, as many Members of this House are, with personal knowledge.
The first thing I should like to ask the Minister is to give us some idea of the Government's opinion of the definition of a rural area. According to the Bill, in Clause 18, the definition reads:
"an area designated by order of the Secretary of State as a rural area".
What does that mean? For example, I am sure the right reverend Prelate, whose maiden speech was very much enjoyed this afternoon, would agree with me that Newcastle is a city, but Newcastle is also a rural area, and there are rural areas with cities at their centre. We need to know. We cannot just leave it in the hands of the Secretary of State to make his arbitrary definition of what a rural area is. So could we have some much clearer definition of what the Government have in mind when they talk about rural areas being designated by the Secretary of State? I know that the Minister, when he is answering the worries that many of us have about the effect on the rural areas, will talk about the ten-year rule. People in rural areas are not very happy about this ten-year rule. At its best it will simply postpone the issue; at its worst it will become a lawyers' charter for those who wish to get round it.

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The rural areas of this country have communities of character, and one of the essential elements in these communities is the place that the local council can have in providing accommodation. This is important not just for the individual as a human being but because rural areas, by definition at least, are associated with agriculture. What happens to the agricultural workers? Many agricultural workers have been accustomed to living in tied cottages. It is the normal practice when an agricultural worker retires from a tied cottage for the council to look favourably on his application for a council house, thereby releasing the cottage, whether it happens to be a tied cottage or whether it is a convenient cottage near the farm, for his replacement as an agricultural worker. This will be at least severely threatened by the compulsion that rural authorities must sell their council houses, or must offer for sale their council houses, and thus reduce—and in this case, as the right reverend Prelate pointed out, reduce from a very small base—the number of council houses, when there are only a few council houses available in such an area.
Again in following my noble friend Lady Denington, it is also in rural areas that you find so many of the bungalows specially built for the elderly that will come outside the exceptions to this Bill, the elderly who are looking for community, for continuation in the community and for the security of being near friends and relatives in their old age. Indeed, the threat that is made by this Bill to the rural communities as communities is likely to undermine those communities in very large areas of our country, and force people unwillingly to go and live in towns. And then what? What is happening to our rural communities? They are being denuded of their public transport; their residents are being forced to try and run a car, because there is no other transport; they are then being hit by the increase in the cost of cars and the cost of petrol and insurance; they are being hit by the educational cuts; they are being damaged by substantial rate increases; and now, on top of all that, comes the threat to the settled order of their housing facilities.
I suggest to the Minister, and particularly to the noble Lord, Lord Hylton, and his colleagues on that side of the House
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that, as happened in another place, they get together and bring their pressure to bear on the Government before the Government get away with the undermining of the health of our rural communities and destroy what has for long been a heritage of this country, and still makes an important contribution to the development of the economic, the social and the cultural life of this country.
6.52 p.m.
Lord MONSON: My Lords, I should like to join other noble Lords in congratulating the right reverend Prelate the Bishop of Newcastle on a most eloquent maiden speech. This is a lengthy and complex Bill and we have not been given a great deal of time to study it in depth. If it appears that I have misinterpreted any of the details, therefore, I trust that the noble Lord, Lord Bellwin, who is to wind up for the Government, will understand.
If Labour Bills dealing with housing tend to be heavily underscored by ideology of a fairly extreme and uncompromising nature—even when the Labour Administrations tend to be moderate in other respects (and I shall return to this later)—then Conservative Bills dealing with housing also tend to reflect one particular strand of Conservative philosophy—the strand that heavily plays down principle, or ideology, as those in this camp would term it, in favour of pragmatism. This Bill runs true to form in being long on pragmatism, or at any rate would-be pragmatism, and short on principle. Let me give an example.
The White Paper that preceded and paved the way for the Leasehold Reform Act 1967 was surely one of the most intellectually dishonest documents ever to emerge from a Government department. The Conservative Party, both in this House and in another place, rightly fought the Bill through all its stages with extreme vigour, almost entirely on grounds of principle. Yet, Clause 133, at the end of this Bill, far from making the 1967 Act fairer to the freeholder, actually extends its scope, even if only by a small degree.
Similarly, one must doubt whether the proposal to grant tenants who have lived in their council houses for as little as three years, more often than not at a

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subsidised rent, the right to buy their houses at a discount of 33 per cent.—a discount which may well be worth £10,000 or more in certain cases and which will effectively be paid for by the taxpayer or the rate-payers of the borough in question, some of whom may well be poorer than those who are buying their houses and flats—can have anything to do with principle. Here I strongly agree with the noble Lord, Lord Hylton.
If we accept then that principles play only a minor part in the Bill, then (the admirable Clause 42, dealing with tenants' rights is perhaps one exception) how does it shape up in terms of the Government's pragmatic objectives? Let us revert to Chapter 1 of Part I which gives council tenants the right to buy the freehold or long leasehold of their houses or flats.
First, will it benefit the nation as opposed to the purchaser, from the longterm economic point of view? The Government argue, of course, that the savings in annual maintenance costs will more than offset the adverse effects of disposing of assets at between 50 and 67 per cent. of their market value. The Government may well be right, but will the savings in annual maintenance expenditure be as great as they anticipate? We must bear in mind that council flats, as opposed to council houses, will be sold on 125 year leases at a fixed ground rent of £10 per annum. Even if inflation should drop to only 8 per cent. per annum—which seems pretty remote at the moment —within less than 60 years £10 will not cover the cost of a second-class postage stamp. Surely there is a case for some indexation of the ground rent, and also perhaps for introducing a fair service charge. I am sure that in this House we are all opposed to the unfair or bogus service charge, about which many noble Lords have spoken, and which is levied by a few private landlords and which I understand Clause 129 is meant to remedy. However, few could object to a fairly-calculated service charge, designed to cover the maintenance and insurance of the roof, stairways, lifts and other communal areas.
There is another reason, I think, why the overall economic gains may be smaller than envisaged. The noble Baroness, Lady Birk, has pointed out that many
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tenants who buy will be taking on a greater economic burden than they can actually afford. I entirely agree with the noble Lord, Lord Evans of Claughton, who spoke from the Liberal Benches, that most councils do far too many things for tenants which they could easily do for themselves—for example, changing the locks, replacing tap washers and so on and, in certain cases, even changing the tenants' light bulbs, if my informantion is correct. One particular merit of the Government's proposals is that such wastefulness will be greatly reduced.
However, there are certain jobs—the maintenance of the roof, chimneys, drains and the structure generally—which even the most talented do-it-yourselfer cannot manage without outside help. It will be extremely expensive outside help, as those who already own a house will know, and over the long-term it is hound to be reflected in higher wage claims. I hope that the Government are aware of that.
Secondly, will giving the right to buy, encourage labour mobility? Perhaps, but not, I think, to the extent imagined. The political correspondent of the Spectator usually writes extremely good sense, but a few months ago he came something of a cropper, in my view. Mr. Mount was writing about the Glasgow constituency of Cathcart, the constituency represented up until May last year by Mr. Teddy Taylor, and speculating upon the effects of the sort of legislation contained in Part I of the Bill upon the area, had such legislation been in force at the time. He suggested that ownership of their council houses would open up great avenues of opportunity for unemployed shipyard workers in the area, by enabling them to sell and to buy comparable houses elsewhere where more work was available. But who on earth would buy a house in Cathcart if no work were available for him in the area? Retired people will scarcely choose Cathcart in preference to Bournemouth or Torquay. What use is it to a shipyard worker to be able to have a house to sell, if the price realised represents only one-fifth of the cost of a comparable house elsewhere where work is in fact available?
Thirdly, bearing in mind the rights conferred by Clause 1, is Clause 18 really adequate as a safeguard to prevent extra burdens being imposed on farmers, with workers living in tied cottages who

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subsequently obtain jobs outside farming? Like the noble Baroness, Lady Birk, I doubt it, notwithstanding that it was the Government of which the noble Baroness was a member that caused the difficulties in the first place via the 1976 Act dealing with tied cottages.
Let me turn to Part II of the Bill dealing with the private sector. One can unreservedly welcome Clauses 50 to 52 which introduce the concept of the shorthold tenancy. This will be of immeasurable benefit to students, young married couples and others desperate for accommodation. I said that I welcomed it unreservedly, but I have one proviso, which is the unilateral right given to the tenant in Clause 52 to give up the tenancy at as little as one month's notice. This will surely be highly discouraging to anyone leaving for, say, Canada, Saudi Arabia or Australia on a two-year contract and who wants to let his house or flat while he is abroad, and will certainly reduce the amount of accommodation coming on to the market. This case must be looked at extremely carefully when the Bill goes to Committee.
But what a pity that the Opposition are threatening to throw a spanner in the works because of outdated ideological obsessions. It was the late Richard Crossman who once wrote that he had an instinctive prejudice against landlords. Of course, the late Mr. Crossman must be given credit for his honesty and for admitting his prejudice, unlike fellow Socialists who will not admit their prejudices openly. But it cannot be left at that. A blanket prejudice against landlords is no different morally or intellectually from blanket prejudices against Americans, Pakistanis, Germans, Jews, Roman Catholics, or against butchers, bakers, candlestick-makers or any other occupational group, and it is something which intelligent people ought to work to overcome.
Baroness BIRK: My Lords, perhaps I may briefly interrupt the noble Lord, as we are running so late. It is not a blanket prejudice against the landlords. He is talking about the shorthold section and we were saying that the safeguards, which, in fact, were introduced by a Conservative Member in another place, have not yet been honoured. That is what we were speaking about.
Lord MONSON: My Lords, I entirely accept that the noble Baroness, Lady Birk, is devoid of such a blanket prejudice. I merely mention that the late Mr. Richard Crossman was not, and I believe that many of his colleagues were not. At the same time, I am extremely glad to know that this is now no longer an important factor.
I now turn to Clauses 58 to 62 dealing with registered rents. Here I must declare an interest, inasmuch as I own property let at "fair rents", albeit on a voluntary basis. In other words, although over the years I have had many tempting opportunities to sell very profitably with vacant possession, I have chosen not to so on what might be termed, at the risk of sounding priggish, "conservationist" grounds; that is to say, I believe that village houses should, so far as possible, be kept for village people, many of whom are of slender means, rather than being sold to urban commuters—the young executives who use slimline brief-cases and drive their firms' Cortinas, in the memorable words of Sir John Betjeman.
However, although one does not and should not expect much of a net return from letting residential property, there comes a point when the return is so derisory as to make one wonder whether it is worth continuing at all. I think that it was the Royal Institute of Chartered Surveyors which a year or two ago estimated that the net return on so-called "fair rented" property was as little as 1.8 per cent. per annum, this in an era when three months' money attracts interest at a rate of 17½ per cent., and when even blue chip equities yield 10 per cent. This great disadvantage is compounded by the illogical phasing system, which ensures that rents which come in never keep up with the rising cost of outgoings—repairs, insurance and so on.
The proposal in Clause 59 to shorten the re-registration interval from 3 years to 2 years will certainly help a little, although to some extent it will be counter-balanced by the effect of Clause 60, which effectively brings a revised rent into operation somewhat later than it has done hitherto.
I should like to suggest an entirely different approach to the pattern of rent revision—one which is based on human nature and human psychology, as it actually is. Your Lordships will have

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noticed that petrol prices have risen by well over 100 per cent. over the past three years, while "fair rents" have risen by scarcely one quarter of that amount —well below the rate of inflation. Yet people accept the rise in petrol prices with barely a murmur and they become angry when rents increase. Most people are resigned to paying steadily higher prices every year for food, clothing, gas, electricity, bus fares, train fares, and so on, in line with inflation. Yet, again, they are indignant when rents rise by very much smaller cumulative amounts over a three-year period.
Why should this be so? It can only be because the rise in food prices, clothing prices, bus fares and so on happens at least annually; in the case of petrol the rises takes place almost monthly now whereas rent reviews take place at only three-year intervals, which is far too long a period in an era of rapid inflation. I have worn both caps, and been on both sides of the fence; in other words, I have been a residential landlord and a residential tenant; I have been, and still am, a business landlord and a business tenant. In the case of the latter I must admit that emotionally I have become most annoyed when a rent has been increased sharply after seven years of static rent, even though intellectually I have to admit that it is entirely justified.
The answer then, surely, is for all fair rents to be automatically adjusted annually in line either with the retail price index or with the earnings index, whichever has risen the less in the preceding 12-month period. This would still be somewhat unfair on the landlord, but a lot less so than the present system. From the tenant's point of view such a change would produce two inestimable benefits. He or she would not have to cope with a sudden unforeseen increase in rents every three years or so, for which he or she was mentally unprepared. Secondly, and more important, the tenant would know that the rent would never swallow a larger proportion of his or her income than at the outset of the let. In other words, in some years—those years when earnings rose faster than prices—the rent would actually take a smaller proportion of his or her income. It would still, of course, be necessary for rents to be re-registered periodically to take into account changes in other extraneous
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circumstances, but it should not be necessary to do so as often as once every two years or even as often as once every three years. Therefore, there would be a most useful saving in public expenditure.
I believe—and if noble Lords on either side of the House disbelieve me I urge them to reflect carefully upon this—that 90 per cent. of private tenants would vote for such a scheme were it put to a ballot. The valid and desirable objectives of Government policy must surely be, first, substantially to increase the amount of rented accommodation coming on to the market—indeed, the noble Lord, Lord Bellwin, himself said that the Government were determined to stem the unabated decline of the private rented sector; secondly, to create genuine fairness as between landlord and tenant; and, thirdly, for the sake of social harmony, to foster good and durable relations between landlord and tenant. I believe that my proposal would achieve all three objectives, and I urge the Government to give it serious consideration.
7.8 p.m.
Lord PITT of HAMPSTEAD: My Lords, I think that it is in the context of the country's very difficult housing situation that this Bill should be examined. It is in terms of its contribution in helping to solve the housing problem that, like my noble friend Lady Birk, I have examined this Bill. The Bill proposes to give security of tenure and the right to buy their homes to tenants of local authorities and other bodies, to make provision with respect to those and other tenants, to amend the law about housing finance in the public sector, and to make other provisions with respect to housing.
Security of tenure for public sector tenants is obviously desirable and the tenants' charter should be welcomed. As my noble friend Lady Denington has already pointed out, it is unfortunate that the Government have not gone as far as they might in helping to increase the mobility of public sector tenants. Perhaps the Minister could give us more details of the voluntary scheme, which he mentioned in introducing the Bill. I also think that the Government ought to have abolished residential qualifications, because they so often prevent newcomers from getting on to the council housing

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register, and that the power of distraint on tenants' goods ought to have been abolished in this Bill so that the public tenant can be placed on the same level as the private tenant.
The right to buy their homes—which is a new right conferred on council tenants —needs to be examined carefully in relation to its effect on people in housing need. Remember that these council tenants, and tenants of other public bodies, are the only tenants with such a right. A house which has been sold, and can be re-sold, is no longer available to house someone who is homeless or living in bad conditions. That is obvious. It will not be available for people with children who may be living in high rise flats and needing to transfer to more suitable accommodation. That is also obvious. Moreover, in some areas its effect can be catastrophic. The Government have accepted this fact in relation to rural areas, and have been pressed by several speakers this evening to go further than they have gone in this matter. However, I think that this applies with equal force to the many stress areas in our inner cities.
Further, the tenants will have the right to buy, even though they may have been the tenants of this particular local authority for no more than six months, provided that they have been tenants of other authorities and the total period is three years. This will create hardship, or anyway administrative problems for local authorities. If the dwelling is a house it has to be sold freehold, and if a flat for a lease of 125 years. We have had speakers query the inflexibility of the lease, and I hope that the Government will be prepared to look at this aspect again.
The purchaser is to receive a discount ranging from 33 per cent. if he has been a tenant for three years, and up to 50 per cent. after 20 years. The first question I wish to ask the Minister is how the Government arrived at this level of discount, and what is its purpose? The Minister attempted to explain it when he introduced the Bill. But his explanation is not consonant with that level of discount. I can see and understand it as a deliberate means of redistributing wealth, since it is one of the few ways that a working man has of accumulating capital.
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If that is the purpose, the Government should say so, and say so straightforwardly. But if that is the purpose, then it is the resources of the central Government that should be used and not the resources of local authorities. In other words, since central Government are compelling local authorities to sell their houses at a discount, central Government should meet the cost of that discount. Admittedly, because of housing subsidies some of these resources belong to the central Government, and the Government have underlined that fact by insisting on receiving 50 per cent. of any surplus that may accrue from sale. The least therefore that the Government can do is to repay the selling authority 50 per cent. of the discount, and agree to compensate authorities which are forced to sell below historic cost.
This matter is more important than it may seem at first sight, because the only way in which the detrimental effects of the sale of council houses can be offset is by provision of more new dwellings. This means that we must add a percentage of council houses sold to the 290.000 to 310,000 houses that the last Government estimated we need to build each year. Let us not forget that in 1979 there were only 220,000 dwellings started, so we were far from the target.
A house building programme of the magnitude required calls for a large increase in housing expenditure, but the public expenditure White Paper has indicated that the total housing expenditure for 1980/81 is expected to be £4,700 million at 1979 prices, which is little more than half the expenditure in 1974/75. The anticipated expenditure for 1983/84 will be nearly half the 1980/81 level. This is quite important because it means that not only are we selling council houses, but we are not prepared to supply the finance to provide the replacement.
The Bill introduces a new form of local authority housing subsidies, under which local authorities will be paid subsidies which represent the difference between what is called the basic amount (which is expected to be what the authority received in 1980/81), and its reckonable expenditure, which consists mainly of loan charges on admissible capital costs and amounts related to the costs of managing and maintaining housing revenue account dwellings, minus what is called local contribu

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tion differential, which is the amount received from rents and rates.
Moreover, the Secretary of State has taken power to amend the basic amount upwards or downwards; to decide what expenditure will be accepted as reckonable expenditure; and also the reckonable income of that authority, which is to be the local contribution differential. It follows from this that the Secretary of State can substantially reduce the amount of subsidy paid to any authority by keeping the base amount as low as possible, restricting the reckonable expenditure, and assuming a large increase in rent for purposes of calculating subsidy. The authority will then merely have the choice of charging the rent that the Minister used, or increasing its rate contribution; in other words, the Government have again placed themselves in a position to force local authorities to charge high rents, much as they did in the Housing Finance Act 1972, but on this occasion they have been more subtle.
The question of relevant expenditure for determining subsidies is inextricably linked with arrangements for project control. The Secretary of State has promised a consultation paper on the subject, but it has not yet been produced; perhaps the Minister will tell us when the paper will be published. The Secretary of State's powers on housing subsidies are too wide-ranging and they should be more narrowly defined. I hope the House will take steps to see that happens.
Moreover, the purchasers of council dwellings also have a right to a mortgage. The extent, therefore, to which local authorities are forced to provide mortgages will determine the amount of cash which will accrue to them from council house sales, and if there is very little private investment available to finance council house sales, then the amount available for housing expenditure will be small. And the right of local authority tenants to a mortgage could result in building societies adopting a policy that finance will not be available from their funds to enable sitting tenants to purchase. Thus, if there is very little private finance available, the discount becomes much more important and the necessity to have it refunded by the central Government becomes more meaningful. I hope I have made my point.
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There are other aspects of the scheme which call for criticism. Many of them have already been mentioned and I will not pursue them. I must, however, again mention the question of the 100 per cent. grant option limiting the eventual selling price for a period of two years to the value ruling at the time of the original valuation, because that really amounts in practice to an additional and very significant discount at a time of high inflation.
Although sheltered housing is exempted from the right to buy provision, that does not apply to other old people's dwellings, but my noble friend Lady Denington dealt with that so well that there is no need for me to go into it, except to mention a point she did not deal with, namely, that this will present some difficulties for the Greater London Council, which built some very expensive and desirable seaside dwellings for old people. There is no doubt that if they are sold to the sitting tenants they will certainly be outwith the availablity of other old people. The right reverend Prelate the Lord Bishop of Newcastle instanced various difficulties and I wish to take this opportunity of congratulating him on his maiden speech, which I found really excellent, and I am sure noble Lords will agree with me that we look forward to hearing from him in the future.
There are other difficulties and in Committee we shall have to amend the Bill in many ways. There were other points to which I intended to refer but I will not prolong my speech. I must say, however, that I too attended the meeting which my noble friend Lady Birk attended in the Grand Committee Room and I formed the same impression as she did. The people present were not anti-landlord, but they were very worried about the consequential effect of shorthold tenancies and about the present situation regarding service charges. I feel a great deal of sympathy for those people.
I know the Government firmly believe it is necessary to revive the private rented sector of housing and that shorthold tenures, assured tenancies, the abolition of controlled tenancies, the more frequent re-registration of fair rents and less security of tenure for tenants of resident landlords will contribute to that objective. I do not believe it. The consequence will be increased insecurity, as happened after 1957, and the continued decline of the

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private sector. But the Government feel strongly about this and we must try their plan. I simply urge them to try to reassure those tenants who will be affected.
I know that the Westminster City Council wrote to the Department of the Environment giving its views on this subject and making proposals. I am told that the Borough Council of Kensington and Chelsea has done the same. I hope the Government will give careful consideration to the representations made by those two important Conservative-controlled councils, because they are very worried about the possible consequences of the Bill on their areas. They are inner London areas with major problems and they do not want the Government to add to them.
Finally, a comment about empty houses. Schedule 3 to the Bill deals with tenancies which are not secure tenancies. Short life or short-term accommodation is affected by the arrangements in paragraph (5) and, in paragraph (3), land acquired for development. Local authorities in inner London make considerable use of short-life accommodation, in particular accommodation which at some time in the future is destined for rehabilitation or major repair. This is often let out to householders, who would otherwise have little priority, on short-term licence arrangements. Acquired property is often used in this way and it has the dual advantage of keeping scarce accommodation in occupation and making houses available to groups with less priority for mainstream local authority housing. The effect of Schedule 3(3) will be to make a proportion of short life accommodation secure from the date of the passing of the measure. That will leave authorities with the difficult problem of what to do with tenants in accommodation which is about to be secure.
It is likely that some authorities may have to consider whether to evict the occupants prior to the Bill becoming law, and there is certainly the danger that the authorities may cease to carry out this very useful service. The Bill will have to be amended in Committee to circumvent this particular problem. This is a very important Bill, which will affect the lives of millions of people in this country. Its principles, whether we like them or not,
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have already been accepted by the other place, but we can amend the Bill and send it back there very much improved. Let us try to do that.
Lord MOWBRAY and STOURTON: My Lords, before the noble Baroness rises, may I make an appeal to your Lordships. The two Front Benches have been appealing to their respective BackBenchers to try to keep their speeches brief. I have been assured by speakers on our side that they will try to do this. I must point out to noble Lords opposite that the last three speakers on their side have averaged just over 20 minutes each. May I appeal to your Lordships to be brief? We have important business to follow, and it is in the interests of all of us to try to be brief. I appreciate that this Bill is important and that your Lordships feel very strongly about it, but perhaps it would be helpful if we could express our views rather more briefly.
7.31 p.m.
Baroness VICKERS: My Lords, I shall try to take notice of what the noble Lord has just said. First, I wish to congratulate the right reverend Prelate the Bishop of Newcastle on his excellent speech. I know Newcastle quite well and realise the difficulties there. I agree with the right reverend Prelate in what he said about elderly people trying to buy houses. I know of instances of estate agents—not in Newcastle—who have been to see old people and have said, "We will buy your houses for you if you will make provision in your wills to leave them to us". We must see that this kind of practice is prevented.
I also wish to thank the right reverend Prelate the Bishop of London because he has been so helpful to me in regard to the hostels that I run. I entirely agree with the Liberal spokesman, the noble Lord, Lord Evans of Claughton, in what he said about allowing tenants to do their own repairs wherever possible. The difficulty here is that often local authorities take a long time to carry out repairs and houses fall into a worse condition than they otherwise would have done.
I wish quickly to pass on to one or two points which I do not think have so far been raised. The noble Baroness, Lady Faithfull, spoke about sub-standard

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houses. It is estimated that at present there are 900,000 such houses, and with a current clearance rate of approximately 37,000 a year, the potential life of a house is now between 400 and 500 years. Clearance must continue; otherwise there will have to be a massive clearance programme in 20 years' time.
The recent take-up of grants in the private sector is poor, the total in 1979 being only 50,000, compared with 217,000 in 1974. Perhaps the taking up of such grants could be encouraged. One difficulty here is that when a property is improved usually the rates go up, which is very unfortunate. There should be a much more simplified application form for grants. It is sad that 90 per cent. of the grants are for dwellings which lack basic amenities. Houses are the only buildings which do not legally have to have a hot-water system. I believe that there should be an amendment to the Housing Act 1957 so that in future each house has a bath, a hot water system, and an internal WC.
With regard to the homeless—in whom I am particularly interested, as the chairman of hostels in London for young people aged 17 to 21 years—I should like the Department of the Environment to call a meeting to discuss with the voluntary organisations, the housing associations, and the hostels the different types of housing needed, and to decide what should be the functions of those involved in this matter.
It seems to me that we should have one Ministry in charge of grants. At the moment both the Department of the Environment and the DHSS are involved with grants. There should be a central agency to direct people to the type of hostel or home to which they should go. Let me give an example here. In the case of a hostel obtaining a grant from the Department of the Environment, no welfare services are expected to be provided; in fact they are forbidden. If money is used for welfare purposes, the grant can be taken away. Furthermore, such a hostel is allowed to employ only one warden, which is not enough. I understand that in the future grant-in-aid will be paid to the Housing Corporation and that there will be a finite grant budget for any given year. Subsections (2) and (3) of the clause dealing with this matter
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confirm that the Housing Corporation can continue to make grants to housing associations and bodies connected with voluntary housing movements, by which I assume is meant hostels. Perhaps the Minister can tell me something about how these allocations are to be made.
In 1978 local authorities had to obtain accommodation for some 50,000 households under the Act dealing with the homeless. Perhaps we can be told—though not necessarily tonight—what the corresponding figure is now and how many such households are accommodated by local authorities and how many by voluntary organisations.
One of the difficulties about public sector housing that I learnt of when I was a Member of Parliament is that often people are not prepared to take the first house allocated to them by the local authority, perhaps because it is in a district which they do not like, or is in a poor state of repair. Thus 230,000 dwellings—4 to 5 per cent.—of the local authority housing stock are at present empty. I should also like to know what action is being taken regarding 21,000 Ministry of Defence houses which are empty, and which are administered by the Property Services Agency.
I should like to support what has been said about fire precautions. Bearing in mind experience from the hostels that I run, it seems that a new fire officer coming into an area has ideas different from those of his predecessor. Now there is also a move to bring in the health authorities, too, in this regard.
I should like to see elderly local authority tenants who are over-housed but who do not want to move from their neighbourhood where their friends are, allowed to take in a lodger. This would be very beneficial, particularly for young homeless people. In such cases there could be an agreement with the local authority, which could go to court and quite easily manage to get the lodgers out if they were unsatisfactory. The National Association for Voluntary Housing proposed a lodging scheme and has a very good response from potential landladies. The idea was that all prospective lodgers should be interviewed by a qualified social worker or probation officer. But difficulties arose because there could be no guarantee to

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get such lodgers out of the accommodation if they proved to be undesirable.
Finally, at this early stage of our consideration of the Bill I should like to draw attention to the fact that many provisions in it will lead to a substantial increase in administrative work for the housing associations. For example, the proposal to change the period of rent registration from three years to two years would increase administrative work by 50 per cent. Similarly the tenants' charter will mean that housing management staff will have increased responsibilities, as will accountants in preparing and maintaining the grant redemption fund. If housing associations are required to undertake these extra activities under the Bill, then the department should be aware that the associations will expect a commensurate increase in the appropriate allowances.
7.38 p.m.
Lord GIFFORD: My Lords, I, too, wish to pay my tribute to the maiden speech of the right reverend Prelate the Bishop of Newcastle, and in so doing I hope that I may be a little more controversial than he felt himself open to be by adding the following point. The probing questions which the right reverend Prelate put to the Government as a result of his experience in the North-East can, I suggest, be answered in only one way: that the untrammelled right to buy, which is contained in the Bill, is bound to lead to quite intolerable shortages in those areas where there is the most acute housing need.
Having said that, I wish to confine my speech to those provisions of the Bill which deal with security of tenure, because it is in that field that my own experience as a lawyer has been. When we speak about security of tenure let us remember what we mean. We mean the right of people to live in, and build up, their homes in the secure knowledge that no outside agency will arbitrarily take away those homes.
It is a right which is taken completely for granted by the 55 per cent. of owner-occupiers, and one sees in their case, whenever there is a question of compulsory purchase, how precious it is to them. But in the rented field, of course, the right has
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been much less well recognised and much less complete; and my own practice has led me to witness the extraordinary unfairness and misery which is felt when people who are in no way at fault come to face eviction proceedings in the courts and the courts, for one reason or another, can do nothing to stop it.
This Bill deals with security of tenure in both sectors. In the public sector, I also support fully the tenants' charter. The practice of local authorities has varied in the past; some have very fair procedures for investigating complaints against tenants, some evict on the basis of allegations made by neighbours or other third parties against tenants which the tenant often has no chance to answer at all. There will now be the provision for a proper court hearing and for an eviction only if the complaint is proved and it is reasonable to make an order.
I would suggest that we could make one improvement which has not been mentioned this afternoon but which I hope the Minister will consider, and that concerns what happens when there is the break-up of a family. I hope the noble Lord, Lord Bellwin, will listen to what I am saying and will consider it, if not in his reply then at any rate in Committee. When there is the breakdown of a family, whether married or unmarried, and the wife and children have to leave, often under the threat of violence, it is not right that the man, if he is left there, should have the full right to security of tenure of the large house or flat that the family have occupied, and with it the right to buy, and that the local authority should have perhaps to rehouse the woman and the children and not have the flexibility, as they have at the moment, to change the tenancy from the man's name to the woman's name and perhaps rehouse the man in some smaller accommodation. That is an amendment and an improvement to which I shall return in Committee.
To turn to the private sector, the security of tenure, which in Part I of the Bill has appeared as a right to be valued, in Part II becomes a burden from which landlords are to be freed. I appreciate that existing secure tenants will not lose their protection unless they are subject to some kind of switching around, but every future tenant will obviously receive a shorthold of one year and no more, because there would be

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no point in a landlord providing more. It will not just be young people who will receive these tenancies, these shortholds; it will be everyone—young and old, families with children and those without—who have recourse to the private rented market. From now on every such new tenant will live at the grace and favour of the landlord. It is not fanciful to suppose that that is a terrifying thing, because in a property market subject to peaks and troughs it is inevitable that a property owner will obtain, and will want to obtain, vacant possession and sell for owner-occupation whenever the market is high—and that is exactly what happened when we had the furnished tenancies which were insecure.
My Lords, we are being invited to legislate for this insecurity and for this homelessness because it is argued that this will encourage people to let properties which are now empty. In another place, at the Report stage, there was a significant intervention by Mr. Vivian Bendall, a Conservative Member and an estate agent, who told another place that in the view of his profession shortholds would not be attractive because they will be subject to rent control. This is where the pressure is clearly going to come next—not only against security of tenure, but against the rent control provisions. Indeed, the Government have written in a device in Clause 51(4) by which, by mere order, rent control over shortholds can be abolished at a stroke, and I hope that the Minister will tell us (because he did not in his opening) in what circumstances and when it is envisaged that that power is going to be used, because that is insupportable.
So, my Lords, although I would have the greatest misgivings about the introduction of shortholds at all, we must examine this Bill on the basis that the Government's policy is to provide for short-term lettings without security of tenure but to subject those lettings to rent control. It is my suggestion that the Bill does not achieve that object. As it is drafted, it is wide open to exploitation. You have perhaps to work inside the legal profession to appreciate the fantastic ingenuity of those who advise and who draft agreements for owners of property, and it is therefore necessary, I think, to spell out the changes to this Bill which are needed to close off the opportunities for evasion which it contains.
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First of all, it should be mandatory to register the fair rent before the shorthold was granted, and not merely to say that the landlord must apply for it within 28 days; because that gives not only a month's bonanza period, but the right to charge a deposit at the contractual rent, which may be very much higher than the registered rent. It was said in another place that such an amendment would be put before this House, and I would ask the Minister to confirm whether that is going to be the case.
Secondly, there is a deplorable provision in Clause 60 that a fair rent will not take effect from the date that it is applied for but will take effect from the date on which it is registered. This is quite extraordinary. It gives every incentive to the landlord and his solicitors to delay the proceedings before the rent officer, which sometimes even now can take four or five months, during which time the tenant will be paying a non-refundable market rent in areas of scarcity at the highest possible level.
Thirdly, there is really no effective sanction against a landlord overcharging or demanding a premium for the renewal of a shorthold tenancy; for saying, "I know that the registered rent is £20 a week, but if you want to go on living here you are going to have to pay £40". Now the only remedy that a tenant will have is to refuse, in which case he will not get a renewal, or to sue at the end of the period for the rent which has been overpaid, but that is not good enough for a tenant who has just lost his home. What we need is a provision in the Bill to the effect that a landlord cannot obtain possession if he has knowingly required excess rent or knowingly required an unlawful premium.
Fourthly, there is in the Bill a power in the court to dispense with rent registration altogether if the court thinks it is just and equitable. That means that a legal adviser to a tenant, if asked, "Is my tenancy a shorthold or not?", is in many cases going to have to say, "It depends on the judge", because such a discretion given to the court will be exercised in all sorts of different ways and in ways which are quite unforeseeable.
My Lords, the final point lies in what the Bill does not contain. What is does not contain is the closing up of one of the

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most dangerous loopholes which has appeared in the existing Rent Acts; that is, the creation of the so-called licences, the so-called non-exclusive occupation agreements, which the courts have said are perfectly legal. I have experience of tenants having been charged two and three times the registered rent on a registered property by means of these ingeniously drafted agreements.
My Lords, it must be a prime duty of a Chamber of Parliament to ensure that the laws which pass through it have the effect that they are intended to have, that they are not open to evasion, manipulation or abuse. In urban areas and in other areas of scarcity, the provision of rented housing is, I think, more exposed to profiteering than almost any other marketable commodity. There is therefore a heavy responsibility upon us in Committee to ensure that the shorthold provisions of this Bill do not become a charter for exploitation.
7.51 p.m.
Baroness MACLEOD of BORVE: My Lords, the hour is late and I shall be brief. I should like to congratulate the Minister, if I may, on the very helpful way in which he presented this Bill this afternoon. It is an extremely complicated Bill and seems to allow for every housing need and every contingency. All the i's are carefully dotted and all the t's are laboriously crossed. But of all the many Bills which come before Parliament, none seems to have fulfilled the old adage of, "Never use one word when 10 will do" as much as this one; and yet a very important section of the population is hardly mentioned at all. I refer, of course, to those who are without homes of any sort, those whose only home is hostel accommodation. Other noble Lords have referred to the many voluntary organisations which provide invaluable service in sheltering the homeless; but far too often local authorities give inadequate help. Those Members of this House who are not aware of the problem would, I am afraid, be deeply shocked by the conditions of squalor in which many people live. Those of us who are aware of the situation feel that it is incumbent upon the Government to direct more resources for the provision of those in housing need in this category.
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In Hansard of another place on 29th November, 1979, the Housing Minister described the housing conditions endured by thousands of single homeless people sheltering in common lodging houses and hostels as:
"some of the worst housing conditions faced by those who are undoubtedly amongst the most deprived and vulnerable".
In the other place clauses were moved on this problem but were not pressed on the understanding that the Minister would consider certain aspects further. Perhaps we may hope that the Minister here will introduce some amendments at the Committee stage.
Clauses 34 to 39 make it possible for a secure tenant of a local authority home to sublet part of his dwelling to members of his family. This is wholly laudable and long overdue—but why only to members of his family? There is provision in Clause 34 that if you get written consent of the landlord (presumably, the local authority) you can house someone who is not a member of your family as a tenant in your house. But time will hardly allow of this if one is asked at short notice to give a room to somebody who is perfectly willing to pay. One knows only too well the difficulty of getting something out of the local authority—and certainly if it is to be in written form. This, I suggest, seems a quite ludicrous and quite unnecessary provision; and it is likely that a tenant will suddenly have a great number of nieces, aunts and in-laws so as to comply with this particular provision. On the other hand, if he is on his own and is an honest man, then much-soughtafter rooms in his house will remain vacant because of all the hassle of having to go to the council for permission to let to someone who is not a member of the family. I should like this clause to be open-ended, with no restriction other than the rent book to be complied with. It would not cost anything and more much-needed accommodation could be provided from this source.
This Bill is very far-reaching and very important, as other noble Lords have said, and its provisions will be welcomed by many thousands of people—especially so, the right it gives tenants to buy their own homes. But, as I have pleaded on other Bills in your Lordships' House, may I again make a plea that a shortened, readable version of this Bill be produced

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for those who have to understand its intricacies and have to try to implement its intention? With those few words, I wish the Bill well.
7.56 p.m.
Baroness STEWART of ALVECHURCH: My Lords, may I first congratulate the right reverend Prelate on his maiden speech, which was of exceptional interest to us all. We hope we shall have many further opportunities of hearing him. Many of your Lordships will agree that the provision of adequate housing accommodation for those with urgent housing needs is one of the most important duties undertaken by local authorities. We know of the misery and tragedies that may be associated with homelessness, of the countless problems associated with overcrowding and insecurity of tenure and the suffering of tenants who live in high-rise buildings. I first visited tenants in this type of building as a student many years ago. What struck me then and has done often since is the loneliness of life in these buildings. Unlike the residents of council houses and flats which are only a few storeys high, the residents of high-rise flats are usually unaware even of the names of their next door neighbours. The need to travel 15 or more storeys by lifts, which not infrequently break down, does not encourage high-rise residents to go out to visit friends or attend meetings or go for walks in the local park. The views from the windows of some of these high-rise buildings may be of interest to visitors, but there is created a great feeling of loneliness and isolation in the minds of the residents. Residents in modern council flats which may be only three or four storeys high will usually know their neighbours; while, when they look out of the window they will see children at play and will almost certainly participate in group activities.
This Bill seems to be in some respects anti-social in its approach to human needs. Although adequate housing accommodation is one of the greatest human needs and the provisions of housing one of the most important social services undertaken by local authorities, one of the main purposes of the Bill would appear to be to encourage local authorities to sell their most attractive properties (which would, no doubt, in some areas include houses
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with small gardens) and retain the least attractive (which in urban areas would include high-rise flats) for citizens who could not afford to buy a house or flat. One of the results of this policy will be to reduce both the amount and the standards of council houses, and many of the million or more people on the local authority waiting lists will be deprived of council houses and flats for many years to come. It is also likely, under the Government's policy, that there will be large rent increases for many of the poorest tenants, and for those in the worst accommodation.
When considering this Bill, we must bear in mind that local authorities are elected bodies and that it is the duty of their members to serve the community which voted them into power. I think it extremely unlikely that a Government policy which encourages local authorities to sell all their best property, houses and flats, to the well-to-do members of the community, and thereby greatly reduce the number of houses and flats available to the less fortunate, will meet with the approval of the majority of electors in large cities.
8 p.m.
Viscount BOYD of MERTON: My Lords, I must apologise to the House (as I have already done to the Minister) for not having been here at the opening of the debate. It is possible that one of the two brief points that I want to make may already have been made by another noble Lord. If this is so I must apologise to him. My points concern solely the older charitable housing trusts. Here I must declare a personal interest. I am a trustee of the Guinness Trust, a housing trust founded 90 years ago by my wife's grandfather. Certain points I know have been raised with Ministers—and the noble Lord, Lord Hylton, made a reference to it today—of the views which concern the National Federation of Housing Associations.
However, the older trusts are concerned also about two points which go beyond the general points raised by the National Federation. I know that my anxieties are shared by my noble kinsman Lord Moyne, who is also a Guinness housing trustee, and Lord Jellicoe and Lord Blakenham, who are Peabody trustees. The anxieties are also shared by the Samuel Lewis and the Sutton Trusts.

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Our anxieties concern Clause 124 of the Bill, which provide that every registered housing association which has received a grant under the 1974 Act shall show separately in its accounts the surpluses arriving from increased rental income from housing projects to which the grant was made, and that the surpluses are to be shown by each association in a fund to be known as the Grant Redemption Fund; and the method of constituting this Fund and of showing it in the accounts is to be as required by the Secretary of State.
However, these older trusts that I have mentioned had considerable holdings of land and properties prior to the passing of the Housing Act 1974. The Peabody Trust had some 10,000 dwellings and the Guinness Trust had round about 3,000. These holdings had been very little, if at all, affected by the housing association grants. It can therefore be justly claimed that some of the surpluses arising on these estates will be generated by those holdings which were created out of the original endowments. This part of the surplus should therefore go to the general reserve funds of the various trusts and not to the Grant Redemption Fund, where it would be subject to the recoupment powers of the Secretary of State. We trustees forsee many difficulties and misunderstandings unless an agreed formula can he arrived at to deal with these cases of the older trusts.
My second point is this: some of the older charitable trusts are not entirely confined to housing and do not use the whole of their resources for housing purposes. It is just possible that the proposals in the Bill could result in the Secretary of State taking away funds generated at least in part by the original bequest, and preventing a trust from using its funds to the benefit of the poor in other ways. I know that the Charity Commissioners are concerned about this.
On both these counts we are very anxious that a formula should be provided which will ensure that only part of any surplus should go into the Grant Redemption Fund and be subject to its rules, and the balance should remain in the accounts of the trusts as a reserve available for use in accordance with each trust's objects, which in some cases include purposes other than housing. If it is possible for
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the noble Lord the Minister at the Committee stage to give some reassurances of a formal kind for the points that I have made, it will I know allay the doubts of very many trustees.
8.5 p.m.
Lord STEWART of FULHAM: My Lords, we have had a lengthy, wide-ranging debate on the many aspects of the Bill. I do not know whether we can call it an enthusastic debate so far as the Bill is concerned. I am sure that the noble Lord who opened and will reply to the debate will have made careful note of all the criticisms and misgivings that not only we on this side but his noble friends have expressed. There is one aspect of the matter with which I should like to begin and which has not received a great deal of attention. It is this: all the things which the Bill proposes to do are going to be carried out in a climate of steadily declining house building. There is nothing in this Bill to deal with the fact that we just do not have a large enough housing stock and the rate at which new houses are being provided is steadily declining. That makes the solution of all the problems more difficult.
This is a Bill which, among other things, reduces the security of tenure of some tenants and raises the rents of many others. Those are not desirable things to do at any time. At a time when there is going to be an increasing shortage in the total supply of housing, they are all the more alarming. If we look, for example, at what has happened between 1978 and 1979 and look at the number of dwellings started in those two years, we find that as compared with 1978, the number of starts in the public sector in 1979 had fallen, in round figures, by 30,000 and in the private sector by 20,000. As my noble friend Lady Birk pointed out, all our prognostications for the future are that there is going to be an even more alarming decline in the rate of house building. That is certainly true so far as the public sector is concerned. To judge from the provisions made for subsidies in the Bill it is the positive intention of the Government that publically provided housing should become a less and less important part of the total stock, which is disquieting, because it is still true, despite all that has been done, that a very large section of the population have a housing need which can only be met by

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the provision of property for rent at reasonable rents; and so far only the public authority has really been able to meet that.
I believe that my noble friend Lord Pitt of Hampstead (whose speech I was sorry to miss) referred to the subsidy provisions. I should like to develop them a little. We are told—and things always sound more impressive if you put them in an algebraic formula—that the subsidies are to be determined by BA + HCD -;LCD: base amount plus higher costs differential minus local contributions differential. But what are BA, HCD and LCD? Clauses 93, 94 and 95 respectively tell us. Clause 93 tells us how the base amount is to be calculated. But, having told us that, it then adds that the Secretary of State, if he thinks that the circumstances are appropriate, can either increase the base amount or decrease it, without any limit placed on the extent to which he can do so. So we are not much wiser at the end of Clause 93 as to what the base amount actually will be.
In the following Clauses, 94 and 95, we find exactly the same provision. HCD is to be made up of two amounts, both of which can be determined by the Secretary of State. We come to the conclusion, then, that BA, HCD and LCD are what the Secretary of State thinks they ought to be. That is the situation with which local authorities are faced as to the amount of subsidy they may expect. They can be quite sure that it will be substantially less than it has been in the past.
It may be the Government's hope that the stock of houses provided by private builders will increase. There seems to be the assumption that if you make it easier for the private landlord to get his tenant out or if you enable him to charge a higher rent, this will bring on to the market, and cause to be built, more and more private accommodation for rent. This assumption has been tried out several times in the past and it has never worked.
It is quite clear that, whatever the state of legislation, the private rented section in housing is steadily declining. I think one fairly obvious reason for it is that for years we have given owner-occupiers tax relief on their mortgage payments and we do not give tax relief for the
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rent that is paid. That may or may not be right. But it is obviously going to have the result that the private rented sector is going to shrink. The idea that it shrinks because of wicked rent control legislation has nothing to support it. Still less have we any solid reason based on experience for supposing that less security and higher rents for the tenant will result in an outpouring of private rented accommodation. So we have to conclude that this is not so much a Housing Bill as a de-housing Bill. It legislates in an atmosphere of steadily declining provision, which it does nothing to alleviate and something to aggravate. That affects almost every housing problem we are concerned with.
My noble friend Lady Denington referred to the importance of the mobility of labour and the need for the man who has got a job in another part of the country to be able to get a house there. But it is terribly difficult for the local authority in the area to which he proposes to move to make provision for someone it regards as a stranger if it is up against a desperate shortage all the time. No doubt it ought to be more generous. We ought not to have residential qualifications, but it is very difficult to persuade local councils of that when every vacancy they have got is sought after desperately. If we want greater mobility of labour we simply have got to increase the housing stock more than we are doing or plan to do at present.
However, it may be argued that if the Bill does nothing to increase the housing stock it is going to provide a better use of the existing stock. It has two instruments for doing that. The first instrument is in the public sector. It is argued that if one provides for the sale of council houses this will be a better use of the existing stock. Let me say at once that there is nothing new about the idea of sale of council houses or, indeed, the building of houses by councils for sale. Councils of all political complexions have done this in different places and in different times. But—and this is a very large "but"—whether it is done and the extent to which it is done should be a matter for local judgment, because whether it is a sensible thing to do or not varies greatly from one part of the country to another.

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If I may say so, this was brought out very clearly in the distinguished maiden speech we heard from the right reverend Prelate the Bishop of Newcastle, when he pointed out that the local conditions and the finance of each local authority affects whether it is sensible for it to sell council houses. Under this Bill every local authority has got to do it whether the conditions and the finance make it a suitable thing to do or not. Early in the debate the noble Lord, Lord Evans of Claughton, made the same point about the need for local discretion in the sale of council houses, and my noble friend Lord Hatch of Lusby stressed particularly how this will affect the needs of the elderly—that the provision for them, in particular, will gradually shrink.
But perhaps the most devastating case against the iron rule that all councils must sell was made by the noble Lord, Lord Hylton, who rightly described the action of the Minister as like that of the brigand Procrustes, who either stretched or locked his guests so that they should fit his inflexible iron bed. I must congratulate the noble Lord on Procrustes. As one who is always looking for suitable words and phrases with which to describe the policies of Conservative Governments, I wish I had thought of that one myself.
The Government's policy of universal sales is one that predominantly will help the better-off tenants. This point was made very forcefully by the right reverend Prelate the Bishop of London. Not so very long ago a publication by the Tory Reform Group, of all bodies, had something very similar to say. What, it asked, did such a policy really achieve? It said that what it resulted in was that better housing was being sold to the wealthier tenants. It would be of no advantage to the old and would not be available to the poor. It reduced the overall quality of the public housing stock, and this had financial consequences when average repair and maintenance costs rose. I wish we had here the noble Lord, Lord Carrington, who is one of the vice-presidents of the Tory Reform Group; or even, from another place, Mr. Peter Walker, who is its patron; or the right honourable William Whitelaw, who is another of its vice-presidents. All told, this idea of absolute and universal council house sales does not seem to have many
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friends and I really think the Government ought to look again before they persist with this.
Then, of course, compulsory sales leave the other tenants—those who cannot buy, and they arc overwhelmingly in the majority—with less and less hope of transfer to something a bit better than what they took on first offer because they felt they must have something. They are also left with the prospect of higher rents. This is partly because the no-profit rule has been abolished. Local authorities are now to be encouraged to run their housing account at a profit. They are going to be under continual pressure from the central Government to raise rents, and the tenants' charter, which has some admirable things in it, does not contain what the Labour version of it contained—a right of tenants to be consulted about rents.
The stock argument put forward for allowing rises in rents is that if one compares rents with what has happened to prices and incomes in other fields, really they have not gone up all that much. Possibly the noble Lord was going to say that. It looks as if the Government have looked round and said, "We've got a rate of inflation running in general at rather more than 20 per cent. but we've found one field where this isn't happening. It isn't happening to that extent in rents so we had better see that they go up like all the other things". This is a very odd performance for a Government who were supposed to make the battle against inflation their highest priority.
Perhaps I am dealing with the subject a little too lightheartedly. It is going to be a very ugly and nasty business for a great many of the council tenants and they will by definition be those who can least afford it, because those who can really afford it will have taken advantage and bought their houses to the disadvantage of the other tenants. The situation of those who are not yet tenants but are on waiting lists is going to be rendered hopeless because the pool of council housing from which alone they could have hoped to get a decent home is going to be steadily shrunk as year follows year.
The effect of this policy, then, as so often with Conservative policies, is that those who are already tolerably housed

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will find it is made easier for them to improve their position. Those who are less fortunate will be thrust further down. A wedge will be driven all the time between the two sections. That is the Bill's device for dealing with the public sector. Its device for dealing with the proper use of the housing stock in the private sector is predominantly the shorthold tenancies. It is important to notice what could result from the creation of shorthold tenancies, and I must pay tribute to the speech of the noble Lord, Lord Gifford, who spelt out in a way that helped laymen to understand a number of the legal traps and difficulties into which tenants could be drawn.
The point I would like to make is this. The merit of existing legislation about rents is that the landlord—I am speaking now not of the landlord who wants to get in and possess the property itself but of one whose business it is to let property for rent—as things now stand, has no financial motive for wanting to squeeze out a sitting tenant because the law requires that the dwelling would still have a registered rent and the next tenant who came would pay that same rent.
What shorthold would do is this: if you can manage to persuade, cajole or bully your tenant out of a registered tenancy into a shorthold, arid then make another shorthold of the place he used to occupy, there is a decided advantage to you. In the first place, you are nearer in time to the point where you may be able to sell the property free of all restrictions; and, secondly, very probably you will be able to put up the rent because, although it is a condition at the beginning of a shorthold or at least within 28 days of its beginning that there must be a registered rent, Clause 51(4) of the Bill enables the Secretary of State to remove that condition at any time he likes. There is substantial financial motive, then, for the landlord to try to get a tenant out so that he can turn premises which had a registered tenancy into one with a shorthold tenancy for a new tenant.
If you create that situation, what will happen? We do not need theoretical speculation about that because it has all happened before. The 1957 Rent Act created a situation whereby, if you owned controlled property and if you could get the sitting tenant out by hook or by crook
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—if he were not so obliging as to move or die—the tenancy became uncontrolled and you could let it at four, five or six times the rent you had been getting. That was a plain invitation to landlords to harass tenants out in one way or another.
I accept without argument what was said by, I think, the noble Lord, Lord Evans, that not all landlords are heartless and avaricious; to suggest otherwise is quite wrong. But the point about the 1957 Rent Act and shorthold tenancies is that it puts a premium on avarice. The landlord who wants to behave decently is made to look a mug by comparison with the landlord who is out to make as much money as he can. It is true that the temptation to do that kind of thing in this Bill is not so serious as it was in the 1957 Act, but though less serious in degree it is the same in kind. This Bill when enacted will create a situation in which it pays the landlord to get the tenant out.
How do you get a tenant out? The Government say there is absolutely nothing in this Bill that disturbs the security of any sitting tenant. In a number of cases that may be so, but there are a variety of ways of getting your tenant to go if you really want him to. You can neglect the repairs until the place becomes almost uninhabitable. If the tenant's situation is that he occupies part of the house and the other part is vacant, you can get hold of some peculiarly undesirable people and put them in the other half, with a deliberate remit to make the place most uninhabitable. You can practise deceit by persuading the tenant that his legal rights are not in fact what they are, and that you will be able to do particularly skilfully with those who find it most difficult to cope with modern life: the less well-educated, the semi-literate, perhaps, and some who by disease or disability are not able to get about and know how to do things. I remember one particularly heartless deceit being practised under the 1957 Act on a blind man. In the last resort, you can do it by straightforward bullying. The tenant can be visited by "strong arm men" and possibly by alsatian dogs.
None of these things have I invented. All of them happened under the 1957 Rent Act, despite the assurance of the Government which passed it that nothing of the sort would happen, and despite a determined effort, I am sorry to say, by a large

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section of the press to pretend that it was not happening, until you got somebody with a nasty foreign-sounding name like Rachman, and the possibility of a really juicy scandal, and then it burst and the Government did something about it.
It is interesting to notice where Rachman and his like got the money from to buy up controlled property and practise these rackets. They got it from the most impeccable sources, as newspaper inquiries revealed; from people from the best clubs, the best regiments, the best public schools, who cheerfully lent them money and, equally cheerfully, did not inquire how it was they were able to draw a rate of interest so much higher than was normally available from investments in house property at that time. As I said, these things happened once. We certainly have no certainty that they will not happen again. One would have thought, having gone through that experience, that the Government would have been at great pains not to re-create anything like that situation; but that is what they are doing.
However, there are some good features in this Bill. For example, there is the tenants' charter—the noble Lord should be grateful to me because not many people have said much about it—although even that could be improved. There are arrangements about improvements which I think will be helpful; but if we look at the most distinctive characteristic of the Bill, it is that it ignores the need for more housing and especially for more housing to let at reasonable rents, and its two special features—the shorthold tenancies and the sale of council houses—will increase inequality, and injustice.
8.26 p.m.
Lord BELLWIN: My Lords, really, it is a question of where to begin! I think I should do so by saying that noble Lords opposite, and indeed all those who have spoken, would not really expect me to try to deal with all the points that have been raised, many of which are really more appropriate for Committee stage where they can be much better debated in detail rather than by my merely giving a riposte to them now. At the same time, there are a good many comments I wish to make, but before I do so may I apologise
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to those noble Lords who may feel that I have not picked up all or, in the odd case, any of the points they have raised. It is for the reasons I have just given, which I believe to be in the best interests of the House.
Before I tackle the points specifically raised on the Bill itself, perhaps I should make one or two general observations in response to many of the general observations that were made. Quite a number of comments referred to the Government's broad housing policy generally and not to specific items in the Bill. I suppose that is fair enough; after all, this is a debate about housing and this is an important Bill; therefore I have no complaint about that. But, equally, I have to presume that noble Lords opposite, in particular, and also my noble friend Lord Hylton, will not mind if I comment accordingly on what they have had to say.
From the Labour side we have, not unexpectedly, listened to expressions of some of their philosophies—as always very strong on rhetoric and not so strong on logic, sounding always very plausible and emotive. But one has to look at the record, and really if we started to dig there, there would be a lot that we should want to say. Had the debate come to a close sooner I should have wanted to do that, because I have masses of material with me. However, I think that in the interests of brevity we had better leave that for the Committee stage.
Even so, perhaps I might make the odd observation, and not least in response to the provocation—shall I say, in the nicest possible way—from noble Lords opposite. For example, the noble Baroness, Lady Birk, referred to the Government's cutback in housing investment allocations, as indeed did several other noble Lords. She referred to the dreadful effect that that would have on the new building programme. I think that I have to say this, and in so doing pick up a point which the noble Lord, Lord Stewart, made towards the very end, when he referred to the decline in the rate of new house building.
The fact is that new house building in England fell from 110,000 starts in 1975 to 47,000 starts in 1979—a drop of over 50 per cent. in Labour's last five years in office. Net capital expenditure also fell

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by over half, from £4,202 million in 1974/75 to £2,077 million in 1979/80. Yet, despite this reduction in the level of funds available for housing—and this is a very important point—local authorities were still either unable or unwilling to maintain the earlier level of new building and, in fact, underspent even those reduced targets by £340 million in 1978/79. Yes, even after we had removed £300 million from Labour's 1979/80 housing expenditure plans, authorities failed to reach the new cash limit.
Local authorities are responsible for drawing up their own housing strategies, and it is clear that their perception of need has changed over the years. I have been one of those who have been there while that change has been taking place. The matter is reflected in the increasing proportion of the housing investment programme resources which are being spent today on rehabilitation and improvement of the existing stock. That is right, and that is as it should be. The needs and problems have become increasingly specific and local. The emphasis of public sector housing policy now must be to meet particular needs, such as those of the elderly and the handicapped. We have to concentrate on modernising, improving and making better use of the existing stock, rather than on the general provision of new houses, and we must encourage, as we are now doing, home ownership and the private rented sector.
I can speak with a great deal of feeling and at some length on this subject. I was personally involved over many years in the debate on what should be the rate of slum clearance; what should be the rate of new build; was it right to have torn out areas and destroyed communities to the extent that we did; or, on the other hand, was it right to say—and there are those who do—that if we had not done that to the extent that we did, then we should have had even more slums today?
This is a very finely balanced debate, but I make the point because it ill becomes anybody, who is really talking about housing in its broadest sense, to try to proclaim that the answer is solely in any one sector, because it is not. Least of all is it in saying that new public sector house building is the only solution, because I do not believe that it is the only solution. It may again become a solution, when we
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have restored the existing stock of housing to the proper state that we all want to see. We can then look again at the situation, as it will be.
Among the general reviews of the national housing scene, and complaints from the Benches opposite about our housing policy, I listened in vain for at least some acknowledgment of the shortcomings—and I have to say this—of many of the Labour-controlled authorities and their contribution to the nation's housing ills. My noble friend Lady Faithfull referred to sub-standard properties and I take her point to as starts on them. No doubt, we shall be coming back to that. But why no reference to the thousands of council-owned properties which are standing empty all over the country, and nowhere more so than in some Labour areas? I am told that there are over 1,000 such in Lambeth alone, yet they bludgeon their ratepayers for some £20 million a year to subsidise their council housing; and they are not the only ones, by any means, although they are indeed among the worst.
Why have we heard nothing about the scandal of rent arrears? Just how many tens of millions of pounds are locked up in them today? Again Labour authorities are in the lead. Yes, my Lords, we hear much of municipalisation, and they are very quick to municipalise and to lay their hands on all the housing that they can acquire. But can it really be said that they are putting it to the most efficient service of their citizens when we see this kind of record, which I see as much as most people as I go around the country?
I make only one further riposte to the comments we have had, which I consider to be very much of a political nature today. There has been a lot said about the shortage of private rented accommodation, about how critical this is for so many single, elderly and young families, and some noble Lords opposite became quite involved in this argument. To hear them, we might well have been excused for thinking that their party's past policies had been as pure as the driven snow on this, until one starts to look at the facts, especially at the rent legislation in their last five-year term of office.

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Over the years, while never ceasing to bemoan the shortage of private rented accommodation, the fact is that the Labour Party's hostile attitude to the private landlord has become steadily more marked. The Rent Act 1974 and the Housing Rents and Subsidies Act 1975 provided further fuel to hasten the decline of the private landlord. The 1974 Rent Act extended security of tenure to many tenants in furnished accommodation, and from the beginning of 1974 to December 1977 hundreds of thousands of dwellings ceased to be available for rent. The noble Lord, Lord Stewart, did not seem to think that that was in any way a contributory factor. He and I will have to agree to differ as to that.
In passing the 1974 Act,—as my noble friend Lord Sandford said earlier, the Labour Government ignored the advice of the committee which was set up to study the working of the Rent Acts. I very quickly quote from one part of that report, which read:
"The eventual overall reduction in the supply of privately rented accommodation would, as we think, be substantial. Greater security for those in occupation when the extended security code came into force could well he bought at the cost of greater hardship and difficulty for the much larger number of households seeking accommodation in the following weeks, months and years. For the reasons we have indicated, we cannot recommend such an extension. On the contrary, we venture to sound a solemn warning against it."
Prophetic words indeed, as events turned out!
On the right to buy, which has most certainly been the most talked about topic today, I feel that I should like to say this. I listened carefully to arguments here, as I have listened to them for so many years in the past, as I have read of them, as I have heard them put to us so often by our political opponents and by some well-meaning, but usually biased, advocates of public ownership at all costs. We will have none of it. Why should we compel public tenants always to have to pay rent, without ever owning anything? Why should they be disadvantaged? Why should they not have the chance to leave something of real value to their children?
The right to buy is what the people want. It is what we received a mandate for in the General Election. Despite all the well-practised and, by now, all too
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plausible arguments to the contrary, it will not have any meaningful effect on the overall pool of dwellings relative to renting need. Furthermore, it will not mean that only the best will be sold. The record shows otherwise and my own experience confirms that. If anyone wants to argue with me, I shall be very happy to take him on when we come to Committee stage.
Let me demolish another of the antiright-to-buy myths. The fact that a house changes ownership through being sold to the sitting tenant does not mean that the local authority will have to build another house to replace it. There is no need to replace a dwelling simply because the family who have occupied it hitherto as tenants now occupy it as owners. Again, the noble Baroness, Lady Birk, said that only the best and most attractive housing will be sold, but experience shows that this just is not so. A wide variety of property is bought—
Baroness BIRK: My Lords, I wonder whether the noble Lord will give way.
Lord BELLWIN: I will give way in a moment, but I want to conclude what I have to say on the right to buy, because time is pressing and I do not have much time available. I speak from my own personal experience in Leeds. When we had sold some 2,000 to 3,000 houses, we carried out a survey to find out where they had been sold. Was it true that they had been sold only in the better estates? The record was there, and is there, to show that that was not so. They were sold on an incredibly broad spread of housing, of all the different standards in the city. So I will not have anyone tell me that that is not so. The tenants of the most desirable residences are clearly those who are least likely to transfer to older accommodation, so that sales of such property to sitting tenants have much less effect on opportunities for transfer than some have suggested. I will give way to the noble Baroness.
Baroness BIRK: Yes, my Lords, otherwise we shall be past the point of no return, which perhaps is the noble Lord's purpose. The Minister said that he had experience of Leeds where there is a social spread in terms of property sold. Very well; the noble Lord has his figures

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and surveys. However, may I point out to him—we can go into it at the Committee stage—that the figures in the survey I have seen do not show this. They show that in the better outlying districts like Moortown, with which the noble Lord is familiar, the bigger sales have taken place. The same is true in London and everywhere else.
Finally, on the question of the right to buy, which the Minister has very obligingly been rattling through, may I say that what we are complaining about is the compulsion to sell. We are not complaining that people should have the right to buy. We are saying that local authorities should not have imposed upon them an overall compulsion to sell. This has been criticised on all sides of the House this afternoon and evening, and the noble Lord has not had much support from his own Benches.
Lord BELLWIN: My Lords, I will come back in depth to this at the Committee stage, but when the noble Baroness speaks to me about districts in Leeds, may I ask her to tell me how many houses were sold in Middleton, Belle Isle and other parts of the city which she may or may not know but which I assure her are inhabited solely by those whom she, not I, would call working class people? I have forgotten what the noble Baroness's other point was about—
Baroness BIRK: Never mind!
Lord BELLWIN:—but we shall come back to it.
Baroness FAITHFULL: My Lords, the noble Baroness said that my noble friend is not supported by the people sitting behind him, but may I assure him that he is so supported.
Lord BELLWIN: My Lords, I thank my noble friend very much for what she has said. May I say something about waiting lists? They are used as an argument to try to justify something which is unjustifiable. I think we should look very carefully at waiting lists, I refute entirely the argument that the right to buy will add to the length of waiting lists, for the reasons I have given. But waiting lists alone do not by any means represent an adequate measure of housing
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need. The lists contain a variety of applicants, many of whom could in no way be said to have a priority housing need. Many of them are already well housed elsewhere but have not bothered to let the council know. Many want something smaller, now that the children have grown up and moved away. Many want something more modern, or something lower in rent.
The permutations are many and clearly illustrate the folly in using blanket numbers of people on so-called waiting lists. It is emotive, certainly, but it is also thoroughly, and in some cases mischievously, misleading. There have been dramatic alterations to the numbers on waiting lists where these have been thoroughly analysed. If the criteria is solely genuine housing need, within a definition of none or simply bad housing, many lists would be substantially reduced. I do not want to quote percentages because they could be considered to be overdramatic, but I say that the list would be decimated in terms of genuine housing need.
Let me try to deal with some of the individual observations made by noble Lords. The noble Lord, Lord Evans of Claughton, asked why private tenants should not have the right to buy. I would answer by saying that there is a world of difference between giving rights of this kind where public money has been involved and where no public money has been involved. To me this is the key. Many other arguments were raised in another place. But at the end of the day, on the one hand there is public money involved, while on the other hand no public money is involved. To me that is the critical difference.
The noble Lord was concerned about whether we should have Clay Cross martyrs if local authorities refused to sell. This will not arise because the regulations, as they will be laid down, will give to the tenant the right to buy. When I introduced the Bill I said that this was a reserve power. If authorities do not agree to carry out the law, tenants will have the right to circumvent them. We hope that it will happen only rarely, and from my experience of local government I think it will be rare indeed, despite what has been said in some places.

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I think that the noble Baroness, Lady Birk, the noble Baroness, Lady Denington, and other speakers were concerned about the right to buy so far as it affected the elderly and the disabled. One hopes that everyone will be concerned about that. We recognise the genuineness of much of that concern and I pay tribute to the sincere and, by and large, responsible way in which it has been expressed. The treatment of old people's dwellings in the Bill is a matter of judgment. It involves balancing community interests against the interests, or in this case the rights, of individuals. That is a balance which we have tried our best to strike correctly, as I hope that even those who would have struck it differently themselves will agree.
When the Bill was being prepared last year some of the authorities and organisations which we consulted argued at the one extreme that the right to buy should not apply to any accommodation at all which was suitable for old or disabled people. Some still so argue. This would be an extremely wide exclusion. On the other hand, some people argued very strongly that the exclusion even of accommodation which was highly adapted for their special needs would discriminate against them unfairly because of their disability or their age. We decided that the right way to deal with the problem was to identify the dwellings for which there was an overriding need in the community and to exclude them from the right to buy.
In the case of the disabled, I believe it is right that the exclusion should apply only to dwellings that are substantially different from ordinary ones. The Government cannot accept that a disabled tenant, whose home may have some unusual fixtures or superficial adaptations yet is essentially a normal house or flat, should be prevented from buying. That would be to penalise him for his disability. Similarly, elderly people's housing is to be excluded only if it is a group dwelling with a social service or where special facilities were provided in close proximity, entirely or mainly for assisting the occupants. Our judgment is that the elderly must not be deprived of their right to buy when their accommodation has little or nothing to differentiate it from general needs accommodation which
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may be equally suitable for occupation by tenants of any age.
Before I leave the right to buy argument, may I return to the point which was mentioned by the noble Lord, Lord Evans of Claughton, the noble Lord, Lord Stewart of Fulham, and the noble Lord, Lord Hatch of Lusby, namely, the independence of local authorities themselves to decide. This is a very important point, and I feel I cannot leave the subject without commenting upon it even though I am trying so much to hurry on with what I have to say. Your Lordships are rightly jealous of our democratic rights, but there are bound to be instances where it has to be accepted that national policies must dominate over local policies. All parties have subscribed to this and in their turn have criticised it. There is no shortage of precedent, but regrettably it has been made even more unavoidable in this instance by the rigid, doctrinaire attitude of certain Labour controlled authorities resolutely pursuing political dogma, as they see it, and seeking to preserve intact their public sector, regardless of the cost to the individuals wanting to buy their own homes. The opportunity for council tenants to buy their homes was a plank in our election manifesto, and we intend to fulfil that promise as quickly as possible for the 2 million tenants still denied the opportunity because their local authorities are refusing to sell.
May I say here how much I, too, would like to join in with what just about every other speaker has today said, in paying tribute to the right reverend Prelate the Bishop of Newcastle for what was a splendid maiden speech by any standards. Many of the things which he said are so apposite, but I would ask him to excuse me, as I ask all noble Lords to excuse me, if I do not go into detail tonight. There will be plenty of opportunities to do so, and I am sure that all noble Lords and I will be glad of them.
That covers the points I wanted to make about the rural areas which were a cause of much concern. May I now refer to some of the points which were made by the noble Lord, Lord Hatch of Lusby. Well, really? I think that he pinpointed the whole thing so far as he was concerned. I suspect, so far as many noble Lords opposite are concerned, and certainly so

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far as I am concerned, he pinpointed clearly where he stood when he said, and I wrote it down very carefully, that what he wants is "the social ownership of private rented accommodation". That, I think, tells the whole story. That is what he wants: "the social ownership of private rented accommodation". I should have thought that was pretty much the death knell of any landlord in the private sector who might ever contemplate letting his house or accommodation become available to rent. I really do not know where to start to answer the noble Lord, Lord Hatch, because his remarks were so blatantly political and, if I may say so, contributed very little to the debate.
I was very grateful to my noble friend Lady Faithfull for what she had to say and indeed to my noble friend Lord Sandford for his encouraging remarks. As the noble Lord, Lord Stewart, said, perhaps there were not so many of them today but when they came they were all the more welcome for that.
What can I say to—I was about to say, except that I do not think it would do him any good, "my noble friend Lord Janner", with whom I regularly exchange debating points on the subject of fair rents and all that goes with them. We do that at regular intervals and I really do not know whether I can help him very much. I sincerely respect his great concern for the matters which he raises so regularly and I appreciate the manner in which he does it. I am sorry that I cannot give him more comfort in what I have to say today, but I tell him now that his remarks have not gone unheeded, despite the long period of time over which he has made them—but who knows? I shall have to let it go at that for the moment and I think he follows me.
I am trying to come to a conclusion now, but on the subject of the private rented sector that is a most difficult area of housing. The noble Lord, Lord Stewart, is quite right; the decline has gone on for years. We could differ (as we clearly do) about the cause of it, and we also apparently differ on what would make it better. I am very sad about the shorthold provisions because I believe that is a genuine attempt to make better a situation which is declining so much.
Ignoring my notes, this is how I would sum up. If, in fact, the provisions contain
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some of the fears which trouble noble Lords opposite, as they do—and I accept the basis of some of their fears—is it not at least worth trying to do something? What is the good of trying to protect prospective tenants who will never become tenants if the property does not become available on the market? We shall never have to worry about what some wicked landlord will do to them because they will not have any accommodation. These arc the same tenants who today do not have any accommodation, who arc waiting for someone to bring something forth. They have nothing, and yet there is this great concern to protect them from something that might happen—yet at the present time there is nothing there for them in the first place. If there is an attempt at least to tackle something, is it not far better to do that rather than simply going on and saying "Nothing can be done; that is the end of the private rented sector". To me that is not the solution and if there are indeed ways in which we can improve this Bill in Committee by all means let us look at it. I can assure noble Lords that we will treat it accordingly.
The only thing that the noble Lord, Lord Janner, said that really disturbed me was his remarks about controlled tenancies. Nobody can possibly defend a situation where landlords can be expected to charge the same rents today as they were charging in 1956—£1 or £1·50 a week. How can one say that it is wicked and wrong to bring people within the Rent Acts because they would then have to end these controlled tenancies? I cannot accept that argument in any way at all. It is not one minute too soon for these tenancies to be brought within the regulation of the existing procedures for fair rents.
I will not go on about leasehold reform. It is a subject on its own and we shall certainly be going into it at great depth later, just as we shall about multiple occupation, homelessness, and so on. I am tempted to go on at some length on that because the right reverend Prelates who raised this, and indeed other noble Lords, were quite properly anxious about it. I share their anxiety, but I feel that we have some positive and firm proposals that we are bringing forth in the Bill which really will help the situation and they will know that we have taken this on at a fairly late stage in the life of the Bill

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because we accept entirely that this is a matter which we cannot skate over at all.
I think I should make one or two observations on what the noble Lord, Lord Hylton, said. I would just tell him this when he gives me a left-handed pat on the back because Leeds was only giving 15 per cent. discount on the sale of its council houses. I can tell him that the only reason why that was done was, first, that a Labour Secretary of State would not allow them to do any more, and, secondly, when the stage came when he was not there the Liberal minority on the council also prevented us from doing anything more. So although I should like to accept his word of praise, I have to tell him that we should have liked to give more discount and sold more houses. He will see how much he and I differ on this whole subject, which I am sure will not surprise him one bit. When he talks of the social effects of sales he will have to forgive me if I tell him that I am totally unimpressed. I have seen the effects, not now for a year or two but prior to that for 13 years, and I found them to be okay. I will settle for them any time.
When he asks whether it is social justice to sell, I would ask him whether it is social justice to deny the right of people to own their own homes. Clearly we shall get nowhere with it tonight, although I should like to say to him that on one or two of the points that he raised I am glad to tell him that we have some movement in the direction he is wanting to take, but rather than my going through it at length now perhaps he will allow me to do so in writing and later on by discussion, so that any other noble Lord who is interested may take up the points.
Because of the lateness of the hour perhaps noble Lords will forgive me if I do not go into detail. I should have liked to say more to the noble Lord, Lord Stewart, particularly. I am grateful also to my noble friend Lady Macleod of Borve for a short but helpful contribution. I hope we shall be able to help her in some of the concerns which she has about hostel accommodation. We shall be trying, just as we shall also for my noble friend Lady Vickers, who also clearly has interests in this whole matter which are important.
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I do not think there is much more I want to say at this stage. We have had a wide-ranging debate covering housing policy generally as well as the particular proposals in the Bill. I have spoken at length about what we seek to achieve and your Lordships would expect me to do no less. Despite the efforts of successive Governments and the expenditure of vast amounts of public money, housing problems remain among the most intractable in our society, as the concern shown by your Lordships today has amply demonstrated. I do not suggest that the Bill can be a panacea for all the ills of our housing situation, but it will make radical and important changes in housing policy which will go some way towards solving the more serious problems. I commend it to the House as a landmark in housing legislation and a foundation for the future, giving people what they want rather than what politicians and public authorities think best for them. I ask your Lordships to give the Bill a Second Reading tonight.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

FILMS BILL
Brought from the Commons; read 1a, and to be printed.
NEW TOWNS BILL
Brought from the Commons; read la, and to be printed.

IRAN (TRADING SANCTIONS) ORDER 1980
8.59 p.m.
Lord TREFGARNE: My Lords, I beg to move that the Iran (Trading Sanctions) Order 1980, laid before the House on 29th May, be approved. With your Lordships' permission I propose to speak at the same time to the second Motion on the Order Paper in my name, relating to the Export of Goods (Control) (Iran Sanctions) Order 1980.
My Lords, may I first remind your Lordships why we are seeking approval of

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these two orders to implement sanctions against Iran. On 22nd April at Luxembourg the Community Foreign Ministers agreed to proceed with economic sanctions in conformity with the draft UN Security Council resolution vetoed by the Soviet Union on 13th January, if there was no decisive progress on the release of the hostages by 17th May. They decided in the meantime to take any necessary powers to implement the sanctions.
In accordance with this commitment the Government secured passage of the Iran (Temporary Powers) Act 1980 to supplement the powers we already have under the Import, Export and Customs Powers (Defence) Act 1939. At Naples on 18th May the Foreign Ministers of the Nine decided to make the necessary orders to implement the sanctions. I need not recite in detail the reactions expressed to the Naples decision, except to recall Parliament's clearly expressed view against any retrospective effect.
The Government recognised these very strong views and, as my right honourable friend the Lord Privy Seal announced on 20th May, decided to ensure that the orders would not apply to the export of goods under arrangements made before the date of the orders. My right honourable friend also explained that it was our intention to act broadly in line with our Community partners. Our partners in the Community all took action on 22nd May, by means of decrees or other regulations in accordance with their own legislation. Japan and some other countries have also taken action. We ourselves decided to implement our sanctions with effect from 30th May, the earliest practicable date under our parliamentary and statutory procedures. We have now come to seek the approval of Parliament.
I am thus asking the House to approve two orders: first, the Iran (Trading Sanctions) Order 1980, is an Order in Council made on 29th May 1980 under Section 1 of the Iran (Temporary Powers) Act 1980, which prohibits the making or performance of contracts for the sale, supply or transport of embargoed goods to Iran. Under Section 1(6) of the 1980 Act this order will lapse after 28 days unless it is approved by Resolution in each House of Parliament. Second, the Export of Goods (Control)
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(Iran Sanctions) Order 1980 made by the Secretary of State for Trade on 29th May 1980 under Section 1 of the Import, Export and Customs Powers (Defence) Act 1939, which prohibits the export of embargoed goods to Iran. We have given an assurance that this order will be brought before Parliament in the same way as the other order, although formal approval is not a requirement of the 1939 Act. This order will, however, be revoked if not so approved. We have also promised that the House will be given an equal opportunity to debate this order. The Motion on the Order Paper therefore seeks specific approval of the House for this order.
The two orders complement each other in various ways; they use a number of the same definitions and criteria. It is right, therefore, that we should debate both orders together. I should explain why orders need to be made under both the 1980 and 1939 Acts. The 1939 Act gives powers to control the export of goods—the main sanction called for under the resolution vetoed on 13th January. The 1980 Act enables us to take additional measures in accordance with that resolution. Let me give an example. The order under the 1980 Act, as I shall explain, applies to contracts for the supply of goods to persons in Iran. But it would not prevent a person buying goods in the United Kingdom and subsequently exporting them to Iran for his own use, because the 1980 Act provides powers only in relation to contracts related to or connected with Iran, and not sales to persons in this country. Under the 1939 Act we can prevent goods sold in this way from going to Iran.
Both orders contain a number of definitions of which two are particularly important. One is the definition of "embargoed goods". All goods are to be embargoed, except the foodstuffs and medical products specified in Part I of Schedule I to the order and the other products, specified in Part II of that schedule, if, and only if, sold or supplied for medical or surgical purposes. These same lists have been adopted by the other Community countries for this purpose.
The other important definition is that of a "contract made before the date on which this order comes into operation". This is contained in Article 2(2) of the

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Trade Sanctions Order and Article 1(3) of the Export of Goods Order. It is provided in Article 3(2) of the first order and Article 3(1)(e) of the second order that sanctions are not to apply to contracts for the sale or supply of goods entered into before the orders came into effect. This follows the announcement on 20th May that, in view of the clearly expressed view of Parliament, sanctions were not to be applied retrospectively.
Article 2(2) defines what is a "contract made before the date on which this order comes into operation" for the purposes of this exemption. First, a contract made before the date of the order continues to be exempt if it is modified, amended or extended after that date. The reason for this is that, quite frequently, both parties to a contract agree to minor changes to the terms of a contract—for example, to delivery dates or prices. We would not wish an otherwise exempt contract to be frustrated by sanctions because of the sort of everyday changes which businessmen make. However, modifications must not be so substantial that a contract becomes, in effect, a new contract. If that happens, it cannot escape sanctions on the grounds that it has only been modified.
Both orders also provide that the exemption for goods sold or supplied under existing contract shall apply to sales made under new contracts which are made in continuation of an established course of business dealing. To qualify under this exemption, new contracts will have to be made between the same parties. They must relate to goods of the same or a similar class, and be in continuation of a course of business dealing which existed immediately before the date on which the order came into operation, namely, 30th May 1980. Some exports to Iran are made under commercial arrangements which, although they may not amount to legally enforceable contracts, reflect longstanding and regular business commitments. It would be inequitable to draw a distinction between this sort of longstanding arrangement and formal, longterm supply contracts, and we have therefore excluded such arrangements from the retrospective effect of sanctions. This provision also reflects the clearly expressed view of Parliament that there should be no such retrospection.
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Your Lordships will have seen the comments of the Joint Committee on Statutory Instruments in their 31st Report. The Government have, of course, studied their comments with great care. We naturally attach the highest importance to the views of the Committee. It is therefore right that I should say something by way of comment on the main matters which the committee have raised.
The committee expressed the view that the penalty provisions in the Trading Sanctions Order constitute an unexpected use of the powers conferred by the Act under which the order is made, namely the Iran (Temporary Powers) Act 1980. This criticism relates to Article 5 of the order. The committee point out, correctly, that the effect of this provision is that the maximum penalty applicable on summary conviction for an offence against the order may be varied by an order of the Secretary of State under Section 61 of the Criminal Law Act 1977, and that whereas amendments to the Trading Sanctions Order would normally have to be made by the procedure laid down in the 1980 Act—that is, the amending order will be subject to Affirmative Resolution of both Houses—orders under the 1977 Act are subject only to Negative Resolution of either House.
The object of framing the provision in this way was not to get round the procedural requirements of the 1980 Act, but merely to follow the procedure which Parliament had laid down in the 1977 Act for raising maximum penalities by order so that their real value can be maintained. This provision has been used in Section 33 of the Estate Agents Act 1979 and in Section 171 of the Customs and Excise Management Act 1979. It is not therefore novel. I can assure your Lordships that there is no prospect of an order under the 1977 Act being made for some time. Hopefully, by then, these orders will have long since been revoked.
The committee also thought that both orders require elucidation as regards the expression
"a contract made in continuation of an established course of business dealing, between the same parties relating to goods of the same or a similar class".
I have already said that the view was taken that it would be unfair to discriminate against such persons who, but for the

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absence of a formal contract dating from before the orders, were in no different position from others who can point to such contracts. The criteria for this exception are in fact sufficiently clear for most exporters to be able to decide, if necessary with legal advice, where they stand. These criteria are: (a) established trading links; (b) the same two parties; (c) the same or a similar class of goods. accept that there may still be cases where exporters are in doubt. The only sure way of avoiding this would have been to introduce a system of export licences. The Government rejected this as an unjustifiable interruption to trade where exports under existing contracts would be clearly exempted but where exporters would require a licence, with all the verification by the authorities that this would involve, before they could ship the goods.
Finally the Joint Committee point out, correctly, that the last article of both orders gives the Secretary of State, (or the governor of a scheduled territory) an unfettered power to modify or revoke licences granted under the order, with no provision for any appeal against any such modification or revocation. They go on to point out that the effect of this is that, except in rare circumstances, there would be no right of appeal to the courts. This is correct and is equally the case for all export licences issued under the 1939 Act. The power to revoke and modify licences has been taken because, while it is not contemplated that many licences will be issued under the orders, a case could arise where it was necessary to revoke or modify a licence which had been issued—for example, if the licence had been obtained by fraud. Although it is true that it would he difficult to challenge a modification or revocation in the courts, the Secretary of State would be answerable to Parliament and the Ombudsman if he acted in an oppressive manner.
Finally, a word on administration of the orders. We are against setting up an export licensing system for Iranian sanctions. Not only would such a system mean more bureaucracy, it would also seriously interrupt trade under existing contracts while contracts were examined and licences were issued.
Sanctions will instead be operated on the basis of declarations by exporters that
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the goods involved are not prohibited exports under either of the two orders. Firms will be required to enter details of their exports with Customs, together with a declaration, before any goods are shipped. They will then be able to export their goods. However, we will be checking on declarations and firms may be required by the Department of Trade to furnish adequate documentary evidence to support their declarations, for example copies of existing contracts. The only exports for which this declaration will not be required are foodstuffs and medical products falling into Part I of Schedule 1 to each order. These are not embargoed goods and can be exported in the normal way.
We believe that the United Kingdom sanctions are likely to be broadly similar in effect to those adopted by other Community countries and by Japan. They have by decree, or other regulation, introduced systems of licensing for exports to Iran. The procedures adopted in each country naturally vary. It has been announced that exports under contracts signed since 4th November 1979 will not be licensed. Thus it is not possible to generalise about the likely effects of sanctions simply by comparing the regulations which each country has made. Community countries will be keeping in close touch with each other about the application of their measures. Machinery has been set up in Brussels for this purpose.
Finally, I wish to remind your Lordships that by these orders we are implementing sanctions against Iran in accordance with decisions taken by the Foreign Ministers of the Nine on 22nd April and 18th May. The additional necessary powers were granted by Parliament under the Iran (Temporary Powers) Act. The various exemptions from the effects of the sanctions meet, in the Government's view, the wishes of Parliament that sanctions should not be applied retrospectively. Our Community partners and some other countries have already introduced sanctions against Iran. It is therefore necessary that the United Kingdom should play its part.
It is not the Government's argument that these sanctions will bring Iran to its knees. This would not be possible without parallel action by the world community. It is, however, a form of action which

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Community Governments and those of other OECD countries have decided they should take in order to demonstrate to Iran the strength of their feelings about the continued detention of the hostages. I do not claim that they will lead directly to the release of the hostages. But I do know that the many other diplomatic and political solutions that have been attempted have not to date achieved any progress. Further such efforts are being made. I hope very much that they will succeed. However, the United States and its allies have decided that they must act together by means of economic sanctions with the aim of exerting pressure on the Iranian Government. It is for this reason that I ask the House to approve both orders. I now beg to move the first Motion standing in my name in the Order Paper.
Moved, That the order laid before the House on 29th May be approved.—(Lord Trefgarne.)
9.16 p.m.
Lord GORONWY-ROBERTS: My Lords, the Minister knows, of course, that these orders have been very heavily criticised by the Joint Committee on Statutory Instruments and in another place, but one would hardly think so from listening to the speech with which the noble Lord introduced the orders. In another place the Government have admitted that these orders are difficult to defend. In fact, they are indefensible. They are shot through with weaknesses, as their spokesman in another place has had to admit. One is bound to ask: If so, why are they being proposed at all? The simple answer, as has already been given by the Government, is because they think that something must be done to placate our American friends and allies. But, of course, the orders will do nothing of the sort.
Not only have the Government opted out of backdating their application to 14th November, as originally agreed with our Community friends, but the provisions themselves—especially concerning the exemption of contracts—are so confused and unworkable that the Government have already lost heavily in respect and credibility, not only in the United States, but also in the Community and not least in Iran itself.
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When we started on this operation, many of us who believe in sanctions as a substitute for bloodshed expected that the genuine article would be produced. Within the limits of constructive consensus, we did our best to help in this matter. What do we have? We have this, which has lowered our prestige in America, in Europe and in the Far East. The House knows that I do not subscribe to the view that sanctions anyway should not be attempted. I believe exactly the opposite; that they are our last hope of substituting something effective for the arms race and for war. And they can be effective—in my view they must be—if we are all to survive. But not this kind of hypocritical bagatelle.
As they have emerged these orders and the Explanatory Notes for U.K. exporters are even less convincing than the parent Act as it was presented to Parliament by the Government. Heaven knows, that was the most unconvincing case ever made by any Front Bench in any Parliament. The result is that those of us who believe that there must be constant attempts to substitute bloodless pressure for the grim arbitrament of war in international affairs are saddled with this.
Although I cannot oppose these orders, I must protest at the way in which even the attenuated attempts which the Government took under the parent Act have been further reduced in the fact of these orders. As the hour is late, I must content myself with two or three major points, in the hope that even now the Government may attempt to redress the position. First, the provisions in regard to conditions of exemption of contracts are so confused as to be unworkable and are bound to be very unfair to exporters. I should like to quote from the Explanatory Notes for United Kingdom exporters. The first paragraph reads:
"WARNING"—
to the exporters—
"These notes are intended for the guidance of exporters; they do not claim to be an authoritative statement of the law".
Where is that statement? It is certainly not in these orders. It goes on:
"Exporters should obtain copies of the orders from [Her Majesty's Stationery Office] and if in doubt should seek legal advice".
That is, they are to take their legal lives in their hands, hoping that they will not be caught out in their interpretation of what is permissible. There is not an

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exporter in this country, if he is aware of the provisions and the modus of these orders, who is not already quaking.
Presumably the technique will be this. If they fall foul of the random check of declarations which will be conducted by Customs—I see that the Minister is subject to random advice already—I think the phrase is "from time to time" (a Damoclean sword of prosecution hanging over the heads of all exporters) they will be taken to court on criminal charges. I think their only hope then, judging from these documents, is that the prosecution and the courts will be equally confused and uncertain as to precisely what infringement has taken place—as confused and uncertain as the delinquent exporter himself. As we have heard, the penalties are subject to the application of the Criminal Law Act 1977, and can be varied by the Secretary of State.
I wish there were time to go into this question of licences. Unfortunately, there is not. This vital debate has been pushed to the end of a very busy day; I will not say deliberately. We made our point earlier today about the timing. On this question of licences, the Government say—we have just heard it—that they are against a general system because it is bureaucratic, wasteful of time, expensive and the rest of it. Well, whether that system will be wasteful of the time, expense, and indeed liberty of exporters is a matter that we shall find out. Light bureaucracy and heavy sentences. We save on bureaucracy, and then we make up for it in the courts.
Secondly, there is no reference in the orders to future service contracts. The reason of course is that our partners, in their sanctionary zeal, decided that they have too much invested in service contracts; therefore, they should be taken out, and out they come. We have heard so much about the need to bind the 1939 Act on to all this. It is not in. Shall we, with our Community partners, be looking at the question of service contracts later, if necessary, or is that totally out? Is this the common form of Community agreement, that whatever is inconvenient to the rest of the Community we have to defer to? That service contracts, like CAP, are sacrosanct? Perhaps the Minister will reply to that.
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Thirdly, am I right in assuming from all this—it is difficult to be certain—that goods made in the United Kingdom and exported to a third country, say Eire, can be picked up by British carriers, regardless of the second order, and taken to Iran? For instance, if we produce in Birmingham, British carriers may pick up in Cork and deliver in Iran. Is that the position?
Fourthly, having referred to the absence of a general licensing system, I should like to know where is the point of sanction, the point of power, and who is to exercise the supervision leading to the sanctionary application of all this. Is it Customs? I am not being ironical now and I am not unconnected with exporters who are already worried about this matter. Does it work in the following way? An exporter tries to make some sense of this and carries on. He becomes subject to scrutiny under this random check by, I believe, Customs, and perhaps he is picked up as one who has infringed, unwittingly, because he has not been able to understand this very ill-defined definition of what constitutes an exempted contract under the order, even though he has, in doubt, sought legal advice, at some expense. Having been picked up, he is prosecuted.
At that point two things may happen to him. There is a reference to a licence being revoked or modified. Which licence is that? There is no general system of licensing, so perhaps the Minister will explain what he means by a licence being revoked or modified in the case of an infringement. He is very heavily fined; in fact, for the first time since 1977, although inflation has been raging apace for most of the time since 1977, I gather it is now that the provisions of the 1977 Act are to be called in aid to enable the Secretary of State to "up" the £1,000 which is the accepted fine in these cases.
Lord TREFGARNE: That is not quite correct, my Lords. I said quite clearly in my speech that there was no immediate prospect of the 1977 Act being used.
Lord GORONWY-ROBERTS: Here is the confusion, my Lords. We take powers, and then what?
Lord TREFGARNE: I explained, my Lords.
Lord GORONWY-ROBERTS: My Lords, the present Government Front Bench must learn to take it as well as dish it out. There has been a very marked increase in the kind of adolescent sensitivity to the merest breath of criticism in the last few weeks and months, something which has been commented on not only in this House but outside. If the 1977 Act is called in aid to enable the Secretary of State to vary the amount of penalty on a delinquent exporter—
Lord TREFGARNE: That is not what I said, my Lords.
Lord GORONWY-ROBERTS: Then I have it wrong, my Lords. In that case, what is the purpose of that section of the orders which says that? Would the Minister care to explain now or later? If he says it will never be needed, why put it in?
Lord TREFGARNE: My Lords, I explained that in my speech quite clearly.
Lord GORONWY-ROBERTS: My Lords, I assumed it was put in because it might be needed. Nothing is put in because one is certain it will never be needed—that is, unless one engages in the serious operation of sanctions simply as a cosmetic and gesture operation.
There are a number of other criticism of both the orders and the explanatory notes which one would feel obliged to make. However, I shall not oppose these orders. Profoundly disappointed and alarmed though I am and others are at the way in which this has come out and the response to genuine attempts to support a consensus of constructive action in regard to the Iranian enormity, I shall not oppose the orders, although I cannot speak for every one of my noble friends. But I protest most strongly against what is turning out to be a dangerous charade, a charade because it has no real meaning and clearly was never meant to have any. It is dangerous because a weapon which ought to be used and developed as a substitute for bloodletting has been deliberately mishandled in a frivolous and cynical manner.
I feel like voting against the two orders, but my convictions despite these constant disappointments, and especially this dis-
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appointment, on the need to build up an effective alternative to the arms race and the nuclear holocaust that threatens mankind will enable me at least to withhold my opposition to them formally in the Lobby.
9.31 p.m.
Lord GLADWYN: My Lords, my approach to this very difficult problem—I might almost call it a dilemma—which now faces this country differs rather from that of the noble Lord who has just spoken, for various reasons that I shall attempt to give. For a very long time—in fact since 1936; that is to say, almost half a century ago—I have held the view that economic sanctions cannot work unless there is a will ultimately to employ force against the country which has offended against the international community, or a substantial part of it. As the Charter of the United Nations contemplates, there will certainly be cases in which the use of force against a country which has offended in this way is justified; nobody denies that. However, I think that most people would consider that in the present case the action of the Persian Government, however reprehensible and horrible, is not such as can possibly be rectified by the use of force. It does not in itself represent a threat to international peace and security in accordance with the words of the Charter, and if force were applied to rectify this enormity, it would in any case be entirely counter-productive because it would immediately result in the murder of the hostages, which presumably is the one thing that we find best to avoid.
My reasons for doubting the efficacity of economic sanctions in the absence of any will to use force date from a time when I was a minor official on one of the sub-committees of the League of Nations considering the application of sanctions against Mussolini's Italy, at the beginning of 1936. One of the knotty problems by which we were then confronted was whether goldfish grown in the Lombard Plain and then exported to Switzerland, where they were fed on ants' eggs and therefore fattened, and then re-exported from Switzerland, were to be considered to be Italian goldfish within the meaning of the sanctions Act, or, alternatively, owing to the Swiss addition, considered to be Swiss goldfish.

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A very similar case concerned cheeses. Cheeses grown in Lombardy have also traditionally been exported to Switzerland and placed in damp cellars there, in order to become increasingly mouldy and therefore more palatable. When these cheeses were exported from Switzerland, were they to be considered to be Italian cheeses, or, by virtue of the additional bacilli, to be considered Swiss cheeses within the meaning of the sanctions Act? I quote these instances only to show the absurdity in many respects of economic sanctions as such. I find this is the kind of absurdity to which they must lead if there is any real intention to apply them.
Sanctions against Iran will surely give rise to similar problems, such as (as I think was mentioned in another place) whether advice on the propagation of sugar beet seed, which I believe is legitimate under existing contracts, could be extended to, for instance, carrots and turnips on the grounds that they are roots and therefore food, and are consequently exempt under the order. And, for that matter, what about the possible construction of sugar refineries—a matter, it could be, of many millions of pounds —on the grounds that they concern food, and, therefore, also are exempt? That is the sort of question which will arise. These and a host of other problems of the same nature will come up, and I can only hope that the courts, to which many of these cases will undoubtedly be referred, as the noble Lord, Lord GoronwyRoberts, said, will deal with possible offenders in a fairly lenient manner.
My Lords, I need hardly add that, as has also been pointed out at great length in another place, it will be extremely difficult to prevent the export through third countries of sanctionable goods; to determine whether existing contracts have only been renewed, which of course will be legitimate under these orders, or whether they are in effect new contracts: to decide on what exactly are existing "arrangements", because I believe commercial arrangements are also permitted under the orders; how best to provide for licences for alleged humanitarian exports, which can also be granted in accordance with the orders, and so on. In a word, my Lords, the loopholes are legion, and the difficulty for the Government in applying the orders will really be terrible. I understand
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that they feel that they are not likely to be in operation for very long, and I am sure that they hope so, as indeed we all do.
In respect of another aspect of the problem I do not think there is much reason to suppose that the actions taken by ourselves and the countries associated with us will have any very positive effect. They may exert a certain pressure on the Iranian Government, but not very much. On the contrary, I think, the Iranian Government are likely to become even more recalcitrant in regard to the release of the hostages. The orders may have some unpleasant results for the Iranian Government, but as long as the present fanatical regime is in power sanctions will not make it any more forthcoming from our point of view. In other words, scarcely anybody believes that they will achieve their declared objective, at least for a very considerable period of time and failing the emergence of some other regime in Tehran.
There might, I think, have been slightly more reason to suppose the contrary if the noble Lord, Lord Carrington, had been successful in getting the agreement of the Government to the arrangements he made in Naples for retrospective sanctions. That would have made them slightly more credible in my view; and I imagine that the noble Lord thought that he was only carrying out the original policy of the Government, which was, as I understand it, to be as nice to President Carter as possible and to back him up to every possible extent. Nevertheless, it was not approved, as I believe regrettably.
To conclude, I think the only reason for passing these orders is that it would be well to make it apparent to America, and indeed to President Carter, who is going through a difficult political period, that we are essentially doing what we can. It may not be much, but we are helping as much as possible. After all, we voted, along with our friends in the United Nations, for the resolution of last January, and if we now went back on that decision it would surely be a sign to the Ayatollah and to other extremists in Iran that the West was now divided and that the Europeans, at any rate, did not want to continue to express their extreme displeasure, to say the least, at what we all hold to be the barbarous conduct of the Iranian Government. So I agree that these are

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overriding arguments—and I hope that I am speaking for my noble friends when I say that for this reason, if no other, if the House divides tonight we shall vote in favour of the approval of the two orders.
9.40 p.m.
Lord HATCH of LUSBY: My Lords, my noble friend Lord Goronwy-Roberts has devastatingly exposed the technical nonsense of these orders. It will be recalled by the House that on 15th May my noble friend Lord Brockway and I spoke against the Iran (Temporary Powers) Bill, and also divided the House against it on Third Reading. I should not like it to be thought that, because it is inappropriate tonight to divide the House against these orders, they have the unanimous approval of Parliament. Indeed, what has happened since we had the debate on the Bill has only borne out the arguments that my noble friend Lord Brockway and I put on that occasion and in the interim period between the debate on the Bill and the tabling of the orders events have shown exactly what we exposed as our fears. May I say, first, that if either my noble friend Lord Brockway—and I know that I can speak for him on this—or I believed that these sanctions orders would lead to the release of the hostages in a reasonable period, we should both support them.
But that is not the issue. The issue, as we saw it, was, first, that we did not believe that the way in which these sanctions powers had been taken could lead to the release of the hostages; and, because they could not lead to the release of the hostages, we believed that they were thereby debasing the use of sanctions itself—sanctions as an instrument, as my noble friend pointed out, as an alternative, to military force. It was in that belief that we condemned the Bill that was put before the House.
On what has happened since, may I quote the noble Lord the Minister who has moved these orders tonight. In his speech on Committee on 15th May (in col. 426 if the Official Report) he said:
"…it is the firm intention of this Government that there should be the fullest co-ordination between member states, not only on the implementation of sanctions as a general matter, but on the detail of individual measures to be applied".
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He goes on:
"There has been continual consultation between officials of the Nine in Brussels since the decision of 22nd April in order to discuss in detail the measures under consideration, and to harmonise the way in which they will interpret the terms of and extent to which they will aply the measures in the vetoed Security Council resolution. These consultations will doubtless continue, and we are fully conscious of the need to co-ordinate both content and timing in this exercise".
Of course, the noble Lord was perfectly honest in that statement; but, in practice, this is not what has been carried out because, when his noble friend the Foreign Secretary went to Naples, he was apparently of the understanding that he was going to Naples in order to carry out an agreed policy, a policy agreed by the Government here, presumably, and agreed between himself and the Nine. When he came back here he found that he did not get the support of the Government. I would suggest to the noble Lord the Minister that when he says that he found he did not get parliamentary approval, this is rather stretching the case.
When has this ever been put to Parliament? When has Parliament ever had the opportunity, been allowed the opportunity, by the Government of voting on whether or not the sanctions should be retrospective? Where was this decision taken that the Government should change their mind and repudiate the agreement which the Foreign Secretary had made? Was it in Parliament? In Downing Street? In the Conservative Central Office or some cabal of Conservative Back-Benchers? It certainly was not to my knowledge made in Parliament. To the best of my knowledge, no decision has been taken and Parliament has never had the opportunity to express its view on the agreement which the Foreign Secretary made in Naples.
The point of my raising this issue is that my noble friend Lord Brockway and I were concerned on 15th May that sanctions would be debased because they were only to be partial, because the Government were asking for powers only for partial sanctions, and we quoted the experience we had had with Rhodesian sanctions. Partial sanctions always fail, whether they are partial by intent or stealth, and both cases applied to sanctions in Rhodesia. Partial sanctions can never succeed. Only total international sanc-

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tions can give weight to the instrument of sanctions as a valid alternative to military force.
What has happened since 15th May has not only borne out our fears but has increased them, because the sanctions that are now to be applied under these orders are more partial than the powers that were given to the Government through that Bill on 15th May. The second reason we opposed the Bill was, as I said openly to the noble Lord, Lord Trefgarne, on that evening, that I believed that our present Foreign Secretary, the noble Lord, Lord Carrington, was the best man in the western world to lead that policy of mediation as distinct from our historical experience of the use of military power from the West in between the two great super powers, and that this was one particular in which he could lead the western powers in the policy of mediation, of diplomacy, of persuasion, of associating with other countries in different parts of the world with closer ties with the present Iranian regime than our own.
I expressed the view on that occasion that I feared the execution of that crucial task could be undermined by an unsuccessful attempted application of sanctions. What happened following the meeting in Naples has made the position of the Foreign Secretary even weaker. It has removed him from the position of being the leading diplomatic figure in western Europe. The use of these orders, which are designed to produce the maximum resentment with the minimum of result, to be willing to wound but afraid to strike—this form of sanctions—is going to increase the already growing support in the Moslem world for the Iranians. It is going to increase the power of the wildest extremists within Iran. It is going to diminish the influence of those who would attempt to modify the policy of the extremists in Iran and who might give us an opportunity, with skilful diplomacy and patience to get the hostages out alive and well, an outcome which we all desire. It is because I believe that these orders will undermine the diplomatic powers of the British Government and the British Foreign Secretary, and that all that has happened since 15th May has borne this out, that I express my total opposition to both the orders which the Minister has laid.
9.50 p.m.
Lord TREFGARNE: My Lords, I am sorry that these orders have not received the universal approbation of your Lordships. I rather thought that the speech of the noble Lord, Lord Hatch of Lusby, referred more to the Act, as it now is, which we discussed some weeks ago than to the orders before your Lordships tonight. The noble Lord complained about coordination within the European Community. As I said to him, machinery is established for this purpose. It is working very well. Of course, it is true to say that the legislative methods by which the different members of the Community apply their sanctions vary. They have different systems from ours, but, as I said, the end effects are broadly speaking the same.
Lord HATCH of LUSBY: My Lords, will the noble Lord give way for a moment? Is he saying that, although the methods differ, each of the Nine countries will apply sanctions in the same way; that we are not going to be different from the other eight in refusing to apply restrospective sanctions?
Lord TREFGARNE: My Lords, I am coming to the point of retrospection; the noble Lord must contain himself. The parliamentary position regarding retrospection became very clear when my right honourable friend the Lord Privy Seal made his first announcement on this matter. I think the noble Lord, Lord Hatch of Lusby, is naive to suggest that the view of the other place at least was not very clearly expressed. Perhaps when the noble Lord has spent a few more years in Parliament he may begin to understand how views are expressed in the other place. It was quite clear that the retrospection which was part of the original proposal could not be achieved, at least in the other place.
The noble Lord, Lord Goronwy-Roberts, seemed to be looking both ways at once. He complained first that the orders were ineffective—that they were so simplified and boiled down that they would have no effect—and then he complained almost in the next breath that the Sword of Damocles was hanging over our exporters and they would be quaking on their way to the courts. I do not think the noble

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Lord can have it both ways. I shall deal now with some of the detailed points he raised. He referred to random checks. There is no question of random checks. The procedure will be that the Department of Trade will scrutinise these declarations in a general way and will follow up those which it thinks are suspicious in some way or which deserve further investigation.
Lord GORONWY-ROBERTS: My Lords, I am most grateful to the noble Lord for giving way. He said the Department of Trade will scrutinise these declarations in a general way. What does the noble Lord mean? Will the Department of Trade—presumably Customs or a related department—look at every one? What does "in a general way "mean?
Lord TREFGARNE: Yes, of course, my Lords; they will look at every one and will follow up those which in their view deserve further investigation because for some reason or another they are suspicious, or perhaps the declarations do not comply with the precise wording required.
The noble Lord, Lord GoronwyRoberts, also asked me about licences. The purpose of the licence provision and the power to grant licences is in case our embargoes will have effects that we do not require on exports. For example, an occasion might arise where humanitarian goods not covered precisely in the schedule to the order are required to be sent to Iran. For instance, if there was a terrible earthquake there and it was thought necessary to send tents and blankets, these might not be specifically covered—indeed they are not specifically covered by the order—and a licence could then be issued for the purpose of sending such goods to Iran. The power to revoke such a licence, as I have said, is necessary in case that licence were obtained by fraud. As for the new service contracts, most of our European Community partners have not taken action on these and for that reason we have decided not to impose sanctions on them either.
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Finally, regarding the remarks of the noble Lord, Lord Gladwyn, I do not think I agree with him when he visualised the effect of the crisis—it is no less—resulting from the taking of the hostages; but perhaps this is not the moment to go into that in detail. Likewise, perhaps the noble Lord would not wish me to follow him regarding the goldfish and the cheese, which was amusing but perhaps not wholly relevant to the matter before us tonight. I regret that your Lordships are not more wholly pleased with these orders. None the less I hope your Lordships will approve them.
On Question, Motion agreed to.

EXPORT OF GOODS (CONTROL) (IRAN SANCTIONS) ORDER 1980
Lord TREFGARNE: My Lords, I beg to move the second Motion which stands in my name on the Order Paper.
Moved, That this House approves the Export of Goods (Control) (Iran Sanctions) Order 1980.—(Lord Trefgarne.)
On Question, Motion agreed to.

SOUTHERN WATER AUTHORITY BILL
Reported from the Unopposed Bill Committee with amendments.
CLIFTON SUSPENSION BRIDGE BILL
Reported from the Unopposed Bill Committee with amendments.
EDWARD BERRY AND DORIS EILLEEN WARD (MARRIAGE ENABLING) BILL [H.L.]
Reported from the Unopposed Bill Committee without amendment.
  FOLKSTONE-HONITON ROAD: MAINTENANCE AND CONSTRUCTION
  FOLKSTONE-HONITON ROAD: MAINTENANCE AND CONSTRUCTION
  BRITISH SHIPBUILDERS AND IMCO REGULATIONS
  BRITISH SHIPBUILDERS AND IMCO REGULATIONS